Trump announces significant increase in steel and aluminum tariffs to 50%, set to take effect from Wednesday onwards.
Newshound
America raises steel and aluminum tariffs, escalating global trade war
In an unexpected move, the US ratcheted up tariffs on most imported steel and aluminum on Wednesday, with President Donald Trump aggressively pushing forward on his trade with trading partners just as they submit their "best offer" proposals to avoid higher import taxes.
Last week, Trump announced an unexpected hike in tariffs on steel and aluminum imports, which were initially set at 25%, to a staggering 50%. Following Trump's proclamation, the tariffs doubled from Wednesday, with a signing of the executive order late on Tuesday.
Kevin Hassett, White House economic adviser, explained the sudden change, stating, "We started at 25, and then, after studying the data more, realized that it was a big help, but more help is needed. And so that is why the 50 is starting tomorrow."
Except for Britain, all trading partners are affected by the newly increased tariffs. Canada and Mexico, which rank as the top exporters of both steel and aluminum to the US, are particularly vulnerable. Approximately 25% of all steel utilized in the US is imported, making it highly susceptible to these levies.
Initially applicable to everyone, the exception for the UK comes as it's the only country to have reached a preliminary trade agreement with the US during a 90-day pause on a broader array of Trump tariffs. Given the UK's modest position in steel and aluminum exports, the tariff remains at 25% for at least July 9.
The hiked tariffs have sent shivers through the market, significantly impacting both steel and aluminum prices, especially aluminum, which has already seen price premiums more than double in 2023. Reduced demand could be the only deterrent to untouched import volumes.
As the White House waits for trading partners to deliver their "best offer" proposals to avoid steep tariffs on other goods beginning July 4, it presses for timely responses. With talks in progress with several countries, only the United Kingdom has thus far reached an agreement. However, even this deal, which formed the basis for the temporary exemption from metals tariffs, is un finalized and open to further discussions.
With the deadline for submissions now passed, there's a question mark on whether any of these proposals will lead to favorable outcomes. The Trump administration has been actively engaged in seeking remedies but is tight-lipped about the particulars of these efforts.
As the trade war tension escalates, countries like Thailand and Cambodia face escalating tensions border disputes.
- TAGS
- Donald Trump
- Steel
- aluminum
- Tariffs
- trade war
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Enrichment Data:
The current status of the proposed "best offer" deals from trading partners to avoid Trump's increased tariffs on steel and aluminum imports is still under evaluation. While the deadline for trading partners to submit their proposals had passed, the specifics of these proposals, as well as any agreements that may have been reached, remain unclear. The administration is actively working on finding solutions, but more details about their efforts and their outcomes are yet to be disclosed.
- The escalating global trade war, initiated by America's increased steel and aluminum tariffs, could impact the political landscape and policy-and-legislation related to business and economy, especially considering the ongoing discussions about partners' "best offer" proposals to avoid higher import taxes.
- Amidst the uncertainty surrounding the outcome of these "best offer" negotiations, other global events such as border disputes in Thailand and Latin America, like the one between Thailand and Cambodia, are unfolding as a result of increasing tensions caused by the trade war.
- In light of the steel and aluminum tariff hike, the general news is dominantly focused on the implications for the economy, as well as the corresponding responses from trading partners, potentially affecting both political dynamics and the financial markets, with gold and Bitcoin seeing record highs due to investor demand for safe-havens.
