Trump has officially imposed 25% tariffs on all steel and aluminum imports, ending the 2018 exemptions. The move underlines his February plan to reduce foreign imports into the country to promote US factory jobs.
AP News reported that these tariffs will go into effect for Canada, Mexico, China, the EU, Brazil, and South Korea.
Earlier, Trump threatened to double the tariffs on Canadian steel and aluminum. However, he backed off from the decision after Ontario decided not to retaliate with an electricity surcharge against the U.S.
Trump has officially acted on his tariff plans despite an 8% drop in the S&P since the past month amid recession concerns. On Tuesday, during a Business Roundtable meeting, Trump insisted that higher tariffs would promote the growth of domestic facilities. He told the CEOs present in the meeting that “The biggest win is if they move into our country and produce jobs. That’s a bigger win than the tariffs themselves, but the tariffs are going to be throwing off a lot of money to this country.”
However, economic data shows mixed outcomes. While aluminum and steel producers gained $2.3 billion because of higher demand, “downstream” manufacturers lost $3.5 billion in production in 2021, according to a U.S. International Trade Commission report.
Volvo, Volkswagen, and Honda are planning to expand in the country. However, critics believe higher prices will decrease sales and profits. John Murphy, senior vice president at the U.S. Chamber of Commerce, has questioned whether boards will approve the companies’ expansion under these circumstances. He says, “If you’re an executive in the boardroom, are you really going to tell your board it’s the time to expand that assembly line?”
EU has imposed counter tariffs on $28 billion worth of US goods
In a statement on Wednesday, the EU commission said that it will put forward a new package of counter tariffs on US goods in April.
Ursula von der Leyen, president of the EU commission said, “This matches the economic scope of the U.S. tariffs. Our countermeasures will be introduced in two steps. Starting with 1 April and fully in place as of 13 April.”
Ursula mentioned that the EU is ready to engage in “meaningful dialogue.” The president also added that Maros Sefcovic, the Trade Commissioner will continue his talks with the US to look for a better solution.
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