While flying on Air Force One Sunday, President Trump announced he would levy a 25% tariff on all aluminum and steel coming into the United States, saying he planned to make an announcement about tariffs this week.
When asked if new tariffs would allow foreign countries to have a controlling interest in U.S. companies, Trump responded, “I don’t want U.S. steel being owned by a foreign country.”
“(Foreign countries) don’t have a controlling interest; they have an investment. All they’re going to have is an investment,” he said.
Regarding soon to come reciprocal tariffs, Trump said, “Very simply, if they charge us, we charge them.” He added that after announced, the tariffs will go into effect almost immediately.
How do Trump’s second term metal tariffs compare to his first term?
A year into his first administration, Trump imposed a 25% tariff on steel and a 10% tariff on aluminum.
While these tariffs largely benefited American steel and aluminum industries, former Ford Motors CEO James Hackett said the tariffs in Trump’s first term cost his company $1 billion in profit.
Similarly, executive vice president of Honda North America, Rick Schostek, said the resulting steel prices increased the cars’ manufacturing prices, which ultimately led to higher costs for Honda buyers, per Reuters.
Several countries were permitted tariff exemptions during Trump’s first administration, including Australia and South Korea.
Prime Minister Anthony Albanese spoke to the Australian House of Representatives Monday, explaining his plan to continue the country’s case “to be given an exemption to any steel and aluminum tariffs.”
Albanese referenced recent discussions with the U.S. and metal manufacturers.
The prime minister said a deal with Australia would be in the U.S.‘s best interest “because tariffs, of course, don’t tax us; they tax the purchasers of our products. That is something that is very clear.”
Albanese mentioned the country’s continued trade surplus with the U.S., adding, “I have a discussion with President Trump scheduled, and I will certainly keep the House and the Australian people informed after that discussion.”
Dartmouth economist discusses pros and cons of the tariffs
Douglas A. Irwin, a professor of economics at Dartmouth College, told The Wall Street Journal that tariffs hurt consumers, while protecting very specific industries or attempting to get countries to change their behavior.
As seen through his recent interactions with Colombia and others, Trump appears to be using tariffs as leverage in foreign affairs.
However, Irwin said tariffs can hurt everyday Americans.
“There’s this myth out there that if we tax imports, domestic producers won’t change their prices. That’s not the case. You’re creating more demand for them, so prices go up,” he said.
Irwin cited a study that found tariffs brought in $82 million for the U.S., but price increases cost American consumers $1.5 billion more.
So, while the tariffs increased costs for Americans, they “were really designed to punish China for its transgressions of international trade rules,” Irwin believes.
The Wall Street Journal also explained how support or opposition to tariffs don’t necessarily fall along partisan lines, and a review of the Biden administration’s actions on tariffs showed an inclination to let Trump-era tariffs remain in place, and in some cases, add to or increase them for certain products.