The News
US President Donald Trump imposed 25% tariffs on all steel and aluminum imports to the US Monday, in his latest protectionist move after raising duties on Chinese imports last week.
Canada — the biggest importer of steel to the US — will likely be hardest hit, while other US allies also braced for impacts: Trump said he planned to raise import taxes on Europe and Taiwan, and on imports of copper, pharmaceuticals, and semiconductors.
The new tariffs come a week after Canada and Mexico managed to avert Trump’s previous threat to impose 25% duties on all imports from those countries to the US. The combined effect of these and the China tariffs was predicted to shrink US GDP by 0.4% and raise household taxes by $800 on average, according to the Tax Foundation.
SIGNALS
First term tariff moves could indicate Trump’s way forward
Donald Trump’s metals tariffs are a reprisal of his first-term steel and aluminum duty hikes (later paused by the Biden administration). Those tariffs saw the first Trump administration grant many countries exemptions to avoid chaos and political blowback after some world powers retaliated with their own tariffs on US exports, hurting key industries. Still, senior economic advisers to Trump now have indicated that the president is willing to take a harder line this time, as the administration hopes that the money could be used to generate revenue or even replace income tax, The Wall Street Journal wrote.
New steel tariffs have their sights set on China
While the new metals levies will primarily impact US allies, the president is likely aiming to strike at “long-time nemesis” China, The New York Times wrote. China doesn’t export much steel directly to the US, but it dominates the global steel and aluminum trade, producing at least as much of the metals than the rest of the world combined. Among China’s top customers are Canada and Mexico, which in turn sell the metals at a higher price to the US. At the same time, Beijing has been trying to boost its exports to stimulate its stagnant economy. Trump had already imposed across-the-board 10% tariffs on China — with Beijing imposing retaliatory tariffs on the US Monday — and analysts have warned about an escalating trade war.