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Frustrated White House free traders mount campaign to weaken Trump tariffs

Since President Donald Trump announced plans last week to hit steel and aluminum imports with new tariffs, his trade adviser Peter Navarro and Commerce Secretary Wilbur Ross have been all over television celebrating their victory and rebutting suggestions that the move would incite a damaging trade war.

But economic adviser Gary Cohn and other free-trade advocates inside the White House and the Treasury Department are mounting a last-ditch effort to blunt the impact of Trump’s head-turning decision, even as the president insisted Monday that he wasn’t going to be convinced out of it.

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Cohn and like-minded officials in the administration are hoping the parade of senior GOP lawmakers, donors, lobbyists and business groups loudly opposing the pending decision will convince Trump that his proposed tariffs will damage the U.S. economy. There was a growing sense among some administration officials that the best way to talk Trump out of the tariffs was to make sure he hears from people outside of the White House, since he’s ignoring advisers inside the building.

West Wing aides led by Cohn, who directs the National Economic Council, are planning a White House meeting for Thursday with executives from industries likely to be hurt by big tariffs on imported steel and aluminum, two officials familiar with the matter said. The meeting is tentative and the participants have not yet been set in stone, but industries that could be hit hard by the tariffs include automakers and beverage companies.

The meeting is meant to counter the session with steel and aluminum industry executives last week in which Trump stunned the world by announcing he would slap tariffs of 25 percent on imported steel and 10 percent on imported aluminum.

Cohn and other critics of the tariffs have acknowledged privately to associates that Trump is unlikely to completely reverse himself. Trump, aides close to him said, is resistant to publicly flip-flopping on high profile issues, believing it makes him look weak.

But they still hope that as lawyers and policy aides draw up the actual language for fresh tariffs, they can marshal the growing external opposition to craft a more measured policy that includes exemptions that will minimize the economic impacts and preserve relationships with key allies.

One person close to the effort to change Trump’s mind said over the weekend that he’s confident the final proposal will be more nuanced than the one the president announced last week.

“I’d bet my life that’s not where it winds up,” the person said of Thursday’s tariff announcement.

Most senior administration officials weren’t surprised that Trump wanted steep tariffs. He’s been regularly demanding them behind the scenes for months. Cohn and others opposed to the tariffs believed they had convinced the president to hold off while they focused on trade actions related to China’s intellectual property actions, though an administration official who backs tariffs said that sequence had not been set in stone. They hoped the separate, China-specific trade actions, which are slated to include investment restrictions and tariffs on dozens of products, would satisfy Trump’s desire for stiff sanctions.

Yet it had become increasingly clear in recent weeks that Trump was getting impatient. When Cohn, during an Oval Office meeting earlier this year, told Trump that the tariffs will cost more jobs than they would save and presented evidence that President George W. Bush’s 2002 steel tariffs failed to achieve their goals, the president rejected Cohn’s arguments. The president told people present at the meeting that he was deeply skeptical of economists, adding that anybody can find an economist to echo their worldview, according to two people familiar with the deliberations.

Now, instead of relying on economic analyses and academic debates about trade policy, Cohn and other tariff opponents are pointing to market reaction, widespread anger among GOP leaders in Congress and the donor class and the threats from Europe, Mexico and China to retaliate.

It’s a wave of opposition from Trump’s party rarely seen since the early days of Trump’s presidential campaign, when rank-and-file Republicans openly mocked Trump’s proposals.

House Speaker Paul Ryan, Ways & Means chair Kevin Brady (R-Texas) and other lawmakers have each publicly expressed opposition to imposing tariffs. GOP lawmakers on Capitol Hill have started telling business leaders that they will not rule out taking action in the future to stop Trump, according to one Republican congressional aide.

Robert Lighthizer is pictured. | AP Photo

While Congress’ options are limited, the Senate Commerce Committee has congressional authority over these unusual types of trade enforcement tools – though it’s not clear if the full Senate would have enough votes to legislatively make such a change, according to another Republican congressional aide.

“We are extremely worried about the consequences of a trade war and are urging the White House to not advance with this plan,” said House Speaker Paul Ryan’s spokeswoman, AshLee Strong. “The new tax reform law has boosted the economy and we certainly don’t want to jeopardize those gains.”

Asked to respond to Ryan’s comments, White House press secretary Sarah Huckabee Sanders told reporters Monday, “We have a great relationship with Speaker Ryan, but that doesn’t mean we have to agree on everything.”

