News & Press: General

President Trump Announces Aluminum and Steel Tariffs

Friday, March 2, 2018  
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On Thursday, March 1, 2018, President Trump met with industry representatives to announce that he had decided to impose tariffs on imported Steel and Aluminum as a result of the Commerce Department’s Section 232 Investigations into these materials. He indicated that the U.S. will implement a 25% tariff on foreign-made steel, and a 10% tariffs on foreign-made aluminum, once signed next week.

This was a surprise, as many expected the President to announce that the tariffs would be implemented immediately. The delay in effective date may be in response to the visit of Liu He, one of Chinese President Xi Jinping’s aides, who is scheduled to meet with administration officials to continue economic dialogue that had lapsed late last year. Announcing major tariffs on materials supplied by China to the U.S. on the same day as the trade meeting with senior Chinese officials would have provided terrible optics, and likely angered the Chinese, who have threatened to retaliate if the tariffs were put into place.

In his remarks on Thursday, the President promised to rebuild the American steel and aluminum industries. He noted, “And when it comes to a time when our country can’t make aluminum and steel—and somebody said it before and I will tell you—you almost don’t have much of a country, because without steel and aluminum your country is not the same.” He also said, “We need great steel makers, great aluminum makers for defense.”

It is widely expected that the decision will result in legal challenges by U.S. trading partners, as well as provoke retaliation against U.S. made goods in the affected countries. The impact on future NAFTA negotiations with Canada and Mexico is unknown at this time, though the move is certain to complicate the conversation.

Representatives from industries that use significant amounts of steel and aluminum, including U.S. automakers, have warned that the increased raw material costs will result in reduced sales levels and could potentially cause a significant number of layoffs. Commerce Secretary Wilbur Ross said in response that the material costs have very little influence on the price of products such as soup cans and automobiles. In comments made last week, he stated, “We really don’t think there’s very much likelihood of that. We really don’t buy that argument given the nature of these tariffs.”

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