President Donald Trump insists he is “not backing down” on his plan to impose stiff tariffs on imported steel and aluminium despite anxious warnings from House Speaker Paul Ryan and other congressional Republicans of a possible trade war.
The president said North American neighbours Canada and Mexico would not get any relief from his plan to place the tariffs on the imports but suggested he might be willing to exempt the two longstanding allies if they agreed to better terms for the North American Free Trade Agreement.
“No, we’re not backing down,” Trump said in the Oval Office, seated with visiting Israeli Prime Minister Benjamin Netanyahu. “We’ve had a very bad deal with Mexico, we’ve had a very bad deal with Canada — it’s called NAFTA,” Mr Trump said.
The president opened the door to exempting the two countries from the planned tariffs, telling reporters: “That would be, I would imagine, one of the points that we’ll negotiate.”
But he added: “If they aren’t going to make a fair NAFTA deal, we’re just going to leave it this way.”
Republican leaders of the House Ways and Means Committee, meanwhile, circulated a letter opposing Trump’s tariff plan.
The administration says the tariffs are necessary to preserve the American industries — and that imposing them is a national security imperative.
But Mr Trump’s comments and tweets earlier in the day suggested he was also using them as leverage in the current talks to revise NAFTA. The latest round of a nearly yearlong renegotiation effort is concluding this week in Mexico City.
He tweeted: “Tariffs on Steel and Aluminum will only come off if new & fair NAFTA agreement is signed. Also, Canada must treat our farmers much better. Highly restrictive. Mexico must do much more on stopping drugs from pouring into the U.S.”
In the meantime, Mr Trump’s tariff plan has been branded “absolutely unacceptable” by Canadian Prime Minister Justin Trudeau.
Jean-Claude Juncker, president of the European Commission, has said the European Union could respond by taxing American goods including bourbon, blue jeans and Harley Davidson motorcycles.
The tariffs will be made official in the next two weeks, White House officials said Monday, as the administration defended the protectionist decision from critics in Washington and overseas.
Speaking on Fox and Friends, White House trade adviser Peter Navarro said: “25% on steel, and the 10% on aluminium, no country exclusions — firm line in the sand.”
Mr Trump’s pronouncement last week that he would impose the tariffs roiled markets and rankled allies.
The across-the-board action would break with the recommendation of the Pentagon, which pushed for more targeted tariffs on metals imports from countries like China and warned that a wide-ranging move would jeopardise national security partnerships.
But Commerce Secretary Wilbur Ross, whose agency oversaw reviews of the industries that recommended the tariffs, said on ABC’s This Week Mr Trump was “talking about a fairly broad brush”.
Republican South Carolina Senator Lindsey Graham said the sweeping action would let China “off the hook”, adding the tariffs would drive a wedge between the US and its allies.
“China wins when we fight with Europe,” he said on CBS’s Face the Nation, adding “China wins when the American consumer has higher prices because of tariffs that don’t affect Chinese behaviour.”
Mr Trump has threatened to tax European cars if the EU boosts tariffs on American products in response to the president’s plan to increase duties on steel and aluminium.
Prime Minister Theresa May raised her “deep concern” at the tariff announcement in a phone call with Trump on Sunday.
Mrs May’s office says she noted that multilateral action was the only way to resolve the problem of global overcapacity.”
But Mr Ross rejected threats of retaliation from American allies as “pretty trivial” and not much more than a “rounding error.”
And Mr Navarro argued “there are virtually no costs here”, saying: “If you put a 10% tariff on aluminium, it’s a cent and a half on a six pack of beer and it’s $25,000 on a $330 million (Boeing 777).”
Trade politics often cut along regional, rather than ideological, lines, as politicians reflect the interests of the hometown industries and workers. But rarely does a debate open so wide a rift between a president and his party — leaving him almost exclusively with support from his ideological opposites.
Labour unions and liberal Democrats are in the unusual position of applauding Trump’s approach on grounds it will bolster jobs in a depleted industry, while Republicans and an array of business groups are warning of dire economic and political consequences.
In the 2016 election, Trump’s criticism of trade agreements and China’s trade policies found support with working-class Americans whose wages had stagnated over the years.
Victories in big steel-producing states such as Ohio, Pennsylvania and Indiana demonstrated his tough trade talk had a receptive audience.