Steel and other metal products are among the goods included in President Trump’s latest round of tariffs against Chinese imports, and come months after a similar tax on imported metals.
The trade war between the U.S. and China intensified Tuesday, as the Chinese government announced $60 billion in tariffs on American goods in response, according to Bloomberg.
On Monday, the president announced he would impose a 10 percent tariff on $200 billion of Chinese goods. The import tax will take effect Sept. 24, and is expected to jump to 25 percent on Jan. 1. Steel is usually priced in anticipation of future supply, which means prices could increase before the January hike.
The Chinese government’s retaliatory measures include a 5 percent tax on 1,600 products, such as computers and textiles; along with a 10 percent tax on 3,500 products including meat, liquid natural gas and wine.
The U.S. already imposed a 25 percent tariff on steel goods from nearly all foreign countries earlier this year. The U.S. only imports around 3 percent of its steel from China, but those larger tariffs have had a noticeable effect on overall U.S. steel imports. In June, imports dropped by 10.2 percent, according to Forbes.
Domestic steel prices were at a seven-year high as of July, good news for the steel producers, but more troubling for buyers. Besides builders, who rely on the material for construction, manufacturers of heavy equipment need steel to build their products. Those higher costs will trickle down.
Canada is the United States’ largest steel trading partner, and has been hit particularly hard by the 25 percent tariffs on the alloy.
The two countries are in talks to resolve the tariffs, possibly with an update to the North American Free Trade Agreement, which includes Mexico. [Bloomberg] — Dennis Lynch