President Donald Trump made a sudden announcement on Thursday, saying that he would impose a tariff on steel and aluminum imports “for a long period of time,” a move likely to trigger retaliation from the EU and China and raise fears of a trade war.
Trump announced that somewhere next week he will sign an order to impose a 25-percent tariff on steel and a 10-percent tariff on aluminum, prompting the EU and China to issue warnings and sparking outrage from other countries, Financial Times reported.
“We’re going to build our steel industry back and we’re going to build our [aluminum] industry back,” Trump told reporters after a White House meeting with industry chief executives. “We’ll be signing [an order imposing tariffs] next week. And you’ll have protection for a long time in a while. You’ll have to regrow your industries, that’s all I’m asking.”
He further said that “What’s been allowed to go on for decades is “disgraceful.” Following his announcement, stocks crashed and GOP members registered frustration, CNN writes.
“We were told at the beginning of all this that Donald Trump was comfortable with chaos — that’s how he is accustomed to operate,” David Axelrod, a former Obama administration top strategist, said. “That may be OK if you are running a small family branding business, but when you are in the most important office on the planet it can have grave consequences,” he added.
The Financial Times also reported that at the close of trading in New York, the S&P 500 had fallen 1.3 percent and the Dow Jones Industrial Average was off 1.7 percent. However, U.S. Steel gained 5.8 percent and AK Steel closed up 9.5 percent. Asian equities, led by steel and aluminum manufacturers, fell on Friday.
Although the tariffs are expected to apply to imports from all countries, there may be a process for countries and companies to apply for exclusions from them. The move was welcomed by executives from the steel and aluminum industries, who say it creates “a level playing field.”
China and Europe, on the other hand, accused Trump of protectionism, saying that if other countries took similar steps, “it will harm global trade.”