Trump pushes tariffs, drilling, manufacturing on Inauguration Day

Donald Trump is officially the US president again, after a dramatic Inauguration Day on Monday that included a slew of promises and day-one executive orders with potential consequences for the steel supply chain.

In his inaugural address, Trump pledged to usher in a new “golden age” and “massive restoration of America.” The 47th president said he will offer stimulus for oil and gas drilling, greater domestic auto production and upgrades to military materiel – all achievable whilst wringing more out of the nation’s trading partners.

“We will tariff and tax foreign countries to enrich our citizens,” Trump warned.

“America will be a manufacturing nation once again,” he emphasised.

Trump was set to sign formal executive orders on Monday night that include a call for federal agency reviews of trade policies including existing tariffs, the United States-Mexico-Canada Agreement and Buy America procurement rules. The initial pile of documents does not yet establish new tariffs. Nor were any international trade measures specified on the “Administration Priorities” page when the new Trump version of the whitehouse.gov website went live after his swearing-in. The list of priorities does include a pledge to resume construction of a border wall between the US and Mexico. When the prior Trump administration erected some sections of the wall, the project was a consumer of hollow structural sections.

Shortly after his victorious election in November, Trump proposed new tariffs of 25% on goods from Canada and Mexico and an additional 10% on Chinese-made items (see Kallanish 27 November). The Canadian government has included US-made steel and aluminium on its list of potential retaliatory tariffs (see Kallanish 17 January).

Unlike the Trump administration of 2017-2021 when Wilbur Ross was commerce secretary, that department will not be run by a steel-industry luminary this time. Trump’s designee for commerce secretary is Howard Lutnick, chief executive of Wall Street firm Cantor Fitzgerald. Lutnick is a supporter of tariffs and of a more aggressive adversarial geopolitical stance against China. He likely faces his Senate confirmation hearings in the next few days. Pending Lutnick’s confirmation, on Monday Trump appointed longtime Commerce deputy Jeremy Pelter as acting secretary.

In his first inaugural address in 2017, Trump never mentioned China by name. On Monday, he did so only once, as a rationale for seizing control of the Panama Canal. Trump mentioned steelmakers once in Monday’s speech, in the context of past achievements in building the US into a world power.

Peter Navarro, who served as director of the White House National Trade Council during the first Trump term, is back in the new administration as a senior counsellor for trade and manufacturing.

Late Monday, Trump signed executive orders freezing any new federal regulation and withdrawing the US from the Paris Agreement on climate. He has promised to ease regulations for the oil and gas industry and other corporate interests and to cut corporate taxes.

Dom Yanchunas USA

kallanish.com