Donald Trump tonight finally unveiled the steel and aluminium tariffs which have riven his Republican party and dismayed the US’s biggest trading partners, although left a get-out clause for countries to see them removed.
The US President said he will charge a 25 per cent tariff on foreign steel and a 10 per cent tariff on aluminium, but will “hold off” tariffs on Canada and Mexico until trade negotiations finish.
Speaking in front of steelworkers at the White House, Trump said steel imports were “an assault on our country”, and that having a strong domestic industry was vital for national security.
“Steel is steel; you don’t have steel, you don’t have a country,” Trump said.
The tariffs will not come into effect for another 15 days, with Trump “open to modifying or removing the tariffs” in exchange for other concessions. US trade representative Robert Lighthizer responsible for managing negotiations with countries. Trump explicitly tied the tariffs to increased contributions to allies’ military spending, which he says is unbalanced.
Trump also promised a “reciprocal tax programme at some point” to match other nations’ charges on imports.
The Mexican peso and the Canadian dollar both appreciated after the announcement, while losses on stock markets were limited at the end of the US trading day.
The imminent tariff announcement this week rocked US markets and led to a massive fallout within Trump’s administration as staff lobbied furiously against the levies. It also provoked a possible tariff hit list for retaliation from the EU.
London Mayor Sadiq Khan last night told City A.M. that members of his administration as well as US businesses “don’t agree with the President when it comes to protectionism.”
“My view is let’s just wait and see how this pans out,” he added. “I just can’t believe that the most capitalist country in the world will impose higher tariffs in this day and age.”
The revival of protectionist economic policy from the White House has dealt a serious blow to advocates for free trade. JP Morgan boss Jamie Dimon earlier said tariffs were the “wrong way to go” to fix “serious issues around trade”.
Trump earlier poked fun at Gary Cohn, his former chief economic adviser who quit the White House reportedly over his disagreement over the tariffs.
"He may be a globalist, but I still like him," Trump said of Cohn, who was sitting in his last Cabinet meeting with the President.
“In his own way he’s a nationalist because he loves his country,” Trump added.