US
Trump imposes 25% tariffs on all steel and aluminium imports
Donald Trump has signed two proclamations imposing 25% tariffs on all steel and aluminium imports to the US.
A proclamation is a form of presidential directive to government officials, but they do not carry the force of law, as an executive order would.
However the White House has said the tariffs will take effect from 4 March.
“This is a big deal,” Mr Trump said in the Oval Office as he announced the tariffs. “The beginning of making America rich again.”
He added: “We were being pummelled by both friend and foe alike.”
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‘We were being pummelled by both friend and foe alike,’ said the US president
The proclamations mean the president has now removed the exceptions and exemptions from his 2018 tariffs on steel to allow for all imports of the metal to be taxed at 25%.
The new tariff on aluminium is also much higher than the 10% duty he imposed on the material in his first term.
The tariffs are part of an aggressive push by Mr Trump to reset global trade, as he claims that price hikes on the people and companies buying foreign-made products will ultimately strengthen domestic manufacturing.
Outside economic analyses suggest the tariffs would increase costs for the factories that use steel and aluminium, possibly leaving US manufacturers worse off.
Canada, the largest source of steel imports to the US, criticised the move.
Candace Laing, CEO of the Canadian Chamber of Commerce, said Mr Trump was destabilising the global economy.
“Today’s news makes it clear that perpetual uncertainty is here to stay,” she said.
Hard to see how tariffs won’t be inflationary
At least part of the idea behind tariffs is to bring some production back to the US, but imposing them will have consequences.
What kinds of consequences? Well, at its simplest, tariffs push up prices. This is, when you think about it, blindingly obvious.
A tariff is a tax on a good entering the country.
So if aluminium and steel are going up in price then that means, all else equal, that the cost of making everything from aircraft wings to steel rivets also goes up.
That in turn means consumers end up paying the price – and if a company can’t make ends meet in the face of these tariffs, it means job losses – possibly within the very industrial sectors the president wants to protect.
So says the economic theory. But in practice, economics isn’t everything.
There are countless examples throughout history of countries defying economic logic in search of other goals.
Perhaps they want to improve their national self-reliance in a given product; perhaps they want to ensure certain jobs in cherished areas or industries are protected.
But nothing comes for free, and even if Donald Trump’s tariffs succeed in persuading domestic producers to smelt more aluminium or steel, such things don’t happen overnight.
In the short run, it’s hard to see how these tariffs wouldn’t be significantly inflationary.
Trump’s war of tariffs
Mr Trump’s proclamations come days after the US imposed a 10% tariff on all goods imported from China.
In return, China imposed 10% tariffs on American crude oil, agricultural machinery, large-displacement cars and pickup trucks.
There will also be 15% tariffs on coal and liquefied natural gas from the US.
US plans to impose 25% tariffs on Mexico and Canada were paused after agreements were reached on border security.
Mexico’s president said she was sending 10,000 National Guard troops to the US border immediately in return for a tariff delay.
Mr Trump said the Mexican soldiers would be “specifically designated” to stop the flow of fentanyl into the US, as well as illegal migrants.
Meanwhile, Canada’s prime minister Justin Trudeau said almost 10,000 frontline personnel “are and will be working on protecting the border”.
He added that his country was appointing a “fentanyl czar”, drug cartels would be listed as terrorists, and there would be “24/7 eyes on the border”.