As writes The New York Times, the White House called the increase in tariffs to 50% a matter of combating "trade practices undermining national security." The increase was announced last week during Trump's visit to the U.S. Steel steel plant.
The increase on Wednesday became the latest in a series of rising import tariffs that Trump has announced since returning to the Oval Office in January, including a 25% tariff on steel and aluminum in March. Collectively, the president's trade tactics have raised concerns about a global downturn and increased worries among American corporations about the cost of doing business.
Economists note that tariffs on manufacturing materials can slow the development of American manufacturing as they increase prices for factories.
An economic analysis published by the U.S. International Trade Commission, an independent bipartisan government agency, showed that while tariffs on steel and aluminum imposed during Trump's first term helped American steel and aluminum producers, they harmed the economy as a whole by raising prices for many other industries, including automotive manufacturing.
Foreign governments reject the idea that their steel exports pose a threat to U.S. national security, partly because American demand for metals significantly exceeds the country's current production capabilities. Meanwhile, the United States imports very little steel directly from China due to previously imposed tariffs. However, the American steel industry claims that China's massive steel production lowers metal prices worldwide, making it difficult for American plants to compete.
The largest foreign supplier of steel and aluminum to the U.S. is Canada. Catherine Cobden, president of the trade group Canadian Steel Producers Association, stated that doubling tariffs on imported steel "essentially closes the American market to our domestic industry."
The introduction of 25% tariffs on steel has already impacted Canadian producers. According to estimates by the steel association, since their implementation in March, steel shipments to the U.S. from Canada have fallen by 30%.
The Aluminum Association of Canada noted in its statement on Tuesday that the increase "makes Canadian exports to the U.S. economically unviable" and that "the industry may be forced to diversify trade towards the European Union."