President Trump's comprehensive tariffs for foreign steel and aluminum came into force on Wednesday, which invites an immediate retaliation of the European Union and the tensions with other trading partners who were withdrawn from its input and outdoor approach to steep trade sentences.
Mr. Trump's tariffs of 25 percent reached metal imports from every country that sells steel and aluminum to the USA. Many domestic steel and aluminum manufacturers support the move and say that they will protect their industry from foreign competitors. However, the tariffs are expected to increase costs for American companies that use foreign metals, including manufacturers of cars, food and drinks in canned tamper, solar collectors and other products.
Some trading partners have vowed to take revenge by having issued taxes that aim to violate US exporters. Canada, an important metal supplier in the USA, said that there would be new retaliation tariffs for American imports worth 20 billion US dollars such as metals, computers and sporting goods. And the European Union quickly announced tariffs for American goods worth up to 28 billion US dollars, including bourbon, boats and motorcycles.
These conflicts could turn into even larger trade wars. When asked on Wednesday whether he would take revenge against the EU tariff, Mr. Trump said: “Of course I will answer.”
Many other governments – such as Japan, Australia, Mexico, Brazil and Great Britain – have not reacted to fear of deterioration relationships and the effects on their own economies. These countries also grant the next round of Mr. Trump's tariffs on April 2, when the president declared that he would impose tariffs on foreign cars and countries that he says to discriminate against the United States.
Mr. Trump's latest trade movements have shaken the stock markets and tightened the concerns about the economy. The stock markets shifted between profit and losses on Wednesday when investors defeated concerns about the tariffs against better than expected inflation data for February. Analysts have warned that Mr. Trump's comprehensive plan for tariffs could increase inflation in the future and to slow down the economy.
On Monday, Goldman Sachs reduced his forecasts for economic growth from 2025 for the United States from 2.4 percent to 1.7 percent, citing an undesirable trading policy.
“This can be the quiet CPI report in front of the storm,” said Seema Shah, chief -global strategist of the main assets management and referred to the inflation data. She said that the inflation image with tariff policy could possibly become “over the months”.
The campaign on metals is only the latest attempt by Mr. Trump to use the power of tariffs and the American market against foreign governments. Last week he issued steep tariffs for imports from Canada, Mexico and China and responsible for the entry of drugs and migrants to the USA before protecting some of the tariffs quickly.
Mr. Trump's approach has sent many US allies into a defense mode when they try to find out how to avoid the president and at the same time protect their own industries. On Tuesday, Mr. Trump threatened to double the tariffs to Canadian metal after the province of Ontario reacted to his earlier tariffs by entering an electricity exported to the USA. Ontario had suspended his contract within a few hours and Mr. Trump went back.
The steel and aluminum tariffs restore similar steps that Mr. Trump carried out in 2018, which redeemed several long-term commercial fats. Mr. Trump argued that the tariffs were needed to protect national security and to provide a reliable metal source for the military in times of war.
However, the metal tariffs mainly affect the US allies: Canada is by far the largest provider of steel and aluminum in the USA. Brazil, Mexico, South Korea and Vietnam also send the considerable amounts of steel, while the United Arab Emirates and China send the United States aluminum.
Since Mr. Trump published the tariffs for the first time in 2018, he and former President Joseph R. Biden Biden Biden Jr. Business have been doing business with abroad, including Brazil, Mexico, Canada and the European Union, which were knocked away in the tariffs. The US metal industry has complained that the measures were no longer strong enough to keep steel mills and aluminum huts alive.
Us Steel, one of the only surviving manufacturers of the country's primary steel, warned against closing plants and taking workers unless he finds a profound buyer. The managing director of Cleveland Cliffs, the other primary steel manufacturer of the country, said that last year “the worst year for demand in domestic steel” had been in over a decade.
“Things would be much worse for the industry without these tariffs,” said Kevin Dempsey, President of the American Iron and Steel Institute, an industry group.
Since steel and aluminum are used to produce so many other products, tariffs that increase the price of metals have consequences for many other manufacturers and for the US economy.
By increasing the costs of fundamental inputs for many companies, tariffs could damage factories that ultimately employ far more Americans than steel mills and melting aluminum. Economists say that this could possibly backfire Mr. Trump's plans to strengthen the US production.
An economic analysis published by the US International Trade Commission, an independent, cross -party agency, indicated that the total cost of the US economy from Mr. Trump's first term prevails the metal tariffs.
