Trump's steel salvo looms over Greer

Politico

2 days ago

QUICK FIX
— President Donald Trump's plan to hike tariffs on steel and aluminum starting Wednesday raises the stakes for negotiations this week with the United Kingdom and other trading partners.
— The Trump administration is weighing a backup plan if courts strike down its broader tariff agenda: Section 122 of the 1974 Trade Act.
— German Chancellor Friedrich Merz's White House visit on Thursday will touch on trade and security issues.
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Driving the day
GREER-ING UP FOR OECD: President Donald Trump's plan to double steel and aluminum tariffs is ratcheting up pressure as U.S. Trade Representative Jamieson Greer heads to Paris for trade talks. He'll be tasked with countering the perception that foreign countries now have the upper hand, after a pair of court rulings sent the administration's tariff strategy reeling.
The looming tariff hike on metals will be top of mind for British Trade Secretary Jonathan Reynolds, who will meet Greer for the annual ministerial-level meeting of the Organization for Economic Cooperation and Development tomorrow and Wednesday. The confab will gather officials from dozens of market-based countries for talks that will touch on the themes of free trade, the digital economy and sustainable and inclusive growth.
The U.S. and U.K. this week hope to nail down a timeline to implement the framework for a trade deal which slashed tariffs on imports of British autos, steel and aluminum on the sidelines of the gathering, after the countries agreed early last month to coordinate the timing of their tariff reduction. Businesses fear it will be weeks before any duties are actually removed.
One step back: The Paris trip comes less than a week after Trump announced plans to hike steel and aluminum tariffs to 50 percent starting Wednesday, which would build off tariffs imposed in his first administration under a national security trade provision known as Section 232 of the 1962 Trade Expansion Act.
The president made the announcement during a speech on Friday at a U.S. Steel facility in West Mifflin, Pennsylvania, and later took to Truth Social to say: 'This will be yet another BIG jolt of great news for our wonderful steel and aluminum workers.'
'The administration's position is a lot shakier going into the meeting,' said Ed Gresser, a former official in the Office of USTR now at the Progressive Policy Institute, a left-leaning think tank. Gresser pointed to court rulings last week that invalidated the far-reaching levies Trump imposed using the International Emergency Economic Powers Act, which could force the president to scrap a major part of his tariff strategy.
But Gresser added that a decision to nullify Trump's so-called reciprocal tariffs could eventually help focus and advance trade negotiations. 'We wouldn't have these 10 percent global tariffs anymore, and instead would be bargaining over very specific industrial sectors,' Gresser told Morning Trade.
Legal lexicon: Trump's sector-specific tariffs are becoming a growing focus of trade negotiations after the U.S. Court of International Trade and a second federal court rejected the president's use of the emergency law to impose tariffs. A third federal court promptly issued a temporary stay of one of the rulings, keeping the tariffs in effect for now. But the threat to expand Section 232 tariffs suggests the Trump administration will simply dig in to other trade authorities, if courts ultimately block his use of IEEPA for tariffs.
What else to watch: The trip will also give Greer an opportunity to meet face-to-face with trade ministers from other leading economies, such as France, Germany, Australia, Japan and South Korea.
Greer in an interview with CNBC on Friday reiterated that deals with several countries could come in a matter of weeks. He said he has standing calls with India 'every day,' and is planning to meet this week with officials from Malaysia, Vietnam and the European Union.
REGULATORY REVIEW
NEW TARIFF LAW, WHO DIS? The Trump administration is eyeing another obscure trade weapon as a potential fallback if courts once again block its sweeping tariffs: Section 122 of the 1974 Trade Act, which allows the president to temporarily impose up to 15 percent tariffs.
Why it could work: The strategy would empower the administration to quickly impose tariffs without congressional approval or a more burdensome evidence-gathering and review process, and is one of several under consideration, POLITICO reports. It would also let the president replace existing 10 percent across-the-board tariffs on countries, but only for six months. After that, Trump would need Congress' approval to extend them.
'Rest assured, tariffs are not going away,' Commerce Secretary Howard Lutnick told Fox News on Sunday. 'He has so many other authorities that even in the weird and unusual circumstance where this was taken away, we just bring on another or another or another. Congress has given this authority to the president, and he's going to use it.'
Keep in mind: While Section 122 is generally viewed as less controversial for imposing tariffs than IEEPA, the provision has never been used by a president for that purpose — potentially leaving it vulnerable to legal challenges.
ADMIN'S VIEW: Lutnick also insisted Sunday that a court fight over Trump's tariff power won't blunt the administration's leverage as it works on trade deals with key partners.
'All of the countries that are negotiating with us understand the power of Donald Trump and his ability to protect the American worker,' Lutnick told Fox News. 'And so what they're doing is they're negotiating with us. I think it cost us a week, maybe — maybe cost us a week. But then everybody came right back to the table. Everybody's talking to us.'
Around the World
MERZ TO MEET TRUMP: The European Union will get another chance to gauge progress in negotiations with Washington, when German Chancellor Friedrich Merz meets Trump on Thursday for the first time since taking office last month.
The leaders are expected to discuss the war in Ukraine, the Middle East and trade policy, German government spokesperson Stefan Kornelius said in a statement.
There's a history: Days after the German chancellor was elected, Merz urged Trump in a phone call to end his trade war with Germany and his European allies, saying he told the president 'the best solution would be 'down to zero' for everything and for everyone.'
CHINA IN VIOLATION: Treasury Secretary Scott Bessent said Sunday that China is withholding critical minerals it agreed to release in a trade deal the country signed with U.S. negotiators last month in Geneva, which slashed triple-digit tariffs on both sides.
'What China is doing is they are holding back products that are essential for the industrial supply chains of India, of Europe, and that is not what a reliable partner does,' he told CBS host Margaret Brennan on 'Face the Nation.'
TRADE OVERNIGHT
— Trump court turmoil strengthens EU hand in tariff talks, POLITICO Europe reports.
— Imports plunge in early sign of Trump tariff impact, per POLITICO Pro.
— White House set to issue EOs boosting US drone-makers over China, per POLITICO Pro.
— German carmakers promise 'massive' investments in US to dodge Trump tariffs, POLITICO Pro reports.
— OP-ED: Where the Trade Court's Tariff Decision Went Wrong, per The Wall Street Journal.
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