Let The Trade Wars Begin: Trump Says He Will Impose Steel, Aluminum Tariffs Next Week

Update III: After the White House said earlier that today's meeting would be a "listening" meeting, President Trump has taken investors by surprise by announcing that he will impose the long-rumored aluminum and steel sanctions next week.

As expected, Trump said he would impose a 25% tariff on steel imports, and a 10% tariff for aluminum. Meanwhile, here are the initial details as they trickle in:

  • TRUMP: STEEL, ALUMINUM WORKERS HAVEN'T BEEN REPRESENTED
  • U.S. STEEL'S BURRITT TELLS TRUMP COS. NEED LEVEL PLAYING FIELD
  • TRUMP SAYS WILL REBUILD U.S. STEEL AND ALUMINUM INDUSTRIES: RTRS
  • TRUMP, IN MEETING W/ STEEL COS., PRAISES SOLAR TARIFFS HE DID
  • TRUMP SAYS U.S. WILL INSTITUTE TARIFFS NEXT WEEK
  • TRUMP AT STEEL MEETING SAYS NEXT WEEK WILL SIGN SOMETHING
  • TRUMP SAYS 25% TARIFFS FOR STEEL
  • TRUMP SAYS 10% TARIFF FOR ALUMINUM

"Some time next week we’ll be signing it," Trump said during meeting with steel and aluminum executives at White House. “And you’re going to have protection for the first time in a long time"

Before making the announcement, Trump praised his recent tariffs on solar cells and washing machines, and said they were an example of how tariffs can lead to additional U.S. investment in sectors

Metals stocks such as AK Steel, U.S. Steel, Commercial Metals and Century Aluminum rose to new session highs after Trump’s midday comments. At the same time, the Canadian dollar fell to a fresh 2018 low at 1.2879 before paring its decline slightly; steel and aluminum tariffs remind of the trade tensions between the two countries amid Nafta negotiations.

And the market is not happy...

... perhaps because it is waiting for Emperor Xi to give the sell order in retaliation.

 

* * *

Update II: Newswires are reporting that Trump's tariff announcement could come as early as 11 am ET.

* * *

Update: In yet another sign that the tariffs could be unveiled as soon as today, Trump tweeted Thursday morning that "our steel and aluminum industries (and many others) have been decimated by decades of unfair trade and bad policy with countries around the world...We must not let our country, companies and workers be taken advantage of..."

 

Meanwhile, Axios published a study showing voters in swing states largely back Trump's protectionist trade policies, with about half of the voters surveyed saying they'd be willing to pay more for cars if it helped the US steel and automotive industries.

* * *

Ignoring threats of a WTO challenge by the European Union and other potentially harmful countermeasures by China, President Trump is reportedly preparing to impose stiff tariffs on steel and aluminum on Thursday, according to Bloomberg.

Trump has abruptly summoned steel and aluminum executives to the White House - telling them he could announce the tariffs at the meeting, the Wall Street Journal adds.

Last week, media reports said Trump was leaning toward the stiffest trade protections from a bevy of options presented to him by the Commerce Department two weeks ago. These include  a tariffs of 25 percent on steel and 10 percent on aluminum from all countries.

However, other sources told WSJ that a final decision on tariffs had not yet been made, and that the meeting could just be an opportunity to consider alternatives.

In its initial study, the Commerce Department and other agencies concluded that imports of cheap steel and aluminum harm US national security and military needs. While Trump is said to favor the broadest measures, Defense Secretary James Mattis has suggested that exemptions could be made. Commerce Secretary Wilbur Ross, a longtime steel executive, has also pushed for the toughest sanctions.

The White House ordered the Commerce Department back in April to look into these issues under the seldom-used section 232 of the 1962 Trade Expansion Act.

Steel

Both BBG and WSJ pointed out that tariffs could elicit protests and retaliations from some of the US's biggest trading partners. The timing of the announcement could also be interpreted as an insult to China. Liu He, President Xi Jinping's top economic advisor who's widely believed to be in line to become China's next financial superregulator as well as head of the PBOC, is visiting Washington this week. 

Contrary to the outraged reactions from US trade partners and some pro-free trade economists, UBS' chief economist Paul Donovan suggested that a 25% tariff on steel and 10% tariff on aluminum wouldn't have much of an impact on consumers, who could see prices of goods from beer cans to cars move marginally higher. Indeed, the pass-through impact felt by consumers from Trump's tariffs on solar panels and washing machines would probably be more intense.

