President Donald Trump today imposed heavy tariffs on imported steel and aluminium which he said were necessary to boost the US industry suffering from “unfair” business practices, a move that has sparked fears of a global trade war.

Trump signed two proclamations that levied a 25 per cent tariff on steel and a 10 per cent tariff on aluminium imported from all countries except Canada and Mexico. The contentious tariffs will go into effect in 15 days. Other countries would have to negotiate with US Trade Representatives (USTR) if they want exemptions from the steel and aluminium import tariffs.

Trump said strong steel and aluminium industries were vital to the US national security. “Absolutely vital. Steel is steel. You don’t have steel. You don’t have a country. Our industries have been targeted for years and years. Decades, in fact, by unfair foreign trade practices, leading to the shuttered plants and mills, the laying-off of millions of workers, and the decimation of entire communities. That’s going to stop,” he said.

“Unfair”

Trump said the “unfair” foreign trade practices were not merely an “economic disaster” but a “security disaster” and by signing the two proclamations he was defending America’s national security. “We want to build our ships, we want to build our planes, we want to build our military equipment with steel, with aluminium from our country. And now we’re finally taking action to correct this long-overdue problem. It’s a travesty,” he said.

Stating that he wants a lot of steel coming to the US, Trump asserted that he wants it to be “fair”. “We want our workers to be protected and we want, frankly, our companies to be protected. By contrast, we will not place any new tax on product made in the US. So there’s no tax if a product is made in the USA. You don’t want to pay tax? Bring your plant to the USA. There’s no tax,” he said.

The action being taken, the president said, follows a nine-month investigation by the Department of Commerce, documenting a growing crisis in US steel and aluminium production that threatens the security of the country. “It is also bad for US economically and with jobs,” he rued.

Trump called the “aggressive” foreign trade practices an “assault on our country”. “The American steel and aluminium industry has been ravaged by aggressive foreign trade practices. It’s really an assault on our country. It’s been an assault. They know better than anybody. Other countries have added production capacity that far exceeds demand. And flooded the world market with cheap metal that is subsidised by foreign governments, creating jobs for their country and taking away jobs from our country,” he said.

Reciprocal tax

The import tariffs are likely to face retaliation from America’s top trading partners, the European Union and China. Major Asian nations reacted sharply to Trump’s decision to impose tariffs on steel and aluminum imports, warning of damage to close relations amid industry calls for retaliation.

Japan said the move would have a “big impact” on the countries’ close bilateral ties, while China said it was “resolutely opposed” to the decision and South Korea said it may file a complaint to the World Trade Organisation.

Trump also pledged to impose “reciprocal tax” on countries like China and India if they do not match America’s tariff. “We’re going to be doing a reciprocal tax programme, at some point so that if China is going to charge us 25 per cent or if India is going to charge us 75 per cent and we charge them nothing. They are 50, they are 75 or they are 25, we are going to be doing the same numbers. It’s called reciprocal. It’s a mirror of tags. So they charge us 50, we would charge them 50,” Trump said in his remarks before signing the two proclamations. We will be going to be doing a lot of them,” he said.

Trump in recent weeks had complained India’s tariff on the import of American motorcycles—specifically Harley-Davidsons—was too high.

“American companies have not been treated fairly and some American companies frankly have taken advantage of it and gone to other countries and developed in Mexico, massive automobile plants, taking our jobs away and taking our companies down to Mexico to make the cars and then they send them right across the border without tax, without anything,” he said.

Referring to a tweet by Tesla head Elan Musk, Trump said China charges 25 per cent duty on American cars whereas it is just 2.5 per cent on import of Chinese cars into the US.

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