U.S. will Impose Steel and Aluminum tariffs
President Donald Trump announced that U.S. will impose hefty tariffs on imported steel and aluminum to protect U.S. producers, risking retaliation from major trade partners like China, Europe and neighboring Canada. Trump said the duties, 25 percent on steel imports and 10 percent on aluminum, would be formally announced next week, although White House officials later said some details still needed to be ironed out.
Trump believes the tariffs will safeguard American jobs, but many economists say the impact of price increases for users of steel and aluminum, such as the auto and oil industries, will destroy more jobs than curbs on imports create. Steel is around $700 per ton because prices have already risen $100 per ton this year largely in anticipation of tariffs. Appearing on CNBC, U.S. Commerce Secretary Wilbur Ross said tariffs would have a “trivial effect.” He said the one ton of steel used per vehicle, at $700 per ton (0.907 metric tonnes), would have little impact on vehicle costs.
U.S. automakers stand to be among the most impacted. The sector accounted for 26 percent of U.S. steel demand in 2017, behind the construction industry’s 40 percent, according to data provider Statista. According to research and consulting firm Ducker Worldwide-FSG, the average U.S. vehicle weighs in at 3,835 pounds (1.9 tons) and is 11 percent aluminum (422 pounds) and 54 percent steel (2,071 pounds, around a ton). But producing parts leads to scrap wastage, so Ducker estimates automakers need 526 pounds of aluminum and 2,925 pounds of steel to make the average vehicle.
President Trump’s promise to impose hefty tariffs on U.S. imports of steel and aluminum sent markets around the globe into a tailspin and prompted anger and threats of retaliation from major U.S. trading partners, raising the specter of a full-fledged trade war.