Trump Announces 25% Tariff on Steel and Aluminum Imports
President Donald Trump has announced his decision to impose a 25 percent tariff on all imports of steel and aluminum, marking another significant shift in U.S. trade policy.
While the president is known for declaring dramatic changes to trade policies only to reverse them later, there are indications that these latest tariffs may indeed be implemented. In March 2018, Trump had previously imposed a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum, exempting only a few countries.
Last week, the president postponed his long-promised 25 percent tariffs on all imports from Mexico and Canada after reaching agreements with both countries over border security. However, this move suggests that Trump is committed to enforcing the steel and aluminum tariffs this time around.
The impact of such tariffs on domestic consumers is clear: they tend to make imported goods more expensive. While proponents argue that these policies benefit domestic manufacturing and national security, data from Trump’s previous metal tariffs indicates otherwise.
According to an estimate by the Peterson Institute for International Economics, Trump’s metal tariffs were costing American consumers and businesses roughly $11.5 billion per year. Moreover, it is not certain that these costs translated into a significant increase in U.S. steel jobs, as employment in the sector remained relatively stagnant between January 2018 and the time of the estimate.
The primary beneficiaries of Trump’s tariffs appeared to be foreign steel producers, who saw their exports to the U.S. surge by 36 percent after the duties were imposed. Meanwhile, U.S. manufacturers faced higher input costs due to the increased price of steel and aluminum, which could have potentially hindered economic growth.
As the Biden administration has lifted these tariffs, it remains to be seen whether Trump’s latest announcement will lead to a return of such policies or if this is another instance of the president using strong rhetoric that may not translate into action.