Donald Trump announced plans to apply a 25% duty on steel and aluminium imports. This expanded his agenda in terms of trade and raised concerns with key US trading partners.
Trump, speaking aboard Air Force One Sunday, confirmed that tariffs will apply to Mexico and Canada as well, but did not specify when the measures would be implemented.
Trump hinted that he would impose reciprocal tariffs against countries who tax US imports. He noted these measures would take effect “almost instantly” following an announcement. He did not provide any further information.
Tariffs on steel and aluminium could have a significant impact
Aluminum imports from Canada, UAE and China account for the majority of US demand.
Imports of steel, although they represent a small portion of the total consumption, are essential for certain industries that require specialty grades, which cannot be produced in-house, like energy companies engaged in oil and wind drilling.
The metal markets of Asia responded positively to Monday’s announcement. The price of iron ore in Singapore rose by less than 1 percent, while the London Metal Exchange’s aluminum futures saw a marginal gain. US aluminum futures traded on Comex gained 0.4% during light trading.
Canada, Mexico Brazil and South Korea are leading steel suppliers to the U.S. Some oil companies had been exempted from tariffs in Trump’s previous term.
It is not clear whether the 10% tariff on Chinese products will be doubled for imports.
China responded by imposing retaliatory actions on US imports worth $14 billion, which will take place Monday.
The targeted tariffs are more measured than Trump’s larger tariff plans.
Trump’s Tariff Negotiations
Trump has used his tariffs strategy as a bargaining tool many times. After Mexico and Canada proposed increased border security, he delayed the tariffs for imports until March.
His threat to impose a tariff of 25% on Colombia in January also had an effect, as the country was forced to accept those deported.
The president also threatened to impose duties on EU goods, such as pharmaceuticals, oils, and semiconductors. He has maintained a mixture of hardline rhetoric while remaining willing to negotiate with China.
Tariffs are used by the president to achieve his economic objectives of reducing deficits in trade and raising revenue for his tax reform initiatives.
Economists caution that these measures may increase the costs of manufacturers, drive up consumer prices and cause trade relationships to be strained without producing revenue.
Tariffs between Mexico and Canada are still in the works
In a Fox News Interview, Trump criticized Canada for its insufficient border security measures, as well as drug trafficking and migration, ahead of the March 1 deadline.
Trump reiterated that he would impose 25% tariffs for all imports coming from America’s largest trading partners, if they did not take more aggressive actions.
Trump delayed tariffs on March 1, after both countries made initial concessions to border security.
Mexico committed to sending 10,000 National Guard soldiers to patrol its border, while Canada pledged new technology and additional personnel as well as anti-fentanyl initiatives.
Trump has made it very clear that these efforts did not meet his expectations.
When asked if the actions of Mexico and Canada were sufficient, Trump replied, “No. It’s not enough. It’s time to do something. “It’s not sustainable and I am changing it.”
He didn’t elaborate on the specific measures that the two countries could take to avoid tariffs.
This article, President Trump Plans to Impose 25% Tariff on Steel and Aluminum Imports first appeared on The ICD
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