PRESIDENT TRUMP THIS WEEK ANNOUNCED HIS PROTECTIONIST
PLANS FOR STEEL TARIFFS.
- TODAY I'M DEFENDING AMERICA'S NATIONAL SECURITY BY PLACING
TARIFFS ON FOREIGN IMPORTS OF STEEL AND ALUMINUM.
WE WILL HAVE A 25% TARIFF ON FOREIGN STEEL AND A 10% TARIFF
ON FOREIGN ALUMINUM.
WHEN THE PRODUCT COMES ACROSS OUR BORDERS.
AT THE SAME TIME, DUE TO THE UNIQUE NATURE OF OUR
RELATIONSHIP WITH CANADA AND MEXICO, WE'RE NEGOTIATING RIGHT
NOW NAFTA.
AND WE'RE GOING TO HOLD OFF THE TARIFF ON THOSE TWO COUNTRIES TO
SEE WHETHER OR NOT WE'RE ABLE TO MAKE THE DEAL ON NAFTA.
- SPEAKER PAUL RYAN OPPOSES THE PRESIDENT'S TARIFFS, SAYING,
QUOTE, I DISAGREE WITH THIS ACTION AND FEAR ITS UNINTENDED
CONSEQUENCES.
THE BETTER APPROACH, HE SAYS, IS TARGETED ENFORCEMENT AGAINST
THOSE PRACTICES.
OUR ECONOMY AND NATIONAL SECURITY ARE STRENGTHENED BY
FOSTERING FREE TRADE WITH OUR ALLIES AND PROMOTING THE RULE OF
LAW.
DEMOCRATIC U.S. SENATOR TAMMY BALDWIN SAYS THIS.
QUOTE, I BELIEVE THE BEST WAY TO SUPPORT WISCONSIN WORKERS IS TO
PUT IN PLACE STRONG BUY AMERICAN STANDARDS, RENEGOTIATE A BETTER
DEAL ON NAFTA AND TAKE ON CHINA CHEATING.
I ALSO WANT AN EXEMPTION FOR OUR EUROPEAN TRADING PARTNERS SO
WISCONSIN'S MANUFACTURING AND FARMING ECONOMY ISN'T HURT GOING
FORWARD.
FOR HIS PART, GOVERNOR SCOTT WALKER USED A VISIT THIS WEEK TO
JANESVILLE'S SENECA FOODS TO STAGE HIS OPPOSITION TO HIGHER
STEEL AND ALUMINUM TARIFFS.
SENECA, WITH NINE PLANTS IN WISCONSIN, MAKES THEIR OWN STEEL
CANS FOR THEIR FOOD PRODUCTS.
HIGHER TARIFFS MAY IMPACT THEIR BOTTOM LINE.
- THAT JUST MEANS THAT EACH OF THESE COMPANIES ARE GOING TO
HAVE TO PAY MORE, YOU'RE TALKING ABOUT $25 MILLION MORE ANNUALLY
TO PAY FOR THE STEEL THEY NEED TO USE FOR THE PRODUCTS THEY
MAKE HERE.
- SO JUST WHAT ARE THE STAKES FOR IMPORTS AND EXPORTS FLOWING
IN AND OUT OF WISCONSIN?
EXPORTS THAT INCLUDE MILWAUKEE'S HARLEY-DAVIDSON MOTORCYCLES.
COMPANY OFFICIALS SAY RETALIATORY TARIFFS ON HARLEY
BIKES OVERSEAS WOULD HAVE A SIGNIFICANT IMPACT ON SALES,
CUSTOMERS AND RETAILERS.
WE TAKE THOSE TARIFF QUESTIONS TO UW-MADISON PROFESSOR OF
PUBLIC AFFAIRS AND ECONOMICS, MENZIE CHINN.
THANKS VERY MUCH FOR BEING HERE.
- THANK YOU FOR HAVING ME.
- WAS THIS ANNOUNCEMENT ON THESE TARIFFS A SURPRISE?
- I MEAN, HE GAVE SORT OF A WARNING SHOT LAST WEEK, SO TO
THAT EXTENT IT WASN'T A SURPRISE.
BUT THE VERY FACT THAT HE WENT THROUGH WITH IT IN THE NATURE
THAT HE DID WAS SURPRISING.
AND THEN THE VERY FACT THAT IT'S NOT EVEN OVER, EVEN AS WE SPEAK,
IS EVEN YET ANOTHER SURPRISE.
THAT IS HE LEFT A LOT OF WIGGLE ROOM.
AND IN A WAY THAT ACTUALLY MAKES THINGS MORE UNSETTLED THAN YOU
WOULD HAVE THOUGHT A WEEK AGO.
