US president Donald Trump announced he will place a 25% tariff on all steel and aluminium goods entering the US.
In a press briefing aboard Air Force One last night (9 February), Trump said that the tariffs would apply from today (10 February) and would hit “everyone”, including US allies.
"Any steel coming into the US is going to have a 25% tariff," he said.
The White House has yet to formally release a statement.
Allied reaction
If confirmed, this would mean another escalation of Trump’s aggressive trade policy, which has already sparked a retaliation from China and reaction from US allies.
A spokesperson for the European Commission (EC) said that they had not received any official notification and would not respond to any “broad announcement” without additional details.
“The EU sees no justification for the imposition of tariffs on its exports,” they said, adding that the EC would regard any tariffs as being “unlawful and economically counterproductive.”
Australian prime minister, Anthony Albanese, told his country’s parliament that he would speak to Trump about an exemption for Australia’s metal exports.
Doug Ford, the Conservative premier of Ontario, accused Trump of “shifting goalposts and constant chaos, putting our economy at risk.”
Canadian political adviser, Catherine Loubier, told the BBC’s Today programme that “hundreds of thousands of jobs” in the US were linked to Canadian exports, and this could be a negotiating tactic.
"I think there's a lot at stake and nobody's winning with these tariffs, that's for sure."
Net importer
Brad Setser, senior fellow at the Council on Foreign Relations, highlighted that the US remains a net importer of steel and that most imports into the US come under various exemptions or exclusions.
This includes substantial steel imports from Canada and Mexico, a significant amount of which come under a trade deal negotiated during the first Trump administration.
“Imports have been flat recently, so Trump isn't responding to any surge in imports or crisis in the industry,” he said.
Setser added that Canadian imports were “essential for the primary aluminium market in the US to clear”, and that an increase from 10% to 25% would drive up costs.
‘Pain for no gain’
David Henig, UK director of the European Centre for International Political Economy, said that “pain for no gain pretty much sums up Trump’s trade policy”.
“To be clear, none of this is ‘a negotiating strategy’.
“Trump may retreat, there will be exemptions, but this is Mao-type cultural revolution misrule, the unleashing of domestic and international chaos because he can, and to smash lots of things viewed as wrong.”
Chinese retaliation
Chinese retaliatory tariffs also come into effect today, following Trump’s announcement last Monday (3 February) of a 10% tariff increase on Chinese imports into the US.
In last week’s announcement, Trump also confirmed 25% tariffs on Mexican and Canadian goods, while threatening the EU with similar measures.
He later delayed the measures on his North American allies by a month, after both Mexico City and Ottawa made announcements on tackling the flow of drugs and migrants into the US.
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