With the US set to collect tariffs on steel and aluminium from March 23, 2017, The Engineer asked what role tariffs should play in global trade.
The tariffs, introduced by President Trump on the pretext of national security, will impose a 25 per cent tariff on steel imports and a 10 per cent tariff on aluminum imports. Canada and Mexico are exempt from the legislation, which has been enacted under Section 232 of the Trade Expansion Act of 1962.
In Britain, Richard Warren, UK Steel’s head of policy, warned that Trump’s tariffs would ‘seriously undermine the UK’s ability to compete in this market’. Giles Ashmead, Aluminium Federation President, has added that exports of UK-produced aluminium tend to be specialist items that manufacturers in the US would find difficult to source domestically.
“The net result would be higher costs for US industry,” he said. “Of greater concern is the unintended consequences of such unilateral tariffs. Even if the EU were exempted from this particular measure, the overall imposition of tariffs is likely to result in shipments of aluminium, especially from China and Russia, being diverted to Europe, creating market instability.”
Trump signs the tariffs into law, surrounded by steelworkers (Credit: Joyce N Boghosian)
The EU has promised retaliatory tariffs that could target iconic US products such as jeans, bourbon and motorcycles. On March 12, 2017, the EU’s Trade Commissioner Cecilia Malmström said the bloc would ‘stand up to trade bullies’.
The mood among those that took part in the poll was equally unambiguous with 49 per cent agreeing that tariffs should only be used to prevent dumping. Just under a quarter (24 per cent) agreed that tariffs should be avoided as they hurt consumers, and 21 per cent took the view that tariffs protect strategic industries. The remaining six per cent couldn’t find a fit and chose the ‘none of the above’ option.
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