This Wednesday, President Donald Trump issued a 25% tariff across all aluminum and steel products imported into the U.S. Conceived as a plan to stimulate the U.S. and its massive economy, the plan has been negatively received. Many are viewing the latest tariff maneuvers as a risk that threatens to impact the price of consumer and industrial goods for American consumers.
Imposing a 25% tariff for all aluminum and steel products poses a big risk.
Although tariffs could provide much-needed assistance to U.S. domestic industries, they could also drastically increase the cost of materials for American manufacturers. The new tariffs could also potentially backfire, costing the U.S. a loss of over 100,000 American Jobs in the aluminum and steel industry. Some of the largest U.S. aluminum and steel production companies have a significant portion of their production located in Canada and then imported into the U.S. for refining and processing. The increase in costs could cause companies to lay off workers for cost-saving purposes.
Tariffs on China
During President Trump’s previous 2016-2020 term, he introduced 25% tariffs that specifically targeted China. The 25% covered almost all Chinese-made goods with very few exceptions. However, the implementation of the 25% tariff on steel and aluminum products is the first set of tariffs issued by President Trump that apply to all countries. Although Trump introduced these global tariffs as a plan to correct global trade imbalances, many view this as a risky plan that could potentially ignite a global trade war.
Tariffs on the European Union (E.U.) and Countermeasures
The implementation of this new 25% across-the-board tariff marks the first time that the European Union (E.U.) is affected by additional tariffs since President Trump’s return to the White House. The E.U. announced that it will take actions immediately to retaliate against these new tariffs, with Canada doing the same shortly after.
Prior to this Wednesday, the President had only implemented tariffs that affected China, Mexico, and Canada. Applicable for only Canada and Mexico, businesses were exempt from paying tariffs through April 2nd, if they complied with the USMCA. Canada’s swift response to these new tariffs are 25% tariff increases on U.S.-imported aluminum and steel products into Canada. Canada also continues increasing tariffs on other U.S. imported goods such as sporting equipment, computers, and cast-iron kitchenware. President Trump declared that the U.S. will not sit idly against retaliation and would “up the ante”.
