This afternoon, President Trump signed a proclamation to impose the 25% tariff on imported steel and 10% tariff on imported aluminum products, both of which were announced on March 1. The tariffs will go into effect in 15 days, and will exclude Canada and Mexico for the moment, until NAFTA negotiations finish, according to several news sources.
Other countries such as China, South Korea, Japan, Germany and Brazil may be hit by these tariffs, according to the New York Times. However, the President claimed they would be flexible when imposing the tariffs, which were implemented in the wake of the Commerce Department’s Section 232 investigation.
“We’re going to be very flexible,” Mr. Trump said. “At the same time, we have some friends and some enemies where we have been tremendously taken advantage of over the years.”
The President also said that the tariff order may exclude some additional countries and would give him the authority to raise or lower levies on a country-by-country basis and add or take countries off the list as he deems fit.
President Trump extolled the benefits of the tariff order and the relevance of the U.S. as a primary metal producer. The recent announcements of steel mill openings made since the President’s first comments about the tariffs on March 1 were also highlighted at the White House event.
He mentioned the United States’ current relationship with China, characterizing it as a “great” one, but noting that “something has to be done about the trade deficit,” according to the Guardian. The China question has been at the center of the tariff debate from the beginning, with that country’s metal production overcapacity and questionable trade practices spurring President Trump’s campaign promise.
Not surprisingly, organizations representing upstream steel and aluminum industries saw the results differently than those representing downstream players.
“The president’s commitment to addressing the steel crisis is already producing benefits in Granite City, Ill., where U.S. Steel will be restarting one of the blast furnaces that has been idle since December 2015 due to global excess steel capacity and unfairly traded steel imports,” said Tom Gibson, president and CEO of AISI, in a statement. “With the signing today, the steel industry can be on track to maintain our essential contributions to national security and critical infrastructure like transportation, public health and safety, energy and the power grid – all of which rely heavily on steel.”
Other sectors of the aluminum industry were opposed. For example, the Beer Institute, on behalf of U.S. brewers, implored the President to exempt aluminum can-sheet imports, making an argument based on job loss and overall economic loss, in a press release.
“We have not yet seen the order formalizing these tariffs,” said the Institute’s president and CEO Jim McGreevy, in the statement. “If possible, the Beer Institute will work with our member companies to file an exclusion request with the Department of Commerce. It is critical that if the president and his administration choose to impose any tariffs, they be carefully targeted only to protect America’s national security interests.”
For more in-depth scenario-based analysis, including buying strategies, check out MetalMiner’s report, “Section 232 Impact by Scenario on Aluminum, Stainless Steel and Steel Prices.”