Washington — President Trump is planning to apply tariffs on steel and aluminum at 25% on steel and 10% on aluminum. But the President says he wants the flexibility to raise, or lower those tariffs – or even exclude certain countries from a tariff on their products, depending on what the President says is the fairness in their trade regulations with the United States.
In other words, the President is seeking the “Big Stick” of tariffs, to threaten tariffs on nations whose policies treat American products with regulations and taxes that are not applied by the United States on those foreign nation’s sales to America.
Reportedly, the President will exclude Canada and Mexico from any tariffs at this time. Canada is America’s second largest trading partner in dollar terms, with approximately $545 Billion in annual trade. Canada is Illinois’ #1 trading partner, as Illinois does more trade with Canada than any state in the union.
As details emerge on the tariffs, the stock markets are rising in a relief rally, though weak, as tariffs are not going to be applied across the board.
Yet the fear remains that other nations could retaliate with their own tariffs. The question is whether this approach by the President of putting pressure on what he says are “unfair trade practices” by other nations, will see those nations opening up their markets and reducing taxes on products made by American firms.
The President said the tariffs follow a nine month investigation that showed other countries are dumping steel in the United States, below the cost of production. He said China now produces as much steel in one month as the United States produces in one year.
“The actions we take today are not a matter of choice, but a matter of necessity for national security,” the President said
He noted that Granite City Steel, in Illinois, was reopening due in large part to these proposed sanctions. President Trump, “America must have a strong, vibrant and independent manufacturing base.”
The President said he is delivering on a promise he made to American workers during the campaign. He said American workers have been betrayed by policies that undercut the base of the American economy, via unfair trade with other nations.
“We’ve been treated badly by other countries and by other Presidents, people who didn’t know what they were doing. We lose over $800 Billion in trade every year” he said, adding, “We have a trade imbalance with China of $500 Billion a year.”
Mr Trump read from a statement by Elon Musk, of Tesla, that noted an American car exported to China faces a 25% import tax, while a Chinese car being sold in America pays only a 2.5% tax.
We’re going to a reciprocal trade tax at some point, also called a mirror tax. “So if they charge us 25% on our products, we’ll charge 25% on their products,” the President said.
Attending the announcement were workers from steel plants across the country, who spoke on the hardships that have impacted their families from layoffs, or plant closings over the years due to the cheap steel flooding the world markets, due in large part to an over capacity by China, that produces far more steel annually than demand for steel products.
The tariffs go into effect in 15 days.