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VOL. 42 | NO. 24 | Friday, June 15, 2018

Lawmakers rip tariffs enacted in name of national security

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WASHINGTON (AP) — Pointing to damage done to home-state companies, lawmakers from both parties Wednesday criticized tariffs the Trump administration has imposed on imported steel and aluminum products in the name of national security.

The Trump administration has turned to a little-used weapon in trade policy: Section 232 of the Trade Expansion Act of 1962. It empowers the president to impose unlimited tariffs if the Commerce Department finds that imports threaten national security. Trump imposed the tariffs in March, exempting several allies with a reprieve that expired in May. Trading partners have responded by slapping tariffs on a wide range of U.S.-made products.

Republican Sen. Orrin Hatch of Utah, chairman of the Senate Finance Committee, said rising steel costs since the imposition of the tariffs have made it harder for a Salt Lake City company to win contracts for custom industrial equipment, while pork farmers in his state are facing retaliatory tariffs from their two biggest markets, Mexico and China.

"I just don't see how the damage posed on all of these sectors could possibly advance our national security," Hatch said.

Democrats shared similar stories. Sen. Maria Cantwell, D-Wash., said apple and cherry producers in her state are getting hurt. Sen. Claire McCaskill, D-Mo., said a steel nail manufacturer in her state, the largest such enterprise in the country, has lost almost half of its business. The company will sell fewer than 4,000 tons of steel nails in July, versus 9,000 tons previously, she said.

"The customers can easily source nails manufactured in other countries," McCaskill said, adding that the company is worried about being out of business by Labor Day.

Commerce Secretary Wilbur Ross defended the tariffs as necessary to revive America's steel and aluminum industries. He said the tariffs will reduce imports to levels needed for the steel and aluminum industries in the U.S. to achieve long-term viability.

Because of the tariffs, Ross says steel and aluminum producers are already restarting idled factories in Illinois, Ohio, South Carolina, Missouri and Kentucky.

In addition to the steel and aluminum tariffs, Trump has ordered 25 percent tariffs on $50 billion in Chinese goods in retaliation for Beijing's forced transfer of U.S. technology and for intellectual property theft. Those tariffs, set to start taking effect July 6, have been matched by China's threat to penalize U.S. exports. Trump has proposed imposing duties on up to $400 billion more if China doesn't further open its markets to U.S. companies and reduce its trade surplus with the United States. China, in turn, says it will retaliate.

Ross said that applying pressure is the only way the U.S. can get China and other countries to curb "untoward practices" on trade, particularly when it comes to technology companies.

"The purpose of this is to get an end-game that's much closer to free trade than anything the world has seen before," Ross said.

Lawmakers were also critical of how the Commerce Department is handling exemptions that U.S. companies can seek from steel and aluminum tariffs. The department expected about 4,500 requests for exemptions — and got more than 20,000. The process has bogged down under the volume and confusion over how to apply for the exemptions.

"We have made some major progress in reforming and improving the process," Ross said. He promised to speed things up.

Lawmakers were skeptical. Democratic Sen. Ron Wyden, D-Ore., said the administration's most obvious accomplishment so far has been to unite "our allies and China against us."

When asked if the U.S. was in a trade war, Ross replied: "As the president has often said, we've been at a trade war forever. The difference is that, now our troops are coming to the ramparts."