The Real Risks of Trump’s Steel and Aluminum Tariffs
- 6 years ago
The Real Risks of Trump’s Steel and Aluminum Tariffs
President Trump announced today that his administration would impose a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum, on the grounds
that other countries’ trade practices endanger American national security by undermining domestic production.
First, the United States imports only about one-third of its steel,
and the tariff would not apply to domestic production (aluminum is more heavily dependent on imports, with only 10 percent made domestically
But that was a more narrowly targeted law aimed at safeguarding domestic industries harmed by imports (the Trump administration has used
that provision to impose tariffs on imported solar panels and washing machines).
If the Trump administration follows through on the president’s comments Thursday, a company bringing $100,000 of steel
made in Canada into the United States would have to pay $25,000 to the government, effectively increasing its price.
The industries that use steel and aluminum are considerably larger as a share of the United States economy than are steel and aluminum producers.
After the president’s announcement, Wall Street quickly reflected this divide: Shares of U. S. Steel
and Century Aluminum were each up about 7 percent shortly afterward, while shares of Ford, Caterpillar and Boeing were each down about 3 percent.
The argument is that with domestic metals production undermined, the United States
is left vulnerable in the event of conflict that disrupts trade flows.
President Trump announced today that his administration would impose a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum, on the grounds
that other countries’ trade practices endanger American national security by undermining domestic production.
First, the United States imports only about one-third of its steel,
and the tariff would not apply to domestic production (aluminum is more heavily dependent on imports, with only 10 percent made domestically
But that was a more narrowly targeted law aimed at safeguarding domestic industries harmed by imports (the Trump administration has used
that provision to impose tariffs on imported solar panels and washing machines).
If the Trump administration follows through on the president’s comments Thursday, a company bringing $100,000 of steel
made in Canada into the United States would have to pay $25,000 to the government, effectively increasing its price.
The industries that use steel and aluminum are considerably larger as a share of the United States economy than are steel and aluminum producers.
After the president’s announcement, Wall Street quickly reflected this divide: Shares of U. S. Steel
and Century Aluminum were each up about 7 percent shortly afterward, while shares of Ford, Caterpillar and Boeing were each down about 3 percent.
The argument is that with domestic metals production undermined, the United States
is left vulnerable in the event of conflict that disrupts trade flows.