Morning News Brief: Tariff Deadline, Iran Nuclear Deal

May 1, 2018
Originally published on May 1, 2018 8:17 am
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DAVID GREENE, HOST:

U.S. allies, including Mexico, Canada, also the European Union, have really been on edge. They've been waiting for a big decision from the White House.

STEVE INSKEEP, HOST:

Yeah, there was a trade deadline at one minute after midnight. Tariffs on imported steel and aluminum were scheduled to take effect for these U.S. allies. And then the White House put off the decision.

GREENE: And let's ask White House correspondent Scott Horsley why that is.

Hey there, Scott.

SCOTT HORSLEY, BYLINE: Good morning, David.

GREENE: All right, so President Trump has been talking up these tariffs for a while now, makes a last-minute decision last night to delay them. What was that decision about?

HORSLEY: David, these tariffs were ostensibly designed to protect the domestic steel and aluminum industries, which President Trump has called vital to national security. But over the last couple of months, it has become clear that Trump also sees these tariffs as a bargaining chip. And he's been using the threat of tariffs as leverage in broader trade negotiations. In the case of Canada and Mexico, for example, the U.S. is trying to negotiate a revised version of NAFTA. So they've decided to hold off on these steel and aluminum tariffs for now, ditto the European Union. With Australia, Argentina and Brazil, the administration says it has reached an agreement in principle on a deal that might make the tariffs unnecessary. So it's postponing the implementation for 30 days to try to finish up the details.

GREENE: So 30 days, the beginning of June, the president could still decide to impose these tariffs. And if he were to do that, I mean, how would these countries respond?

HORSLEY: They would likely retaliate against U.S. exports. The EU in particular has said it would go after politically sensitive products, including Harley-Davidson motorcycles and Kentucky bourbon, with tariffs of its own. Of course, Harleys are manufactured in Wisconsin, which is the home of House Speaker Paul Ryan. And Kentucky bourbon tariffs might get the attention of Senator Mitch McConnell. Farm exports could also be targeted in an effort to hurt a key constituency of President Trump. China, for example, has already imposed tariffs on some farm exports like pork in response to steel and aluminum tariffs, which have taken effect on China. And a delegation of U.S. officials is on its way to Beijing this week for broader trade talks.

GREENE: You say broader trade talks. And you said that the president, I mean, is trying to use these threats as a negotiating tool. Is that working? Is there a sign that that's effective?

HORSLEY: It's kind of a mixed bag. South Korea did agree to a rewrite of the Korean free trade agreement with the U.S. And as part of that, South Korea got a permanent exemption from the steel tariffs. But it had to agree to cut its steel exports to the U.S. by about 30 percent. And the White House says it may pursue similar quotas with other trading partners.

Japan has also been subject to the tariffs on steel and aluminum. And that was a source of some friction when Japanese Prime Minister Shinzo Abe met with President Trump down in Mar-a-Lago a couple of weeks ago.

GREENE: All right. So the key thing, I guess, is to just watch these negotiations as they go on. But we have this delay now for a month.

HORSLEY: It is kind of a blunt instrument, though, because the tariffs do have the potential to raise prices for U.S. consumers and companies and, of course, spark retaliatory tariffs on U.S. exports.

GREENE: NPR White House correspondent Scott Horsley

Scott, we appreciate it.

HORSLEY: You're welcome.

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GREENE: So the prime minister of Israel gave a pretty dramatic presentation yesterday.

HORSLEY: Yeah, Benjamin Netanyahu addressed his nation. It was in the evening Israel time, when Israelis might be home. But the presentation suggested there was also a different audience. Netanyahu spoke mostly in English, and he included appeals to President Trump to do the right thing and withdraw from a nuclear deal with Iran. Netanyahu revealed that Israeli spies have uncovered thousands of secret documents from Iran.

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PRIME MINISTER BENJAMIN NETANYAHU: We can now prove that Project Amad was a comprehensive program to design, build and test nuclear weapons.

INSKEEP: Project Amad - that's the project described in these documents, which are years old, from well before a 2015 agreement limiting Iran's nuclear program. Nuclear inspectors say Iran is abiding by that deal. But the Israeli leader contends the existence of nuclear plans shows Iranians may have wanted to use them later. An Iranian diplomat dismissed these allegations as childish. But the revelation comes days before President Trump decides whether to stay in the deal.

GREENE: And NPR's Peter Kenyon has been following all of this from Istanbul.

Hi, Peter.

PETER KENYON, BYLINE: Hey, David.

GREENE: So if what Netanyahu says is true - he's talking about documents that, as Steve said, are pretty old - so how much of a revelation is this?

KENYON: Well, we are talking about a lot of information - tens of thousands of documents, CDs full of more information. So there could well be some new information, some new details about Iran's past activities in there. But the broad outline of what Netanyahu made his case on, that Tehran did pursue research on a nuclear weapon up until 2003 and then claimed it hadn't done that - that was known even before the nuclear talks really got going in earnest. And it was certainly known among all six countries doing that negotiating that Tehran's denials of ever pursuing a nuclear weapon were really not credible.

