Trump announces imposition of tariffs on steel and aluminum imports to US
The US may impose tariffs on steel and aluminum imports (Illustrative photo: Getty Images)
US President Donald Trump intends to impose a 25% tariff on all steel and aluminum imports to the country. This move puts America's relations with some of its largest trading partners at risk, reports Bloomberg.
According to the president, the tariffs will apply to steel and aluminum imports from all countries. When asked by reporters aboard Air Force One whether Mexico and Canada would be affected, he stated that the tariffs would apply to everyone, but did not specify when they would take effect.
Additionally, Trump mentioned that this week he would announce corresponding tariffs on countries that impose taxes on imports from the US. He stated that these tariffs would take effect almost immediately after the announcement.
Bloomberg notes that these moves are the latest in a series of threats regarding tariffs on specific countries and sectors.
However, it is unclear whether Trump will follow through on his threats - he previously announced, then suspended, tariffs on Canada and Mexico, although he continues the process of imposing tariffs on China.
Which countries may be subject to restrictions
The US relies on aluminum imports, mainly from Canada, the United Arab Emirates, and China, to meet the majority of its demand. Steel imports make up a smaller portion of consumption but are vital for sectors that rely on special grades of steel not produced in the US, including energy companies - ranging from wind farm developers to oil drillers.
The primary foreign suppliers of steel to the US are Canada, Mexico, Brazil, and South Korea.
When announcing these plans, Trump did not clarify whether Chinese metal imports would be subjected to double tariffs, considering he has already imposed a 10% tariff on Chinese goods.
Bloomberg notes that the president sees tariffs as a central element of his attempt to reform the US economy, reduce the trade deficit, and find new sources of revenue to support his tax agenda.
"The moves threaten to wreak economic havoc, with economists saying the levies will raise costs for US manufacturers who import goods, raise prices for consumers already weary from inflation, reduce trade flows and fail to bring in the revenue Trump has predicted," writes Bloomberg.
Steel crisis
Trump's statement came at a time when the US steel industry was still trying to recover from its worst year since his first presidential term. Domestic steel producers had complained that the new surge in imports had hurt their profits and production volumes.
Bloomberg reminded that tariffs on steel and aluminum were among the first tariffs Trump imposed during his first term: in 2018, as president, he introduced a 25% tariff on steel and a 10% tariff on aluminum for national security reasons.
The announcement of tariffs on steel also came amid the halted deal between Japan's Nippon Steel Corp. and US Steel Corp. for $14.1 billion. The deal was blocked by former president Joe Biden, and Trump also opposed it.
However, on Friday, February 7, after a meeting with Japanese Prime Minister Shigeru Ishiba, Trump stated that Nippon Steel was considering investing in US Steel instead of purchasing the company outright.
On Sunday, Trump told reporters that Nippon Steel could not hold a controlling stake in the American company.
"I don’t want US Steel being owned by a foreign country. All they can have is an investment," Trump said.
Both companies are challenging the US blocking of the deal in court.
Trump's tariff war
On February 1, Donald Trump signed an executive order imposing 25% tariffs on imports from Canada and Mexico, as well as 10% tariffs on goods from China.
However, just two days later, the president postponed the implementation of tariffs on imports from Mexico and Canada until March, after the governments of these countries promised to strengthen border security with the US.
On February 8, Trump signed an executive order delaying tariffs on cheap parcels from China.
In response to the US tariffs, Beijing announced countermeasures that were set to take effect on Monday, February 10.
Additionally, Trump intends to impose tariffs on goods such as pharmaceuticals, oil, and semiconductors and has not ruled out introducing tariffs on imports from the European Union.
The scale of Trump's overall tariff ambitions remains unclear. His willingness to occasionally shift course has reinforced the idea that the new president primarily uses tariffs as a negotiation tool.
