On Thursday, President Trump announced that his administration would soon impose a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum. The new taxes on these imported goods are set to go into effect next week. His aim with the taxes is to institute more of his “America First” mentality into the U.S. trade framework.
Already, his announcement has received mixed reviews from both supporters and the international community. Tariffs are typically instituted as a form of protectionism policy in order to ensure the safety and production of domestic products. So far, this mentality has been Trump’s primary justification, arguing that the United States’ steel and aluminum industries are greatly hurting. This morning, he tweeted: “When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!” The tariff will allow U.S. steel and aluminum industries to flourish as their competition dissipates.
However, the tax will also hurt many European consumers and U.S. products that utilize steel as an intermediate good, such as cars, beer and baseball bats. European Commission president Jean-Claude Juncker has said that, in reaction to Trump’s tariffs, the EU will move to place taxes on imports from the U.S., such as bourbon, Levi’s blue jeans and Harley-Davidson motorcycles. The next week will bring more clarification on the specifics of the tariffs and solidify the threats of the EU.