Donald Trump announced a 25% tariff on all steel and aluminum imports, escalating the tariff war and potentially negatively impacting the economies of Canada and Mexico.
Donald Trump Tariff War: US President Donald Trump is known for his decisive actions. Whether it's the issue of eliminating third-gender identification or declaring an emergency on the Mexico border, his decisions consistently grab headlines. He has once again stirred the global trade world. Trump has decided to impose a 25% tariff on steel and aluminum imports, which could impact the economies of several countries.
Heavy Tariffs Imposed on Steel and Aluminum
Donald Trump, making a significant change to his trade policy, announced a 25% tariff on steel and aluminum imports. This tariff will be in addition to existing metal duties and will be implemented soon. According to Trump, this decision is aimed at boosting America's domestic manufacturing industry. However, it could negatively impact America's trading partners.
Canada and Mexico to Suffer the Most
According to official figures, the US imports the most steel from Canada, Brazil, and Mexico. South Korea and Vietnam follow in this list. Canada is the largest supplier of primary aluminum to the US.
In the first 11 months of 2024, 79% of the total aluminum imported by the US came from Canada. Furthermore, Mexico is a major supplier of aluminum scrap and alloys. This tariff could now severely impact the economies of these countries.
Impact on India?
This decision will likely have a minimal impact on India, as India's imports of steel and aluminum from the US are far less than its needs. However, if the US further tightens trade relations, India might experience some indirect effects.
Trump to Announce Reciprocal Tariffs
Speaking to reporters in New Orleans on Sunday, Trump stated that he would announce reciprocal tariffs, effective immediately, starting Tuesday. However, he did not specify which countries these tariffs would apply to. He mentioned that the US would levy duties equivalent to those imposed by other countries, implying a broad application.
Reasons Behind the Decision
Trump stated that during his first term (2016-2020), he imposed a 25% tariff on steel and 10% on aluminum. However, duty-free quotas were later granted to some trade partners, including Canada, Mexico, and Brazil.
He alleged that the Biden administration expanded these quotas to include Britain, Japan, and the European Union, impacting the production capacity of US steel mills. This is the reason behind his stringent decision.
Impact on the Global Market
Trump's decision could cause turmoil in the global market. Tensions between the US and its trade partners may increase. Previously, tariff wars led to strained trade relations between the US and China. This time too, Trump's decision could affect the economies of many countries.
