Video: Administration Explains Reasons Behind Steel Tariffs

by TJ Jerke and Sean Shields

President Trump is anticipated to announce new tariffs on aluminum and steel in a matter of days. The question is why is it being applied to everyone?

Peter Navarro, Director of the Office of Trade and Manufacturing Policy, said Sunday that Trump does not plan to exclude any countries from the tariffs, but certain products may be granted an exemption.

When looking at global steel production, it’s clear these new trade decisions will have a large impact on many U.S. trading partners. The Trump Administration is focusing its efforts on  punishing China, but in the process it may be hurting many long-time allies and U.S. trade partners, who are already threatening the U.S. with retaliatory tariffs of their own. 

China currently only accounts for two percent of U.S. steel imports, but leads the pack in steel production with over 831 million tons of steel produced. The U.S. will also be slapping tariffs on eight of nine top producing steel producers behind China who combined production is only half that of China’s.

So why Canada and Mexico?

Sixteen percent of the U.S. steel supply is imported from Canada and nine percent is imported from Mexico, according to the U.S. Global Trade Association. Navarro justifies the White House’s tariff on our neighbors by saying China – the largest steel producer – flood’s the world market because of this and ultimately gets their steel imported into the U.S. from other countries; calling China the, “root of the problem for all countries of the world.” The following illustration puts Chinese production into perspective:

Economists have estimated that current trade practices threaten upwards of 140,000 U.S. workers. However, many experts say the new tariffs will harm upwards of five million downstream manufacturing jobs who work with aluminum and steel every day, including component manufacturing. 

The Pentagon first came out and said current unfair steel practices are creating national security problems. Now that Trump will move forward with the tariff’s, the Pentagon has authored a second memo saying that a broad, across-the-board tariff may lead to other national security problems and the White House should consider using targeted tariffs.