CNN reports, President Trump imposed a 25-percent tariff on all steel and aluminum imports to the US today, “a policy aimed at leveling the playing field for US manufacturing but a move that threatens to drive up prices on a broad range of consumer and industrial goods for Americans.”
The action increased the risk of a global trade war. The European Union and Canada immediately responded by imposing tariffs on a range of US imports. Trump announced he will retaliate without specifying how or when. Mexico said it won’t reciprocate immediately, but it might reconsider its if Trump follows through on his threat to impose a general tariff on Mexican imports. Because China was already subject to an across-the-board tariff of 20 percent, today’s action sets the tariff on Chinese metal imports at 45 percent.
The CNN article also reports on precedent indicating the tariffs may actually harm some US manufacturers they are intended to benefit in addition to raising costs for other businesses and for consumers.
Trump imposed more moderate steel and aluminum tariffs during his first term. A detailed Reuters analysis of that policy concludes there were some limited benefits, but the taxes “also had negative downstream effects on the industries that require these metals as inputs.” Reuters adds that the tariffs imposed today “are even more extensive — this round has higher rates and includes finished metal products as well as raw materials.”
The Wall Street Journal (subscription required) is keeping tabs on Trump’s seesawing tariffs policy.
