Business

Trump says what Canada does to US dairy farmers is a disgrace

WASHINGTON — President Trump added a new name Thursday to the list of countries he accuses of preying on US workers and exploiting naive US trade policies: Canada.

“What they’ve done to our dairy farmworkers is a disgrace,” Trump said as he ordered a sweeping investigation into whether steel imports are harming national security. “We can’t let Canada or anybody else take advantage and do what they did to our workers and to our farmers.”

Trump admitted he was going off script, because the steel order is aimed at more familiar trade boogeymen like China and Japan. But his outburst toward a friendly neighbor punctuated a week when tough talk on trade took center stage in a White House deeply divided over how aggressively to erect the trade barriers Trump promised during his campaign.

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From Trump’s “buy American, hire American” rallying cry in Wisconsin this week to Vice President Mike Pence’s warnings to Japan and South Korea about the need to rewrite trade deals, the Trump administration is moving against free trade on multiple fronts. A senior official said there would be two trade-related events a week for the next few weeks.

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“He’s manically focused on these trade issues,” said Stephen K. Bannon, the president’s chief strategist.

The flurry of activity amounts to a comeback by nationalists like Bannon, who views trade as crucial to Trump’s populist appeal but whose star has dimmed after clashes with globalist-minded aides like Jared Kushner, Trump’s son-in-law, and Gary D. Cohn, the former Goldman Sachs banker and lifelong Democrat who is head of the National Economic Council.

Last week, the globalists appeared to be winning when the administration decided not to designate China a currency manipulator, despite Trump’s vow to do so during the campaign. Trump also offered President Xi Jinping of China other concessions on his trade agenda in return for China’s help in curbing North Korea’s nuclear program.

But the nationalists scored an early victory when Trump fulfilled a major trade promise three days after taking office. He pulled the United States out of the Trans-Pacific Partnership, the 12-nation trade pact negotiated by Barack Obama, declaring the era of multinational trade deals over.

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After that, said Gary Clyde Hufbauer, a trade expert at the Peterson Institute for International Economics, the president’s “bark quieted down.” “Now the volume of the bark is going back up,” he said. “But these are still barks,” he added. “So far, no bites.”

Trump’s steel investigation is much broader than dozens of anti-dumping cases against China and other exporters filed by the Obama administration and its predecessors. It invokes a somewhat novel principle of using national security as the criterion for whether imports are damaging the United States. The narrow argument is that a depleted US steel industry would be unable to produce enough steel to supply the military. More broadly, White House officials say an economically vibrant country is better able to defend itself.

It is unclear what steps Trump will take once the investigation is completed — within 270 days but likely sooner. The most obvious would be to impose tariffs on steel imports. Hufbauer said the United States could also use the results as leverage to persuade countries to accept voluntary export restraint agreements, such as those in the 1980s.

“We are groping here to see whether the facts warrant a comprehensive solution to deal with a very wide range of products from a very wide range of countries,” Commerce Secretary Wilbur L. Ross told reporters Thursday. His department will run the investigation.

While the directive does not single out any country, China is clearly in the cross-hairs. It accounts for only 2 percent of direct steel exports to the United States, but its excess capacity drives down prices worldwide. Surplus Chinese steel, shipped to other countries, ends up in the United States in other manufactured products. Ross noted that steel imports from China have continued to rise, despite the government’s pledge to cut back its overcapacity.

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With Trump scheduled to attend a meeting of the Group of 7 countries in Sicily next month — his first foreign trip as president — some officials predict that Cohn and Kushner will try again to moderate his language on trade.

But if Trump’s performance Thursday was any indication, he remains as seized by the subject as he was on the campaign trail. In two weeks, he noted, the White House would present its ideas for renegotiating the North American Free Trade Agreement.

“NAFTA, whether it’s Mexico or Canada, is a disaster for our country,” he said. “It’s a disaster, it’s a trading disaster.”

Trump’s disparagement of NAFTA led to his unexpected sideswipe of Canada. The president had a cordial meeting recently with Prime Minister Justin Trudeau, and Trudeau took Trump’s daughter, Ivanka, to a Broadway show. None of that spared the Canadians from the president’s anger over how they protect their dairy industry — an issue that flared up after 75 dairy farmers in Wisconsin lost their main milk buyer because of a trade dispute with Canada.

“I was in Wisconsin the other day,” Trump said. “What they’ve done to our farmworkers is a disgrace. It’s a disgrace.”