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Trump launches his trade war, with reprieves for Mexico & Canada

Donald Trump
Donald Trump during a meeting on March 6. Photo: Andrew Harrer-Pool/Getty Images

President Trump signed two proclamations today that go into effect on March 23, one imposing a 25% tariff on steel and the other a 10% tariff on aluminum. The president confirmed that Canada and Mexico are exempt from the tariff increases, citing national security agreements — specifically ongoing NAFTA negotiations. He called the existing taxes an economic and national security "disaster" adding, "we're finally taking action to correct."

The big picture: This will still meet fierce opposition from free traders and large sections of the business community. But it’s not nearly so bad as it originally appeared. Trump initially wanted to impose these tariffs on everyone with no exceptions and no room for exclusions. There’s now plenty of wiggle room.

A factor that influenced Trump: In his conversations with Canadian leader Justin Trudeau he became convinced that he could use the threat of steel and aluminum tariffs as leverage to get a better deal in the NAFTA negotiations, according to sources with direct knowledge. Trump’s team viewed Canada as a bigger problem than Mexico in these negotiations and given Canada sells so much of those metals to the US, Trump saw an opportunity to squeeze them. (Whether it works is an open question.)

The details: The proclamations will be "flexible," allowing the U.S. to address security relationships in an "ironclad way" to defend its steel and aluminum industries, said a senior administration official. Trump explained that they will show "great flexibility and cooperation towards [nations] who are really friends of ours both on a trade basis and on a military basis." The administration is open to allowing some countries to negotiate for exemptions on a "case-by-case" basis, pending separate, bilateral agreements.

What's next: Countries have threatened to protest the increased tariffs, with the EU warning of "tit-for-tat" tariffs of 25% on $3.5 billion worth of American products. We could see an international trade war looming with subsequent hits to the U.S. and global economies.

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Why Trump added a streetfighter to his legal team

Screenshot via Fox News

A new addition to President Trump's legal team — Joe diGenova, a former U.S. attorney who is well-known in Washington and has argued for the president on Fox News — reflects three White House realities.

The state of play: (1) The White House is digging in for a fight that looks to be longer and messier than officials had expected. (2) This is another example of the president responding to televised cues. Trump has spent most of his adult life in litigation, and obsesses about legal positioning in the same way that he is consumed by his press coverage. (3) It's another pugilistic voice at the table, and suggests that this weekend's attacks on Mueller won't be the last.

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Facebook reaches a tipping point

Illustration: Rebecca Zisser/Axios 

Of all the news crises Facebook has faced during the past year, the Cambridge Analytica scandal is playing out to be the worst and most damaging.

Why it matters: It's not that the reports reveal anything particularly new about how Facebook's back end works — developers have understood the vulnerabilities of Facebook's interface for years. But stakeholders crucial to the company's success — as well as the public seem less willing to listen to its side of the story this time around.