Economic, political impact of President Trump's trade agenda

This is a rush transcript from "Special Report with Bret Baier," March 1, 2018. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIPS)

THEN-PRESIDENTIAL CANDIDATE DONALD TRUMP: Any country that devalues their currency in order to take advantage of the United States and its workers will be met very, very sharply. And that includes tariffs and taxes for their goods coming into the country.

PRESIDENT DONALD TRUMP: We will be imposing tariffs on steel imports and tariffs on aluminum imports, and you're going to see a lot of good things happen. You're going to see expansions of the companies.

It will be 25 percent for steel. It will 10 percent for aluminum. It will be for a long period of time.

(END VIDEO CLIPS)

BRET BAIER, ANCHOR: President announcing tariffs, not making it official until next week. The markets got spooked by all of that today. A lot of people were surprised it came out today. When it comes to steel imports, the United States is the world's largest steel importer -- 26.9 million metric tons of steel imported into the U.S. in 2017.

Here is the interesting thing. If you thought this was all about China, the top 10 sources of steel imports into the U.S., they are not China. Number one is Canada, Brazil, South Korea, actually 10 of the top 12 are allies of the U.S. You look at aluminum, China is number three is this was all about China. But Canada at 43 percent is the number one exporter into the U.S. of aluminum.

But what about all of this and where this heads? Let's bring in our panel: Mike Allen, cofounder of Axios; Katie Pavlich, news editor at Townhall.com, and Mo Elleithee, executive director of the Georgetown Institute of Politics. OK, Mike, there's a big battle on this issue. The president campaigned on it. Shouldn't be a surprise. But yet rolling it out like this was.

MIKE ALLEN, AXIOS: It was a surprise, and it was not just a surprise to the markets. It was a shock inside. And I can't overstate how unusual it is for White House aides a couple hours before a big presidential event to have no idea. And this tells you how they think compared to how the president thinks. They were telling us he can't do this. The paperwork isn't done. And the president has been saying he wants to do this. Axios has reported in some meetings he's saying bring me my tariffs. So this is a president getting what he wanted, and the chart that you showed is part of the argument that aides have been making to delay, try to put this off, buy some time.

BAIER: Gary Cohn is one of those pushing back. But obviously he has a supporter in Wilbur Ross at Commerce, in Lighthizer, the trade representative, and, as I mentioned, he campaigned on this in some of the states that are really affected by these numbers.

KATIE PAVLICH, TOWNHALL.COM: Yes, the administration is gambling on the idea that the ends will justify the means here. They know that it's a big risk. History shows that tariffs aren't always good for the United States, and they certainly aren't good when it comes to putting these taxes on our allies. This might be about China. We do need to find ways to punish them. They steal our intellectual property, they constantly cheat on the economy. There have been a number of people who have pushed back on the way that the president is going about this but I think we have to give it time. This is a president who has blown things out before. People have panicked, issued their statements of condemnation saying it will never work, and in a lot of cases it has. So this is a big risk for the administration to take but I think we will just have to wait and see how well it plays out.

BAIER: Here is Lighthizer and Senator Sasse earlier on this show.

(BEGIN VIDEO CLIPS)

ROBERT LIGHTHIZER, U.S. TRADE REPRESENTATIVE: The response that we are going to start a trade war is nonsense. We have a very, very imbalanced relationship with China. The president is beyond engaged. He cares about jobs and wages. Politics never comes up. When he is not thinking about jobs and wages, it's wages and jobs.

SEN. BEN SASSE, R-NE.: Trade is great for America. Trade is great for American families, and no trade war has ever worked. We don't want to make America 1930 again, and the forgotten men and women of America don't want to be drafted into trade war. If you own a steel mill, today was great for you. If you consume steel, and every American family at the store tonight bought something that has different metals in it, today is a bad day for you.

(END VIDEO CLIPS)

BAIER: Mo, this is two for two for Democrats when it comes to gun control and on this issue. Sherrod Brown putting out a statement supporting this kind of thing. How does it stand?