- BECAUSE THERE'S A LOT OF UNCERTAINTY AS TO WHAT IT COULD
ALL MEAN.
- EXACTLY.
LAST WEEK HE SAID 25%, 10% ON STEEL AND ALUMINUM RESPECTIVELY
AS TARIFFS OVER THE ENTIRE SPECTRUM OF IMPORTS FROM ALL
SORTS OF COUNTRIES.
WHAT HE DID YESTERDAY WAS EXEMPT CANADA AND MEXICO SUBJECT TO AN
ACCEPTABLE NEGOTIATION ON NAFTA.
AND THEN HE ALSO LET THE DOOR OPEN FOR FURTHER NEGOTIATIONS
FOR ANY COUNTRIES THAT MIGHT APPLY FOR WHATEVER PARTICULAR
REASONS THAT WOULD COME TO THEIR MINDS.
- SO DOES EXEMPTING FOR A PERIOD OF TIME, UNCLEAR AS TO
HOW LONG YET, CANADA AND MEXICO, DOES IT SOFTEN, YOU KNOW, THE
TARIFFS THAT HE HAS IMPOSED?
DOES IT SOFTEN THE WHOLE THING FOR CRITICS OF THIS?
- WELL, CERTAINLY IT WOULD BECAUSE A GOOD PORTION OF THE
IMPORTS COMING INTO THE UNITED STATES, IN FACT, CANADA IS THE
MAJOR SUPPLIER OF STEEL IMPORTS INTO THE U.S., TO THE EXTENT
YOU'RE LIMITING THE NUMBER OF COUNTRIES COVERED BY THE TARIFF,
THEN THE AVERAGE PRICE OF IMPORTED STEEL IS GOING TO BE
LESS THAN IT OTHERWISE WOULD BE IF YOU IMPOSED IT ACROSS ALL
COUNTRIES.
- SO IF THIS EXEMPTING CANADA AND MEXICO IS QUID PRO QUO FOR
RENEGOTIATING NAFTA, WHAT IS THAT PRESIDENT TRUMP OR THE
ADMINISTRATION WANTS TO GET OUT OF NAFTA?
- WELL, THEY'VE SAID THEY WANT TO RENEGOTIATE SOME OF THE TERMS
BY WHICH NAFTA IS IMPLEMENTED.
TO ME, THE BIGGEST ONES HAVE TO DO WITH DOMESTIC CONTENT
REQUIREMENTS.
SO, FOR INSTANCE, IF YOU LOOK AT AN AUTOMOBILE THAT'S MADE IN
NORTH AMERICA, WHAT PROPORTION OF IT HAS GOT TO BE U.S.
SOURCED, AS OPPOSED TO SOME PARTS ARE FROM MEXICO AND
CANADA.
AND THEY WANT TO JACK UP THAT RATIO A LOT HIGHER.
AND SO THAT'S A MAJOR POINT OF CONTENTION.
- OKAY.
BACK TO THE TARIFFS ON STEEL AND ALUMINUM.
MANY REPUBLICANS, INCLUDING OUR GOVERNOR, SAY THAT THIS IS GOING
TO HURT WISCONSIN BUSINESSES, FROM BEER TO MOTORCYCLES TO
CRANBERRIES TO OTHER KIND OF PRODUCTS.
- THERE ARE TWO SETS OF CONCERNS YOU HAVE TO ADDRESS.
FIRST IS THE DIRECT IMPLICATION OF HIGHER STEEL AND ALUMINUM
COSTS.
SO THOSE ARE GOING TO FEED DIRECTLY INTO THE COST OF
PRODUCTION OF MOTORCYCLES, FOR INSTANCE, OR CONSTRUCTION, WHERE
YOU USE IMPORTED STEEL.
SO THERE'S THIS DIRECT IMPACT.
WHATEVER JOBS YOU MIGHT SAVE IN STEEL, IN GENERAL IN THE OTHER
INDUSTRIES THAT USE STEEL, WHICH ARE MORE LABOR-INTENSIVE, YOU'RE
PROBABLY GOING TO HAVE OFFSETTING OR MORE THAN
OFFSETTING JOB LOSSES.
ON NET YOU HAVE THIS DIRECT IMPACT OF HIGHER PRICES FOR THE
FINAL GOODS PLUS REDUCED EMPLOYMENT IN THOSE INDUSTRIES,
OF WHICH WISCONSIN IS ONE OF THOSE STATES THAT IS PRIMARILY
-- HAS A LOT OF THIS SUSCEPTIBILITY TO STEEL PRICES.
