The commercial warra unleashed by Donald Trump with the imposition of 25% tariffs on steel and aluminum will have more effects than are thought. The president will seek the protection of the US industries at the expense of the closest allies that the United States, Canada, Brazil and Mexico has They will be the most affected in America because they are the nations that export the most steel to the American country.
While in a commercial war there are more losers than winners, the idea is to boost the industry in the United States. Although experts say that such a war will generate losses for US $ 139,380 million, a figure that represents half a percentage point of GDP. This was estimated by Oxford Economics in 2021 during Trump’s first mandate, when tariffs also imposed on the same raw materials.
Winners and losers
As for the winners of the ad, the US steel industry is expected to have an improvement, but not a reactivation. United States companies such as United States Steel Corp and Clevelad-Cliffs, for example, saw a rebound in their shares after Donald Trump’s announcement .
The protectionist strategy will be key to a new round of investments for these companies, although Bloomberg ensures that the production of these raw materials has fallen since 2018 anyway. For this reason it is “a relief, but not a reactivation of the sector.” Likewise, the measure will be expected to transfer prices to Americans if there is no exception to any commercial partner that is important. Commercial partners, including the European Union, are expected to retaliate against exports from the northern country.
There are five countries that will be largely affected by the imposition of tariffs. In order of importance, Canada, Brazil, Mexico, South Korea and Vietnam are the countries that have 65% of the I.UU. USA.
Javier Díaz, president of Analdex, said that “it is unquestionable that the decision will have a large impact on the world steel market, particularly in the region. A good part of the steel consumed by the United States comes from Canada, Brazil and Mexico.
Reactions to measures
The European Union, Canada and Mexico condemned the decision of the American government. Canada’s Prime Minister Justin Trudeau said tariffs are “unacceptable.” Von der Leyen said that he regrets the decision of the United States and stressed that it will be bad for companies and worsen the conditions for consumers. The German Chancellor, Olaf Scholz, said that, if the United States leaves another option, they will respond in unison.
Billionaire Carlos Slim said that 25% tariffs will be “an explosion.” Companies such as Coca-Cola and Ford, as well as other small aluminum firms will be affected.
