What's going on?

Looking to give a boost to domestic producers, US President Donald Trump announced late on Thursday that he would follow through on previous recommendations to slap tariffs on imports of steel and aluminum into the US.

What does this mean?

While yet to be confirmed, it seems the tax will likely be 25% on steel imports and 10% on aluminum imports, applied equally to all countries. There are still some open questions (like whether the tariffs will apply indefinitely) but, crucially, it seems that potential exceptions for close trade partners like Canada will be absent (tweet this).


Other jurisdictions are beginning to formulate their responses: according to some reports, the European Union is already readying its own tariffs that would impose a 25% levy on a long list of imports from the United States into Europe worth nearly $3.5 billion annually. It seems a “trade war” is inevitable…

Why should I care?

For you personally: Tariffs can often mean that the costs of everyday goods will go up.

In America, for example, most aluminum is imported from abroad, so any goods that involve aluminum in some way (Dr Pepper, anyone?) will end up costing more. While companies do lose out from the higher costs brought on by tariffs, by and large it�s consumers that tend to pay up in these situations.

The bigger picture: Some sectors will be hit especially hard by the higher costs.

The automotive industry accounts for 26% of total steel demand in America, and American auto companies have already given notice that higher metal costs would be bad for their bottom lines. Now that it seems like the price of steel will be going up, industry analysts say that car makers should expect lower sales in the future as some customers are unwilling to pay the higher price for new vehicles. Other companies expected to suffer from the tariffs include those in the construction industry.