Trump's tariff proposal divides tire industry, government leaders

WASHINGTON — President Donald Trump's promise to levy elevated tariffs against all imported steel and aluminum has elicited starkly different responses from various sectors.

The steel industry and the United Steelworkers union (USW) are enthusiastic about the prospect of tariffs, while organizations such as the U.S. Tire Manufacturers Association (USTMA), the Association of International Automobile Dealers Association (AIADA) and the Aluminum Association have condemned the tariffs as harmful to both manufacturers and consumers dependent on products made from steel and aluminum.

President Trump announced March 1 his intention to impose import tariffs on steel and aluminum of 25 and 10 percent, respectively.

The U.S. tire industry, especially, could be harmed by the elevated tariffs because the grade of steel needed by producers of tire wire is not produced in the U.S., the USTMA has pointed out repeatedly since Commerce announced in early 2017 it was investigating steel imports.

Republican members of Congress also have expressed opposition to the planned tariffs. House Speaker Paul Ryan, R-Wis., has met with Mr. Trump, trying to dissuade him from an action that might cause a backlash in an election year.

House Ways and Means Committee Chairman Kevin Brady, R-Texas, who also met with President Trump since his March 1 announcement, reportedly asked him to take a narrower approach to tariffs, targeting countries such as China rather than Canada and the European Union.

"I applaud the president for targeting unfairly traded steel and aluminum," Mr. Brady was quoted as saying on the Ways and Means website. "But unlike the tariffs that also sweep up fairly traded steel and aluminum, especially with trading partners like Canada and Mexico, they should be excluded from this tariff."

Gary Cohn, director of the National Economic Council and chief economic adviser to the president, announced his resignation March 6 because of his sharp disagreement with Mr. Trump over tariffs.

Mr. Trump announced the tariffs under Section 232 of the Trade Expansion Act of 1962, which allows the president to impose trade restrictions on any import that may threaten national security.

"We're going to build our steel industry back and we're going to build our aluminum industry back," Mr. Trump said during a March 1 "listening session" with representatives of the U.S. steel and aluminum industry, the minutes of which were posted on the White House website.

David Burritt, president and CEO of United States Steel Corp., hailed the president's decision at the same listening session.

"Having been somebody that has global views and believes in free trade, we know when it's completely unfair." Mr. Burritt said. "We are not protectionists. We want a level playing field. It's for our employees; to support our customers."

Scott Paul, president of the Alliance for American Manufacturing (AAM), said the deleterious effects ascribed to steel tariffs — such as skyrocketing costs for companies that use steel and a possible depressions — are myths.

"The chattering class has been itching to assign a trade war to President Trump since he took office," Mr. Paul said. "But the steel tariffs aren't it."

In a March 3 statement, USW International President Leo W. Gerard also praised Trump's action, especially as related to China.

"American aluminum and steel manufacturers and their workers have railed for decades against the trade regulations scofflaws that bankrupted U.S. mills and destroyed U.S. jobs," Mr. Gerard said.

"China has conducted a trade war against the United States since the day in 2001 that the World Trade Organization granted the Asian giant membership," he said.

However, Mr. Gerard also said the tariff plan needed to be fine-tuned to exempt Canada.

"Canada is not the problem," Mr. Gerard said. "The United States and Canada have integrated manufacturing markets and our union represents trade-impacted workers in both nations. In addition, the defense and intelligence relationship between the countries is unique and integral to our security.

"Any solution must exempt Canadian production," Mr. Gerard said. "At the same time, Canada must commit to robust enforcement and enhance its cooperation to address global overcapacity in steel and aluminum."

The Aluminum Associaton said the proposed tariffs "will do little to address the fundamental problem of massive aluminum overcapacity in China, while impacting supply chains with vital trading partners who play by the rules,

"We fear that the proposed tariff may do more harm than good, hurting rather than helping the 97 percent of aluminum industry jobs in mid-and-downstream production processes."

The USTMA has opposed a sweeping tariff against imported steel since the U.S. Department of Commerce began the Section 232 investigation last year. The tire-grade steel that tire makers need is simply not manufactured in the U.S., the USTMA has reiterated at Section 232 hearings.

Two weeks before Mr. Trump announced the tariffs, Commerce issued a report recommending elevated tariffs on both steel and aluminum.

"We are concerned that the Department of Commerce's recommendations may have unintended consequences for domestic tire manufacturers and the workers and industries they support," USTMA President and CEO Anne Forristall Luke said at the time the agency released its recommendations.

"High-quality steel is critical for tire production," Ms. Luke said. "Domestic steel mills use a production process that is unable to produce the steel necessary to make tires."

The AIADA said that since steel and aluminum are so integral to auto manufacturing, the tariffs would raise new car prices substantially.

"In addition to paying more for their vehicles, American consumers and workers can also expect to bear the brunt of the retaliatory tariffs other countries will almost certainly place on goods manufactured and exported from the United States," the association said.

The Trade Partnership, an international trade and economic consulting firm, released a report saying the proposed steel and aluminum tariffs will cost the U.S. some 146,000 jobs, including more than 5,000 in motor vehicles and parts and more than 1,200 in rubber, plastics and chemicals.

"While employment increases in sectors making steel and aluminum, it declines in every other sector of the U.S. economy," the report said. "More than five jobs would be lost for every one gained."

The American Wire Producers Association (AWPA) was one of 15 manufacturing associations that signed a Feb. 12 letter to Mr. Trump, stating that steel and aluminum tariffs would have a harmful effect on the more than 1 million jobs their members represent.

"Our member companies source the majority of their steel requirements from the domestic steel industry, but we also require continuing access to global supply chains," the letter said. "This is necessary as there are many types of steel products that are simply not available from domestic steel mills."

There was no immediate word on when Mr. Trump would issue an official order on steel and aluminum tariffs. Meanwhile, the president said March 5 that he might consider canceling the tariffs if the North American Free Trade Agreement is renegotiated in a way he finds favorable to the U.S.