House Republicans challenge Ross on metal tariffs

A litany of Ways and Means Republicans criticized the Trump administration’s approach to a Commerce Department-led investigation into steel and aluminum imports that found such imports could harm United States national security.

   Several GOP lawmakers expressed concern with Trump administration “Section 232” tariffs against steel and aluminum during a March 22 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 March 23.
   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.”
   While Commerce has set out a 90-day time frame to evaluate product exclusion petitions, Ross 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 March 22 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.”