Bernanke, Greenspan and other top economists warn Trump against steel tariffs - The Washington Post

U.S. President Donald Trump speaks before signing a directive ordering an investigation into the impact of foreign steel on the American economy in the Oval Office of the White House in Washington, U.S., April 20, 2017. REUTERS/Aaron P. Bernstein

A group of influential economic advisers to past presidents on Wednesday cautioned President Trump against a potential plan to impose restrictions on imported steel.

Fifteen economists who had served as former chairs of the President’s Council of Economic Advisers under both Republican and Democratic administrations -- including former Fed chairs Alan Greenspan and Ben Bernanke -- penned a joint letter in opposition to tariffs or other limits on steel imports. The protections, they wrote, would harm relations with close allies and damage the economy, including by raising costs for manufacturers, reducing factory employment and raising prices for consumers.

“Among us are Republicans and Democrats alike, and we have disagreements on a number of policy issues. But on some policies there is near universal agreement. One such issue is the harm of imposing tariffs on steel imports,” the letter read.

The Trump administration is currently considering restrictions on imports of steel and aluminum, asserting they may be a threat to national security. The Commerce Department is conducting a review of how much of these materials the nation needs to defend itself and whether low-priced imports are putting American production of the metals at risk.

The steel industry has argued in favor of a tariff or quota on imports, which would limit the amount or raise the price of imported steel and boost business for U.S. steel makers.

But many industries that use steel to make their products, including auto manufacturers, have come out against the potential measure, arguing that higher prices for steel would make them less competitive. Allies that sell steel to the United States, including Canada, South Korea, Japan and the European Union, have also argued for exemptions from any restrictions.

Commerce Secretary Wilbur Ross had said that the Commerce Department would complete its study of the national security issue by the end of June. But government officials and industry executives say the White House appears to be divided over how to proceed. Ross and other White House advisers, including National Trade Council Director Peter Navarro, have pushed for protections for the steel industry, while others, including National Economic Council Director Gary Cohn, have reportedly cautioned the president about potential retaliation.

The letter Wednesday cautioning against the steel restrictions was authored by nearly every former chair of the White House Council of Economic Advisors, including prominent economists such as Harvard University professor Greg Mankiw and Columbia University professor Joseph Stiglitz.

The list includes economists who have served Barack Obama, George W. Bush, Bill Clinton, George H.W. Bush and Ronald Reagan. The only living CEA chair not to sign the letter was Janet Yellen, who is currently serving as chair of the Federal Reserve.

Other groups have raised their voices in protest of a tariff or quota. On Tuesday, 18 agricultural groups including the National Pork Producers Council sent a letter to Ross arguing that restrictions on steel and aluminum could result in other countries retaliating by restricting their products, an outcome that they said would be “disastrous for the global trading system and for U.S. agriculture in particular.”