Trump signs new tariffs on steel and aluminum
(CNN) — Arizona Republican Sen. Jeff Flake has threatened to introduce legislation to nullify the President’s tariffs if they are anything like what Donald Trump is predicting.
“I’m going to — as soon as it comes out if it is anything approximating what he’s talked about — introduce legislation to nullify it. I’m assuming I won’t be the only one to do that,” the frequent Trump critic told reporters Thursday.
Flake, like many Republicans, has expressed deep concerns about Trump’s plans to issue new tariffs on aluminum and steel and says he’s ready to fight legislatively if needed.
Lawmakers have largely remained in the dark about the White House’s plans, but many senators said it’s a long shot at best to stop Trump. Even if Congress does act, it would likely need 67 votes to override an expected presidential veto in the Senate, a massive undertaking in a deeply divided body.
Sen. John Thune, a member of GOP leadership, described the potential for a successful legislative action a “double bank shot,” Wednesday when talking to reporters.
(CNN Money) — President Donald Trump’s steep tariffs on steel and aluminum imports are poised to become a reality.
For American companies that make metals, that’s welcome news. But for businesses that consume steel and aluminum, like automakers and beverage producers, it will likely mean higher prices. Many have warned that could cut into profits and ultimately spur layoffs.
Here’s a look at some of the US companies that may be hit by Trump’s latest protectionist move.
The aluminum used in beer cans is expected to get more expensive once the tariffs go into effect. Anheuser-Busch has warned that it could threaten manufacturing jobs in the industry.
The company employes more than 18,000 people in the United States.
Auto parts manufacturers
The Motor & Equipment Manufacturers Association, which represents companies that make vehicle parts in the United States, has said the tariffs will make cars more expensive and could put the many of the more than 800,000 jobs in its industry at risk.
The nation’s largest single exporter uses aluminum and some steel parts to make planes. Boeing could also suffer if other countries decide to retaliate against US tariffs by buying planes from competitors like Airbus. The company has more than 140,000 employees in the United States and around the world.
Making Caterpillar construction equipment could get more expensive if steel and aluminum prices rise.
The company employs more than 98,000 full-time workers around the world. About 42,000 are in the United States.
Campbell Soup Company
Commerce Secretary Wilbur Ross has said that there’s 2.6 cents worth of steel in a can of Campbell’s soup, and consumers can expect prices to rise less than one cent as a result of tariffs. Campbell’s responded that “any new broad-based tariffs on imported tin plate steel — an insufficient amount of which is produced in the U.S. — will result in higher prices on one of the safest and more affordable parts of the food supply.”
Campbell’s has about 18,000 employees.
Craft breweries, which have been a breakout success over the past few years, worry that future growth will be stunted if beer cans get more expensive due to higher aluminum prices. Oskar Blues, a Colorado-based brewery with operations in North Carolina and Texas, said tariffs would put “a strain on the business.”
An executive at the chemical company told Bloomberg that it might need to start building plants in Canada or Argentina if the cost of construction goes up too much in the United States.
DowDuPont has approximately 98,000 employees.
Ford uses steel and aluminum in car production. Ford said in a statement that the tariffs “could result in an increase in domestic commodity prices — harming the competitiveness of American manufacturers,” though it mostly uses American-made steel and aluminum in vehicles manufactured in the United States.
Ford has about 202,000 employees worldwide.
GE makes jet engines, power plant turbines, trains and other heavy machinery, all of which use steel and aluminum. Higher costs could inflict further damage on a company that already faces serious financial troubles.
GE has about 313,000 employees total. About 106,000 are in the United States.
GM cars contain steel and aluminum, though the company says that more than 90% of the steel it uses to make cars in the United States comes from American suppliers.
It has more than 180,000 workers around the world.
The maker of Coors Light and Miller Light has said that it makes an “increasing” number of beers in aluminum cans. Rising prices will “likely to lead to job losses across the beer industry,” the company said on Twitter.
