Read more about Trump to impose steep tariffs on steel, aluminium; stokes trade war fears on Business Standard. WASHINGTON (Reuters) – President Donald Trump announced on Thursday he would impose hefty tariffs on imported steel and aluminium to protect U. S. producers, risking retaliation from major trade partners like China, Europe and neighbouring Canada.
(Reuters) – announced on Thursday he would impose hefty tariffs on and aluminium to protect U. S. producers, risking retaliation from major trade partners like China, and neighbouring
Trump said the duties, 25 percent on imports and 10 percent on aluminium, would be formally announced next week, although officials later said some details still needed to be ironed out.
Trump believes the tariffs will safeguard American jobs, but many economists say the impact of price increases for users of and aluminium, such as the auto and oil industries, will destroy more jobs than curbs on imports create.
„We’re going to build our industry back and our aluminium industry back,“ Trump said.
Shares of U. S. domestic and aluminium makers rallied, but shares of companies ranging from auto makers to airplane makers fell on the potential impact of the higher costs they will have to pay for the metals.
The announcement came after what one person with direct knowledge of the discussions described as a night of „chaos“ in the due to frequent switching of positions in the administration.
The tariffs were sharply criticized by some senior Republican lawmakers as well as industries ranging from autos to oil to construction equipment. A major concern is that U. S. farm exports could be hit hard in retaliation by
„Every time you do this, you get a retaliation. Agriculture is the number one target. I think this is terribly counterproductive for the agriculture economy,“ said Senator Pat Roberts, who chairs the chamber’s agriculture committee.
has already threatened to curb imports of U. S. soybeans, and the has said it will consider action as well. Xi Jinping’s top economic adviser, Liu He, held talks with the Trump administration in on Thursday.
The discussion was described as „frank and constructive“, by a official, and focused on „ways to ensure fair and reciprocal trade.“
Trade tensions between the and have risen since Trump took office in 2017.
The tariffs will not directly hit that hard. Data shows that supplies 16 percent of U.
S. demand for versus China’s 2 percent and is by far the largest exporter, followed by and
Other countries were already looking at how to respond.
„Should restrictions be imposed on Canadian and aluminium products, will take responsive measures to defend its trade interests and workers,“ the country’s foreign affairs minister, Chrystia Freeland, said in a sharply worded statement.
Brazil’s industry ministry said would consider taking action on its own over the tariffs or in concert with other countries. Shares of two of its largest makers, and Usiminas, sold off, closing down 4.4 percent and 4.2 percent, respectively.
is already engaged in a dispute with and over its proposed revision to the North American Free Trade Agreement, and months of tense talks have failed to produce any meaningful progress.
Asked whether there would be exemptions for any countries, said she would not get into any details ahead of next week’s announcement. She said the tariffs were still being finalised.
Although only accounts for a small fraction of U. S. imports, its massive industry expansion has helped produce a global glut of that has driven down prices.
trading reflected the divergent impact of the tariffs. makers rose, with Holding up 9.5 percent, Corp up 5.7 percent and up 3.3 percent. Companies that are big users of fell. shed 3 percent and fell 4 percent.
But the overall trend was down, with the Dow Jones Industrial Average falling 1.7 percent and the index down 1.3 percent.
Though the administration says duties would protect U. S. industry, critics say they would raise costs for industry and fail to deliver on Trump’s campaign pledge to boost domestic jobs.
The tariffs were a victory for the trade hawks in Trump’s administration, including Peter Navarro, who has been rising in importance, and a setback for those who fear repercussions, such as top
It had appeared unlikely that Trump would announce the tariffs on Thursday after a night of back and forth inside the administration.
„There was a lot of movement within the past 12,16 hours,“ said the source who had knowledge of the discussions but who declined to be named due to the sensitivity of the issue.
„It was going to happen. It wasn’t going to happen and then it did happen,“ the source said.
The administration also cited national security interests for its action, saying the needs domestic supply for its tanks and warships. But the had recommended tariffs and a delay in aluminium duties.
FEW MORE JOBS FROM TARIFFS
While American steelmakers lost three quarters of their jobs between 1962 and 2005, a major study by the showed that much of this reflected improved production technology, with output per worker rising fivefold.
„Thus, even if trade protection leads to increased domestic production, increases in employment may be far less than many hope,“ a report from the independent Econofact network said last week.
„Across many states, the number of jobs adversely affected in these could far exceed any jobs saved,“ Econofact warned.
The overall impact on the U. S. is likely to be muted, barring a major trade war, with and aluminium imports accounting for just 2 percent of the overall total.
estimated the tariffs would add 0.1 percentage point to core inflation over a period of time and cut economic growth by 0.1-0.2 percentage point, which would be more than offset by Trump’s fiscal stimulus.
