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Trump announces fresh round of tariffs on steel and aluminum

The 25 percent tariffs on imported steel and aluminum are the latest salvo in his ongoing effort to overhaul the U.S. trading relationship with the rest of the world.

Trump Adds New Tariffs

President Donald Trump signed a pair of executive orders on Monday imposing 25 percent tariffs on imported steel and aluminum, the latest salvo in his ongoing effort to overhaul the U.S. trading relationship with the rest of the world.

This is a big deal — making America rich again, Trump said as he signed the orders.

The president’s actions are designed to promote greater domestic steel industry production and employment. But they will increase costs for manufacturers that use the industrial metals to produce goods such as automobiles and appliances. Those higher costs are at odds with Trump’s repeated campaign promises to bring down the cost of living.

This isn’t just about trade. It’s about ensuring that America never has to rely on foreign nations for critical industries like steel and aluminum, said Peter Navarro, White House senior counselor for trade and manufacturing.

Even before the official announcement, which the president previewed Sunday, the European Commission slammed it as “unlawful and counterproductive. German Chancellor Olaf Scholz vowed that Germany, Europe’s largest exporter of steel to the United States, could retaliate “within an hour” of any U.S. move.

Trump may announce additional U.S. trade measures as soon as Tuesday. He has promised to debut a new reciprocal tariff that would set U.S. import taxes to match those that other nations apply to U.S. products. One target is the European Union, which maintains a 10 percent tariff on cars imported from the United States while European vehicles are hit with a 2.5 percent U.S. tax when sold to American customers.

Trump’s reciprocal plan would represent a departure from recent decades when U.S. policymakers sought lower tariffs in most cases to reduce product costs and spur global integration. Trump’s new approach would further increase U.S. trade barriers, particularly on products from nations such as India and Brazil.

Combined with the raft of tariff plans he has proposed or implemented since taking office three weeks ago, the reciprocal proposal underscores Trump’s determination to enact historic changes in U.S. trade policy.

The steel and aluminum tariffs, meanwhile, are likely to renew tensions between the United States and its North American neighbors, which are among its largest suppliers of steel imports. The president just last week paused plans to impose a separate set of import taxes on goods from Canada and Mexico, which he linked to concerns over immigration and drug trafficking.

Canada, the No. 1 foreign supplier to the United States, last year shipped 6.6 million tons of steel to American buyers, according to the American Iron and Steel Institute (AISI). Brazil, Mexico, South Korea and Vietnam rounded out the top five import sources.

Though China is a relatively modest U.S. supplier, shipping 508,000 tons to U.S. customers, its global dominance of the steel industry makes it the administration’s real target.

China produces more than half of global steel output. As its domestic economy has slowed amid the collapse of a property bubble, its mills have continued to churn out more steel than the country’s builders and manufacturers can use.

The amount of excess steel available on global markets in 2023 reached 551 million metric tons, four times what the European Union produced, according to the Organization for Economic Cooperation and Development in Paris. That surplus supply weighs on global prices, keeping them too low for U.S. steelmakers to operate profitably without tariff protection.

In 2018, Trump imposed similar import taxes on steel and aluminum during his first term. They were later amended to permit continuing shipments from major U.S. allies such as Canada and Mexico, and replaced with an annual quota for Argentina, Brazil and several other nations.

But provisions for specific products in some cases, or all metals from countries like South Korea, to avoid those tariffs have been abused, a White House official said. The result has been continued weakness in the domestic industry, including the closure in recent years of aluminum smelters in Kentucky and Washington state.

Steel industry executives also complain that Chinese steel often enters the U.S. market via third countries such as Mexico.

Both China and Russia have exploited loopholes in the existing metals tariffs to ship their steel and aluminum to the United States via Canada and Mexico, the official told reporters Monday.

The new tariff regime aims to close those loopholes by instituting requirements for steel and aluminum to be cast or smelt in North America before reaching the U.S. market. Customs and Border Protection officials also will intensity their oversight of industrial metals shipments to prevent Chinese or Russian products being mislabeled to evade tariffs, the official said.
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