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Photo: Alex Wong/Getty Images

I can’t overstate the effect of Trump's new tariffs, 25% on steel and 10% on aluminum. (As we reported Sunday, he upped the recommended 24% on steel to 25% because it's a nice round number).

Why it matters: These tariffs have the potential to roil markets and affect relationships with allies. Trump is also touching the third rail of international trade law — he’s using an arcane trade law known as Section 232 to justify his actions. He’s saying “F You” to the World Trade Organization and arguing the global overproduction of steel and aluminum constitutes a national security threat to the U.S. He's also breaking with Capitol Hill and top officials — including Gary Cohn, James Mattis, Steven Mnuchin and Rex Tillerson — who have been arguing strenuously against these tariffs.

Mattis says they will be a national security problem if they’re broad-based and don’t allow allies off the hook. And one other thing — the loss of staff secretary Rob Porter contributed to the chaos here. Porter controlled the paper flow and oversaw the weekly trade meetings in the Roosevelt Room. What happened over the past 24 hours was a complete breakdown in White House process.

Flashback: Remember we wrote that story last August giving the fly on the wall account of the Oval Office meeting where Trump told Kelly and staff:

“I want tariffs! Bring me tariffs!”

Well, it’s March 2018, and Trump hasn’t changed his views one iota. He wants his tariffs and darn it, he’ll have them. The only two senior officials telling Trump this is a good idea are Wilbur Ross and Peter Navarro. 

Watch for huge fallout: Will Gary Cohn and other free-traders stay after this? Trump just completely circumvented the interagency process and is executing a policy Cohn and others think is calamitous.

Perhaps the thing that will most unsettle Trump is the markets falling after his announcement. Cohn and Mnuchin had been using Trump’s love of his record-setting stock market as a way to convince him not to take any dramatic trade actions. Over the course of a year Trump watched his top officials — the free-traders versus the protectionists — duke it out in front of him, in meetings that sometimes descended into officials flat out insulting each other. These fights have happened in the Oval and more recently in the Situation Room.

The tariffs could rebound on Trump by increasing the the price that consumers pay for cars and trucks, canned drinks, aluminum foil and more. The Pentagon will pay more to make fighter jets.

The big picture:

  • Trump believes to his core that foreign countries are taking advantage of America and that America needs to fight back with tariffs.
  • He also believes that he can oversee a renaissance of steel production in the United States. He foresees a return to the Rust Belt smokestacks and the high-paying steel manufacturing jobs of yesteryear.
  • Some of his staff have been telling him those days are over, and a number of senior officials criticized Wilbur Ross’ report that underpinned this decision.
  • Some officials, including Cohn, told colleagues the report was “terrible” because it didn’t properly analyze the jobs that would be lost downstream in industries like the automotive sector that rely on steel and aluminum to make their products.

Get more stories like this by signing up for our weekly political lookahead newsletter, Axios Sneak Peek. 

Go deeper

Updated 2 hours ago - Energy & Environment

Thousands without power as "hazardous" winter storm lashes East Coast

Satellite imagery of the Northeastern U.S. taken by NOAA on Jan. 17. Photo: NOAA

A major winter storm lashed much of the East Coast Sunday and Monday, causing widespread power outages and disrupting travel over the holiday weekend.

The latest: Authorities in North Carolina confirmed that two people died in a car crash and that they responded 600 vehicle accidents during the storm on Sunday, per the Washington Post.

5 hours ago - Health

CDC director says COVID-19 messaging should have been clearer

Rochelle Walensky. Photo: Stefani Reynolds-Pool/Getty Images

Rochelle Walensky, director of the Centers for Disease Control and Prevention, said in an interview with the Wall Street Journal that the messaging around the COVID-19 pandemic and changing guidance should have been clearer.

State of play: Walensky is being coached by media experts and is planning to have more press briefings by herself in order to ensure that CDC is seen as an independent, scientific entity, rather than as a political one, the Journal reports.

5 hours ago - World

UAE asks U.S. to reinstate Houthi terrorist designation after attack

Secretary of State Tony Blinken (left) listens to United Arab Emirates Foreign Minister Sheikh Abdullah bin Zayed al-Nahyan during a joint news conference at the State Department iin October. Photo: Andrew Harnik/Pool/AFP via Getty Images

Emirati Foreign Minister Abdullah Bin Zayed asked Secretary of State Tony Blinken in a phone call Monday to re-designate the Houthi rebels in Yemen as a terrorist organization, a senior Emirati official told Axios.

Why it matters: Less than a month after he assumed office, President Biden rolled back the Trump administration’s decision to make the designation. He said it hampered humanitarian assistance to the Yemeni people. Since then, the Houthis have escalated their attacks against Saudi Arabia and other countries in the region — including an attack Monday in Abu Dhabi.