President Trump Is Imposing Tariffs on Steel and Aluminum. Here's What That Means

From TIME - March 1, 2018

(WASHINGTON)Determined to protect vital American industries, President Donald Trump declared Thursday that he will impose tariffs on steel and aluminum imports, dramatically raising the possibility of a trade showdown with China and other key trading partners.

Trump summoned steel and aluminum executives to the White House and told them that next week he would levy penalties of 25 percent on steel and 10 percent on aluminum imports. Those tariffs, he said, will remain for a long period of time. But it was not immediately clear if the tariffs would exempt certain trading partners.

Whats been allowed to go on for decades is disgraceful. Its disgraceful, Trump told them in the Cabinet Room. You will have protection for the first time in a long while and youre going to regrow your industries.

Increased foreign production, especially by China, has driven down prices and hurt U.S. producers, creating a situation the Commerce Department calls a national security threat.

Any action to impose tariffs is likely to escalate simmering tensions with China and other U.S. trading partners. Critics of such a move fear that other countries will retaliate or use national security as a pretext to impose trade penalties of their own. They also argue that sanctions on imports will drive up prices and hurt U.S. automakers and other companies that use steel or aluminum.

Plans for Trump to make an announcement were thrown into doubt earlier because of internal wrangling over the decision. Some White House officials, including chief of staff John Kelly, were not fully briefed on the Commerce Departments plans, according to a senior administration official familiar with the process. This official was not authorized to discuss the internal deliberations publicly and spoke on condition of anonymity.

The possibility of an announcement, on an issue overseen by Commerce Secretary Wilbur Ross and White House trade adviser Peter Navarro, caught some top White House officials off guard and left several aides scrambling for details.

Key Senate offices also did not receive notice that Trump was expected to announce a decision before April deadlines.

The confusion spread to Wall Street. Shares of U.S. Steel, AK Steel Holding Corp. and Century Aluminum Co. dropped mid-morning on news the announcement had been delayed, then rebounded two hours later after Trump said the tariffs were coming next week.

Trump met more than a dozen executives, including representatives from U.S. Steel Corp., Arcelor Mittal, Nucor, JW Aluminum and Century Aluminum. The industry leaders urged Trump to act, saying they had been unfairly hurt by a glut of imports and foreign countries circumventing trade rules.

We are not protectionist. We want a level playing field, said Dave Burritt, president and chief executive officer at U.S. Steel. Its for our employees, to support our customers, and when we get this right it will be great for the United States of America. We have to get this done.

But the announcement was received warily in Congress, with lawmakers raising concern it could launch a trade war that could hurt other industries.


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