Meanwhile, Trump’s pending announcement has set off deep concerns that the move could imperil Republicans in the upcoming midterm elections, with some donors loudly opposing the measure.

“I am a strong supporter of Trump, but this policy gives me pause,” said GOP donor Dan Eberhart, the CEO of Canary, oilfield services company.

Others close to the White House said they were not surprised that Trump finally pulled the trigger on a policy promise he made months ago, adding that he has long been a critic of free trade.

“This is something that has been anticipated for months, and in fact, the president campaigned on this. It is clear that he has been concerned about a trade deficit for a long, long time,” said David Tamasi, the former Washington finance chair for Trump Victory Fund. “With this decision, there is an alignment with the political contingency that propelled him to victory in many states.”

At the moment, the president does not seem swayed by any of the counter-arguments against the tariffs. Navarro and Ross have the clear upper hand inside the West Wing, according to two people who have spoken to Trump.

The president said Monday he’s sticking by his plans. “No. We’re not backing down,” Trump told reporters when asked about the tariffs, though he added that he may be open to negotiating on the issue in the ongoing NAFTA negotiations with Mexico and Canada.

Asked about the status of the tariffs, White House spokeswoman Lindsay Walters said in an email that the White House is still “in the process of formalizing the documents and details” of Trump’s plan.

The president has long pushed for tariffs over the strenuous and repeated objections of Cohn former staff secretary Rob Porter, and, to a lesser extent, several top members of Trump’s national security team. But Cohn on Thursday morning thought he’d forestalled an announcement in part by telling White House chief of staff John Kelly he’d quit if Trump launched a trade war.

Cohn was wrong, it turned out.

The Thursday event at the White House last week was described by aides as a listening session. But Trump decided after hearing from steel and aluminum industry executives – who universally called for sanctions without any exemptions, according to an aide – that he would make the announcement anyway, ignoring the advice of the free traders in the administration. However, there was one benefit to the last-minute announcement for the free-traders: because the administration had not yet completed key legal legwork, they have several days to change Trump’s mind before he can finalize the tariffs – likely later this week or next week.

But many in Washington were starting look beyond trade to consider the implications of Trump’s fast-and-loose approach to policy.

Republicans inside and outside the White House worry that the internal breakdown in the administration’s policy-vetting process — which collapsed after the departure of Porter, who coordinated policy across the administration — could be repeated on everything from gun control to infrastructure to drug pricing.

“The same thing is going to be true of every other policy issue,” said one person familiar with the internal policy dysfunction.

Multiple aides described a whirlwind week in which the president – fed up with negative headlines about his son-in-law Jared Kushner – surprised even his most senior advisers by demanding an immediate announcement on the tariffs.

Trump’s tariff decision was so last-minute that the White House did not alert senior aides across multiple agencies. The State Department was not prepared to send cables to embassies in an effort to explain the decision. And senior leaders on Capitol Hill were caught totally flat footed, even if some Republican aides had long worried Trump would make a dramatic trade move to play to his base in a midterm election year.

President Donald Trump is pictured. | AP Photo

Lobbyists and business groups – including many of the organizations that helped to mobilize support for the White House’s historic tax overhaul – were working behind the scenes over the weekend to influence the legal and policy underpinnings of the president’s proposed steel tariffs.

Even if the groups don’t kill off the tariffs, several hoped to pressure Trump to weaken them or carve out exemptions.

Industry and agriculture groups are trying to get their message out on platforms popular with Trump, such as Fox News and other networks that Trump is known to frequently watch, said one lobbyist involved in the push.

“You’ve got to use the same audience-of-one tactics that have been effective on other issues,” this person said.

Business Roundtable President Joshua Bolten, the former chief of staff to Bush, criticized Navarro, one of the administration’s most vocal trade hawks, by name in a Fox News appearance Sunday.

“The remedy that Peter Navarro was pushing the president to impose doesn’t address the real problem, which is Chinese overcapacity,” Bolten said. “We have to get together with our friends and allies who all face the same problems, put pressure on the Chinese jointly, because you can’t do this individually, and force the Chinese to reform their practices.”

But the lobbying efforts are going both ways. Scott Paul, president of the Alliance for American Manufacturing, said that the group expanded its ad campaign today in support of the tariffs to Pittsburgh, where Trump will visit later this week. The group began running ads last Tuesday in the D.C. area. Paul did not disclose how much his organization was spending on the ads but said that they cost somewhere in the six figures.

“We’re cautiously optimistic,” he said, but added “we’re not taking anything for granted.”

Marianne LeVine and Adam Behsudi contributed to this report.

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