Trump imposes 25% tariffs on steel, aluminum imports

While aboard Air Force One, President Donald Trump told reporters yesterday that he plans to impose a 25% tariff on all steel and aluminum imports.

The US imports most of its aluminum (80%) from countries like Canada, Brazil, Mexico, Germany and South Korea. Canada alone accounted for over 50% of aluminum imported into the US last year.

Companies that depend on imports, like the auto industries, could see a rise in costs, but according to Trump, the tariffs are likely to boost domestic manufacturing. US steelmaker stocks surged.

Additional tariffs and trade measures
Trump also plans additional tariffs on pharmaceuticals, computer chips and automobiles. Over the weekend, he said the US would impose “reciprocal tariffs” on countries that charge duties on American goods.

Earlier this month, the president authorized 25% tariffs on Mexico and Canada, but last week, he paused the imposition of tariffs on Mexican and Canadian imports for 30 days. 

A few days later, China saw a 10% tariff on all imports, which saw retaliatory tariffs on some US imports.

2018 replay
In his first term, Trump imposed a 25% tariff on steel and a 10% levy on aluminum. According to experts, his tariffs, this time, leave uncertainty over whether it is a way to bargain with other countries or if it’s his way of helping the steel industry.

Impact on prices
Research firm Pantheon Macroeconomics estimates steel and aluminum prices to rise 20%, potentially costing consumers $8 billion annually. A $48,000 car could see a price increase of $400-$500 due to the tariffs.

Global reaction and potential trade war
The European Union vowed to retaliate, with France’s foreign minister warning they would “replicate” any tariffs. Germany’s Chancellor Olaf Scholz called a tariff war a “lose-lose situation,” while Canada’s steelmakers and Britain’s steel industry called the move devastating.