US to Double Tariffs on Steel and Aluminium to 50%, Impacting Global Trade
US President Donald Trump announced a hike in tariffs on most foreign steel and aluminium imports to 50%, effective Wednesday. This move, aimed at protecting US industries and national security, is expected to impact businesses like automakers and construction, potentially raising consumer prices. While the UK receives a partial exemption, maintaining a 25% tariff, the steep increase for other nations could spark retaliatory measures and further strain global trade relations.
Unpacked:
The US has a long history of using tariffs to protect domestic industries. Under President Trump’s first term, tariffs on steel (25%) and aluminum (10%) were imposed in 2018. These actions sparked retaliatory measures and strained global trade. The new increase to 50% continues this protectionist approach, echoing past cycles of tariff escalation and trade tension.
Countries like China and India have imposed retaliatory tariffs on US goods in response to earlier US steel and aluminum tariffs. The European Union, Canada, and Mexico also enacted countermeasures before reaching deals with the US or negotiating exemptions. Retaliation has often escalated trade disputes and affected unrelated sectors.
The UK has been granted a partial exemption, maintaining a 25% tariff, likely due to ongoing trade negotiations, the strong US-UK alliance, or efforts to avoid broader conflict with key allies. Such exemptions are sometimes used to reward diplomatic partners or support strategic relationships, as seen in past US tariff policies.
Higher tariffs increase the cost of imported steel and aluminum, raising expenses for industries like automotive and construction. These costs are typically passed on to consumers, resulting in higher prices for goods such as cars and appliances. Past tariff hikes have also reduced consumption and export competitiveness for US manufacturers.