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<p>Politico shows their hand. </p>
<p>President Hoffa's letter to POTUS on the tariffs, attached.</p>
<p>Mike D.</p>
<p>Teamsters</p>
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<p><strong></strong> </p>
<p><strong>Trump threatens to blow up global trading order with tariffs </strong>
</p>
<p>By Adam Behsudi </p>
<p>03/08/2018 08:29 PM EDT<br>
</p>
<p><font face="Trebuchet MS"></font> </p>
<p><font face="Trebuchet MS">President Donald Trump says he is protecting national security by imposing tariffs on steel and aluminum imports, but he may have just thrown a bomb into the global trading system.</font></p>
<p><font face="Trebuchet MS"></font> </p>
<p><font face="Trebuchet MS">Using national security to justify tariffs will likely invite copycat behavior from other countries - ranging from India restricting U.S. agriculture imports in the name of food security, to China defending its massive subsidies
to industry as a security necessity. The result could be a cascade of unintended consequences that could restrict the ability of Iowa farmers to export corn, automakers to competitively sell cars overseas and increase costs to U.S. consumers.</font></p>
<p><font face="Trebuchet MS"></font> </p>
<p><font face="Trebuchet MS">More ominously, experts say the move represents a nuclear option in the trade world that threatens the very institutions that maintain the global economic order.
</font></p>
<p><font face="Trebuchet MS"></font> </p>
<p><font face="Trebuchet MS">"Using national security in a way that nobody believes -- it's a complete perversion of what is supposed to be extraordinary latitude in the world trading system for countries to deal with their national security interests," said
Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics.</font></p>
<p><font face="Trebuchet MS"></font> </p>
<p><font face="Trebuchet MS">There's an unspoken truth at the World Trade Organization, where countries routinely challenge each other's trade actions:
<u>Nobody invokes national security</u> and nobody questions national security, even though WTO rules allow countries to take extraordinary steps if they feel their national security is at risk.</font></p>
<p><font face="Trebuchet MS"></font> </p>
<p><font face="Trebuchet MS">A legal challenge that will likely arise at the WTO over the U.S. tariffs could force a judicial panel to rule on the sacred question of what is or isn't national security. That could massively erode support for the international
system, especially from the Trump administration, which has already scorned WTO decisions that it contends infringe on U.S. sovereignty.</font></p>
<p><font face="Trebuchet MS"></font> </p>
<p><font face="Trebuchet MS">A WTO panel has "never done it before, and they realize if they do that, that's going to be
<u>the death knell of the WTO</u>," Hufbauer said.</font></p>
<p><font face="Trebuchet MS"></font> </p>
<p><font face="Trebuchet MS">The Trump administration strongly argues that a 25 percent tariff on steel and a 10 percent tariff on aluminum is necessary to maintain national security. "Economic security is national security," the White House trumpeted in a
fact sheet released just prior to Trump's announcement.</font></p>
<p><font face="Trebuchet MS"></font> </p>
<p><font face="Trebuchet MS">A senior administration official said the rationale from a national security and economic security perspective is "unassailable."</font></p>
<p><font face="Trebuchet MS"></font> </p>
<p><font face="Trebuchet MS">"We need aluminum and steel to build everything from the Bradley Fighting Vehicle, an F-35 Joint Strike Fighter, to the littoral combat ship, the Tomahawk Missile, Delta IV and Atlas V rockets," the official told reporters. "And,
importantly, as we move on this national security argument, broadly defined, again, it's not just defense applications. It's also things like critical infrastructure, whether it's the electricity grid, dams, transportation projects, water and sewer treatment
plants."</font></p>
<p><font face="Trebuchet MS"></font> </p>
<p><font face="Trebuchet MS">The Commerce Department investigation that cleared the way for Trump to impose tariffs concluded that a flood of cheaper imports threatened domestic industries to the point where they might be unable to "meet demands for national
defense and critical industries in a national emergency."</font></p>
<p><font face="Trebuchet MS"></font> </p>
<p><font face="Trebuchet MS">"It is permissible under WTO rules to do what we are doing and we are doing that," the official added.</font></p>
<p><font face="Trebuchet MS"></font> </p>
<p><font face="Trebuchet MS">But legal experts say Trump and his advisers have undermined their own national security case by tying restrictions on Canada and Mexico to their cooperation in NAFTA talks. Those two countries were officially exempted from the
tariffs for national security reasons, but Trump continued to tie their exclusion to the outcome of NAFTA negotiations in his remarks before signing the tariff orders.</font></p>
<p><font face="Trebuchet MS"></font> </p>
<p><font face="Trebuchet MS">"When the president publicly states that he's willing to exempt Mexico and Canada if they give him concessions in NAFTA negotiations, he's undermining the weak legal argument they have to begin with," said Matt Gold, a former U.S.
