The US will levy a 25% import duty on steel and 10% on aluminum. NAFTA partners Canada and Mexico will be exempted. The US will allow allies to petition for similar exemptions.
Net Job Loss Forecast by Experts
An analysis by Trade Partnership Worldwide has concluded “the tariffs would increase US iron and steel employment and mostly aluminum employment by 33,464 jobs, but cost 179,334 jobs throughout the rest of the economy, for a net loss of nearly 146,000 jobs” including more than 28,000 construction jobs.
President Donald Trump on Thursday signed proclamations authorizing tariffs on steel and aluminum imports, following through on his promise to protect domestic industries even as his top aide resigned and markets reeled at the prospect of trade wars with US allies.
The US will levy a 25% import duty on steel and 10% on aluminum, and the tariffs will take effect in 15 days, according to officials. NAFTA trading partners Canada and Mexico will be exempted from the tariffs, and the US will allow other allies to petition for similar exemptions.
“Today I’m defending America’s national security by placing tariffs on foreign imports of steel and aluminum,” Trump said, flanked by workers from the industries and economic advisers who had backed the plan.
He warned there would be more tariffs coming, saying he planned to proceed with what he has called “reciprocal taxes” on imports from countries that charge higher duties on US goods than the US now charges on their products. “We’re going to be doing a lot of that,” he said.
Industry groups that supported this measure hailed today’s move as long needed to level the trade playing field, while those opposed to it warned of trade wars with allies and the potential for slowing down the US economy, including vital sectors such as infrastructure.
“After a nearly year-long investigation, President Trump took action Thursday to curb steel and aluminum imports,” said Scott Paul, President of Alliance for American Manufacturing.
“Already more than 500 people are headed back to work in Granite City, as U.S. Steel announced it will restart a blast furnace there. On top of that, this action will go a long way toward securing our national defense, as it will allow American companies to continue to provide the steel and aluminum needed to equip the military and build critical infrastructure.”
The group said more than 150,000 people had called on the president to keep his “promise to defend American workers.”
Their main concern is China’s overcapacity which is swamping the markets with cheap steel enabled by state subsidies, causing layoffs here and elsewhere. However, because of many prior US tariff measures on individual steel products, China accounts for only about 2.5% of US imports of steel.
Meanwhile, opposition to this measure has come from within and outside the country.
“These new tariffs will cause significant harm to the nation’s construction industry, put tens of thousands of high-paying construction jobs at risk, undermine the President’s proposed infrastructure initiative, and potentially dampen demand for new construction projects for years to come,” said Associated General Contractors of America CEO Stephen E. Sandherr
An analysis by Trade Partnership Worldwide, an international trade and economic consulting firm, has concluded “the tariffs would increase US iron and steel employment and non-ferrous metals (primarily aluminum) employment by 33,464 jobs, but cost 179,334 jobs throughout the rest of the economy, for a net loss of nearly 146,000 jobs” including more than 28,000 construction jobs.
Earlier this week, President Trump’s announcement had caused markets to tumble, sparked concerns about trade wars with allies, and prompted the resignation of his top economist Gary Cohn.
Industry groups opposed to the measure such as the Associated General Contractors of America had called on the White House to avoid triggering a “trade war” with other countries, saying tariffs would undermine the Trump Administration’s goals of dramatically boosting infrastructure investment and achieving sustained higher economic growth.
The tariffs could lead to retaliation from certain countries. The European Union on Wednesday detailed a list of US-made goods that it would subject to reciprocal tariffs if Trump follows through with his plan. China also indicated it was preparing an appropriate response.