#1 – TRUMP GETS HIS TARIFFS
- This week’s edition will largely be dedicated to President Trump’s consequential decision to impose tariffs on foreign steel and aluminum of 25% and 10% respectively. First off we look at the announcement itself:
“Angry and Unglued” – Shortly after the announcement NBC News posted a story that cited several White House officials as saying that the announcement, which was the product of a chaotic internal White House process, was made after the President became “unglued” following unrelated developments related to Jared Kushner and Hope Hicks, among others.
#2 - NAVARRO DOES THE SUNDAY ROUNDS TO DEFEND THE DECISION
Regardless of what prompted the ultimate decision to announce the tariffs on Friday, the White House went into full defensive mode shortly after. That included sending Peter Navarro, a man whose stock is reportedly on the rise, out to do the Sunday shows. Here are the big takeaways from his interviews:
• The tariffs are going through legal review and should be signed by the end of this week.
• He says there will be “negligible to nothing effects” on U.S. buyers of foreign steel.
• He believes that Americans will be willing to pay any small costs passed on to the consumer.
• This is not a “China only” problem and the only effective tool is to target all foreign importers.
• “At this point in time there will be no country exclusions.”
• The U.S. will not be retaliated against because we are a large market.
The most contentious of the interviews may have been with Chris Wallace of Fox News. Watch that full clip here:
#3 - TRUMP’S TWITTER DEFENSE (AND SOME OFFENSE)
The President’s tweets over the weekend and into Monday were seen by many as fanning the trade war flames. Below are the three most talked about tweets and media reaction:
#4 – THE COMING RETALIATORY STORM
The threats of retaliatory action came swiftly. Most vocal were the EU, with Jean-Claud Junker,
President of the European Commission, outlining that they would likely hit bourbon, blue jeans, and Harley-Davidsons. Read the NY Times coverage of those threats HERE.
Canada simultaneously sought an exemption and threatened retaliation. Read more HERE.
Look for lists of products that will be hit by retaliatory tariffs to either leak this week or be released more officially after the tariffs are imposed. Those lists will be focused on ag products and products from places like Kentucky and Wisconsin in order to inflict political pain on Republican leadership.
#5 - THE REACTION FROM U.S. BUYERS OF STEEL
The list of industries that buy steel and aluminum angered by this decision is long and growing. On Friday, Vox put together a list of industries that will be impacted and many of their statements since the decision. Read that HERE.
A lobbying effort, both to push the President to undo the planned tariffs and to seek out exclusions for individual trading partners, has already kicked into high gear. Trade and business organizations are meeting right now to ramp up public and private efforts. Pay particular attention to efforts directed at Ag Secretary Sonny Purdue, who was has had success showing the President how aggressive trade actions hurt his political base.
#6 - CONGRESSIONAL REACTION
Paul Ryan's office is out with a statement today saying, in part:
“We are extremely worried about the consequences of a trade war and are urging the White House to not advance with this plan.”
The Hill’s reporting on the reaction from GOP member’s of Congress over the weekend dubbed it “fast, furious, and negative." Read more HERE.
The National Taxpayers Union has also been tracking reactions from the Hill and stakeholders. Read more HERE.
#7 – HOW THE DECISION IMPACTS NAFTA NEGOTIATIONS
The seventh round of NAFTA negotiations, which wrap up today, were overshadowed by the steel and aluminum news. Many negotiators reported that it was the first thing discussed in their meetings.
However, the slow progress on a variety of major outstanding issues during this round of talks, namely - labor, IP, Rules of Origin, and government procurement – is more a product of the U.S. not making counteroffers and or specific proposals on these controversial topics.
Look for the steel and aluminum tariff decision to throw a major monkey wrench into ongoing discussions on automotive rules of origin.
While ministers are set to meet this afternoon, most observers have noted a lack of progress on any controversial issues in the talks, and a single chapter closed (Good Regulatory Practices) is a sign of an unproductive round.
BONUS - NAFTA STORY WORTH READING:HOW THE DECISION IMPACTS NAFTA NEGOTIATIONS
It flew under the radar last week because of steel and aluminum, but this story on Senator Hatch saying that Congress could pass a veto-proof bill to prevent Trump from withdrawing from NAFTA is an important new development in the ongoing NAFTA drama.