The White House's National Economic Council has changed the Trump administration's approach to steel in the past week, people familiar with the strategy said.
Stopping over in Poland on his way to the Group of 20 summit meeting in Germany gives President Trump a chance to briefly bask in the acclaim of a right-wing, illiberal Polish leadership before he starts taking flak from more powerful allies like Germany and France.
Also, invoking national security is all but taboo at the World Trade Organisation, the arbiter of worldwide trade rules, because it is largely seen as a way to wage economic warfare by citing arbitrary defense concerns.
Europe is ready to fight back if President Trump introduces tariffs on steel imports, a top European Union official said Friday.
"There is no doubt that this entire line of trade remedy actions regarding national security matters is going to be an issue", said Jacob Kirkegaard, a senior fellow with the Peterson Institute for International Economics.
Trump touts G20 summit as 'great success' for US
President Trump hinted this week that his administration may move to protect the USA steel industry from foreign competition, a maneuver popular with his base but likely to upset China ahead of a meeting of the world's largest economies this week.
In addition to being intellectually dishonest, asserting that steel imports pose a threat to US national security could be internationally destabilizing.
At the same time, the language in the final statement refers to the use of "trade defense instruments", leaving the shadow of tariffs hanging over the world. The U.S. also has accused China of shipping steel and aluminum to the U.S. through countries such as Vietnam and South Korea. Many are looking to Trump's participation at the Group of 20 summit later this week for more specific answers regarding the president's thoughts on steel overcapacity.
European countries would prefer a multilateral solution on steel, he said. Thousands of protesters have descended on Hamburg - a city with a long history of protests and riots, where the meeting will be held Friday and Saturday - to demonstrate against everything from globalization and capitalism to the controversial leaders who will be there, most notably Mr. Trump, President Vladimir Putin of Russian Federation and President Recep Tayyip Erdogan of Turkey. "I think that there are some concerns about the systemic implications about going down that route for the global trading system". When it comes to trade policy, it's easy to shout "America first", but hard to define exactly what you mean by "America".
Just last week, Saudi Arabia, Bahrain, and the United Arab Emirates said their decision to close all land, sea, and airport links to Qatar was done to protect their national security and therefore complied with the WTO's national security exemption.