WASHINGTON, U.S. - Stunning the nation’s allies and some within his own party, the U.S. President Donald Trump signed an order on Thursday, imposing sweeping new tariffs on imported steel and aluminum, but with a more flexible plan.
After days of protests from overseas and some opposition within his own party, Trump agreed to exempt Canada and Mexico, America’s closest allies from the tariffs.
Trump tied the exclusions to renegotiation of the North American Free Trade Agreement.
He also dangled the possibility of excluding other allies sometime later, singling out Australia and citing the trade surplus that the U.S. maintains with Australia, which imports more from America than it exports to the country.
The order signed by Trump is set to go into effect in 15 days and is set to hit South Korea, China, Japan, Germany, Turkey and Brazil.
The order comes at a time when several foreign leaders have warned that Trump’s trade war-type behaviour could escalate to other industries and could be aimed at American goods.
However, defying all criticism and threats, Trump held a ceremony at the White House, officially authorizing the tariffs.
He said, “The actions we are taking today are not a matter of choice, they are a matter of necessity for our security. We’ve been treated so badly over the years by other countries.”
He added that the measures were taken to address “a growing crisis in our steel and aluminum production that threatens the security of our nation and also is bad for us economically and with jobs.”
After a week of lobbying, several internal debates, and after losing his top economic adviser - Trump finally signed the order - a move that represents his most expansive use of federal power to rewrite the rules of global trade since he took office.
At the cost of plunging his economic team in disarray and provoking other global trade partners, Trump, with the move, has managed to upend the prevailing consensus on free markets that has largely governed Washington under administrations of both parties for decades.
Trump has argued that America has been ravaged by unfair trading partners, particularly in fading sectors like steel and aluminum and now, his sweeping new orders will raise levies on foreign steel by 25 percent and on imported aluminum by 10 percent.
When Trump first announced the tariff proposal, business groups had warned that the impact of such tariffs could be felt across the supply chain.
However, Trump’s aides have dismissed such predictions as overwrought and have insisted that most Americans will hardly notice any impact.
Earlier on Thursday, hours before signing the order, Trump hosted a morning cabinet meeting and declared, “We’re going to be very flexible. At the same time, we have some friends and some enemies where we have been tremendously taken advantage of over the years.”
The President added that his tariff order would be tailored to exclude some countries and would give him the authority to raise or lower levies on a country-by-country basis.
He said that the flexibility would give him the power to add or take countries off the list as he deems fit.
At the cabinet meeting, Trump also poked his chief economic adviser, Gary Cohn, who announced his resignation on Tuesday, after his failure to forestall the president from pursuing tariffs.
Trump first thanked Cohn for his service after which he needled about his decision to leave.
Trump said, “He may be a globalist, but I still like him. He’s seriously a globalist. There’s no question. You know what? In his own way he’s a nationalist, because he loves his country.”
The President even suggested that Cohn might eventually return to the administration.
Adding teasingly, “I have a feeling you’ll be back. I don’t know if I can put him in the same position though. He’s not quite as strong on those tariffs as we want.”
Trump’s order on Thursday also came a day after over 100 Republican lawmakers sent him a letter, imploring him to drop plans for sweeping tariffs.
They warned that the move would potentially prompt retaliation and a wider trade war with other countries.
The Republican lawmakers said in their letter, “We urge you to reconsider the idea of broad tariffs to avoid unintended negative consequences.”