Stocks nosedive after Trump announces steel, aluminum tariffs
- Author: Leroy Wright Mar 02, 2018,
Mar 02, 2018, 10:45
Wall Street also reacted negatively with all major US benchmark indexes closing sharply down after the announcement.
The anticipation of expected tariffs could explain why we've been seeing increased activity in sourcing for both steel and aluminum from North American suppliers at Thomasnet.com.
"Import taxes on steel and aluminum will raise the prices of those products, which in turn will raise the price of doing business for USA manufacturers, ' said economist Christine Mcdaniel of George Mason University's Mercatus Center".
Trump has until mid-April to decide on a course of action.
The announcement led to gains in metal prices, as well as in shares of Alcoa Corp., Century Aluminum Co. and United States Steel Corp. Trump told confidantes, that he was leaning toward a 24 per cent tariff on steel, the harshest of the alternatives given to him by the Department of Commerce.
"We must tread carefully when imposing tariffs of this size as they often have unintended consequences on American businesses", he said.
The administration says duties would protect US industry, but critics say they would raise costs for industry and fail to deliver on a campaign pledge to boost domestic jobs.
President Donald Trump's planned tariffs on aluminum and steel is bad news for pretty much everyone in the US. We covered this in regard to steel in a Thomas Index back in June of 2017. Trump says he'll sign an executive order next week.
It's true that the US steel and aluminum industries have been hurt by imports. Following the Commerce Department's recommendation, the stocks of Ford Motor Co. and General Motors Co. dropped. Experts note that steel has never fully recovered from the 2008 financial crisis and that capacity utilization in the USA iron and steel industry has been lagging.
Mexico will place retaliatory tariffs on US goods if President Donald Trump includes it on a list of nations that would face steel tariffs, according to a person close to the Latin American country's position.
"This is vital to the interests of the United States".
"I'm also sympathetic to what he's been saying because we've been getting heat when it comes to our worldwide trade relationships", he added. The American International Automobile Dealers Association warned it would drive prices up "substantially".
"The United States ignored rules of the World Trade Organization and seriously damaged the interests of Chinese aluminum foil exporters", Wang said. "They don't work very well".
Later, President Trump mentioned his tariff plans in a hastily arranged listening session with steel and aluminum executives. And other nations already are threatening retaliatory tariffs, which would make USA exports more expensive to consumers overseas.
Even members of Senate leadership who are working with the White House on other measures expressed their concerns about Trump's plans for trade.