The real risk, UBS says, is to markets, which - if history is any guide - could pitch a fit as protectionist rumblings out of the Trump administrations have often harmed stocks and the dollar. Reports late last night that Trump might unveil the sanctions today sent Asian steel stocks lower.

One economist who spoke with Bloomberg said Trump's tariffs likely wouldn't have a major impact on global trade on their own - the danger, he said, lies in whether the affected countries (i.e. China, Mexico and Canada) choose to retaliate. China in particular has been accused of flooding the global market with cheap steel to undermine foreign producers.

Chinese bureaucrats are already threatening retaliation.

"The United States has over-used trade remedies and it will impact employment in the U.S. and the interests of U.S. consumers," Chinese Foreign Ministry spokeswoman Hua Chunying said. "China will take proper measures to safeguard its rights and interests."

European officials have argued it doesn't make sense to penalize NATO members in the name of national security.

Trump's protectionist push comes as free-trade Republicans pressure him to soften the crackdown. However, the decision will likely go over well in Pennsylvania and Ohio - two rust belt swing states that Trump needs to keep in his corner if he wants to win reelection in 2020.

Imposing these tariffs could also complicate the renegotiation of the North American Free Trade Agreement. Canada and the US are already engaged in mini-trade spats over the Trump administration's decision to slap a massive 300% tariff on C-Series jets produced by Canadian aerospace company Bombardier.

Ironically, Trump's unveiling of the new tariffs would follow a surprising statement made by Treasury Secretary Steve Mnuchin earlier this week that the president is open to rejoining the Trans-Pacific Partnership - that is, if he could secure a good enough deal.

Trump still prefers bilateral trade agreements over group accords, Mnuchin said.

Any announcement on tariffs likely wouldn't come until late Thursday, after Trump's meeting with steel and aluminum executives has concluded.

Comments

Last of the Mi… Thu, 03/01/2018 - 06:51 Permalink

Protectionism raises prices for US consumers. It is a tax by any other mans to protect a small group of businessmen who cannot remain competitive in a global economy. This will result in higher prices and retaliation in kind from China. It is a stupid stupid move and has been tried many times before with bad results.

MK ULTRA Alpha Tarzan Thu, 03/01/2018 - 07:21 Permalink

Well if isn't Tarzan aka McKay, the printer who just lost his job with the Florida Times Union who pumps the most left wing issues.

He used the death of his father in Vietnam to justify his left wing rants and at the same time he rails against the media, stating journalism is real poor etc. could it be he lost his job at the newspaper. The Florida Times Union can no longer afford to print the newspaper, laid off many staff and has been sold and the building is being sold by the old owner. It is a shell of it's former self, and Mr. McKay lost his career. (he used his fathers death for his rant, his name was McKay then I looked it up, he's a former newspaper worker railing at journalist, but he pumps the same thing they did, and lost many subscribers.)

The newspaper blames the internet and loss of advertisers, but it was more, the newspaper pumped the same agenda Tarzan aka McKay pumps here. The newspaper highlighted transvestites on the front page and allowed lesbian and gay newspaper employees to write admonishments of the predominate Christian city of Jacksonville. The newspaper can barely survive and McKay is gone and bitter.

The newspaper was/is loaded with homosexuals, I suspect Mr. McKay is also a homosexual because my essay he attacked with this emotional drama was critical of Obama and his army of homosexuals and Obama's Open Border illegal immigration policy.

 

In reply to by Tarzan

MK ULTRA Alpha peddling-fiction Thu, 03/01/2018 - 07:49 Permalink

I guess no one here has heard of "dumping steel" well China had over capacity, they dumped a great deal of steel on world markets to keep workers employed. In other words, the Chinese government subsidized steel production.

If the US wants a steel industry for national defense at this point it has no choice but a tariff.

What concerns me, is Cohen and Mnuchin has talked Trump into reentering the Pacific Partnership, and I detected Japanese acting like it was going to happen and now we hear Trump is reconsidering. Pacific Partnership means greater loss of jobs than steel and aluminum imports.

Don't know what's going to happen, but the great powers are arming for a global war. A global war will impact everyone's future and must be prepared for accordingly.

