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E-mail Xinhua, February 11, 2025
WASHINGTON, Feb. 11 (Xinhua) -- U.S. President Donald Trump on Monday signed proclamations to raise tariffs on aluminum from 10 percent to 25 percent and ended duty-free quotas, exemptions and exclusions for steel and aluminum tariffs.
"This is a big deal. This is the beginning of making America rich again," Trump said when signing the proclamations in the Oval Office. "It's time for our great industries to come back to America."
The decision sent shockwaves through the global economy, prompting swift and varied responses from the United States' major trading partners. While the United States justified the move as necessary to protect domestic industries, countries condemned it as protectionist and are preparing for countermeasures.
WHO ARE THE TARGETS?
The tariffs will apply to millions of tons of steel and aluminum imports from Canada, Brazil, Mexico, South Korea and other countries that had entered the U.S. duty-free under the carve-outs. A White House official confirmed the measures would take effect on March 4.
According to U.S. trade data, Canada and Mexico -- both of which Trump has already threatened with tariffs -- along with Brazil, are the largest steel exporters to the United States. South Korea is also a major steel supplier. Additionally, approximately 25 percent of European steel exports are sent to the United States.
The move will simplify tariffs on the metals "so that everyone can understand exactly what it means," Trump said. "It's 25 percent without exceptions or exemptions. That's all countries, no matter where it comes from. All countries."
Despite the claim against exceptions, shortly after, Trump said he would give "great consideration" to Australia's request for an exemption to the steel tariffs due to that country's trade deficit with the United States.
"We actually have a surplus (on Australia)," Trump told reporters. "It is one of the only countries which we do."
During his first term, Trump imposed tariffs of 25 percent on steel and 10 percent on aluminum imports, citing national security concerns. He later allowed certain trading partners, including Canada, Mexico and Brazil, to receive duty-free quotas.
Under former President Joe Biden, the United States continued some tariff exemptions introduced under Trump and extended new quotas for the European Union (EU), Britain and Japan.
Since the beginning of his second term, Trump has quickly rolled out a series of protectionist measures, which have been widely opposed both domestically and internationally.
On Feb. 1, Trump signed executive orders to impose 25-percent additional tariffs on imports from Canada and Mexico and a 10-percent tariff increase on imports from China, drawing widespread opposition and immediate retaliations. He later paused the tariffs on Canada and Mexico for one month to allow negotiations.
WHAT WAS THE REACTION?
"The EU sees no justification for the imposition of tariffs on its exports. We will react to protect the interests of European businesses, workers and consumers from unjustified measures," the European Commission said on Monday.
French Foreign Minister Jean-Noel Barrot said the EU would counter in kind.
"There is no hesitation when it comes to defending our interests," he said during an interview with local broadcaster TF1.
French President Emmanuel Macron warned in an interview with CNN on Sunday that he was willing to go "head-to-head" on tariffs with his U.S. counterpart, adding that tariffs would not only harm European economies but also the United States.
"It means if you put tariffs on a lot of sectors, it will increase the costs and create inflation in the U.S.. Is it what your people want? I am not so sure," Macron said.
German Chancellor Olaf Scholz echoed the European Commission's sentiments on Monday, stating that while nothing is official yet, "we can only say with great caution but great clarity: anyone who imposes tariffs must expect counter-tariffs."
On Monday, Scholz's economy minister, Robert Habeck, said the EU was ready to respond: "Europe must and can only react unitedly and decisively to unilateral trade restrictions. And we are prepared for this."
Canada is consulting with international partners and examining the details of Trump's tariff orders, Canadian Minister of Innovation, Science and Industry Francois-Philippe Champagne said on his social media account.
"Our response will be clear and calibrated," wrote Champagne in a statement.
According to local media, the Canadian steel industry has called on the federal government to intervene with retaliatory tariffs.
Candace Laing, president and CEO of the Canadian Chamber of Commerce, said that Trump was destabilizing the global economy.
"Today's news makes it clear that perpetual uncertainty is here to stay," said Laing.
WHAT DO ECONOMISTS SAY?
While Trump claims that such measures will bring businesses and jobs back to the United States, economists said they would do the opposite.
"What this means is that U.S. steel and aluminum prices will be substantially higher than world prices for the foreseeable future ... That spells harm for a large number of downstream industries that use steel and aluminum. Those downstream industries employ about 10 times as many workers as the steel and aluminum industries," Gary Clyde Hufbauer, a nonresident senior fellow at the Peterson Institute for International Economics, told Xinhua.
A 2019 study published by the Federal Reserve Bank of New York showed that Trump's 2018 widespread tariffs on steel and aluminum, as well as tariffs on Chinese goods, and the countermeasures they triggered led to a loss of manufacturing jobs in the United States.
"Obviously, some firms benefit, but a great many more lose out. I expect the same outcome, but worse, this time," said Hufbauer.
The tariffs carry inflation risks at a moment when voters are already weary of high prices and fear that price increases will eclipse any income gains, according to the Associated Press.
When signing the proclamations, Trump said his administration was weighing so-called "reciprocal tariffs" on products such as chips, cars and pharmaceuticals.
He claimed that other countries had taken advantage of the United States in trade for many years with their own tariffs and that the United States needed to raise its tariffs to the same level.
"'Fairness' is in the eye of the beholder, but the more fundamental question is whether the United States actually benefits from such new tariffs," Benn Steil, director of international economics at the Council on Foreign Relations, a New York-based think tank, was quoted by the AP as saying.
"The costs to the United States will include higher prices to U.S. consumers, retaliatory tariffs abroad, and the loss of U.S. jobs and competitiveness in firms hit by higher input costs," said Steil.
Since tariffs imposed on national security grounds cannot be legally challenged at the World Trade Organization, other countries have already followed Trump's approach to raise trade barriers, Steil added. Enditem
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