Recently, President Trump announced that he plans on applying tariffs on both steel and aluminum. Tariffs will be at the 25% mark for imported steel and 10% for imported aluminum. Likewise, President Trump stated after announcing these import tariffs that “We’re going to build our steel industry back and we’re going to build our aluminum industry back”. As a response to the announcement, the stock market experienced a rather sharp market index drop, with the Dow Jones Industrial Average closing at 420 points or roughly 2%. These tariffs are in response to a recent commerce department study, which stated that a rather large amount of both steel and aluminum posed a threat to the national security of the United States. Consequently, those findings provide the necessary backing for the presidential action states the White House.
Furthermore, on Thursday President Trump took to Twitter to tweet his stance on the entire situation and trade in general. Moreover, many United States steel executives along with aluminum executives voiced their full support on the tactic of throwing on tariffs on imports. One such steel executive was quoted stating, “We are not protectionists. We want a level playing field…”. Another executive made similar statements but stated that currently, investments in many US steel and aluminum companies are hurting due to the alleged unfair playing field for the industry. Yet, in retrospect, many economists have voiced that the tariffs will have the general effect of driving up prices for these metals and will affect the many other industries that use the steel and aluminum products.
Thus, many economists believe this policy announcement and ensuing application will drastically impact the economy. Moreover, these tariffs are in response to the massive overproduction of the products by the Chinese. However, since many of the Chinese firms already
have stringent barriers many believe that much of our European allies, as well as Canada and Mexico, will most likely seek retribution. Yet, both the Trump Administration and the commerce department have voiced their support for the innovative policy because if the action does not get applied then America’s security may encounter a weakened future military mobilization ability. Yet, our friends to north Canada is the principal supplier for both products to the United States and thus Canada is filed under the department of defense’s industrial base, and as a result will most likely invite the defense to ask for more funds if they were to continue to purchase steel and aluminum from Canada in addition to the domestic product.
Consequently, it is no surprise that the Canadian trade minister had stated the following, “the U.S. tariffs, which will take effect in two weeks, unacceptable”. In conclusion, many countries such as China and many of the European Union members have raised their concern that these actions mean that they will have to respond by placing tariffs on many of the American and loved products that many European and Chinese individuals like, and therefore creating the perfect storm for a trade war. All of this is due to both the Chinese and many European Union members stating that they will retaliate.