Trump increases steel tariffs to 50%: a blow to the US economy!

Trump increases steel tariffs to 50%: a blow to the US economy!

Pittsburgh, Pennsylvania, USA - The US President Donald Trump announced today during a rally outside of Pittsburgh, Pennsylvania, to increase the import duties to steel imports from current 25 % to 50 %. This increase will take effect on June 4 and aim to strengthen the US steel industry. Trump described the customs increase as an advantage for the domestic manufacturing industry and particularly campaigned for the working class voters in the Rust Belt region to support his re-election in 2024. This measure is part of its “America First” agenda, which promotes protectionist policies to secure domestic economy and employment. However, it remains unclear how this customs increase will affect existing trade agreements with countries such as Canada, Mexico and the United Kingdom, Al Jazera.

Trump emphasized an important partnership between Nippon Steel, the largest steel producer in Japan, and US Steel. This partnership, which was described as a "blockbuster agreement", includes a planned investment of $ 14 billion in US Steel. This investment is at the center of the discussions, especially since Trump had previously announced that he was to block the takeover of US Steel by Nippon Steel, but then changed his position and supported the deal, which the United Steelworkers union sees skeptically, it was said in a report from ctol .

economic effects and international reactions

economists already warn that the high tariffs that are introduced under the section 232 of the Trade Expansion Act could lead to increased prices for US consumers. It is estimated that the tariffs could increase the prices by a further $ 75-120 per ton, which the margins in particular would put pressure on for downstream manufacturers. The first tariffs on steel and aluminum, which were introduced in March 2023, had already led to a decline in finishing steel imports by around 30 % and a price increase for hot-rolled coils by 15-20 %, which steamed the market reactions, with the shares of US Steel slightly climbed, while that of Cleveland cliffs fell.

The United Steelworkers union has taken a cautious attitude towards fusion between Nippon Steel and US Steel. Turbocharged Zölle could also complicate negotiations on future zero-inch agreements with European countries. In the long term, the question remains whether such tariffs are sufficient to really revitalize US steel production, since the domestic capacity is not sufficient to meet the need.