And by the way, how are you getting along with the CIA using microwaves to control your mind in Finland in the 80's, fascinating and riveting tale of insanity while drunk I would suspect.

In reply to by peddling-fiction

cheka Kayman Thu, 03/01/2018 - 13:12 Permalink

tariff or continue to get bled out by nyc.  free trade = one of their greatest scams

but we need a blanket tariff -- apple ishit included

use tariff revenue to reduce income taxes on WAGES

note that the jobs sent overseas NEVER include the big fish - where the most bang for shareholder buck is found

 

In reply to by Kayman

EddieLomax MK ULTRA Alpha Thu, 03/01/2018 - 18:32 Permalink

The Chinese steel production is immense and their capacity long since overshot their needs, I suspect it was more a jobs program than a real industry.

Now they are playing the pump-and-dump, just like the Koreans did with DRAM, government backed conglomerates with vast debts produced ram at below cost until major Japanese semiconductors pulled out of the market.  The overly indebts giant's "fixed" things by merging, and then prices went up.

Everyone (on their board) is a winner.

In reply to by MK ULTRA Alpha

Tarzan MK ULTRA Alpha Thu, 03/01/2018 - 09:19 Permalink

That is Mr Bobby Don McKay, eldest son of Homer Eugene McKay.  Visit his empty grave in Alington some day. 

I have nothing to hide, how about you?

I've been a printer my whole life, and supervised the engraving department for years at the Times Union, then ran the digital printing department until they bought me out, a month before they sold.

 I am still employed, running a commercial digital print shop, making better money, never missed a beat, BITCHEZ!

Before that I owned Abba Printing.  

I've also been married over 30 years now, have three educated, employed sons, three grandchildren, and a fourth on the way.  I do a lot of fishing and play a lot of golf.   Other then that I'm a pretty boring guy.

Anything else you like to know?

In reply to by MK ULTRA Alpha

Tarzan MK ULTRA Alpha Thu, 03/01/2018 - 09:25 Permalink

Let me add,  You have no clue about the Florida Times Union. 

They were a very conservative Paper, as far as Papers go.  They were owned by the very conservative Morris Family, from Georgia, who owned many papers and magazines across the country. 

The editorial staff were not so much though.  This is one of the reason, IMO, the family sold out.  They forced the Editorial staff to endorse Trump, it didn't go over well, and they recently sold all but one of their "news" papers. 

I don't blame them.  The Press is dead.  I know first hand!!

In reply to by MK ULTRA Alpha

MK ULTRA Alpha Tarzan Thu, 03/01/2018 - 13:08 Permalink

I know everything about your newspaper. Please leave me alone, you attacked me, I gave it back. You're a real low rent white trash kind of person. It's Jacksonville. I really don't want to have anything to do with you.

I received a nasty dirty comment from you about my opinion, it was a nasty low rent cut down and to justify your hate rant you used the death of your father. It was low rent white trash Jacksonville, I could see it. I don't want that dirty filth on me.

Jacksonville is one of the most, if not the most corrupt and violent city in Florida, and Florida is ranked number one in corruption. Everyone is a thief.

I know most of the reporters at the paper, and most people will say and have seen it written in the comment section under the editor Denton's articles many times, it was stated the newspaper was an extreme left wing newspaper. Not only did posters say that, but everyone I know stopped taking the newspaper.

And the other thing, you're not a well informed, well educated person, I can tell, so please don't post to me, I find no value in your comments, and that's the God's truth.

In reply to by Tarzan

Dilluminati Tarzan Thu, 03/01/2018 - 09:03 Permalink

I'm glad I bought last year: New Jeep, New Hyundai, and put myself into a Subaru with under 20K bought the year before.  Especially Korea steel is cheap.. Kia Hyundai..

Just saying.. that was a sound move if inflation in commodities kicks in.. tell you in 5-10 years how sound that decision was..

