Trade war escalates as Trump’s 25% metal tariffs take effect

The prices imposed by US President Donald Trump on steel and aluminum imports have taken effect in a decision that will probably increase tensions with some of the largest business partners in America.

The measure increases a flat service on steel and aluminum entering the United States at 25% and puts an end to all exemptions from countries to the samples.

He sparked an immediate response from the European Union which said it would impose prices against billions of euros in American products.

Trump hopes that the prices will stimulate American production of steel and aluminum, but criticisms say that this will increase prices for American consumers and the economic growth of bumps.

The American Iron and Steel Institute (AISI), a group that represented Steelmakers, welcomed prices by saying that they will create jobs and stimulate the interior manufacturing of steel.

Group president Kevin Dempsey said this decision closed a system of exemptions, exclusions and quotas that allowed foreign producers to avoid prices.

“AISI applauds the president’s actions to restore the integrity of steel prices and implement a robust and invigorated program to combat unfair commercial practices,” added Mr. Dempsey.

The United States is an important importer of aluminum and steel, and Canada, Mexico and Brazil are among its largest metal suppliers.

Other countries immediately responded to this decision.

British trade minister Jonathan Reynolds said he was disappointed and that “all the options were on the table” to respond in the national interest.

The European Commission said in a statement that it imposed accounting tariffs on 26 billion euros (21.9 billion pounds sterling, $ 28.3 billion) of American goods.

Australian Prime Minister Anthony Albanese said that Trump’s decision to move forward with the new prices was “completely unjustified”.

“It is against the spirit of the lasting friendship of our two nations and fundamentally in contradiction with the advantages that our economic partnership has offered more than 70 years,” he added.

Albanese, who had tried to guarantee an exemption at the prices, also said that Australia would not impose reprisal tasks because such a decision would only increase prices for Australian consumers.

Meanwhile, Canadian Minister of Energy, Jonathan Wilkinson, told CNN that his country would retaliate, but added that Canada was not trying to intensify tensions.

Canada is one of the closest trade partners in America and the largest exporter of steel and aluminum with the United States.

In 2018, during his first mandate as president, Trump imposed 25% import rates on steel and 10% on aluminum, but the cuts were finally negotiated for many countries.

This time, the Trump administration indicated that there will be no exemption.

Prices mean that US companies wishing to bring metals to the country will have to pay them a 25%tax.

This will probably result in higher costs for a large number of American industries, including aerospace, car manufacturing and construction.

Michael Dimarino directs Linda Tool, a Brooklyn company that manufactures parts for the aerospace industry. Everything it does implies a kind of steel, a large part of which comes from American factories.

“If I have higher prices, I transmit them to my customers. They have higher prices, they transmit it to the consumer,” said Dimarino, adding that he supports the call for increased manufacturing in the United States, but warning the president’s movements could turn against him.

The American Automotive Policy Council, a group that represents car giants such as Ford, General Motors and Stellantis, also echoed these worries.

The organization president Matt Blunt said that they “feared that the specific revocation of exemptions for Canada and Mexico adds significant costs” to suppliers of car manufacturers.

Some economists warn that prices could help the American steel and aluminum industries, but harm the wider economy.

“He protects [the steel and aluminium] The industries but harm users downstream of their products by making them more expensive, “said Bill Reinsch, a former head of the trade department, who is now at the Center for Strategic and International Studies.

The fear of the economic cost of Trump’s commercial prices started a sale in the United States and the world’s stock markets Who accelerated this week after the American president refused to exclude the prospect of an economic recession.

The S&P 500 index of the largest companies listed in the United States fell 0.7% on Tuesday after falling by 2.7% on Monday, which has been its biggest day since December.

The FTSE 100 sharing index of the United Kingdom, which had dropped earlier on Tuesday, decreased and closed more than 1%. CAC 40 in France and Germany also dropped.

Meanwhile, the Oxford Economics research office said in a report that it had reduced its American growth forecasts for the year by 2.4% to 2% and provided even higher adjustments to its prospects for Canada and Mexico.

“Despite the demotion, we always expect the American economy to surpass other major advanced economies over the next two years,” added its report.

“The uncertainty around the way for us the prices is higher than ever.”

Earlier Tuesday, the United States and Canada reculed from the edge of the edge of a major escalation in the trade war.

It was after Trump said he had interrupted a plan to double the American prices on Canadian steel and metal imports at 50%, just hours after threatening them for the first time.

The president’s decision was made after the Canadian province of Ontario suspended new 25% charges on the electricity it sends to certain North States in the United States.

Despite the climb, Canada will still be faced at 25% Trump prices on steel and aluminum imports that have just entered into force.

Additional Michelle Fleury report in New York