Image source: United States Steel

Steel Tariffs Will Double

Insistent that US manufacturers who use steel will pay still more, especially the auto industry and small businesses, Trump Says Steel and Aluminum Tariffs Will Double to 50%

President Trump said he would double tariffs on imported steel, a move he said would bolster the domestic industry and protect U.S. jobs.

Trump announced the higher duties at a rally near Pittsburgh promoting a $14 billion deal between Tokyo-based Nippon Steel and U.S. Steel, which the president said would ensure U.S. control over the storied steelmaker.

“There’s never been a $14 billion investment in the history of the steel industry in the United States,” Trump said Friday evening before several hundred steelworkers in hard hats and a backdrop of giant steel coils in a cavernous U.S. Steel mill. “Most importantly, U.S. Steel will continue to be controlled by the U.S.A.”

Trump said tariffs on imported steel, as well as aluminum, would increase to 50% from the current 25%, effective June 4. Global prices for steel have been falling in recent months, making it easier for steel buyers to pay the existing duty on imports and still acquire steel at a discount to domestic prices.

The higher tariff also will give domestic steelmakers more power to raise prices. Steel demand and prices have been cooling since April.

However, Trump’s move risks angering U.S. trading partners. The European Union said the tariff increase undermines its ongoing trade negotiations with the U.S. and could trigger retaliatory tariffs. “The EU is prepared to impose countermeasures, including in response to the latest U.S. tariff increase,” a spokesman said.

We still do not have all the details of the Nippon-US Steel (X) merger but I am certain they are better than if the Cleveland Cliffs (CLF) counter-proposal was accepted.

That aside, higher prices is the last thing US automakers need or small businesses need.

The US does not even make some of the steel small businesses need. If that is still the case after the Nippon deal, Trump will drive those small businesses out of business.

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