Trump Hails Steel Tariffs in Defiance of GOP Request to End Them

(Bloomberg) -- Republican senators said they warned President Donald Trump Thursday against imposing tariffs on auto imports and discussed alternatives that would achieve the White House's goals.

Trump followed with a tweet celebrating his current steel tariffs.

More than perhaps any other issue, trade is where Trump has broken with Republican free-market orthodoxy. GOP Senators used a Thursday meeting at the White House to voice their economic and political concerns with Trump's steel and aluminum tariffs, the ongoing trade conflict with China and new tariffs the president has threatened to impose on auto imports.

The Republican senators, led by Finance Committee Chairman Chuck Grassley of Iowa, said they emphasized the urgency of approving Trump's new North American trade deal, known as the USMCA, as well as the importance of removing existing tariffs and avoiding new ones. Grassley said he “urged President Trump to work with us get past the steel and aluminum tariffs issue so USMCA can become law.”

The appeal appears to have had little success, as Trump followed the meeting with a Twitter post declaring that “Tariffs are working” for Pennsylvania, one of the swing states that helped lead him to electoral victory in 2016.

The Trump administration has studied auto tariffs, using the same national security justifications cited for the steel and aluminum tariffs. A spokeswoman for Senator Johnny Isakson of Georgia, said he warned Trump “that moving forward with tariffs on foreign automobiles will hurt the American economy, and Georgia companies will be forced to decrease capacity and delay planned expansion if tariffs are imposed.”

Harmful Tariffs

“It was a productive meeting where ideas were discussed on ways to accomplish the administration's goals without imposing harmful tariffs that will hamper the U.S. economy,” the spokeswoman added.

Trump in February received the findings of an investigation by the U.S. Commerce Department into whether there was a national security threat from auto imports, which could lead to tariffs on imported cars and their parts.

Trump has until May 18 to decide whether to act on any of the recommendations in the report, or he can delay a decision. The president has threatened to slap a 25 percent duty on cars coming from the European Union, though last year he agreed to delay that action while the two sides negotiated.

Trump administration officials at the meeting on Thursday included U.S. Trade Representative Robert Lighthizer, White House economic adviser Larry Kudlow, trade adviser Peter Navarro and Commerce Secretary Wilbur Ross.

The U.S.-Mexico-Canada Agreement that Trump negotiated as a replacement for the North American Free Trade Agreement has yet to be approved by lawmakers in all three countries.

Earlier: Independent Report Finds Trump's New Nafta Would Hit Auto Sector

With time running out before the American presidential election next year and elections in Canada this fall, Grassley and other Republicans have been pushing the White House to remove remaining obstacles, including metals tariffs and other changes that House Democrats have demanded, before the deal can be considered for a vote.

Grassley's most pointed attack yet came in a Wall Street Journal op-ed earlier this week, where he told Trump his new trade deal is dead if he decides not to lift the metals tariffs.

He said his intention was to underscore that point with the president and his advisers.

“It's the same message I have been giving to the White House: Auto tariffs are bad and if you are going to get any sort of Mexican trade agreement, the tariffs have to go off,” Grassley said before the meeting.

“The president says it's a good agreement. If it's a good agreement, why wouldn't the president want to pass it? If we don't pass it we aren't going to have credibility for any other negotiation.”

To contact the reporters on this story: Jenny Leonard in Washington at jleonard67@bloomberg.net;Erik Wasson in Washington at ewasson@bloomberg.net

To contact the editors responsible for this story: Brendan Murray at brmurray@bloomberg.net, Anna Edgerton, John Harney

©2019 Bloomberg L.P.