Trump held a rally on May 30th at a US Steel plant in Pennsylvania, announcing he would double the current tariff rate on imported steel and aluminum from 25% to 50% as of June 4th. This continues to impact international trade relations as Canadian, EU, and British leaders are not happy with the news.
The Canadian Prime Minister, Mark Carney, met with President Trump on May 6th to negotiate the gaping differences in a trade war that has destroyed decades of trust with the U.S neighbor. Carney had recently been elected as prime minister after Trudeau stepped down after his 9-year run. Carney gained popularity by promising supporters he would confront the increased aggression shown by Trump. During the meeting, a reporter asked if there was anything that would levy the tariffs on Canada, Trump simply replied, “No”. He continued by emphasizing that the U.S doesn’t need anything from Canada, despite prior to his presidency, the U.S imported most of its metals from Canada. This meeting displayed the current president’s stubbornness and aggression in the ongoing trade war.
The EU stated that Trump’s surprise plan to double tariffs on these metals will throw bilateral trade talks into chaos and undermine all ongoing measures. They also threatened to take countermeasures if tariffs continue. This could cause major issues as the U.S imports almost all its pharmaceuticals from the EU. This raises questions in the UK, which was the first country to clinch a trade deal with the U.S. The agreement, not yet signed, called for 0 tariffs on all aluminum and steel.
The potential 2x increase is aimed at increasing steel and aluminum production in the U.S. Experts claim that this could lead to supply security and job creation, but reducing foreign sources of metals, such as steel and aluminum, could lead to higher prices downstream. Automakers and construction will face higher prices, leading to more expensive consumer purchases. Additionally, the U.S production of these metals has declined in recent years, leading to over ¼ of all steel used in the U.S to be imported. Therefore, existing plants will not be able to keep up with demand. This, in turn, requires new plants to be built or existing ones to be remodeled. Despite this, some people argue that these are just negotiation tactics to receive more beneficial trade terms.