Trump's new steel, aluminum tariffs kick in as deadline looms for trade deal pitches
President Donald Trump followed through on a promise made last week to double the current 25% tariff rate on steel and aluminum imports, a move he says will help bolster a beleaguered U.S. manufacturing base.
Trump made the increase official in a proclamation that raised the trade levies on most steel and aluminum imports to 50% as of 12:01 a.m. EDT Wednesday. The president signaled the move in a speech delivered last Friday in Pennsylvania to an audience mostly of steelworkers.
Economists say the import fees are likely to fuel higher prices for construction, automobiles, appliances and other products though it may take months for the impacts to be felt.
White House spokesman Kush Desai said the tariff increase is just one part of a bigger Trump plan aimed at bolstering the domestic economy.
'Domestic steel and aluminum production is imperative for our defense-industrial base,' Desai said in a statement to CNN. 'The Trump administration is committed to reshoring manufacturing that's critical for our national and economic security while unleashing a full suite of supply-side reforms — including rapid deregulation, tax cuts, and unleashing American energy — to continue delivering economic relief for the American people.'
UK steel and aluminum exports to the U.S. were exempted from the new levies thanks to a trade deal between the two countries announced on May 8. But Trump said the 50% fee could be extended to the UK after July 9 if the White House 'determines that the United Kingdom has not complied with relevant aspects' of the agreement, per CNBC.
Wednesday also marks the deadline for U.S. trading partners to provide their best offer on trade negotiations as Trump's international trade representatives seek to accelerate talks with multiple partners ahead of a self-imposed deadline in just five weeks, according to a draft letter to negotiating partners seen by Reuters.
In the draft, the U.S. is asking countries to list their best proposals in a number of key areas, including tariff and quota offers for purchase of U.S. industrial and agricultural products and plans to remedy any non-tariff barriers.
Trump's new tariff decree, which doubles a 25% import fee on steel and aluminum first imposed on March 12, comes as trade tensions between the U.S. and China appear to be re-escalating, with both countries claiming in recent days that the other is in violation of an agreement reached last month.
Earlier this week, China hit back on Trump's claims the Asian country was in breach of a new trade agreement, struck last month following talks held in Geneva, Switzerland, countering that the U.S. itself was undermining the deal with new sanctions.
A statement from China's Ministry of Commerce released Monday said Trump administration actions 'seriously undermine the existing consensus reached at the Geneva economic and trade talks, and seriously damage China's legitimate rights and interests.' Chinese officials also pointed to recent signaling from the U.S. about potential new regulations for advanced microchips and the revocation of U.S. visas for Chinese students, per CBS News, as evidence that the U.S. was acting in bad faith following the trade deal.
In Truth Social post last Friday, Trump said that the deal had led to greater economic stability for China and 'everybody was happy' but alluded to China violating terms of the agreement.
'The bad news is that China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US. So much for being Mr. NICE GUY!' Trump wrote.
Trump's tariff strategy is also facing legal scrutiny.
In a ruling issued last Wednesday, the U.S. Court of International Trade struck down a wide swath of trade tariff decrees made by Trump since he took office, finding the president overstepped his authority with the international levies.
But a day later, the U.S. Court of Appeals for the Federal Circuit granted a temporary hold on the lower court ruling, deciding that the 'permanent injunctions entered by the Court of International Trade in these cases are temporarily stayed until further notice while this court considers the motions papers.'
Per the appeals court, the plaintiffs in the lower court case have until June 5 to respond to the stay decision and Trump's legal team will have until June 9 to develop its argument for the pause to remain in place as the appeals process plays out.
The trade court ruling, should it stand, impacts new tariffs Trump has issued, without congressional approval, under the International Emergency Economic Powers Act. The decision would not impact sector-specific tariffs issued by the president including those on imported autos, auto parts, steel and aluminum.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
31 minutes ago
- Yahoo
Asian equities see largest monthly foreign inflow in 15 months
(Reuters) -Asian equities attracted strong foreign inflows in May as concerns over an immediate economic hit from higher U.S. tariffs eased, prompting a return by investors who had previously exited large and concentrated positions in the region. The inflows marked a sharp reversal after four consecutive months of net foreign selling. According to data from LSEG, foreign investors bought approximately $10.65 billion worth of equities across India, Taiwan, South Korea, Thailand, Indonesia, Vietnam, and the Philippines, registering their largest monthly net purchase since February 2024. U.S. President Donald Trump's announcement of reciprocal tariffs in early April stoked concerns over the impact on Asian exports, exporter margins, and regional supply chains, but a subsequent 90-day pause for most countries later in the month helped ease investor fears and revive interest in regional assets. Goldman Sachs said it has revised its earnings growth forecast for MSCI Asia Pacific ex-Japan (MXAPJ) to 9% for both 2025 and 2026, raising estimates by 2 and 1 percentage points, respectively, citing stronger macro growth in China and U.S.-exposed markets. The upgrade was also supported by $600 billion in AI-related investments from Saudi Arabia to U.S. firms, which are expected to benefit Taiwan and Korea, though the impact may be partially offset by a weaker dollar, the brokerage said. Taiwan equities witnessed $7.28 billion worth of foreign inflows, the largest monthly cross-border net purchase since November 2023. Foreigners also acquired a significant $2.34 billion worth of Indian stocks in their largest monthly net purchase since September 2024. South Korean, Indonesian and Philippine stocks also saw foreign inflows worth a net $885 million, $338 million and $290 million, respectively, while Thai stocks suffered $491 million of net selling. Despite heightened market volatility in the first half of the year driven by concerns over President Trump's trade policies, the MSCI Asia-Pacific Index has risen about 8.8% year-to-date, outperforming both the MSCI World Index, which is up 5.4%, and the S&P 500 Index, which has gained 0.98%. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
