President Donald Trump as expected signed into law tariffs on steel and aluminum in a move he feels will recharge American industry. The deal exempts NAFTA partners Canada and Mexico as expected. National security was also cited as part of the decision.
President Donald Trump as expected signed into law tariffs on steel and aluminum in a move he feels will recharge American industry. The deal exempts NAFTA partners Canada and Mexico as expected. National security was also cited as part of the decision.
Key Highlights
- Tariffs of 25% on imported steel and 10% on aluminum.
- Canada and Mexico will be excluded for now, as U.S. discusses its national security relationships and the North American Free Trade Agreement with both countries. “We’re going to hold off on Mexico and Canada while we negotiate NAFTA I have a feeling we’re going to make a deal of NAFTA ” Trump said
- Tariffs could be modified for other countries, such as Australia, which Trump called a “long-term partner” at a cabinet meeting. Trump said “Military subsidies and spending will factor into our decisions on tariff exemptions”
- The tariffs will go into effect 15 days from Thursday.
- The tariffs are being imposed under a law that allows action to defend national security with both materials are critical to the U.S.’s defense industrial base.
- Trump said “Foreign governments are subsidizing a flood of cheap metals, other countries are dumping”
Trump’s announcement will fire up both partisan poltics but also some congressional Republicans, many of whom have urged him to hold off on sweeping tariffs. His own economic advisor Gary Cohn resigned on the move a few days ago.
The Import and Export Impact on China Potentially
A recent report by UBS concluded that to “assess potential areas of vulnerability across industries, we analyzed total US trade to and from China across industries.
- On imports, risks are greatest for communication equipment (i.e. cell phones), computer equipment, apparel, semis and various consumer goods.
- For exports, aerospace parts, agricultural products and motor vehicles have the greatest exposure to potential retaliatory actions.”
Source: UBS, WhiteHouse