MO ELLEITHEE, GEORGETOWN INSTITUTE OF POLITICS: Look, I don't know that you would find unanimity in the Democratic party on this. I think there are a lot of Democrats out there who support free trade and who are very nervous about a trade war. I thought Senator Sasse's point there was interesting. If you are a steel manufacturer, you are happy tonight. If you are a steel consumer, hold on to your horses because things are about to get rocky.

The last time we had one of these, in 2002 when President George W. Bush imposed tariffs on steel, we saw not just threats of retaliation from the E.U. on the American agricultural sector, so American farmers ought to be sweating it right now. But you also saw manufacturing plants that are consumers of steel put out reports talking about how they had to lay off 200,000 American workers and jack up their prices. There's going to be a lot of political alliances for and against this.

BAIER: I covered those tariffs back in the Bush administration and they lasted 21 months. And they eventually were pulled down for that very reason because there were threats of retaliation. Does this go through? Does this see a lot of resistance on Capitol Hill?

ALLEN: Bret, the important thing to watch, and you're 12 countries there tells the story, over the next week there's going to be a ferocious battle in the west wing over your shoulder and elsewhere in this town for what are going to be the carve-outs because the paperwork was not done. The President did this. If you are against it, you consider it a crime of opportunity. The president had a couple aides who were for it and they pushed this through. But now they will try to sweat it out, do we take out Canada, do we take out Europe? That's going to make a huge difference.

BAIER: You can almost hear the phone's ringing on K Street.

(LAUGHTER)

BAIER: Get over there. What is going on?

I want to talk about guns, and we have a little montage of some of the sound coming out from the past day and a half.

(BEGIN VIDEO CLIPS)

SENATE MINORITY LEADER CHUCK SCHUMER, D-N.Y.: The president said a lot of things right yesterday. Of course in similar meetings we have been disappointed in the past.

TRUMP: I don't care. I will take all the heat you want to give me, and I will take the heat off both the Democrats and Republicans.

SCHUMER: That cannot happen on guns.

HOUSE MINORITY LEADER NANCY PELOSI, D-CALIF.: I know if the comprehensive bill came to the floor on background checks, it would win.

SEN. MARCO RUBIO, R-FLA.: There are things that we can do that have widespread bipartisan support that we can act on, that we can get passed.

TRUMP: A week will go by, another week, another week, another week, and all of sudden people are going to be onto other things. We can't let that happen.

(END VIDEO CLIPS)

BAIER: Katie, the president has gotten a lot praise for these open cabinet meetings where he talks about all kinds of things. But the one on guns yesterday really raised some eyebrows, especially from the NRA and gun supporters.

PAVLICH: Yes, I don't know where to start with what happened yesterday. For the president to sit there and essentially punch the NRA in the nose multiple times while essentially downplaying their importance, saying directly he doesn't necessarily need them, and then for him to have Dianne Feinstein, Senator Dianne Feinstein, she was jumping for joy quite literally out of her seat, resubmit her ban on a number of semiautomatic rifles which the Clinton Justice Department said did nothing to combat crime numbers when it came to criminals who are using firearms in crimes, did nothing to actually reduce the number of mass shootings in this country, I have talked to a number of NRA members today who are saying we are willing to give the president a pass on the number of things but the Second Amendment and caving to the emotions of this, the do something attitude when this was a failure at the local level and at the federal level in terms of law enforcement, it's a redline for us. We're not going to go there.

BAIER: I am little cynical on the political thing and the positioning of Dianne Feinstein could be trouble for her in the primary in California, how close are you to Donald Trump? I don't know. There's all kinds of plays.

ELLEITHEE: I don't know if this plays into primary politics. I am old enough to remember when one of the number one talking points against Barack Obama and Hillary Clinton and Bill Clinton was the Democrats are going to come and illegally seize your guns. Yesterday the president of the United States sat there and said seize the guns first, due process later. A Republican president has gone further to talk about illegally seizing firearms than any Democratic president ever has.

BAIER: Which is what Senator Sasse talked about earlier. Mike, 10 seconds. Does something get done?

ALLEN: Something does get done, but very minimalist. The calculation up here is that whatever credit Republicans would get for going further on guns than they have in the past, they would pay more of a price with their own people. So it's going to be a couple things, nothing like what the president was talking about. They really told him that around the table. They said not this time.

BAIER: That was 12 seconds.

(LAUGHTER)

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