Sullivan worried a Trump trade war would be bad for Alaska

WASHINGTON — Alaska Sen. Dan Sullivan wants the Trump administration to rethink plans for broad steel and aluminum tariffs that he said could harm Alaska's economy.

The U.S. and Alaska have "had a good run of tax reform, regulatory reform, doing a lot in the energy sector that's really starting to grow the economy, and I worry that this could put the brakes on it," Sullivan said. The Republican lawmaker said he is worried that the White House plans would hinder Alaska's economic recovery, damage plans for a natural gas pipeline and garner retaliatory moves from countries to which Alaska exports fish and other natural resources.

Sullivan spoke to a reporter about the issue Wednesday afternoon before the White House confirmed that President Donald Trump plans to sign off on steel and aluminum tariffs later this week.

Sullivan has served on the National Economic Council and as assistant secretary of state for economic and business affairs. He joined a slew of economists and Republican lawmakers who cautioned that a blunt approach to trade and a resulting "trade war" could have negative consequences for the U.S. economy.

"I also worry about retaliation with regard to Alaska products. We're a huge exporter, particularly of fish and natural resource products. And you know, we've been caught up in trade wars before that have negatively impacted our citizens." Sullivan also said that higher steel prices could have a detrimental impact on Alaska's planned natural gas pipeline.

Trump's plan would set a 25 percent tariff on steel and a 10 percent tariff on aluminum imports, with possible exclusions for Mexico and Canada.

The European Union said Wednesday that it will "react proportionately and fully in line with the World Trade Organisation rules in case the U.S. measures are formalised and affect EU's economic interests."

[Gary Cohn, Trump's top economic adviser, resigns amid differences on trade policy]

The focus should be on overproduction of steel in China, Sullivan said. Broadly applied tariffs on steel and aluminium "kind of missed the main point" of a report Commerce Secretary Wilbur Ross delivered to the president in January, "which is that the big challenge to the global steel industry — to the U.S. steel industry — is the dramatic overproduction of steel in China. That's what's driving all this," Sullivan said.

The United States is the world's largest importer of steel, and there is an excess capacity of steel around the world, largely due to overproduction in China, according to the Commerce Department. "On an average month, China produces nearly as much steel as the U.S. does in a year," the department said when it released its report to the public in February.

The conservative Heritage Institute argued last month that the White House should not act to impose new tariffs "under the guise of national security" and urged Congress to "reassert its constitutional authority over trade."

Heritage noted that while the U.S. steel industry is struggling, the industries that rely on steel employ millions of Americans. But is unclear if long-closed U.S. steel producers could reopen to meet that demand.

There are issues with some U.S. allies, Sullivan said. Countries like South Korea "import steel from China; they refab it; and then they export it to the U.S." The U.S. needs to deal with that, but the focus, he said, should be on China.

Sullivan said he had been talking to people within the Trump administration "over the last several days and I'm continuing to have discussions."

"I know there's still a lot of internal debate" over the final decision, Sullivan said.

But the senator said he wasn't sure what to make of this week's resignation of Trump's top economic adviser Gary Cohn.

"You know, I think it's always hard to see what the certain shakeups in White House personnel mean when they happen very regularly. That kind of disruption doesn't help things," he said. The senator added that Cohn "has been one of the guys who has been very focused on helping the AK LNG project in the White House. So from that perspective, it's not a positive development."