João da Silva
Business Reporter, BBC News
Reuters
25% flat rights on steel and aluminum imports are a major success for some of the best business partners in the United States
The prices imposed by US President Donald Trump on steel and aluminum imports have taken effect in a decision that will probably increase tensions with some of the largest business partners in America.
The measure increases a flat service on steel and aluminum entering the United States at 25% and puts an end to all exemptions from countries to the samples.
Several countries, including the United Kingdom and Australia, have tried to guarantee unanswered races. Others, including Canada and the European Union, said they would retaliate.
Trump hopes that the prices will stimulate American production of steel and aluminum, but criticisms say that this will increase prices for American consumers and the economic growth of bumps.
The American Iron and Steel Institute (AISI), a group that represented Steelmakers, welcomed prices by saying that they will create jobs and stimulate the interior manufacturing of steel.
The president of the Kevin Dempsey group said that the move closed a system of exemptions, exclusions and quotas which allowed foreign producers to avoid prices.
“AISI applauds the president’s actions to restore the integrity of steel prices and implement a robust and invigorated program to combat unfair commercial practices,” added Mr. Dempsey.
The United States is an important importer of aluminum and steel, and Canada, Mexico and Brazil are among its largest metal suppliers.
Prices mean that US companies wishing to bring metals to the country will have to pay them a 25%tax.
This is likely to lead to higher costs for a large number of American industries, including aerospace companies, car manufacturers, constructions and manufacturers.
Michael Dimarino directs Linda Tool, Brooklyn Company of 17 people who manufacture parts for the aerospace industry. Everything it does implies a kind of steel, a large part of which comes from American factories.
“If I have higher prices, I transmit them to my customers. They have higher prices, they transmit it to the consumer,” said Dimarino, adding that he supports the call for increased manufacturing in the United States, but warning the movements of the president may return against the return.
The American Automotive Policy Council, a group that represents car giants such as Ford, General Motors and Stellantis, has also echoed these concerns.
“We are examining and always awaiting all the details of the prices proposed, but we are concerned that the specific revocation of exemptions for Canada and Mexico will add significant costs for our suppliers,” said Matt Blunt, president of the organization.
Some economists warn that prices could help the American steel and aluminum industries, but harm the wider economy.
“He protects the industries (the steel and aluminum industries) but injures users downstream of their products by making them more expensive,” said Bill Reinsch, a former trade in the trade department who is now at the Center for Strategic and International Studies.
‘No exception’
In 2018, during his first mandate as president, Trump imposed import rates of 25% on steel and 10% in aluminum, but he finally negotiated sculptures for many countries.
Several countries, including the United Kingdom and Australia, which had previously been exempt from paying such prices sought to avoid them once again.
But President Trump said he will not grant the same kind of exclusions and exemptions he made during his first mandate.
Responding to the prices that come into force, Australian Prime Minister Anthony Albanese said in a press conference that Trump’s decision to move forward with the new prices was “entirely unjustified”.
“It is against the spirit of the lasting friendship of our two nations and fundamentally in contradiction with the advantages that our economic partnership has offered more than 70 years,” he added.
Albanese also said that Australia would not impose reciprocal prices in the United States, because such a decision would not increase the prices of Australian consumers.
Meanwhile, Canadian Minister of Energy, Jonathan Wilkinson, told CNN that his country would be binding, but added that Canada was not trying to intensify tensions.
Canada is one of the closest trade partners in America and the largest exporter of steel and aluminum with the United States.
The European Union has also said it would come back to Trump’s decision.
Last month, the British government said it was asking for an exemption from the prices and added that it would not immediately retaliate.
Recession fears
The fear of the economic cost of Trump’s commercial prices sparked a sale on the US and global stock markets that accelerated this week after the American president refused to exclude the prospect of an economic recession.
The S&P 500 index of the largest companies listed in the United States fell 0.7% on Tuesday after falling by 2.7% on Monday, which has been its biggest day since December.
The FTSE 100 sharing index of the United Kingdom, which had dropped earlier on Tuesday, decreased and closed more than 1%. The French CAC 40 index and the German Dax followed a similar model.
Meanwhile, the economic research office, Oxford Economics, said in a report that it had reduced its US economic growth forecasts for the year from 2.4% to 2% had made even higher adjustments in Canada and Mexico.
“Despite the demotion, we always expect the American economy to surpass other major advanced economies over the next two years,” added its report.
“The uncertainty around the way for us the prices is higher than ever”.
Ontario force test
Earlier Tuesday, the United States and Canada fell on the side of a major climbing in the trade war.
It was after Trump said he had interrupted a plan to double the American prices on Canadian steel and metal imports at 50%, just hours after threatening them for the first time.
The president’s decision was made after the Canadian province of Ontario suspended new 25% charges on the electricity it sends to certain North States in the United States.
Despite the ascent, Canada will always face 25% Trump’s price on steel and aluminum imports that have just come into force.
Additional Michelle Fleury report in New York
