Economy & Business

Trump Signs Tariff Proclamation, Extends Carve-Outs to Mexico and Canada

(Leah Millis/Reuters)
The president left open the possibility of extending exemptions to other allies.

Surrounded by steel workers in the White House Roosevelt room Thursday afternoon, President Donald Trump signed a proclamation imposing a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports.

The proclamation provides exemptions for Canada and Mexico, contingent on their cooperation in ongoing NAFTA negotiations, and Trump said Thursday that other countries could negotiate their own exemptions in exchange for reciprocal trade concessions and, in certain cases, increased contributions to NATO.

The White House sidestepped congressional oversight in ordering the tariffs, which are set to take effect in 15 days, by appealing to Section 232 of the 1962 Trade Expansion Act, which empowers the president to unilaterally impose tariffs on imports that affect national security.

“Today I’m defending America’s national security by placing tariffs on foreign imports of steel and aluminum,” Trump said during the televised signing ceremony, before extolling the benefits of the measure for American workers, who he insisted were “betrayed” by previous administrations.

The emphasis on national security — Trump invoked the term numerous times during his speech — has prompted speculation that the administration is angling to avoid World Trade Organization sanctions, which punish members for implementing tariffs for reasons other than national security.

After initially ruling out broad exemptions last week, Trump appeared to leave open the possibility of exempting key trading partners besides Mexico and Canada, promising “great flexibility” in a Thursday morning tweet and telling reporters he reserved the right “to go up or down, depending on the country,” during a televised cabinet meeting Thursday afternoon.

Mexican economy minister Ildefonso Guajardo rejected Trump’s attempt to leverage tariffs in ongoing NAFTA negotiations. “Under no circumstance will we be subject to any type of pressure,” Guajardo told Reuters Thursday. Canadian officials echoed that sentiment.

Trump’s return to the protectionist policies he advocated on the campaign trail has drawn condemnation from Republican congressional leaders and senior administration officials alike. In a statement released Monday, House speaker Paul Ryan’s office said he was “extremely worried” about the impending tariffs, and Ryan has subsequently urged Trump to make them “more targeted” to prevent “collateral damage.”

Senate majority leader Mitch McConnell (R., Ky.) joined Ryan in voicing skepticism regarding the tariffs, warning the move “could send the economy in the wrong direction.” “There is a lot of concern among Republican senators that this could sort of metastasize into a larger trade war,” McConnell said during a press conference Tuesday.

In addition to the tariffs, the Trump administration has requested that China draw up a plan to reduce the annual U.S.–China trade deficit by $100 billion.