The Real Risks of Trump’s Steel and Aluminum Tariffs<br />President Trump announced today that his administration would impose a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum, on the grounds<br />that other countries’ trade practices endanger American national security by undermining domestic production.<br />First, the United States imports only about one-third of its steel,<br />and the tariff would not apply to domestic production (aluminum is more heavily dependent on imports, with only 10 percent made domestically<br />But that was a more narrowly targeted law aimed at safeguarding domestic industries harmed by imports (the Trump administration has used<br />that provision to impose tariffs on imported solar panels and washing machines).<br />If the Trump administration follows through on the president’s comments Thursday, a company bringing $100,000 of steel<br />made in Canada into the United States would have to pay $25,000 to the government, effectively increasing its price.<br />The industries that use steel and aluminum are considerably larger as a share of the United States economy than are steel and aluminum producers.<br />After the president’s announcement, Wall Street quickly reflected this divide: Shares of U. S. Steel<br />and Century Aluminum were each up about 7 percent shortly afterward, while shares of Ford, Caterpillar and Boeing were each down about 3 percent.<br />The argument is that with domestic metals production undermined, the United States<br />is left vulnerable in the event of conflict that disrupts trade flows.
