Trump’s steel and aluminum tariffs: The target of Trump’s ire is China

US President Donald Trump signed proclamations last Thursday to impose a 25 percent tariff on steel imports and 10 percent on aluminum imports effective March 23. Is it a good news for steel pipe suppliers or consumers who purchase steel pipe or things like that?

The target of Trump’s ire is China

The US is the world’s biggest importer of steel, purchasing 35m ton of raw material in 2017 of which 6.6m ton came from South Korea, Japan, China and India. But Donald Trump on Thursday rolled out his new tariffs on steel and aluminum.

Trump’s announcement on tariffs underlined concerns about rising U.S. protectionism, which has sparked bouts of turmoil in global financial markets as investors feared a damaging trade spat would shatter a synchronized uptick in world growth. Both stock markets and economists tend to loathe tariffs, which hamper the basic efficiency of the market, rarely accomplishing more than saving a few jobs in exchange for higher prices across the entire economy. Stocks sank sharply after his remarks, as investors, already nervous about rising inflation and interest rates, began to worry that tariffs would push up prices of goods and lead to tit-for-tat measures from China and others. The Dow Jones industrial average ended down 420 points.

Billionaire investor and longtime Trump confidant Carl Icahn dumped $31.3 million of stock in a company heavily dependent on steel last week, just days before Trump announced plans to impose steep tariffs on steel imports.

And the president’s rhetoric on steel has focused on China. Trade tensions between China and US have risen since Trump took office, Trump has laid into China for sending excess cheap steel into the global market, which he says makes it impossible for American steel companies to compete.

“China is dumping steel all over the United States, okay? It’s killing you,” Trump said at a campaign rally in Pittsburgh in April 2016. “Maybe we get a little lower price, but we lose all the jobs.” It’s true that China, the world’s top exporter of steel, is a major source of a global supply glut that has driven down prices.“Our Steel and Aluminum industries (and many others) have been decimated by decades of unfair trade and bad policy with countries from around the world,” Trump said in the tweet. “We must not let our country, companies and workers be taken advantage of any longer. We want free, fair and SMART TRADE!”

American and European steelmakers have made complaints echoing Trump’s criticism for years. But these tariffs threaten to destroy more US jobs than they will create while sending an alarming signal to our trading partners and diminishing markets for American-made products overseas. The reality is that there is nothing this country will gain from such a one-sided policy.

But any global trade fight goes back to China. Thanks to its rapid industrialization over the past four decades, China now makes roughly as much steel as the rest of the world combined. While it consumes much of what it makes, China is also by far the world’s largest exporter, although the amount it sells overseas has been on the decline.


The fact of Steel and Aluminum industries

The fact is that many American industries need steel and aluminum. They’re used to build cars, skyscrapers, roads, bridges, washing machines, refrigerators, and a whole host of other products. More expensive steel and aluminum means higher costs for the American businesses that make these products —higher costs that will likely get passed on to consumers. And it makes business leaders nervous about the likelihood that Trump will start adding tariffs on other imports. And the burden of these tariffs, as always, will be passed on to the American consumer.”

Also when the cost of raw materials like steel and aluminum is artificially driving up, all American people ultimately pay the higher prices for everything from canned goods to electronics and automobiles. However,the official said that concerns about increased prices for consumers due to higher costs of steel and aluminum were overblown and that no jobs would be lost at downstream manufacturers that rely on the metals. So there is no doubt that upstream producers hailed the benefit of such a protectionist move, while downstream market participants bemoaned the effect potential action could have on their businesses.

In response to the US move, steel producing economies such as the EU and China have threatened to levy import duties on US exports. Also, China might consider taking action against the EC’s decision to extend the tariffs on Chinese stainless steel pips.

China urges reversal of the tariffs

The Chinese Commerce Ministry urged the United States to “exercise restraint in using trade protection tools, and observe multilateral rules,” according to the Xinhua report. Any trade war with the United States will only bring disaster to the world economy, the Chinese commerce minister Zhong Shan has said, as Beijing stepped up its criticism of metals tariffs introduced by the White House. In the years since China was allowed into the World Trade Organization in 2001, its global expansion has diminished its dependence on the U.S. as a consumer market. China is not the top country from which the United States imports steel. In fact, it’s not even in the top 10. Though China itself accounts for only a fraction of US

“If the United States’ final decision affects China’s interests, we will take necessary measures to defend our rights,” said Wang Hejun, a senior official at China’s Commerce Ministry, according to a report Saturday by state-run news agency Xinhua. He also claimed that the US measures are in essence trade protectionism in the guise of national security. Most US steel and aluminum import are for civil use and by no means impair US national security.

Leave a Reply

Your email address will not be published. Required fields are marked *