Washington — President Donald Trump was set to announce steep tariffs on steel and aluminium imports on Thursday, people familiar with the matter said, in what would be one of his toughest actions yet to implement a hawkish trade agenda that risks antagonising friends and foes alike.
However, the expected announcement did not materialise and Trump later said the US would institute the tariffs next week.
Trump told aides he wants to announce tariffs of 25% on steel and 10% on aluminium from all countries, according to two people who asked not to be identified because the deliberations are not public. One person said that the details of the decision might change and that it was possible some countries might be granted exemptions.
An announcement would end months of uncertainty.
"Our steel and aluminium industries (and many others) have been decimated by decades of unfair trade and bad policy with countries from around the world," Trump said in a Twitter posting on Thursday.
"We must not let our country, companies and workers be taken advantage of any longer. We want free, fair and SMART TRADE!"
Our Steel and Aluminum industries (and many others) have been decimated by decades of unfair trade and bad policy with countries from around the world. We must not let our country, companies and workers be taken advantage of any longer. We want free, fair and SMART TRADE!— Donald J. Trump (@realDonaldTrump) March 1, 2018
The president has been considering a range of options to curb imports of steel and aluminium, after the commerce department concluded shipments of the two metals hurt US national security. Leading up to the decision, the president told confidants he was leaning towards a 24% tariff on steel, the harshest of the alternatives given to him by the department.
The US move may provoke retaliation from China, the world’s biggest maker of steel and aluminium.
President Xi Jinping’s top economic adviser, Liu He, has been dispatched to the US in an attempt to defuse tension.
China has already launched a probe into US imports of sorghum and is studying whether to restrict shipments of US soyabeans, which could hurt Trump’s support in some politically important farming states.
Asian steel stocks declined. Nippon Steel & Sumitomo Metal and JFE Holdings slumped in Tokyo while Baoshan Iron & Steel fell in Shanghai, Hesteel retreated in Shenzhen and BlueScope Steel fell in Sydney.
"Trade measures on specific sectors or countries usually don’t have a major impact on overall global trade," said Chua Hak Bin, a senior economist at Maybank Kim Eng Research in Singapore. "The danger is if affected countries, like China, Korea and Mexico in this case, choose to retaliate with even stronger countermeasures, but we think any retaliation will likely be calibrated and measured as no country wants this to spiral into a major trade war."
Though China accounts for just a fraction of US imports of the metals, it is accused of flooding the global market and dragging down prices.
"The US has overused trade remedies and it will impact employment in the US and the interests of US consumers," a Chinese foreign ministry spokeswoman said. "China will take proper measures to safeguard its rights and interests."
The decision may also harm relations with key allies Canada and Mexico, which are already locked in discussions over US demands to change the North American Free Trade Agreement. Canada is the biggest foreign supplier of US steel.
The EU has suggested such an action by the US would face a legal challenge at the World Trade Organisation.
At home, consumers could see price hikes for everything from cars to beer cans. Businesses have warned a crackdown could raise prices in their industries and cost jobs. However, US steel producers and workers have called on Trump to defend their industry.
The decision may play well in Rust Belt states such as Pennsylvania and Ohio, which Trump won after promising a tougher approach to trade.
But Defence Secretary James Mattis has lobbied the president for targeted options on steel, warning that sweeping measures could undermine US relations with its allies. European officials have argued that it does not make sense to penalise members of the Nato defence alliance in the name of security.
US rhetoric seems to be getting more aggressive going into the mid-term elections, but Beijing still has plenty of ways to hit back, said Dwyfor Evans, head of Asia-Pacific strategy at State Street Global Markets in Hong Kong.