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Donald Trump’s planned setting with 25 percent tariffs on steel and aluminum imports reproduces one of his largest trading movements during his first term as president.
In March 2018, Trump introduced 25 percent tariffs in steel and 10 percent in aluminum against most countries, using national security as an excuse, before extending them to the EU, Canada and Mexico in June.
Trump claimed at a time when they would cut the trade deficit and increase internal production.
American metal imports fell immediately. In total, about 6.4bn € of steel and aluminum exports from the EU were hit. Brussels took three months to respond, but then set taxes on € 2.8 billion worth US imports, which includes approximately one -third of steel and aluminum, one -third of agricultural products and one -third of goods others.
The bloc singled out US iconic products, often produced in states by Republican voting, such as Bourbon whiskey, motorcycles and jeans Harley-Davidson. The annual EU US whiskey exports have fallen by one -third, a loss of about $ 256 million, according to the distilled US spirit council.
EU import fees, however, clashed with exceptions as US producers successfully argued that they needed imports of certain metals and parts.
Car companies including General Motors and Ford were also forced to reduce their earnings or the expectations of lost analysts in 2018 due to tariff uncertainty, as well as increasing raw material costs caused by tasks in steel imports In the SH.BA
Although many American car manufacturers bought most of their steel in the country, they were still hit while domestic steel manufacturers took the opportunity to raise their prices. Manufacturers also increased their production relatively shortly after setting tariffs.
Trump later gave several trade partners, including Canada and Mexico, tasked exceptions.
After Trump left office, the US, EU, Japan and the United Kingdom agreed with a temporary ceasefire when then President Joe Biden partially removed the tariffs, agreeing the quotas on which duties are applied. EU freezed all its measures.
The ceasefire is due to the loss on the EU side in late March, while the US quotas that replaced the tariffs will expire at the end of the year.
However, nearby tariffs already have unsolved investors in those most exposed industries.
Shares in some European steel makers fell on Monday morning after Trump’s announcement. Arcelormittal, which generates about 13 percent of its sales in the US, is highly exposed. The company sells high -value steel products added to the US, especially from its Canadian operations, a leading supplier for the US automotive sector. It also supplies semi -finished steel products from Mexico to its facilities in SH.BA
The Chief of the Financial Company insisted last week, however, that any impact would be managed based on what happened in 2018 when higher prices compensate for the highest costs.
The car industry is still likely to be hit – with the possibility that exceptions can once again hit the blow. This time the tariff threat comes as manufacturers are already accumulating with the relocation on electric vehicles and the harshest standards of emission, making it harder to absorb higher costs of raw materials.
Volvo Cars has already announced the lowest benefit this year, citing uncertainty about Trump’s tariffs. “There will be fees. . . You will see some geopolitics and some changes in politics in order to create general turbulence, ”said Jim Rowan, the chief executive of the Swedish group last week.