The study showed that the metal tariffs raised in 2018 encouraged the buyers of steel and aluminum to buy more from US sources, to lead to higher domestic prices for metals and to expand around 2 percent between 2018 and 2021, in the years examined.
However, the analysis also showed that the tariffs produced production costs for companies that manufactured automobiles, tools and industrial machines in these and other downstream industries by around 3.48 billion US dollars in 2021. The steel and aluminum industry produced this year because of the taxes in metals.
In order to alleviate the harmful consequences for other industries that use steel and aluminum, the Trump management has expanded its steel and aluminum tariffs this time to protect various downstream goods or “derivative products” made of metal such as tractor parts, metal furniture and gift.
Chad Bown, Senior Fellow at the Peterson Institute for International Economics, a research organization, said that the move is an “implicit recognition” that some industries suffer from Mr. Trump's former tariffs.
He said that the tariffs created a “circulation of the cascading protectionism” in which more industries would ask for protective measures and that it could “be difficult to stop” as soon as it gets going.
“Where does it end?” Asked Mr. Bown.
The prospect of higher costs also encouraged other US industries and car manufacturers to praise tariffs for their foreign competitors to protect their business. Mr. Trump said he planned to raise a tariff for foreign cars on April 2.
For car manufacturers, metal tariffs threaten to increase costs if the prices for new cars and trucks are already near record highs. According to Edmund, a market research group, the average price of a new vehicle in January was more than 48,000 US dollars.
“Tavational is already an important concern of American car buyers in terms of increased prices and interest rates,” said Jessica Caldwell, head of insights at Edmunds.
Robert Budway, the President of the CAN Manufacturer Institute, a trading group that represents companies, produce doses for food, soda, beer and color, said that tariffs would lead to higher packaging costs, which would ultimately be passed on to American consumers.
Since Mr. Trump imposed steel tariffs in his first term, Food Packager has rely more on imported metals and simply paid more for her, said Budway.
“It only makes the price higher,” said Budway.
The most important American export industries, especially farmers, are also affected by retaliation tariffs for billions of dollars by American exporters, including poultry, beef, pork and soybeans.
The Canadian officials said on Wednesday that in addition to a 25 percent customs, their retaliation had taken up their government of 30 billion US dollars of American goods in response to Mr. Trump's earlier taxes.
Gabriel Brunet, a spokesman for finance minister, Dominic Leblanc, who heads Canada's trade reaction, said that Canada was “ready to react firmly and proportionally and proportionally”.
The British Minister of Commerce Jonathan Reynolds described the tariffs as “disappointing”. The state investigated steps to protect local manufacturers and to negotiate an agreement with the United States to eliminate additional measures, he said on Wednesday.
Australia would not impose mutual tariffs, said Prime Minister Anthony Albanese because it would increase prices for Australian consumers. In Mexico, President Claudia Sheinbaum said that her country would wait until April 2 if Mr. Trump is considering his next tariff round to decide whether to take revenge.
Brazil, the second largest steel importer in the USA to Canada, also signaled that he would not reciprocate. “President Lula should remain calm at that time,” Brazilian Economic Minister Fernando Haddad told reporters on Wednesday. “We negotiated under worse conditions.”
The European Union announced on Wednesday that it would have a two -part reaction to the tariffs. Officials make it possible for an exceptional tariff to take strength on April 1st and affect everything from boats to bourbon. They also put on what other goods – including agricultural and industrial products – strike with higher tariffs.
The aim of the European Union is to meet the United States as hard as it hits the European economy to draw America to the negotiating table.
But Maros Sefcovic, the trade commissioner of the European Union, said on Monday that the US government “was not committed to completing a deal.”
“In the end, a hand, as it is said, cannot clap,” he said.
Trump officers have implied that at least for metal tariffs, the deal meak is not on the table. When asked what it would need to remove steel and aluminum tariffs, Howard Lutnick, the Minister of Commerce, said on Wednesday that Mr. Trump sees metals as “fundamental to our national security”.
“The president wants steel and aluminum in America. And let me be clear, nothing will stop until we have a large, strong ability to steel and aluminum domestic steel and aluminum, ”he said.
The reporting was contributed by Neal E. Boudette, Danielle Kaye, Ian Austen, Jack Nicas and Paulina Villegas.