The company has 17,200 employees globally, about 7,900 of which are in the United States.
Members of the oil industry have warned that Trump’s steel tariffs could derail the country’s energy boom by raising prices on foreign steel, which oil companies use in drilling and production, as well as in pipelines and refineries.
Canary LLC, a Denver-based oilfield services company that employs about 300 people, said higher costs could force it to lay off up to 17% of its US workers.
Whirlpool recently got a boost when Trump slapped tariffs on imported washing machines. Now it could get more expensive to make household appliances like dryers and refrigerators in the United States as metal costs rise.
Whirlpool has about 92,000 employees.
(CNN Money) — When his turn came to question Treasury Secretary Steven Mnuchin during a House Appropriations Committee hearing on Tuesday, Congressman David Young relayed a concern he’d just heard from a farmer in the hallway.
“He says, ‘There’s not a day on the farm when a farmer doesn’t touch steel,'” the Republican from Iowa told Mnuchin. “The agriculture industry is worried about these tariffs on aluminum and steel. How much do you know about the proposed tariffs?”
“I know a lot about the proposed tariffs,” Mnuchin answered. “And I can tell you the president loves farmers and the agricultural community.”
“It doesn’t seem so with some of the policies that are coming out,” Young shot back. “There’s great concern with folks in the heartland, and concern as well with retaliation and what that may mean to the economy.”
Mnuchin received a lot of criticism that day — even from members of his own party. While farm-state conservatives praised Trump’s tax cuts and regulatory rollbacks, they didn’t hold back when it came to their disapproval of a tariff tit-for-tat.
They have reason to be concerned. Historically, agricultural products take a hit when the US targets imports of industrial goods. Other countries have imposed countermeasures like tariffs on US goods and sometimes outright bans that have depressed sales.
The same thing may happen again if Trump carries through with his promise to impose tariffs of 25% on steel and 10% on aluminum.
In response to what it refers to as this “deeply unjust” plan, the European Union has said it is considering new tariffs on American products ranging from cranberries to peanut butter.
This is a familiar pattern. In 1995, for example, the US banned Mexican trucks from driving more than a short distance over the border, after it had agreed to let them do so under the North American Free Trade Agreement. In 2009, following a drawn-out protest, Mexico retaliated with hefty tariffs on scores of food items, from ketchup to frozen corn.
The US eventually lifted its ban on trucks in 2011, and Mexico dropped the tariffs. But the damage had been done: A study later found that the retaliation decreased sales of those products to Mexico by 22%, or nearly a billion dollars.
And already in the Trump administration, China has announced an investigation into American sorghum imports after the US imposed tariffs on Chinese washing machines and solar panels. The US sold nearly a billion dollars worth of the grain to China in 2017. Should China choose to impose duties on those exports, US farmers could be forced to cut prices in order to attract another buyer for their supply.
“This indicates to me a very real-world example that tariffs on those washing machines and solar panels led to retaliation, to the detriment of American farmers, constituents of the President and mine,” said Kevin Yoder, a Republican from Kansas, during Tuesday’s hearing with Mnuchin. “Is the president aware that these retaliatory tariffs are already occurring?”
Yoder’s home state of Kansas accounts for nearly half of US sorghum production.
Why do American farmers so often get tangled up in trade wars? For one thing, they already have access to many world markets. In places where the US has negotiated trade agreements, they face low or no tariffs. US farmers have also been prodigious exporters: While the US runs a $566 billion trade deficit with the rest of the world overall, it has a trade surplus of $21 billion in agriculture.
With so much going their way, farmers don’t want to upset the international trade apple cart.
“There’s nothing to win,” said Daniel Sumner, an agricultural economics professor at University of California, Davis. “There’s only stuff to lose.”
The US’ trading partners know that farm products are a good way to squeeze a politically powerful constituency, particularly for Republicans. To wield influence, countries may target US products they can get elsewhere, like wine from Chile or soybeans from Brazil.
