President Donald Trump has announced he will impose tariffs of 25 percent on all imported steel and aluminum — but this isn’t the first time he has done so.
During his first term, he implemented a similar policy, causing imports to drop and several countries to implement retaliatory tariffs.
Here’s why Trump wants to implement the new tariffs — and what happened under the same policy during his last term:
Trump wants tariffs on steel and aluminum – again
The president revealed his plan while speaking with reporters as he traveled to New Orleans to watch the Super Bowl.
“Any steel coming into the United States is going to have a 25% tariff,” Trump told reporters from Air Force One. “Aluminum, too.”
This marks yet another blow to Canada and Mexico in Trump’s trade war, as the countries are the two largest sources of US steel imports. Other major aluminum importers include Brazil, South Korea and Germany, CNBC reports.
Meanwhile, Canada is the top exporter of aluminum to the U.S., with the UAE and South Korea following behind, according to CNBC.
Analyst James Campbell told CNBC it could take time for the U.S. to feel the full effect of the tariffs.
“At the start, this could damage demand,” Campbell told the outlet. “In the longer term, we can see investment coming through.”
Since 2018, when Trump implemented similar tariffs during his first term, Campbell told CNBC that investment in U.S. steel and aluminum has gone up.
What happened when Trump put tariffs on steel and aluminum last time?
In May 2018, Trump placed a 25 percent tariff on steel and 10 percent tariff on aluminum from most countries, citing national security, the Financial Times reports. The next month, the tariffs were expanded to include the European Union, Canada and Mexico.
As a result, steel and aluminum imports dropped almost immediately, according to the Financial Times. The tariffs then sparked widespread backlash, the Financial Times reports, including tariffs from the European Union on $2.8 billion worth of US imports.
The EU targeted steel, agricultural products and other goods, including iconic American items like bourbon whiskey and Harley-Davison motorcycles. Annual American whiskey exports to the EU have since dropped by a third, representing a loss of about $256 million, according to the Financial Times.
Amid the backlash, Trump later granted exemptions to some countries, including Canada and Mexico.
Meanwhile, American car manufacturers were impacted as domestic steel producers used the tariffs to drive up their own prices, the Financial Times reports. American companies that made things like nails or wire baskets were also at a disadvantage because the tariff only applied to steel and aluminum, not products made from those metals, NPR reports.
Mark McClelland, an aluminum extrusion business owner from Texas, told NPR the first term tariffs drove up his costs.
“It drove up our raw material costs by 10%, whether we imported them or not,” McClelland told the outlet. “Even if it was produced domestically, it raises your costs 10 percent.”
Former president Joe Biden then struck a temporary truce with the EU and Japan in 2021 after partially lifting the tariffs, the Financial Times reports. The EU also froze all of its measures, although that deal is set to expire in March.
Volvo Cars CEO Jim Rowan warned last week profitability could suffer due to Trump’s tariffs, even before the president announced the latest taxes on steel and aluminum on Sunday, the Financial Times reports.
“There’s going to be tariffs . . . you’re going to see some geopolitics and some change in policy so that’s going to create general turbulence,” Rowan said.
The Independent has contacted the White House for comment.
