Green Worldwide Shipping is the presenting sponsor of Global Atlanta's Trade Channel. Sign up here for monthly global trade updates.
President Donald Trump announced new tariffs on imports of steel and aluminum Thursday, continuing a tough stance on trade despite pleas from many within his own party, including from Georgia’s two Republican senators.
Mr. Trump slapped 25 percent duties on steel and 10 percent on aluminum, using a 1962 law that allows the president to tax imports to protect national security.
Supporters praised the move as necessary to bring back industries decimated by foreign competition. Flanked by steel workers during a White House briefing, Mr. Trump said the U.S. would no longer “betray” its own workers.
Critics say the move is short-sighted and risks touching off a global trade war while harming other sectors like the auto industry — now a Georgia mainstay — which will see the cost of inputs rise.
Canada and Mexico were exempted from the tariffs for now, but that could change if NAFTA talks go south, Mr. Trump said.
“We’re going to hold off on tariffs for those two countries to see whether or not we’re going to make the deal on NAFTA,” the president said.
Other countries have 15 days before the tariffs go into effect to plead their cases for exemption with the office of the U.S. Trade Representative.
“America will remain open to modifying or removing the tariffs for individual nations as long as we can agree on a way to ensure that their products no longer threaten our security,” Mr. Trump said just before signing the order.
Mr. Trump hinted that exemptions for allies like Germany, South Korea and Japan — all major steel producers and home to auto makers with factories in the South — could hinge on their flexibility on military and security cooperation and funding.
Up until today, Mr. Trump had maintained that the tariffs would apply equally to all countries, but his shift U.S. Sen. David Perdue right. The Georgia Republican, widely considered to be one of the closest legislative allies of the president, had predicted Mr. Trump would take a more pragmatic approach.
“I think his instincts are right, and I think you’ll see a more targeted approach as we get into the details of this,” Mr. Perdue said Wednesday on CNBC.
Sen. Johnny Isakson was more blunt about the potential harm to a globally integrated Georgia economy, calling the tariffs a headwind to the manufacturing recovery and a “new tax on American consumers.”
But he also argued hinted that he’d be more supportive if Mr. Trump backed away from a blanket tax on all countries.
“It is my hope that the administration will work to address unfair trade policies and overcapacity by certain global actors that have plagued these industries, but with a targeted approach that does not harm American workers and consumers,” Mr. Isakson said in a statement March 1.
Atlanta-based aluminum giant Novelis (owned by Indian conglomerate the Birla Group) didn’t disagree with the premise that protecting the U.S. industry was vital to national security.
But the company praised the Canadian exemption while saying more needs to be done to address the real culprit: China.
“Novelis believes in free trade, and while we support the decision to exempt Canada from tariffs due to the vital connection between the Canadian and U.S. aluminum industries, we do not believe broad aluminum tariffs on imports address the core problem of aluminum overcapacity in China,” the company said in a statement emailed to Global Atlanta.
Ambassador Charles Shapiro, former U.S. envoy to Venezuela and current president of the World Affairs Council of Atlanta, warned Tuesday of a tit-for-tat response from U.S. trade partners.
Everything Mr. Shapiro needed to know about trade relationships he learned on the playground of E. Rivers Elementary School, the Atlanta native said in a speech to the Kiwanis Club of Atlanta.
“If you push somebody, they will push you back,” he said during his luncheon address. “If you trip somebody, they will trip you. And if you raise tariffs they will raise tariffs on you.”
Mr. Trump’s tariff order came the same day 11 countries signed a revised version of the Trans-Pacific Partnership in Santiago, Chile. The U.S. had pushed for the pact covering 40 percent of the global economy, but Mr. Trump bowed out of it on his first day in office.
That said, Mr. Trump could have other priorities on his mind, Mr. Shapiro said.
‘I wouldn’t be surprised if this decision has more to do with domestic U.S. politics than it does with the realities of international trade.”