President Trump on Monday announced that the United States will implement a 25% rate in all imports of steel and aluminum, a movement that ends with all the previous exemptions. The rates will greatly affect the materials of Canada, Mexico and Brazil. About half of steel imports come from Mexico and Canada, while more than half of all imported aluminum is from Canada, according to the United States Census Office.
The Association of Steel Manufacturers issued a press release that praises the announcement, stating that the import rates will help to “restore north -American manufacturing”. However, economists warn that it will take time to national producers to meet the current demand.
“The United States may increase production, but do not increase production by one hour,” says John Anton, Price and Purchase Director of S&P Global Market Intelligence. “Increase production by three to six months.” Anton states that when similar tariffs were launched in 2018, steel prices initially increased by 40%, before stabilizing approximately 15-20% higher than steel prices in Europe. “I almost expect the same [this time]they will climb quickly, because people have to adjust for the supply chain. “”
The United States matters approximately 25% of its steel, according to Anton, so it does not expect prices to have a complete increase of 25%. However, “they will be higher than they would have been without the rates. Most will depend on the number of North -Americans who restarts the rathm away capacity and the speed of the restarts.”
Sarah Martin, an associate director of the forecast at Dodge Construction Network, also says other possible economic consequences. “President Trump has stated that the intended goal of these rates is to promote the production of steel and aluminum in the United States and to reduce commercial deficits. However, it is unlikely to occur only with rates,” He says. “However, the risk to the United States economy will increase alongside possible retaliation rates, slower investment activity, weaker economic growth and higher prices.”
