In a move that has put U.S. trade allies on the defensive, President Donald Trump announced plans to enact tariffs on the steel and aluminum industries. Last Thursday, the Trump told reporters at the White House that he will impose tariffs of 25% on steel imports and 10% on aluminum imports. Trump's plans to levy heavy tariffs are in line with his protectionist stance on American trade, a key part of his rhetoric both as a candidate and while in office.
Markets reacted immediately to the news from the White House, with the Dow Jones plummeting more than 500 points in a decline of 2% on Thursday afternoon. Virtually all quarters, including domestic corporations, members of Congress, the media, and the international community, have criticized Trump's plan.
In reaction to Trump's aggressive maneuver, Canada promised to retaliate should the White House follow through on Trump's latest threats. The European Union has also vowed to protect its interests through retaliatory measures aimed at exports from the U.S., potentially impacting industries from apparel to automobiles.
The president of the European Commission, Jean-Claude Juncker, indicated that U.S. trade aggression would be met with similar measures from the EU. "If the Americans impose tariffs on steel and aluminum, then we must treat American products the same way," said Juncker. "We must show that we can also take measures. This cannot be a unilateral transatlantic action by the Americans."
In addition to angering U.S. trade partners, Trump's protectionist tariffs would likely hurt domestic companies reliant on foreign steel and aluminum. Fearing potential increases in business costs, as well as hits to sales and employment, U.S. manufacturers have reacted negatively to Trump's plans. The editorial boards of major U.S. publications, including The Washington Post and The Wall Street Journal, were also critical of Trump.
Both Republican and Democratic members of Congress are also voicing their opposition to the planned tariffs. Republican senator John McCain publicly denounced the tariffs, declaring that Trump's measures "will only serve to hurt American workers and consumers, and alienate us from our most important allies and trading partners."
On Saturday morning, Trump responded to the EU's threats of retaliation in customary fashion via Twitter, firing back a threat to "simply apply a Tax on their Cars which freely pour into the U.S." and claiming a "big trade imbalance" with European nations.
Some speculate that Trump's overtly aggressive tariff announcement came as a result of a stressful week. Trump's son-in-law, Jared Kushner, had his security clearance revoked, and Trump's White House Communications Director, Hope Hicks, resigned after her testimony before Congress. According to reports from White House sources, Trump became unhinged with frustration on Wednesday night after these setbacks, and was "gunning for a fight" when he decided to move on trade. The tariff announcement, which had not been formally prepared, came as a surprise to many within his administration.