Price on Trade: Trump tariffs are no negotiating tool - and could come at lightning speed

Nominations suggest aggressive trade actions

One need only look to the language of the president-elect’s announcements to see that aggressive trade actions are the incoming administration’s top economic priority.

In announcing Howard Lutnick as the nominee for Secretary of Commerce, the president-elect emphasized that Lutnick would “lead our Tariff and Trade agenda.” President-elect Trump tasked Scott Bessent with “stop[ping] unfair Trade imbalances” as Secretary of the Treasury. While the Commerce Department and Treasury Department have countless other responsibilities, the main priority for these departments will be supporting domestic manufacturing and levelling trade imbalances.

President-elect Trump also announced the nomination of Jamieson Greer for United States Trade Representative (“USTR”). Greer was formerly the chief of staff to the USTR, Robert Lighthizer, during the first Trump administration.

There, he would have been involved with the first Trump administration’s Section 232 investigation that resulted in 25% tariffs on most steel imports and the Section 301 investigation that resulted in tariffs on billions of dollars of imports from China. He has also spent time in the small world of attorneys defending US producers from unfair import competition. Greer will be particularly attuned to the inner workings of USTR and the concerns of the domestic steel industry.

Trade has also been the focus of recent White House staffing announcements. The President-elect announced that Kevin Hassett would return as the director of the National Economic Council to “ensure that we have Fair Trade with Countries that have taken advantage of the United States in the past.” Peter Navarro, who forcefully advocated for tariffs in the first administration, will also return to the White House as the Senior Counselor for Trade and Manufacturing.

In the first Trump administration, Treasury and the National Economic Council (NEC) often tried to temper more aggressive trade actions. While everyone is singing a more common song at this stage, these agencies may still emerge to play their traditional roles by arguing that tariffs should be limited to achieving concessions from foreign governments.

Tariffs won’t be a negotiating tool

As always, it will be difficult to predict outcomes. However, the president-elect, who has said that “tariff” is the “most beautiful word in the dictionary,” will ultimately have the final say on how tariffs are used. In an interview at the Economic Club of Chicago, Trump made clear that he views tariffs as fundamental to spurring and protecting domestic manufacturing. So those hoping that tariffs will just be a negotiating tool may be disappointed.

In the second Trump administration, trade decisions appear to be even more centralized among a few key decisionmakers, at least at the outset. The Commerce Secretary nomination came with “additional direct responsibility for the Office of the United States Trade Representative.” While different administrations vest the USTR with varying degrees of latitude, the Commerce Department rarely has direct oversight or control over the USTR’s decisions and output.

Such an arrangement could streamline new Section 301 or Section 232 tariffs. It should also recognize that USTR, with its lean structure, is often a more effective organization for executing policy. USTR’s strength is its nimbleness, small size, and ability to execute effectively regardless of reporting lines. Commerce has enormous capabilities and responsibilities. But with its multiple responsibilities, it is more similar to an army needed to fight a vast land war. USTR is more like a Navy SEAL team. Both have their roles, and the key will be how those roles are operationalized.

Be prepared to act fast

Of course, many other appointees will be responsible for the granular, yet impactful, day-to-day decisions within each department. Now that many of the top-level positions are filled, the transition team will begin rolling out various deputy secretary, undersecretary, and assistant secretary positions. These appointees may fly below the general public’s radar. But each will play a crucial role in implementing the Trump administration’s trade agenda.

For example, the Assistant Secretary for Enforcement and Compliance is an appointed position within the Commerce Department’s International Trade Administration. This position is responsible for enforcing the nation’s antidumping and countervailing duty laws, critical tools for domestic steel producers facing unfair import competition. Slight changes to how AD/CVD laws are enforced can be the difference between a domestic industry surviving or being forced out of business.

It often takes months, or even years, for a president to implement a Day 1 agenda. But President-elect Trump is putting his trade team into place at such a rapid pace that we could see many sweeping trade actions in the first weeks or days of his second presidency. Domestic manufacturers should be prepared to think big and move quickly.

Editor’s note

This is an opinion column. The views in this article are those of experienced trade attorneys on issues of relevance to the current steel market. They do not necessarily reflect those of SMU. We welcome you to share your thoughts as well at info@steelmarketupdate.com