Trump signs executive order to impose tariffs on all steel and aluminum from March 12

On February 10, US President Trump signed an executive order to impose a 25% tariff on all steel and aluminum imports. This tariff will also apply to Japanese products. The additional tariff on aluminum products will be increased from the original 10% to 25%.

Trump said that he would also consider imposing tariffs on automobiles, semiconductors and pharmaceuticals in the future.

The executive order on steel and aluminum products shows that from 0:01 on March 12, Eastern Time, additional tariffs based on Section 232 of the US Trade Expansion Act will be fully applied. Additional tariffs were implemented during Trump’s first administration and continued during the Biden administration, but many tax-free exceptions were set up.

The executive order pointed out that due to the exceptions, especially the sharp increase in imports from Canada and Mexico, “has reached a level that may undermine (US) security guarantees.” Trump once showed a sense of crisis about the US steel industry’s operating rate being less than 80%.

Regarding the possibility of rising steel prices, Trump said, “Don’t worry. One day, they will be made in the United States without tariffs, and the price will be cheaper. Jobs will increase as well.”

A senior U.S. government official explained to reporters that “this is a measure aimed at ending dumping (of foreign products)” based on China. The senior official also said that “the era of foreign countries maliciously exploiting the U.S. trade system (through exceptional measures) will end.”

Additional tariffs on steel and aluminum were launched in March 2018 during Trump’s first administration. Although this is a measure based on Section 232, there are many exceptions such as Canada and Mexico being exempted from tariffs in 2019. In addition to the above two countries, Australia is also excluded.

In addition, an exceptional measure called “tariff quotas” that allows a certain number of products to be imported without additional tariffs is set up, and steel products from Japan, the European Union (EU) and the United Kingdom are subject to this measure. Measures to limit import quantities but not impose additional tariffs are taken for South Korea and other countries.

In addition to the exceptional measures of these countries and regions, there are also exemptions when domestic steel importers in the United States apply for them and exemptions for steel products necessary to ensure national security.

This time, since a grace period of about one month was left before the tariffs were launched, it is expected that the United States will continue to negotiate with various countries over the implementation of exceptional measures. Trump hinted at the possibility of negotiating with Australia on the continuation of exceptional measures.