THEN THERE'S THE RETALIATION ISSUE YOU ALLUDED TO EARLIER.
- AND THAT'S A REAL THREAT AS WELL, EVEN THOUGH THERE'S THIS
KIND OF WIGGLE ROOM NOW?
- WELL, YES, BECAUSE, FOR INSTANCE, WE HAVE NOT EXEMPTED
THE EUROPEAN UNION AND WE KNOW WHAT THE EUROPEAN UNION'S
PRELIMINARY HIT LIST LOOKS LIKE.
AS YOU MENTIONED, CRANBERRIES, BUT ALSO MOTORCYCLES.
SO IN NOT EXEMPTING THE EUROPEAN UNION WE'RE ON A COLLISION
COURSE WITH THEM, AT LEAST FOR NOW.
THAT'S DEFINITELY A WORRY FOR OUR EXPORTERS.
- NOW, IS THERE ANY CONCERN OR LIKELIHOOD THAT IF THIS KIND OF
CHEAP STEEL ISN'T AVAILABLE IN CHINA WITHOUT THIS 25% MARKUP
THAT DOMESTIC U.S. PRODUCERS OF GOODS THAT USE THAT CHINESE
STEEL WOULD MOVE OUT OF THE COUNTRY?
- I DON'T THINK IT'S PRIMARILY AT THIS POINT THE ACCESS TO
CHINESE STEEL.
IN POINT OF FACT, CHINA EXPORTS A PRETTY SMALL PROPORTION OF
STEEL TO THE UNITED STATES AT THE MOMENT, PARTLY BECAUSE WE
HAVE IMPLEMENTED A NUMBER OF ANTIDUMPING AND COUNTERVAILING
DUTIES AGAINST CHINESE PRODUCTS.
THAT'S THE IRONY OF THE SITUATION.
CHINA IS TO BLAME FOR LOW PRICES BECAUSE THEY HAVE SO MUCH EXCESS
CAPACITY.
THEY'VE BUILT SO MANY FACTORIES THAT ARE PUTTING OUT STEEL AND
TO A LESSER EXTENT ALUMINUM THAT IT'S DEPRESSING THE WORLD PRICE.
VERY LITTLE COMES TO THE U.S.
BECAUSE WE'VE ALREADY IMPLEMENTED PROTECTIONS AGAINST
THAT STEEL.
SO WHO ARE WE HITTING?
WELL, BEFORE YESTERDAY'S ANNOUNCEMENT PRELIMINARILY, WE
WERE HITTING OUR ALLIES, CA, MEXICO, SOUTH KOREA AND THE
EUROPEAN UNION AND UK.
NOW YOU'VE TAKEN OFF MEXICO AND CANADA, BUT YOU'RE NOT HITTING
THE TARGET YOU SAY YOU WANT TO HIT.
AND EXTRA POINT IS THE MEASURES ARE BEING IMPLEMENTED UNDER THIS
NATIONAL SECURITY PROVISION.
- RIGHT.
- WHICH IS A WHOLE NEW BALL GAME.
WE HAVE NOT HAD AN INVESTIGATION ALONG THESE LINES FOR AT LEAST
15 YEARS AND WE'VE NOT IMPLEMENTED PROTECTIONS BASED ON
THIS SECTION 232 FOR AS LONG AS I KNOW, MANY, MANY DECADES.
- LOTS OF NEW BALL GAMES OUT THERE.
MENZIE CHINN, THANKS VERY MUCH.
- THANK YOU.
- RELATED TO ALL THIS, "HERE AND NOW" REPORTER MARISA WOJCIK
HAS THIS REPORT ON EXPORTS FROM THE BADGER STATE.
- WISCONSIN EXPORTS TOTALED $22.3 BILLION IN 2017.
INDUSTRIAL MACHINERY WAS THE STATE'S LARGEST EXPORT, AT $2.4
BILLION.
THE MAJORITY OF WISCONSIN EXPORTS WENT TO CANADA, TOTALING
$6.9 BILLION.
MEXICO WAS THE NEXT HIGHEST, RECEIVING $3.2 BILLION IN
WISCONSIN EXPORTS.
EXPORTS TO CANADA GREW BY 4.3% FROM 2016 TO 2017.
OTHER TOP EXPORTS FROM WISCONSIN INCLUDE ELECTRONIC EQUIPMENT,
VEHICLES AND PLASTICS.
OTHER TOP COUNTRIES WISCONSIN EXPORTS TO INCLUDE CHINA, SAUDI
ARABIA AND JAPAN.
FIND MORE AT wpt.org.