President Trump signed an executive order doubling tariffs on steel and aluminum imports from 25% to 50%.
This marks the second increase since March, impacting a wide range of goods, from automobiles to food packaging.
The President stated the measures, effective immediately, aim to bolster the American steel industry.
However, critics warn of potential negative consequences, including disruptions to global steel production, retaliatory tariffs from trading partners, and substantial costs for US businesses utilizing these metals.
Many affected businesses expressed disbelief before the announcement, hoping for a temporary measure or negotiating tactic.
The UK received an exemption, maintaining 25% tariffs, reflecting ongoing trade discussions with the US, as reported by the BBC.
Rick Huether, CEO of Independent Can Co., questioned the long-term implications of Trump’s actions, expressing concerns about the uncertainty impacting his business and potentially forcing a shift to alternative materials.
He cited previous investment freezes and price increases as a result of Trump’s earlier actions and noted the current market “chaos.”
The US is a leading steel importer globally, sourcing primarily from Canada, Brazil, Mexico, and South Korea, according to US government data.
Trump previously imposed tariffs under national security provisions. Many imports were later exempted through trade deals or individual firm requests.
These exemptions were revoked in March due to perceived weakening of the protective measures.
At a recent rally, Trump advocated for tariffs high enough to eliminate reliance on foreign steel suppliers.
He stated that the 50% rate would be insurmountable for foreign competitors, preventing them from undercutting domestic producers.
Canadian steel manufacturers predict devastating impacts, with potential for thousands of job losses and industry collapse.
While Canadian officials signaled a measured response, pending ongoing trade talks, a Canadian MP called for immediate retaliation.
US steel production and imports showed minimal change before the tariff increase, according to the American Iron and Steel Institute. However, steel imports experienced a notable 17% decrease in April.
Trump’s March actions prompted retaliatory tariff preparations from Canada and the EU.
The EU confirmed ongoing negotiations to reach an agreement, expressing hope for a reversal of the new tariffs.
In the UK, the announcement intensifies pressure to finalize the US trade deal, originally intended to mitigate the March tariffs.
Following meetings between UK and US trade representatives, the UK expressed satisfaction with the exemption from the latest tariff increase.
However, UK steelmakers reported order cancellations and delays due to the existing 25% tariffs, warning that a 50% tariff would be catastrophic.
Economists point to potential economic harm from the tariffs, noting rising prices and job losses. A 2020 analysis suggested that Trump’s initial tariffs resulted in a net job loss despite some gains in the steel industry.
Experts predict significantly more severe job losses this time due to the impact on intermediate inputs like steel and aluminum.
Chad Bartusek of Drill Rod & Tool Steels detailed the substantial cost increase faced by his company, leading to price hikes and reduced worker hours.
He described the situation as a series of setbacks, hoping for a rapid resolution.
Failure to finalize the UK-US trade deal by July 9th could result in a return to 50% tariffs on UK steel.
While tariffs are central to the President’s economic policy, economists express concern over the risk of a global trade war.
The following paragraphs are unrelated to the main topic and have been removed for clarity.