Trump avows levying a 50% tariff on steel, aluminium imports, ups the ante in trade war

U.S. President Donald Trump said late on Friday at a rally in Pennsylvania that his administration is going to double the proposed tariffs on imported steel and aluminium to 50% from 25%, upping the ante in his policy of trade nationalism.

“We are going to be imposing a 25% increase. We’re going to bring it from 25% to 50%—the tariffs on steel into the United States of America, which will even further secure the steel industry in the United States,” he said, as quoted by Reuters. He later took to social media to further announce that the said tariffs will also apply to aluminium products, and will come into effect on Wednesday, June 4.

The increase in tariffs, aimed at protecting domestic steelmakers, can further affect companies like Hindalco ’s subsidiary Novelis, which has already forewarned a $40 million hit on its EBITDA for the first quarter of the current fiscal year because of the existing 25% tariff.

India has pushed back the Trump administration’s decision to levy tariffs on imported steel and aluminium, while it works out a trade agreement with the U.S.. Earlier this month, India communicated to the WTO that it was mulling levying import duties on certain goods made in the U.S.

The move was seen as a response to the Trump administration's first announcement that it was going to levy a 25% tariff on imported steel. India is the second-largest producer of crude steel, and according to some estimates, the tariffs on India are going to affect exports worth $7.6 billion to the U.S.

Meanwhile, Canada, which holds the largest share among steel exports to the U.S. and also supplies raw material to Novelis, has reacted strongly to the decision. Canada’s Chamber of Commerce dubbed the move as one that is “antithetical to North American economic security.”

“Unwinding the efficient, competitive and reliable cross-border supply chains like we have in steel and aluminium comes at a great cost to both countries,” Candace Laing, president of the chamber, said in a statement.