“We want to get your attention so you’ll change your policy,” Sumner said of countries that want the administration to abandon the steel and aluminum tariffs. “So you’ve got to get an industry that will be hurt enough to talk to their representatives.”
Agricultural margins have already been shrinking over the years. Global commodity prices have sagged and the US’ longstanding subsidy and insurance programs for certain crops have become less generous.
A new threat came from President Trump’s opposition to the North American Free Trade Agreement. The trade deal may have hurt some US manufacturers, but it was a boon to the agriculture sector, which has become highly mechanized and is therefore less dependent on cheap labor than products like cars, for example.
Two separate lobbying groups, Americans for Farmers & Families and Farmers for Free Trade, which is co-chaired by retired senators Dick Lugar and Max Baucus, have formed in the past few months to advocate for preserving NAFTA.
“Farm country is Trump country,” said Matt McAlvanah, a former spokesman for the US Trade Representative in the Obama administration who now represents Farmers for Free Trade. “Our engagement is more important than ever right now.”
To head off the damaging tariffs, the groups have been seeking the support of lawmakers who aren’t from farm states, and working with governors like Arkansas’ Asa Hutchinson to declare Agricultural Trade Awareness days.
It may be working: After initially declaring that the tariffs would apply to all countries, the White House is now saying Canada and Mexico could be exempt if a new NAFTA deal is reached.
Meanwhile, American farmers are losing out in a more subtle way. The Asian and South American countries that were part of the Trans-Pacific Partnership trade deal before Trump pulled out of it are about to sign the pact without the US. That will create more favorable treatment for agricultural products like potatoes within the bloc, according to the USDA, disadvantaging US growers.
Although none of this has happened yet, Sumner said that the uncertainty chills investment in crops that take a long time to bear fruit.
“If I plant a walnut orchard, I’m looking to the next two to three decades,” Sumner said. “If it’s a crop that depends on exports, and you disrupt the potential for exports, that’s a problem.”
(CNN Money) — President Trump is going one way on trade. The world is going very hard in the other direction.
Trump imposed tariffs on steel and aluminum Thursday only a couple hours after 11 nations signed the Trans-Pacific Partnership, a sweeping trade agreement that was once thought to be dead after Trump withdrew the United States from talks.
Leaders from Mexico, Canada, Japan and other nations officially signed TPP on Thursday at a ceremony in Santiago, Chile.
TPP’s revival stands — and its very nature as a multi-country trade pact — defies Trump’s trade views. His administration has sought one-on-one trade pacts, initiated dozens of trade investigations and started to renegotiate existing deals.
In January 2017, Trump withdrew the United States from TPP discussions before it became law, arguing that it was an unfair deal for the country. At the time, some leaders, such as Japanese Prime Minister Shinzo Abe, declared TPP “meaningless.” But eventually, world leaders revived the agreement that encapsulates 14% of the global economy.
The TPP countries are Australia, Brunei, Chile, New Zealand, Peru, Singapore, Vietnam, Japan, Malaysia, Canada and Mexico.
Some of these countries — particularly Japan, Mexico and Canada — may get entangled in a tit-for-tat trade war with the Trump administration. It imposed a 25% tariff on steel and a 10% tariff on aluminum from all countries except Canada and Mexico. Despite their exemptions, Trump has hinted they may be subject to the tariffs if there isn’t major progress in the renegotiation of NAFTA, the three-nation trade pact. So far, Mexico, Canada and the United States have made little progress after seven months of negotiations.
Japan accounts for 5% of US steel imports, double the share from China, the world’s largest steel producer. Although there is widespread agreement that China has produced and exported too much steel worldwide, other nations and even Republican leaders on Capitol Hill asked Trump not to impose the tariffs, fearing it would risk retaliation.
Trump said the tariffs would take effect in 15 days.