As tensions rise in global trade, former President Trump has announced new steel and aluminum tariffs that will impact several countries. He plans to impose a 25% tariff on steel imports from all nations and raise the aluminum tariff from 10% to 25%. These tariffs will be effective starting March 12, 2025. The announcement ends all previous country exemptions and quotas and terminates the product exclusion process.
Trump stated that the tariffs are meant to protect national security, support domestic industries, and counter global excess capacity. He also mentioned the need to address a surge in imports from countries that were previously exempted. This move aims to close loopholes exploited by China and others.
The tariffs are designed to safeguard national security and bolster domestic industries while addressing surging imports and closing loopholes.
The European Union, Canada, and Mexico will feel the most significant impact, losing their past exemptions. The EU alone stands to lose $48 billion in exports to the U.S., while Canada and Mexico will see their steel and aluminum exports, worth $12 billion and $3 billion respectively, affected. Countries like Australia, Brazil, and South Korea will also lose their quota arrangements. Additionally, with the termination of country exemptions, all imports from these economies will be subject to the new 25% duty effective March 12, 2025.
The economic effects on the U.S. are expected to be mixed. Prices may rise by 0.41% in the short term, while U.S. exports could decrease by 1.37%. Some estimates suggest a GDP decline of 0.1% to 0.2%. In addition, around 142,000 full-time equivalent jobs might be lost, especially since steel-consuming jobs outnumber producing jobs by a significant margin. The tariffs could lead to reduced international competitiveness for U.S. steel and aluminum industries, further complicating the economic landscape.
U.S. steelmakers have praised this "America First" trade policy, citing $10 billion in new investments in steel mills. However, many in the auto industry are worried about potential job losses due to higher steel costs.
The announcement raises the risk of retaliatory tariffs from affected countries, which could lead to broader trade conflicts and disrupt global supply chains.
