What President Donald Trump's Steel, Aluminum Tariffs Would Mean for Retailers

03 Mars, 2018, 05:52 | Auteur: Lynn Cook
  • President Donald Trump participates in a meeting with leaders of the steel industry at the White House

President Trump announced the plan Wednesday, following through on a campaign pledge to impose those tariffs.

The European Commission has said it would respond "firmly" to proposed U.S. import duties of 25 percent on steel and 10 percent on aluminum. Late on February 28, reports circulated that President Trump planned to announce sweeping tariffs on March 1, and the Administration invited U.S. steel and aluminum executives to the White House for the formal announcement. "So we're going to build our steel industry back and we're going to build our aluminum industry back".

These are the opening salvos in what may be an ugly global trade war. "Trade wars are lost by both sides", in a statement. Trump triggered a furore yesterday by announcing he would set tariffs of 25 percent on steel and 10 percent on aluminium to protect US producers.

This is "because globally there is over capacity in steel, and jobs are concentrated in areas that have suffered from deindustrialisation", said Nigel Driffield, professor of international trade at Britain's Warwick Business School. The trade deficit that we have with Mexico, that before NAFTA was a balanced trade agenda.

"For someone so obsessed with stock market performance, he's taking a big gamble with these tariffs, the benefits of which are questionable". "It has been great for China and terrible for the United States". They, too, will pay the price for higher-cost steel, in the form of slightly more-expensive cars and other goods. Europe's Stoxx 600 fell 0.7 percent, with many automakers and basic resource companies among major decliners.

The broad-based S&P 500 was off 0.2 percent to 2,673.14, while the tech-rich Nasdaq Composite Index was up 0.2 percent to 7,192.38.

Asian stocks had already built on losses seen in the U.S. the previous day, with shares in Hong Kong, Japan, China, Australia and South Korea weaker.

Ross said the reaction was unjustified and driven by narrow interests resistant long overdue change.

By his own moral sense, Trump believes the tariffs will restore some reciprocity in trade relations.

Industry insiders were less restrained. The Canadian government will continue to make this point directly with the American administration at all levels. It underlies notions of justice, equality, and the social contract.

U.S. allies, seeing their industries threatened, responded with bafflement and dismay. He said the European Commission would take the matter to the World Trade Organisation.

"This is going to have fallout on our downstream suppliers, particularly in the automotive, machinery and aircraft sectors", said Wendy Cutler, a former U.S. trade official who is now vice president of the Asia Society Policy Institute.

Trump also tweeted, "We must protect our country and our workers".

The stock market fell sharply after the announcement because investors feared that the move was the first of several that could result in escalating disputes in which the United States and its trading partners impose new tariffs.

That includes the editorial page of the Wall Street Journal.

If I dump a huge array of cheaper steel into your economy, I then get to drive out the competition and create a monopoly situation where I control the price and quality of the product. This kind of tit-for-tat strategy loses the bigger picture of U.S. trade relationships.

According to Wood Mackenzie's He Ming, senior manager, the United States last year imported 35.6 million metric tons (mmt) of steel, around 36% of its consumption, equivalent to about $33.6 billion.

Senate Finance Chair Orrin Hatch, a pro-Trump Republican, responded to the announcement by saying that the tariffs were "a tax hike the American people don't need and can't afford", and asked the president to consider "all of the implications of raising the cost of steel and aluminum on American manufacturers and consumers".

No one at the State Department, the Treasury Department or the Defense Department had been told that a new policy was about to be announced or given an opportunity to weigh in in advance.