trade official under President Barack Obama who works now as a legal trade consultant.</font></p>
<p><font face="Trebuchet MS"></font> </p>
<p><font face="Trebuchet MS">The Commerce Department's investigation, conducted under an obscure provision of the Trade Expansion Act of 1962, also includes a cautionary note<b>
</b>from the Defense Department.</font></p>
<p><font face="Trebuchet MS">Defense Secretary Jim Mattis said he agreed with Commerce's findings that unfair trade and its impact on the U.S. industrial base "poses a risk to our national security," but said there was little risk the military would suffer
a shortage of steel or aluminum.</font></p>
<p><font face="Trebuchet MS"></font> </p>
<p><font face="Trebuchet MS">"The U.S. military requirements for steel and aluminum each only represent about three percent of U.S. production," Mattis wrote in a memo. "Therefore, 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."</font></p>
<p><font face="Trebuchet MS"></font> </p>
<p><font face="Trebuchet MS">The WTO's national </font><a href="http://go.politicoemail.com/?qs=52cc9f18115244d1b96b764a05e6ab777ba38e3f8e7b9e44b67918949b66b77440b946aeca768e16162d35026327a6d1" target="_blank"><font face="Trebuchet MS">security exception</font></a><font face="Trebuchet MS">
leaves open a number of ways a country can justify a trade restriction. Mattis' note would likely preclude the use of one of those national security exceptions, which can be interpreted to mean the supply of military equipment.</font></p>
<p><font face="Trebuchet MS"></font> </p>
<p><font face="Trebuchet MS">In this case, the likely defense would be under an "emergency in international relations," Gold said.</font></p>
<p><font face="Trebuchet MS"></font> </p>
<p><font face="Trebuchet MS">That envisions a scenario in which the world is in the grips of a major conflict to the point where ocean shipping is disrupted and steel and aluminum imports are cut off, he said.</font></p>
<p><font face="Trebuchet MS">"It's a weak, bordering on absurd, argument," Gold said of the administration's rationale.</font></p>
<p><font face="Trebuchet MS"></font> </p>
<p><font face="Trebuchet MS">There's also a fear that once the U.S. goes down the path of justifying trade restrictions on the basis of national security, it will be difficult to backtrack.</font></p>
<p><font face="Trebuchet MS"></font> </p>
<p><font face="Trebuchet MS">"At some point you'll have to say, 'Well, there's no longer a national security problem.' And why? So the national security justification will make it even harder to back out, and I think the world will see through this," said Carlos
Gutierrez, former Commerce secretary under President George W. Bush who is now chairman of the National Foreign Trade Council.</font></p>
<p><font face="Trebuchet MS">He added that the U.S. is just walking into an "entanglement."</font></p>
<p><font face="Trebuchet MS"></font> </p>
<p><font face="Trebuchet MS">"It just becomes a more complex web to get out of," Gutierrez said. "Trade wars are easy to get in but difficult to get out of."</font></p>
<p> </p>
<p><font face="Trebuchet MS">It also sets up a potential confrontation with the WTO, especially with skepticism of the WTO already running high in the Trump administration, said former U.S. Trade Representative Michael Froman, now a senior fellow at the Council
on Foreign Relations. </font></p>
<p><font face="Trebuchet MS"></font> </p>
<p><font face="Trebuchet MS">"One reason why the U.S and others have been so reluctant and so careful about not invoking the national security exception is precisely because we don't want the WTO necessarily adjudicating how to define essential national security,"
Froman said during a conference call this week.</font></p>
<p><font face="Trebuchet MS"></font> </p>
<p><font face="Trebuchet MS">Froman warned that a WTO challenge of the Trump tariffs could put the global trading system "at the center of a crucible."</font></p>
<p><font face="Trebuchet MS"></font> </p>
<p><font face="Trebuchet MS">"One view of this is it's a way of bringing the WTO to a moment of crisis to justify potentially the U.S. withdrawing from the dispute settlement procedures," he said.</font></p>
<p><i><font face="Trebuchet MS">Doug Palmer and Megan Cassella contribute to this report.</font></i></p>
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