Now I'm getting ready to invest in real precious metals.. lead

In reply to by Tarzan

Juggernaut x2 swamp Thu, 03/01/2018 - 13:12 Permalink

the US middle class rose to prosperity because the rest of the world was rubble after WW2- the war was also the reason that the Great Depression did not stretch over decades. you need to quit spewing your "tariffs are the reason for the US Middle Class" BS. and the only US Middle Class left is the one that draws a check from .gov

In reply to by swamp

Chris88 swamp Thu, 03/01/2018 - 13:45 Permalink

The entire industrial revolution happened with sound money, no central bank, no income tax, sales tax, cap gains tax, dividend tax, interest tax, property tax FICA taxes, and without insane regulations.  But your dumb ass equates it with tariffs.  Stick to manual labor, thinking isn't your strong point.

In reply to by swamp

EddieLomax swamp Thu, 03/01/2018 - 18:35 Permalink

There is a lot of truth in this.

Its the same with brexit and all the fear mongering there.  Yes, we could fall back to imposing WTO tariffs, but it all amounts to just another way to gather tax.  Right now I'm the one paying the tax, so if the tax is moved somewhere else where I also pay it then nothing changes.

But if it keeps my well paid manufacturing job going I'm obviously going to be better off.

In reply to by swamp

D.T.Barnum Last of the Mi… Thu, 03/01/2018 - 06:56 Permalink

Why did we start letting China make everything?  Seems like a bad move in hindsight.  It's like a macrocosm of someone on welfare.  Money just manifests out of thin air (petrodollar printing press) so we got lazy and skill-less.

P.S.  How come one influential group pushes multiculturalism and a heterogeneous gene pool, but not for (((themselves?)))

In reply to by Last of the Mi…

css1971 D.T.Barnum Thu, 03/01/2018 - 07:44 Permalink

Why?

To transfer wealth from the bottom of the economy to the top.

  • Delink from gold.
  • Now you don't need to produce anything, to import unlimited goods.
  • Now you can put your factories in the cheapest places on the planet.
  • And the domestic workforce have to compete against people willing to take 1/10th.

You could think of it as class warfare, or mining the wealth of the working class.

Same for mass immigration for those service jobs which can't be offshored.

In reply to by D.T.Barnum

Mazzy D.T.Barnum Thu, 03/01/2018 - 08:39 Permalink

The dwindling skillset in our country is the most disturbing part.  Meanwhile the Chinese are learning to build everything from factories to ships to electronics. 

The US has plenty of accountants, lawyers, financeers, and "educators", but a dwindling supply of people who can build, weld, manufacture, and create.

In reply to by D.T.Barnum

dirty fingernails Mazzy Thu, 03/01/2018 - 08:51 Permalink

That and the lack of the physical manufacturing equipment on US soil, installed, tooled up, and operational is where the idiots who say "US production can restart in a matter of weeks. There will be nothing but growth" completely fall flat on their faces. Skilled workers have a much longer lead time than the machines!

In reply to by Mazzy

Let it Go Last of the Mi… Thu, 03/01/2018 - 08:36 Permalink

Trade policy has massive long-term ramifications on the strength of a nation's economy. Often people fail to note the difference between free and fair trade. In many ways, the global economy has become an ill-regulated business model tilted to favor big business and giant conglomerates. We should not lose sight of the fact that while free trade is important, fair trade is far more so and should be the main issue.

Developing a long-term sustainable economic system that is balanced would contribute to both global cohesion and the world economy. The article below is in response to a slew of comments from a recent article titled, "Higher Prices On Import Goods A Fair Cost For Jobs". Today many people supporting past trade agreements mistakenly use low consumer prices as a battle flag around which to rally.

 http://Free Trade And Fair Trade Are Very Different.html

In reply to by Last of the Mi…

rejected Last of the Mi… Thu, 03/01/2018 - 08:39 Permalink

It's the way the country operated before deciding to enslave its population with the 16th amendment and the Fed. 

Free trade is allowing other country's businesses to freely join our market. Free trade is NOT American corporations leaving the country for cheaper labor and other expenses, then shipping their product back to their country they just deserted. 

If Americans can afford $1000 Iphones then $1200/$1300 should be no problem and it might put those out of the workforce back to work. 

Protectionism is exactly what it says. It protects the national economy just as the military protects the national borders. And the people of the USA seem to have little problem with trillion dollar military budgets. The military also loses a trillion every year they 'can't' account for. That's two trillion a year and I'll bet that doesn't bother you at all. 

All countries have tariffs,,, and always have had tariffs. If you love cheap so much then you can always move to where cheap lives. 

In reply to by Last of the Mi…