Trump doubles steel, aluminium tariffs to 50 per cent amid legal challenges

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New York, US | Xinhua

The United States started to raise tariffs on imported steel and aluminium from 25 per cent to 50 per cent starting from Wednesday, according to an executive order signed by US President Donald Trump on Tuesday.

Trump announced the decision last Friday during a visit to a US Steel plant in West Mifflin, Pennsylvania.

Trump justified the action by claiming that higher tariffs on imported steel and aluminium would address national security threats and improve the competitiveness of domestic industries.

The new tariffs will remain in effect unless such actions are expressly reduced, modified, or terminated, according to the order.

Trump invoked section 232 of the Trade Expansion Act of 1962; the International Emergency Economic Powers Act; section 301 of title 3 of the United States Code; as well as section 604 of the Trade Act of 1974 in the order.

For now, steel and aluminium imports from the United Kingdom will continue to be subject to a 25 per cent tariff, given the economic deal reached between the United States and the United Kingdom on May 8.

However, on or after July 9, the US secretary of commerce may adjust the applicable rates of duty and construct import quotas for steel and aluminum consistent with the US-UK deal, or the secretary may increase the applicable rates of duty to 50 per cent if the United Kingdom is found not to be complying with the deal, according to the order.

"With the 50 per cent tariff, not only is American steel going to be less internationally competitive, but so are the multitude of American industries that depend on steel as a necessary input," said Gary Clyde Hufbauer, a non-resident senior fellow at the Peterson Institute for International Economics.

The new rate on imported steel will almost certainly enlarge the profits of domestic steel companies while US manufacturers and American households will pay dearly for the bonanza to steel barons, wrote Hufbauer in an opinion piece on Monday.

The tariffs make it more expensive for domestic auto manufacturers to produce here, and "it's an economically inconsistent, illiterate policy that seems to be hiding under the national security justifications," said Wayne Winegarden, a senior fellow at the Pacific Research Institute.

"They've never given any justification why 25 per cent is the right number, let alone why 50 per cent is," Winegarden was quoted by a report on time.com.

No business leader should make massive upfront investments in heavy industry if they don't believe that the same policy will last for a few years, according to Felix Tintelnot, professor of economics at Duke University.

The European Commission criticised the new US tariff measures, warning that the move could prompt swift European retaliation.

"The EU is prepared to impose countermeasures, including in response to the latest US tariff increase," the commission's spokesperson said in an emailed statement.

The US action undermines the EU's ongoing efforts to reach a negotiated agreement with the United States, according to the statement.

"This isn't trade policy, it's a direct attack on Canadian industries and workers," said Marty Warren, United Steelworkers National Director for Canada, in a recent statement.

Thousands of Canadian jobs are on the line, and Canada needs to respond immediately and decisively to defend workers, added Warren.