Donald Trump's reimposition of tariffs on steel and aluminum imports echoes his 2018 actions, aiming to protect domestic industries but with significant consequences. Despite boosting steel production profits and adding jobs, the tariffs drove up prices for consumers and downstream industries, ultimately leading to higher costs for businesses like General Motors and Ford. The 2025 tariffs, unlike their 2018 counterpart, lack exemptions, potentially impacting Australia's exports.
Donald Trump and his advisers have selective memories, choosing the lessons from history that suit Trump’s protectionist convictions while ignoring those that don’t.
The institute estimated that the tariffs increased the costs for steel users by $US5.6 billion – effectively $US650,000 for each job created within the steel industry. There’s nothing surprising about the effects of the 2018 tariffs. Protection does deliver an opportunity for the protected sector to increase its prices and profits and then that flows through in the form of higher costs for their customers and, eventually, end-consumers.The US steel industry is relatively small, supplying only about 17 per cent of US demand. Domestic production is only about 90 million tonnes a year. By comparison, China produces just over a billion tonnes a year.
The latest tariffs, without exemptions, will obviously have a far more significant impact than the earlier version. Given that those companies only exported a little more than 80,000 tonnes of aluminium to the US last year – into a market that consumes about 70 million tonnes of the metal each year – that could hardly be described as a flood, but Trump and his advisers do tend to be a bit hyperbolic.
Politics TARIFFS STEEL ALUMINUM TRADE PROTECTIONISM ECONOMY
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