By Grace Donnelly
March 2, 2018

President Donald Trump announced a proposed 25% tariff on steel and a 10% tariff on aluminum at a meeting with industry leaders on Thursday.

He tweeted about the “unfair and bad policy” on Thursday morning before the meeting.

Trump’s decision to implement these taxes on imported steel and aluminum, which were the most extreme recommended by the Commerce Department, comes after a review by the department to determine whether certain imports pose a threat to national security.

Steel and Aluminum Industries

About one-third of the 100 million tons of steel used each year by American business is imported, while imports account for more than 90% of the 5.5 million tons of aluminum used by U.S. companies.

President Trump has pushed more protective measures for the U.S. steel industry since he was a candidate.

While the American Iron and Steel Association applauded the decision, even the Aluminum Association conceded that not all the needed aluminum needed can be produced in the U.S. The group, which represents the domestic industry, is cautious about tariffs, noting that they need to be directed toward China rather than Canada or the European Union.

Auto and Aerospace Industries

In the aerospace industry, about 2.5 million U.S. jobs depend on both steel and aluminum imports.

The increased cost of individual parts could create “a cascading effect that has fairly significant impacts on our industry’s global competitiveness,” Remy Nathan, vice president of international affairs at the Aerospace Industries Association told NPR.

The auto industry, which was already facing sales declines in the U.S., will also be especially impacted. Toyota, General Motors, and other car makers saw their shares drop after the news Thursday.

The American Automotive Policy Council voiced concerns about the “unintended consequences” of these tariffs, saying they will lead to higher prices in the U.S. compared to competitors in other countries.

“This would place the U.S. automotive industry, which supports more than 7 million American jobs, at a competitive disadvantage,” the AAPC said in a statement.

Manufacturing and Construction Industries

About 17 million Americans work in industries that use domestic steel — 6.9 million in manufacturing and 10.1 million in construction, according to the Bureau of Economic Analysis.

The increased cost of these materials will affect the manufacturing of everything from appliances to beer cans. As a result, there will likely be fewer goods made in the U.S. and fewer workers hired to produce them.

The higher price of steel will also impact the construction industry, which uses the material for beams, and the oil and utility industries, which rely on steel pipelines to build the energy infrastructure that serves American consumers.

“The actions taken today are inconsistent with the administration’s goal of continuing the energy renaissance and building world-class infrastructure,” said Jack Gerard, the CEO of the American Petroleum Institute, a trade association for the industry.

International Entanglements

The tariffs were proposed by President Trump Thursday without many other details and after his economic advisers and other administration officials urged him to hold off on announcing any taxes on imports.

Many in Congress also voiced their opposition to the measures.

Along with concerns for American businesses and workers, the move would also complicate the U.S. trade relationship with China, which is already fraught.

“China is dumping steel all over the United States, okay? It’s killing you,” Trump said at a campaign rally in Pittsburgh in April 2016. “Maybe we get a little lower price, but we lose all the jobs.”

The proposed tariffs would take action on this and many other comments that reinforce the president’s hard-line stance on trade and reciprocity.

The tariffs could impact Canada, Brazil, South Korea, and Russia as well, the top five exporters of steel to the U.S., according to government trade data.


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