Trump Signs Steel and Aluminum Tariffs That Texas Republicans Fear Could Harm Consumers, Economy

WASHINGTON -- In signing off on steep steel and aluminum tariffs, President Donald Trump could be striking deep at the heart of Texas.He formalized on Thursday new import levies of 25 percent on steel and 10 percent on aluminum -- saying the U.S. has "not been treated fairly by other countries" -- in spite of concerns from Texas GOPers and business leaders that it would harm consumers and the economy at large."A strong steel and aluminum industry is vital to our national security," the Republican said, flanked by steelworkers at a White House signing ceremony. "Steel is steel. You don't have steel, you don't have a country."The worry in Texas may be tempered by Trump's decision to allow initial exemptions for Canada and Mexico and perhaps other U.S. allies down the road. The White House has also downplayed any possible negative effects from the tariffs as "fake news."But the Lone Star State remains in a precarious spot, particularly amid continued fears of rising costs and a potential trade war.Texas leads all other states in the amount of steel and aluminum that it imports. A much greater share of Texans work in the energy sector and other industries that rely upon steel and aluminum than in those that actually produce the metals.And the state's globalized economy -- which has deep ties, for instance, to the North American Free Trade Agreement -- could be susceptible to any retaliation from abroad."I hope he's right and I'm wrong. But my read of history is that I don't know any winners in a trade war," Rep. Jeb Hensarling, R-Dallas, said Thursday on Bloomberg TV. "Trade is not a zero-sum game."The tariff action delivers on a top campaign promise for Trump, whose populist message connected with voters in Rust Belt states like Pennsylvania, Ohio and Wisconsin.The president has long complained that the U.S. in getting fleeced in trade by friends and foes alike. He's taken special interest in the beleaguered steel industry, writing on Twitter recently that "to protect our country we must protect American steel."China is the main offender.The country doesn't actually export all that much of the metals to America, thanks in part to other trade actions taken by the U.S. But China has created a worldwide glut, pushing down prices across the globe and putting additional pressure on American manufacturers.So the action is welcome news to the U.S. steel and aluminum industries, which have already announced plans to reopen plants and hire more workers thanks to the trade action."We hope the era of American trade surrender is coming to an end," said Scott Paul, president of the Alliance for American Manufacturing.The import levies, which have divided Trump's Cabinet, are slated to go into effect in 15 days.The measure will also include some flexibility. Canada and Mexico will be initially excluded as they continue to engage the U.S. in NAFTA renegotiation talks. Other countries will have an opportunity to make their case for similar concessions."I'll have a right to go up or down depending on the country and I'll have a right to drop out countries or add countries," Trump said.That shift came after extensive lobbying from top Republicans, the business community and others worried about the prospect of a trade war.The European Union has already lined up American-made goods it would penalize in response to the new tariffs, even as Trump has boasted that "trade wars are good" and "easy to win." Other countries, including other U.S. allies, have made clear that they would follow suit.That tit for tat would be certain to hit Texas, the nation's export leader. And Texas Republicans helped lead the campaign to dissuade Trump."As an ardent free trader, I firmly believe that we must minimize unintended negative consequences on American businesses, consumers, and our economy no matter our intentions," said Rep. Pete Sessions, R-Dallas.At the forefront has been Rep. Kevin Brady, a Republican from The Woodlands who leads the House Ways and Means Committee. He organized more than 100 Republicans -- nearly 20 from Texas -- to write the president this week with "deep concern" about "broad, global tariffs.""Tariffs are taxes that make U.S. businesses less competitive and U.S. consumers poorer," the letter said.Those dynamics could be quite real in Texas, even if looking just at steel and aluminum.The state last year accounted for more than $8.3 billion in steel and aluminum imports, according to a Brookings Institution analysis of U.S. Census Bureau data. That tally, while a relatively small slice of Texas' overall imports, is more than double the amount seen in any other state.Nearly half a million Texans work in industries that use steel and aluminum, according to U.S. Bureau of Labor Statistics data compiled by MarketWatch. That compares to just 7,600 Texans who are directly employed in the production of those two metals.Hensarling, for one, said he's already heard concerns from two steel-reliant businesses in his district, one that makes shelving and another that constructs small buildings."They both tell me, 'This is going to hurt our business. It's going to send our prices up. We're going to lose customers. We're going to lose jobs," the Dallas Republican said this week on Fox Business Network, describing the two outfits as "major employers."The White House and tariff proponents have dismissed concerns about the levies jacking up prices, whether it's for beer or automobiles or any other good that uses steel or aluminum.But Toyota Motor Corp., whose North American headquarters are in Plano, has told Reuters that the tariffs would increase the price of cars and trucks. And some businesses don't always have a ton of choice in picking what kind of steel and aluminum to use -- and from where.Greg Armstrong, chief executive of Houston-based Plains All-American Pipeline, said this week that his company has $1.5 billion in projects underway that "use quite a bit of steel." That steel involves specialty valves and other components that aren't even made in the U.S, he said."We'll survive no matter what," he said, speaking at the CERAWeek energy conference in Houston. "But it's a thornier issue that what's printed in the headlines."  Continue reading...

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