31 minutes ago
- Yahoo
Japan's ex-top FX diplomat expects yen to rise near 140 by year-end
By Leika Kihara and Yoshifumi Takemoto TOKYO (Reuters) -A narrowing U.S.-Japan interest rate gap, rather than any effort by President Donald Trump to weaken the dollar, will likely lift the yen to around 135-140 against the U.S. unit by year-end, Japan's former top currency diplomat said on Friday. Markets are rife with speculation that Trump - who in the past accused Japan and China of currency manipulation - will pressure Tokyo to help weaken the dollar against the yen to give U.S. exports a trade advantage. Mitsuhiro Furusawa, a former currency diplomat who retains close ties with Japanese and overseas incumbent policymakers, said it was unclear whether the Trump administration was explicitly taking a weak-dollar policy. "It's not easy for policymakers to intentionally weaken the dollar," Furusawa said in an interview. "Having made clear that tariffs are the main tools (for negotiation), I don't think Washington needs to rely much on currencies to achieve its goals," said Furusawa, who also served as the International Monetary Fund's deputy managing director until 2021. Still, the U.S. likely wants to avoid further dollar rises from hurting exports, Furusawa said. Japan, for its part, wants to prevent a weak yen from pushing up inflation, he said. "As such, they are eye-to-eye on this front. That means the yen will likely rise gradually," said Furusawa. The diverging monetary policy direction between Japan and the U.S. will also prop up the yen with the Federal Reserve's next move seen as an interest rate cut, while the Bank of Japan (BOJ) eyes further rate hikes, Furusawa said. BOJ Governor Kazuo Ueda has said the bank will continue raising rates if economic improvements keep inflation on course to durably hit its 2% target, though he has signaled a pause until there is more clarity on the fallout from Trump's tariffs. "If Japan succeeds in reaching a broad trade agreement with the U.S. possibly at this month's G7 summit, that will reduce uncertainty," Furusawa said. Real wages will also rise and underpin consumption once food inflation dissipates, he said. "If we see such positive developments, the BOJ could hike rates again in the latter half of this year," Furusawa said, adding the yen "will likely strengthen to around 135-140 to the dollar by year-end." The yen stood around 143.90 to the dollar in Asia on Friday. The BOJ probably wants to eventually raise its short-term policy rate target - currently at 0.5% - above 1%, though there is uncertainty on whether it would succeed, said Furusawa, who is currently president of Sumitomo Mitsui Banking Corp's Institute for Global Financial Affairs. Japan is continuing trade talks with the U.S. with a focus on gaining concessions on automobile tariffs. Domestic media has reported the two sides may seek to clinch a deal in time for the G7 summit on June 15-16. Finance Minister Katsunobu Kato caused a stir last month when he said Japan could use its $1 trillion-plus holdings of U.S. Treasuries as a card in trade talks with Washington. He later said Tokyo had no plan to threaten selling U.S. Treasuries. Furusawa said it was natural for Japan, as a negotiating tactic, to say all options were on the table. But whether Japan can actually use it as a bargaining tool was questionable, partly as threatening to sell U.S. Treasuries could backfire by angering Trump and derailing trade negotiations. Sign in to access your portfolio
Yahoo
33 minutes ago
- Yahoo
Trump outraged by Ukraine's strikes on Russia: White House considers ending support for Kyiv
US President Donald Trump is outraged by Ukraine's decision to strike Russian air bases. The attack has caused anger in the White House and triggered a new wave of debate over the advisability of further support for Kyiv. Source: The Atlantic, citing three administration officials and an outside White House adviser Details: According to The Atlantic, Trump has in private conversations with advisers expressed deep dissatisfaction that Ukraine had taken such a step without coordinating with the United States. The sources said that a new round of discussions has begun on whether continued military and financial support for Kyiv is justified following the Ukrainian attack. Trump's personal dissatisfaction with Ukrainian President Volodymyr Zelenskyy was once again rekindled – the US president has called him a "hothead" who, in his opinion, could push the world towards a Third World War. "Zelenskyy didn't give the president of the United States a heads-up to say he's going to do a deep strike into strategic forces of Russia, which is going up the escalatory ladder as quickly as you can, on the day before your meeting in Türkiye?" Trump's former strategist Steve Bannon said. Trump privately backed the view of right-wing critics this week, accusing Zelenskyy of allegedly showing off after the drone strikes. According to an adviser, Trump was impressed by the boldness of the strikes but believes Zelenskyy should have focused on the talks between Ukraine and Russia in Istanbul. Background: Trump revealed details of his latest conversation with Kremlin leader Vladimir Putin, including his suggestion that Ukraine and Russia should be allowed to "fight for a while" because it would make ending the war easier later. Earlier, Trump said he is refraining from imposing sanctions on Russia if he believes it could "screw up" the conclusion of a "deal". Support Ukrainska Pravda on Patreon!
