Leibowitz: Trump will act fast on tariffs and immigration - buckle up

One thing that is remarkable about the new administration is the lack of leaks. The press is forever seeking to obtain information from people who are not authorized to give it. This is a key component of a free press, and that endeavor will not become less significant.

But so far, the new Trump team does not engage very much in leaking. There are several reasons for this. But for present purposes, it means that the details of the multitude of expected presidential actions are not publicly known.

Expect Trump to act fast on tariffs

The new president clearly likes tariffs, and he wants to use them to make the United States more competitive – especially in manufacturing and mining. I believe that this will not be effective. But tariffs are very likely to be announced among the early pronouncements.

Imports from Canada and Mexico (including, perhaps, steel and aluminum) could be hit with 25% tariffs on nearly all goods. Imports from all countries, friend and foe alike, could be hit with 10% (or higher) tariffs. The affected countries are expected to retaliate against US exports. Canadian officials have reportedly prepared a list of products made in red states to punish those who cleared the way for the Trump victory. (Note that Canada is not as immune to leaks as the Trump team.)

It’s also worth pointing out what should be obvious. International relations – by which I mean trade, investment, international commerce, and immigration – are interrelated.

And on immigration too

In its closing days, the Biden administration has made a multitude of pronouncements too. Many of these are likely to be the subject of some Trump announcements early on, which will attempt to negate the Biden announcements. For example, an agreement with Colombia to interpret investor provisions was signed on Jan. 15. Unusually, the details of the interpretation have not been leaked.

Meanwhile, immigration raids are slated for Tuesday, according to news reports. Exactly what will happen remains secret. But the place (Chicago) has been leaked. Mass deportations are feared – as are the consequent splitting of families that was an unfortunate feature of previous crackdowns.

The Laken Riley Act, named for a nursing student who was murdered by an undocumented alien, passed the House in December and is likely to pass the Senate this week. (The Senate voted on Friday to end debate and to proceed to a vote on the bill.) It would create a category of undocumented aliens that are subject to detention if they have been accused of crimes. It would also create legal standing for state attorneys general in federal court litigation over the detentions. The trend seems to be in favor of the bill.

The “remain in Mexico” policy under Trump 45 seems destined for a second try. And the ban on immigration by people from predominantly Muslim countries may make an early comeback.

All these initiatives, and their negation, raise issues of consequences. Tariffs will hurt consumers, including US manufacturers that rely on imports for many of their raw materials and components. They won’t work to increase manufacturing unless the conditions that caused manufacturing to leave the US are changed. (Keep in mind, the US is still the leading global manufacturing country. But our lead is diminishing.)

The power of invoking national security

And let’s not forget the power of the words “national security”.

TikTok, we learned, has 170 million users who could be deprived of the opportunity to view material on the site, or to make money from their contributions to it. No doubt that’s true.

But Congress and the Biden administration agreed that US national security was in play. And on Friday, the US Supreme Court agreed that the national security considerations rendered the statute constitutional despite First Amendment concerns. Then, over the weekend, President-elect Trump, also citing national security, said he would take executive action after he is sworn in on Monday afternoon as president to prevent TikTok from “going dark”.

There will certainly be more court cases. If tariffs are proclaimed under the International Emergency Economic Powers Act (IEEPA), plaintiffs will repair to the courts seeking to overturn it.

Finally, the current tariffs and quotas on steel, aluminum, and imports from China will likely be reviewed and perhaps revised. Many revisions will also be before the courts soon enough.

The president, like all presidents before him, has lots of authority – especially if he invokes national security. The American people elected Donald Trump, and he will exercise that authority, subject, of course, to the rule of law and the tenets of the Constitution. But make no mistake, change is coming. Buckle up.

Editor’s note

This is an opinion column. The views in this article are those of an experienced trade attorney 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.