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Donald Trump’s planned introduction of 25 percent tariffs for steel and aluminum imported one of his greatest trading movements in his first term as president.
In March 2018, Trump introduced tariffs of 25 percent to steel and 10 percent against aluminum against most countries, with national security being used as justification before they were extended to the EU, Canada and Mexico in June.
At the time, Trump claimed that they would shorten the trade deficit and promote domestic people.
The US imports of metals fell immediately. A total of around 6.4 billion steel and aluminum exports from the EU were hit. It took three months for Brussels to react, but then imposed US imports worth around 2.8 billion euros, which included approximately a third steel and aluminum, a third of agricultural products and a third of other goods.
The block has awarded legendary US products that were often produced in republican voting countries such as Bourbon Whiskey, Harley-Davidson motorcycles and jeans. The annual American whiskey exports to the EU have dropped a third since then, a loss of around $ 256 million, according to the distilled spirits council of the United States.
However, the tariffs for imports from the EU were interspersed with exceptions after the US manufacturers successfully argued that they needed imports of certain metal and parts classes.
Automobile companies such as General Motors and Ford also had to reduce their profit forecasts or the expectations of the analysts in 2018 due to tariff uncertainty and the increasing raw material costs caused by tasks to steel imports in the USA.
Although many US automobile manufacturers bought most of their steel on site, they were still met when domestic steel producers took the opportunity to increase their own prices. The manufacturers also increased their own edition comparatively after the introduction of the tariffs.
Trump later granted several trading partners, including Canada and Mexico, duty -free exceptions.
After Trump had left the office, the US, the EU, Japan and the United Kingdom agreed to temporary armistice when President Joe Biden at the time partially removed the tariffs and approved the quotas through which the tasks were used to metals. The EU solidified all of its measures.
The armistice must be digested on the EU side at the end of March, while the US quotas that replaced the tariffs will expire at the end of the year.
Both and Trump tried to capture Chinese imports. Last year, the bids administration tripled the tariffs on Chinese steel and aluminum in the United States.
Biden also tightened the rules that made it possible for some Mexican steel imports to step into the US Duty-Free by revenue tariffs of 25 percent of every steel from the country that was not melted and cast in North America. Biden officials frame the move as an attempt to keep the Chinese steel away from the US market.
The impending Tariff have already unsettled investors in these industries.
The shares of some European steel manufacturers fell afterwards on Monday morning Trump’s announcement. ArcelorMittal, which generates about 13 percent of its sales in the United States, is very exposed. The company sells high-quality steel products in the USA, especially from its Canadian processes, an important supplier for the US automotive sector. It also delivers semi -fine steel products from Mexico in its facilities in the USA.
However, the company’s Chief Financial Officer insisted that effects on the basis of what happened in 2018 would be manageable on the basis of what happened in 2018 as higher prices.
The EU industry is also concerned about an influx of imports from the USA. Brussels introduced a quota system over which imports pay 25 percent that will have to expire in June next year.
“Our biggest threat is cheap imports from China,” said a senior employee of the European steel industry. “If you cannot import into the USA, you will probably import more in Europe.”
The automotive industry will probably be hit again – with the possibility that exceptions can pillow the blow again. This time there is a threat to tariffs, since the manufacturers already deal with the relocation of electric vehicles and tougher emission standards, which makes it more difficult for them to absorb higher raw material costs.
Volvo Cars has already warned of lower profitability this year and quoted the uncertainty in relation to Trump’s tariffs. “There will be tariffs. . . You will see some geopolitics and a certain change in politics, so that this can be done in general turbulence in the past week, ”said Jim Rowan, Managing Director of the Swedish group.
