Trump raises 25% tariffs on all steel and aluminum imports in the USA

The effects on the US economy

"It could rise even higher," Trump said on Tuesday about the 25%inch on steel and aluminum from all countries at an event of the Business Roundtable. "The higher it increases, the more likely it is that they build," Trump referred to the possibility that more companies move their production to the USA.

Trump distracted from his threat to double the tariffs for Canada after the Prime Minister of Ontario, Doug Ford, agreed to suspend the surcharges on electricity for US customers.

First global increase in the second term in Trump

Before Wednesday, Trump had only raised tariffs from China, Mexico and Canada during this term. Companies from Mexico and Canada can avoid tariffs by April 2 if they adhere to USMCA.

Shortly before the tariffs come into force, the Australian Prime Minister Anthony Albanese criticized the tariffs as "completely unfounded" and "against the spirit of the long -lasting friendship between our two nations". He added that Australia would not collect against tariffs.

The background to the new tariffs

The steel tariffs of 25%, which were introduced in Trump's first term and continued by his successor Joe Biden, led to American importers switching to other sources. However, the bidding government had approved exceptions for allies of the United States, including Canada, Mexico, Japan and South Korea. Trump's latest measure takes up these exceptions, so that no countries are excluded from the tariffs for steel imports to the USA.

china is the only country whose aluminum and steel are occupied with a higher than 25 % inch. This is due to the fact that a general custom of 20 % had previously been based on Chinese imports. The additional inch of 25 % on steel and aluminum increases the total customs to 45 % for products from China.

The importance of aluminum and steel in industry

While Trump wants to damage the Canadian economy with the increase in tariffs to steel and aluminum, this measure also carries risks to the American economy. According to the US Ministry of Trade, the United States imported last year worth $ 31.3 billion of iron and steel and $ 27.4 billion in aluminum.

The largest sources for iron, steel and aluminum that were delivered to the USA were Canada, followed by China, Mexico and the United Arab Emirates. Steel and aluminum can be found in a variety of products. Customs could therefore significantly increase the prices for American consumers.

For example, cars contain hundreds if not thousands of pounds steel and aluminum. Trump said that his “clearly” higher car tariffs will “shut down” the automotive industry in Canada, but in reality this could have negative effects on the American auto industry, since the North American supply chain is closely intertwined.

price increases and long -term effects

Before Wednesday, the prospects for higher tariffs led to strong price increases in steel and aluminum in the markets. The price of domestic steel has increased by more than 30 % in the past two months, while the price of aluminum has increased by about 15 %.

Although many large industrial customers could be protected from these price increases in the near future by long -term contracts, they have to expect to pay higher prices, even if the products they buy come from domestic factories.

The tariffs will probably not only affect the raw products, but also to the costs of imported parts that are made from these metals. For example, the prices for aluminum bumpers or coolers, which are bought by an automobile manufacturer by a Canadian or Mexican supplier, are expected to increase.

This message was updated with additional information and context. CNNS Chris Isidore, Angus Watson and James Legge contributed to reporting.