Heavy Tariffs on Imported Steel & Aluminum
On 7th March, President Trump signed into order new heavy tariffs on imported steel and aluminum. The tariffs go into effect on 23rd March and include exemptions for Canada and Mexico. The steel tariff is to be set at 25% and the tariff on aluminum will be 10%. Countries who are major exporters of steel and aluminum to the U.S.A. have been scrambling to exert pressure on the U.S. to be included as either a full or partial exemption to the new tariffs, as Canada and Mexico already have been. The European Union has expressed the opinion that as a major and close ally of the U.S.A. it should be exempt, and there is no doubt there is a vigorous negotiation going on behind the scenes.
President Trump’s announcement of the tariffs takes him back to the “America first”, Bannon political roots of his presidency. His announcement was met with predictable howls of outrage from globalists and economists in both the Democratic and Republican parties who see the impossibility of starting and winning a trade as well-established universal wisdom. They say that the benefits President Trump might secure for the benefit of American industry will only be met by reciprocal burdens imposed by other countries as a tit-for-tat measure, as he focuses on the meal in front of him while forgetting he can also be “eaten” by somebody else. Knowing the President, though, one thing he can’t stand is other countries free-riding off America, such as the European Union’s acceptance of American defense while it outspent America on welfare and health care. President Trump may well be able to strike a better deal for America, but there is likely to be serious room for negotiation before the tariffs come into effect on 23rd March.