What to make of Donald Trump’s tariffs on metal, aluminum – DW – 02/11/2025 | EUROtoday

“The beginning of making America rich again.”

That’s how US President Donald Trump described his choice to levy 25% tariffs on all metal and aluminum imports into the United States.

Trump signed proclamations on the White House on Monday that can take impact in March and can apply with out exception to metal and aluminum arriving from all international locations.

The measures are the newest in a protracted line of tariff threats made by the president since he returned to workplace final month.

Many economists, nevertheless, disagree that Trump’s tariffs mark the start of a brand new “Golden Age” for the United States and reject his assertion, whereas signing the proclamations, that international exporters — not odd Americans — would bear the brunt of the tariffs.

“The literature on this is abundantly clear,” Abigail Hall Blanco, an affiliate professor of economics on the University of Tampa in Florida, advised DW. “Tariffs mean major losses, for all parties involved.”

While the brand new levies are meant to bolster home metal and aluminum producers, consultants imagine US industries that rely closely on metals, akin to automotive and building, will face elevated manufacturing prices.

Those prices will nearly definitely be handed on to US shoppers, reigniting inflation at a time when policymakers are hell-bent on pushing it decrease.

Meredith Crowley, a professor of economics on the University of Cambridge within the UK, thinks low-income Americans, who in giant measure voted for Trump, will expertise “the most harm from all of these tariffs.”

“If you’re someone who’s just struggling to pay for the not-very-good car you have right now, it’s a much heavier burden. If the price of an auto goes up by $1,000, your family just won’t be able to buy one,” Crowley advised DW.

Imports typically cheaper than home gamers

The US metal and aluminum sectors face a number of structural challenges which have left them struggling to compete with international rivals, together with excessive manufacturing prices, outdated infrastructure and restricted capability.

While the US is not too reliant on provides from China, the Asian nation’s dominance of each industries has created overcapacity. The world’s second-largest economic system produces over 50% of the world’s metal and 60% of its aluminum, at costs typically sponsored by the state.

“We [US manufacturers] typically import metal from locations like China into the West Coast of the United States. Why? Because it is cheaper than taking metal from the East Coast and transporting it to the West Coast,” Hall-Blanco defined.

First-term tariffs harm US jobs

During his first time period, Trump’s tariffs on metal, aluminum and China did assist enhance home manufacturing of the metals. However, a US Federal Reserve research estimated that jobs throughout the manufacturing sector fell by 1.4%.

The identical research discovered that job losses have been felt most strongly amongst producers who have been extra uncovered to the tariff will increase, as they confronted rising enter prices and retaliatory tariffs.

Oxford Economics estimated in 2021 that the commerce conflict throughout Trump’s first time period took half a % off US gross home product (GDP) and minimize actual incomes by $675 (€654) per family.

Similar metal tariffs imposed by the US in 2001 additionally induced decrease demand amongst home in addition to international producers, which led to tens of hundreds of layoffs.

“US domestic producers had to reduce employment because they couldn’t produce [enough] cars [due to a lack of imported steel.] That was one of the things that incentivized President George W. Bush to start removing steel tariffs,” Crowley mentioned.

Canada set to honest worst

Canadian Prime Minister Justin Trudeau, whose nation can be impacted essentially the most by the brand new steel tariffs, labeled the penalties “entirely unjustified” and mentioned Ottawa would “resist strongly and firmly.”

Last yr, Canada was the biggest metal exporter to the US — with some 6.6 million tons — adopted by Brazil, Mexico, South Korea and Vietnam, in accordance with the American Iron and Steel Institute.

Canada can be the biggest exporter of aluminum to the US. At 3.2 million tons final yr, Canadian imports have been twice these of the subsequent 9 international locations mixed, US authorities information confirmed. Other main US sources of aluminum are the United Arab Emirates, China, South Korea and Bahrain.

Around 25% of European metal exports go to the US, in accordance with consultancy Roland Berger, together with from Germany, the Netherlands, Romania, Italy and Spain, which led the European Union to vow Tuesday to guard its financial pursuits within the face of Trump’s tariff assault.

Ursula von der Leyen, President of the European Commission — the bloc’s govt arm — warned that “unjustified tariffs on the EU will not go unanswered — they will trigger firm and proportionate countermeasures.”

Crowley mentioned Trump could get a “political win” if he can power the EU, which levies a better tariff on imported automobiles than the US, to chop its automobile tariff.

“He’s thinking about industry-by-industry deals … making it look like he’s cracked open a market by getting the European Union to cut tariffs,” she advised DW.

Some exporters hope for exemptions

As properly as readying retaliatory measures, a number of international locations — together with Australia — have referred to as on Trump to permit exemptions for their metals exports. The US president mentioned he would give “great consideration” to Australia’s request for an exemption as a result of nation’s commerce deficit with the US.

The Times newspaper cited officers as saying that the UK authorities hoped to barter an opt-out from the tariffs. The nation will not be anticipated to retaliate over Trump’s transfer, though measures have been drawn up.

Indian Prime Minister Narendra Modi, who is because of meet Trump on the White House this week, has already minimize tariffs on dozens of imported items and is reported to be getting ready extra cuts in an try to appease Washington.

India imposes tariffs which are sometimes between 5 and 20% increased than the US on 87% of imported items, in accordance with information from Global Trade Alert.

Ukraine, in the meantime, hopes it will probably additionally sidestep the tariffs, probably in a deal over uncommon earth components, badly wanted by US know-how companies, together with for the manufacturing of electrical autos. Ukraine’s steel merchandise made up almost 58% of exports to the US final yr, value $500 million.

“In 2018, there were deals made with Argentina, Brazil and Australia. So, there is still room for negotiation … there will be exemptions for some countries for sure,” Inga Feschner, senior economist for Germany and international commerce at Dutch financial institution ING, advised DW.

Edited by: Rob Mudge