Several GOP lawmakers expressed concern with Trump
administration “Section 232” tariffs against steel and aluminum during a Thursday
House Ways and Means Committee hearing on executive branch trade policy, where
Commerce Secretary Wilbur Ross testified as the sole witness.
Committee Chairman Kevin Brady, R-Texas, started the hearing
as the first committee member to speak critically about the 25 percent steel
and 10 percent aluminum tariffs that took effect at midnight Friday.
While he commended the administration’s commitments to
provide flexibilities in terms of country and product exclusions, Brady urged
the Commerce Department to allow “consolidation of petitions” for the latter
form of exclusions, as well as retroactive application to the date of petition
filings, and exclusion periods beyond the one year set forth in a Federal
Register notice (FRN) charting the process.
Brady also called for tariffs to remain in place for the “absolute
minimum period,” saying they should sunset after one year.
“Tariffs are taxes – plain and simple – on American job
creators and consumers,” Brady said in his written opening statement. “Their
scope and duration should never exceed what is needed to accomplish their goal.”
Ross said Commerce has already received 100-200 inquiries
since posting the FRN on Monday, adding that his department was processing them
as he spoke on Thursday.
While Commerce has set out a 90-day time frame to evaluate product
exclusion petitions, he said he is hopeful that it would take “a good deal
less.”
Exclusions will generally be made for specific products, but
Commerce has discretion for broader action as warranted by particular products
and circumstances, Ross said.
Rep. Sam Johnson, R-Texas, noted, “I strongly oppose these
tariffs,” as his state imports more steel and aluminum than any other state.
He also said Commerce seemed to ignore a memo submitted to
the department by Defense Secretary James Mattis stating that steel and
aluminum imports don’t currently threaten U.S. national security.
Ross responded that the threshold for Commerce’s determinations
under Section 232 of the Trade Expansion Act of 1962 of whether imports of
steel and aluminum threaten national security doesn’t necessarily center around
whether those imports are threatening national security right now, but also
extends to whether such imports could pose future threats.
Ross noted that the memo also stated Mattis’ concern that the
imports could erode U.S. defense industrial and manufacturing capabilities.
But Rep. Erik Paulsen, R-Minn., later in the hearing said
the memo did indicate the Defense Department was concerned about Commerce’s
approach.
“It says…‘DoD does not believe that the findings in the
reports impact the ability of DoD programs to acquire the steel or aluminum
necessary to meet national defense requirements,’” Paulsen said, also noting
his disagreement with President Trump’s decision to levy tariffs.
Paulsen said sparing U.S. companies of the tariffs through “grandfathering”
in their existing contracts with foreign steel and aluminum producers is “critical.”
He asked Ross whether Commerce had analyzed whether the
tariffs would impact downstream U.S. steel and aluminum businesses.
“Yes, we have,” Ross responded. “In fact, we handed out, I believe,
to each of the committee members, a series of charts showing the interaction
between steel prices and aluminum prices, historically, on auto production, on
recreational vehicles, on construction, on a whole variety of industries, and
we also have done our own analysis, and have studied analytical reports by
various other parties, and have come to the conclusion that there, in the
aggregate, will not be material damage inflicted.”
Ross added that the tariffs, not taking exclusions into
account, are expected to affect only 0.5 percent of the U.S. economy.
Commerce also announced on Thursday that tariffs on steel
and aluminum would be suspended until May 1 for Argentina, Australia, Brazil, Canada,
Mexico, the EU, and South Korea, “pending discussions of satisfactory long-term
alternative means to address the threatened impairment to U.S. national
security.”
Trump by that date will decide whether to continue to exempt
the countries, based on the status of discussions, and he retains “broad
authority” to remove the suspensions or to suspend additional countries that
might choose to enter discussions with the U.S., Commerce said.
In addition to the several lawmakers who provided stories of
specific companies in their districts that had expressed concern about the
tariffs, several farm state Republicans, including Reps. Kristi Noem, S.D., and
Lynn Jenkins, Kan., indicated anxiety that the trade remedies could spark
foreign actions against agriculture, the most commonly targeted sector in trade
retaliation.
Noem said several constituents voiced concern that Ross wasn’t
taking U.S. farmer concerns seriously in implementation of the tariffs, also
mentioning Trump’s global safeguard tariffs against washing machines announced
in January, and that South Dakota farmers are competing in a “devastating commodity
market,” raising questions about their businesses’ survival.
“We’re well aware of the potential problem,” Ross said. “It
is something we’re giving great consideration to….Pretty soon, some of those
questions will be answered.” He also told Noem that the administration was
planning to release more information on “Section 232” tariff flexibilities later
on Thursday. Commerce released a notice of additional tariff exclusion
information after the hearing.
Noem responded to Ross: “I’d encourage you to keep
agriculture in the forefront of your considerations, considering these are such
tough times.”