Trade War Escalation: US to Impose 25-Percent Tariffs on Steel and Aluminum Imports
Latest Development in a Slew of Trade Levies
The United States will move to impose 25-percent tariffs on steel and aluminum imports this week, President Donald Trump announced on Sunday. The tariffs, which will be announced on Monday, will apply to "any steel coming into the United States," including aluminum.
Similar Tariffs Imposed in the Past
Trump imposed similar tariffs during his 2017-2021 presidency to protect US industries, which he believed faced unfair competition from Asian and European countries. Canada, which Trump has already threatened with tariffs, is the largest source of steel and aluminum imports to the United States, according to US trade data. Brazil, Mexico, and South Korea are also major steel providers to the country.
Reciprocal Tariffs to Follow
On Sunday, Trump also said he would announce "reciprocal tariffs" to match his government’s levies to the rates charged by other countries on US products. "Every country will be reciprocal," Trump said, adding that he would make a detailed announcement on the tariffs on Tuesday or Wednesday.
Previous Trade Levees and Their Impact
The president has already shown his fondness for weaponizing the United States’ financial power, ordering tariffs on key trade partners China, Mexico, and Canada soon after he took office. He paused 25-percent levies against Canada and Mexico for a month after both countries vowed to step up measures to counter flows of the drug fentanyl and the crossing of undocumented migrants into the United States. The tariffs against China went ahead, however, with products entering the United States facing additional levies of 10 percent since Tuesday.
Chinese Response
Beijing responded with targeted tariffs on certain US products such as coal and liquefied natural gas, which will come into play on Monday. The new Chinese tariffs cover $14 billion worth of US goods, while the tariffs announced by Trump cover $525 billion worth of Chinese goods, according to Goldman Sachs.
European Union and Japan in the Crosshairs
Trump has also pledged tariffs on the European Union and said that he would soon announce unspecified "reciprocal tariffs." French President Emmanuel Macron vowed in an interview aired Sunday to go head-to-head with Trump over his financial threats to Europe, though he said that the United States should focus its efforts on China rather than the European Union. Macron also warned on CNN that Americans would feel the effects of any tariffs on Europe, saying they "will increase the costs and create inflation in the US." And in an otherwise friendly meeting Friday with Japanese Prime Minister Shigeru Ishiba, Trump warned Tokyo could still face tariffs on exported goods if it fails to cut the US trade deficit with Japan to zero.
Trade Deficit and Economic Impact
The trade deficit of the United States — the world’s largest economy — widened last year to nearly $920 billion. Trump, who has promised a "new golden age" for the United States, has insisted that the impact of any tariffs would be borne by foreign exporters without being passed on to US consumers, despite most experts saying the contrary. But he did acknowledge after announcing tariffs on Mexico, Canada, and China earlier this month that Americans might feel economic "pain."
Tariffs as a Threat
Trump has wielded tariffs as a threat to achieve his wider policy goals, most recently when he said he would slap them on Colombia when it turned back US military planes carrying deported migrants. After a day-long showdown with Trump, the Colombian government backed down.
Conclusion
The latest development in the ongoing trade war between the United States and its trading partners is a sign of the escalating tensions between the two sides. As the trade war continues to unfold, it is essential to monitor the impact on the global economy and the effects on American consumers.
FAQs
- What are the tariffs being imposed on steel and aluminum imports?
- The United States will impose 25-percent tariffs on steel and aluminum imports.
- Who is the largest source of steel and aluminum imports to the United States?
- Canada is the largest source of steel and aluminum imports to the United States.
- What is the purpose of the tariffs?
- The tariffs are intended to protect US industries from unfair competition from Asian and European countries.
- How will the tariffs affect American consumers?
- The tariffs may increase the costs of goods and create inflation in the US, according to experts.