Trump Signs Tariffs, Leaves Door Open to Mexico, Canada, 'Real Friends'

Following days of speculation coinciding with the abrupt exit of President Donald Trump's senior economic adviser, the commander in chief on Thursday rolled out new steel and aluminum tariffs in what some analysts have described as one of the most protectionist trade pivots the administration has undertaken since Trump was sworn into office.

Joined in the Roosevelt Room of the White House by steelworkers from across the country, Trump formally announced new 25 percent duties on imported steel and a 10 percent tariff on foreign aluminum, which he says will better protect American industry from foreign competition.

"A strong steel and aluminum industry are vital to our national security – absolutely vital," Trump said Thursday afternoon from the White House. "We want a lot of steel coming into our country, but we want it to be fair, and we want our workers to be protected."

Trump also announced that Canada and Mexico would not initially be subject to the tariffs, which are expected to kick in roughly two weeks from Thursday's signing. A senior administration official told reporters earlier in the day that the White House could later impose duties, depending in part on how North American Free Trade Agreement discussions unfold.

"This gives some time to figure out how this situation will unfold with respect to NAFTA negotiations," the official said.

Metals executives have welcomed the intervention, though the administration's actions have divided American voters and drawn scorn from companies that use steel and aluminum as an intermediate product. Similarly, economic analysts and senior GOP lawmakers have warned that the tariffs could in some ways undercut the recent national tax overhaul, resulting in steeper prices for companies and American consumers.

A group of more than 100 House Republicans wrote a letter to Trump on Wednesday expressing such concerns, with House Ways and Means Committee Chairman Kevin Brady, R-Texas, saying in a statement that he and his colleagues are urging Trump to "tailor these tariffs so American businesses can continue to trade fairly with our partners, sell American-made products to customers all over the world, and hire more workers here at home."

And in some ways, Brady appears to have locked in at least some of the concessions that he and his fellow lawmakers were looking for. In addition to initially exempting Mexico and Canada from the tariffs, the White House has left the door open to consider waiving other countries on a case-by-case basis. Earlier in the day, Trump specifically singled out Australia as a country that could eventually be exempt from the new duties, and he tweeted that the tariffs would "show great flexibility and cooperation toward those that are real friends and treat us fairly on both trade and the military."

"What the president has done here ... is to build a flexible set of tariffs which will allow us to address our security relationships in a way that will ensure in an ironclad way that we defend our [national interests]," said an administration official speaking on background.

The official said the White House is regarding as "fake news" a handful of reports and studies that have cropped up suggesting auto manufacturers and downstream industries that rely on steel and aluminum will be forced to raise prices or potentially lay off workers as a result of the tariffs.

But even analyses from historically conservative outlets don't paint a particularly rosy picture for the White House. The conservative Heritage Foundation think-tank, for example, estimates 180,000 Americans could lose their jobs as a result of the tariffs.

A more modest estimate offered Wednesday by Mark Zandi, chief economist at Moody's Analytics, suggested a maximum of 15,000 industrial jobs would likely be protected at the expense of 50,000 to 60,000 downstream jobs. Zandi said the tariffs wouldn't "have a big impact" on the economy if other countries don't enact tit-for-tat duties in response to the White House's actions.

But he said job losses could be "quite significant" if countries in Europe and Asia follow through on their threats to hit back at U.S. trade intervention. In the "darkest scenario," he said millions of jobs could be jeopardized.

Trump is hardly the first president to raise duties on steel, but his call for a seemingly indiscriminate tariff has drawn condemnation from across the political spectrum. Although it now appears Trump's team will attempt to use the tariffs as a bargaining chip as NAFTA discussions progress and as the international community reacts to the news, it remains to be seen whether other countries will grant the U.S. the concessions that the Trump administration is seeking.

"This is not a softening of our position in any way whatsoever," a White House official said Thursday. "Now, we have an added benefit in these proclamations which will allow us to deal with the security relationships we have."

The tariffs are the end result of a so-called Section 232 trade investigation undertaken last year by Commerce Secretary Wilbur Ross. Trump for the past week has been teasing the tariffs' introduction, though there appeared to have been an initial kerfuffle at the White House when Trump reportedly advocated for formally announcing the duties last week to coincide with a meeting he had with steel and aluminum executives at the White House.

The sudden announcement reportedly led to a standoff between the more globalist factions of the president's inner circle and the individuals calling for increased protectionism. But the protectionists appear to have won that battle, as Trump sided with them on the tariff decision shortly before Gary Cohn, Trump's top economic adviser and one of the most prominent pro-trade voices in the White House, announced he planned to step away from the administration.