And negotiators basically said, what Iran says about the past isn't really what's important. What matters is verifying going forward, not taking Iran's word for anything but verifying what Iran is doing now and in the near future with regard to its nuclear program. So that's how we got this intrusive inspection regime by the International Atomic Energy Agency. And as you noted, the IAEA inspectors say Iran is in compliance with the deal.

Now, you could ask, are the inspections tough enough? Might they be asking to visit new places, more military sites? Perhaps. But that doesn't seem to be where the White House is heading here.

GREENE: OK. So one place the White House seems to be heading is continuing to say that this deal is unacceptable. And President Trump has dangled the notion of somehow renegotiating the deal and not just pulling out. Is there any hope of a renegotiation before this May 12 deadline?

KENYON: No. Before that deadline, no, I would say not. The foreign minister of Iran told NPR last week this would be like opening Pandora's box. Trump would not only have to get Iran back to the table but Europe, Russia and Chinese partners as well. That's pretty unlikely.

GREENE: What would this mean for Iran and the Europeans, I mean, if the U.S. just totally withdraws?

KENYON: Well, that's interesting. Analysts have been writing recently about ways Europe might be able to protect companies that still want to do business with Iran even if the U.S. walks away. It's not something European central bankers would be eager to take on, I'm guessing. But it might be possible. Would it be worthwhile in a business sense? That's a big question.

GREENE: NPR's Peter Kenyon in Istanbul this morning.

Peter, thanks.

KENYON: Thank you.

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GREENE: All right, we're following what's expected to be some large protests today in Puerto Rico. People there are grappling not only with that long recovery from Hurricane Maria but also with a painful recession and also a mountain of debt.

INSKEEP: And protesters are angry that in order to improve the island's economy and allow it to begin repaying its debts, federal overseers are requiring the island's government to implement a long list of austerity measures - cuts to worker vacation and sick time, to pensions and to the public education system.

GREENE: NPR's Adrian Florido is in Puerto Rico. He's been following this.

Hi, Adrian.

ADRIAN FLORIDO, BYLINE: Good morning, David.

GREENE: So why are these protests timed today? Was it some big decision that just happened, or what?

FLORIDO: Yeah, well, for a couple of reasons - I mean, one, today is May 1, which is, you know, generally considered an international day for workers. And a lot of the folks protesting today are, you know, government employees, teachers, people in low-wage - and frankly, middle-class jobs, too - students, professors, people who feel like all these austerity measures that Steve just mentioned are aimed at them.

You know, the government also plans to triple the cost of tuition at Puerto Rico's public universities, reduce government health benefits, sell off the publicly owned electric grid, close a quarter of the island's public schools. They're all things aimed at, you know, cutting spending and increasing revenue. But there are also measures that protesters feel like are sort of being - you know, those cuts are being made on their backs. And so - you know, many people still haven't recovered from Hurricane Maria? And they worry...

GREENE: Sure.

FLORIDO: ...That these sorts of measures are going to further harm the population.

GREENE: Well, isn't one of the important things to sort of note here the fact that these measures are coming from this federal oversight board? I mean, what is that board? And why is this outside board making decisions about the island's finances?

FLORIDO: Well, it's making decisions about the island's finances because that's the power that Congress gave it. Remember that Puerto Rico's government has been buckling under more than $70 billion in debt. And two years ago, Congress passed a law that essentially allowed it to seek protection from its creditors. But it also created this seven-member board with enormous power to make decisions over the island's finances. It's actually really similar to what happened to Detroit after Detroit's bankruptcy.

GREENE: Oh, interesting.

FLORIDO: Yeah. And so what a lot of protesters here angry about is that you have this powerful, unelected board that's dictating the island's financial future. And because Puerto Rico is a U.S. territory, you know, there is a lot of anger and sensitivity here over the history of its colonial relationship with the United States. And so to protesters, this kind of process feels like more of that. Right?

I should also mention that, you know, they're not only angry at this board. They're also angry at their own government for, you know, playing a large role in getting the island into this financial mess and for agreeing to implement a lot of these cuts that the board is dictating.

GREENE: Adrian, how widespread is this anger? And how big could these protests get today?

FLORIDO: The anger is very widespread. I mean, we're talking about many thousands of people expected on the streets today. They're going to protest in front of the Capitol and in the island's financial district, at the headquarters of banks that they also sort of consider responsible for issuing a lot the public debt that essentially sunk the Puerto Rican government's ability to finance public services. So police are taking some pretty serious security measures, including boarding up the buildings that house some of these banks, just in case they get vandalized.

GREENE: NPR's Adrian Florido reporting from Puerto Rico this morning.

Adrian, thanks.

FLORIDO: Thank you, David.

(SOUNDBITE OF B-SIDE'S "BREEZE") Transcript provided by NPR, Copyright NPR.