US President Trump signed an executive order announcing a 25% tariff on all steel and aluminum imported into the United States, and canceling the steel and aluminum duty-free quota and exemption policy for some trading partners. This move is seen as another major escalation of Trump’s trade policy, which has attracted widespread attention and strong reactions around the world. In addition to opposition from the international community, the 25% tariff on all imported steel and aluminum has also aroused a wave of opposition in the United States. In response to the relevant policies that have come into effect, many US companies are busy increasing inventory or urgently adjusting production strategies.
Response of US Companies
Jim Farley, CEO of Ford Motor Company, said that the 25% tariff on steel and aluminum will “add a lot of costs and cause great chaos” to the US auto industry. He said that if a 25% tariff is imposed on Mexican and Canadian goods, the result will be “devastating” and will set off an unprecedented uproar in the US industrial sector. Some US auto parts suppliers said they plan to pass on the cost increase caused by tariffs to automakers, which may eventually lead to higher car prices.
James Quincey, CEO of Coca-Cola, said that Trump’s tariffs on imported aluminum will make the company’s aluminum cans imported from Canada more expensive, and the company will have to purchase aluminum cans at high prices in the country, or use plastic bottles as a substitute, which will push up production costs and will eventually be directly passed on to American consumers. Well-known perfume company Coty also said that it has increased its inventory of raw materials in the United States and is increasing perfume production in North Carolina.
The CEO of the Northern Chamber of Commerce, which serves major companies in New York State and southern Canada, also said that after surveying more than 40 regional manufacturers and warehouse operators under the Chamber of Commerce in recent weeks, they learned that they are working hard to increase inventory to avoid rising costs after the tariff policy takes effect. In addition, federal data show that U.S. container shipping volume hit a record in January this year, and cross-border truck transportation from Canada and Mexico to the United States has also surged recently. The chain reaction caused by the imposition of tariffs has also stimulated consumers’ sensitive nerves. Data from the University of Michigan showed that the consumer confidence index fell to a seven-month low in February, and inflation expectations soared.
International Community Response
The European Commission said in a statement that the tariffs were “illegal” and economically counterproductive, especially given the deeply integrated industrial chain established by the EU and the US through transatlantic trade and investment. Imposing tariffs is equivalent to the US taxing its own citizens, which will not only increase corporate costs but also push up inflation. In addition, tariffs increase economic and trade uncertainty and undermine the efficiency and integration of global markets. A spokesperson for the German Federal Ministry of Economics and Climate Protection said that the US government’s tariff measures will hit the German economy, and the German government and the EU are actively working to avoid this. The US tariffs on imported steel and aluminum products will ultimately harm the interests of all parties.
Trump signed an executive order to impose a 25% tariff on some products imported from Canada and all products imported from Mexico. Canadian Prime Minister Trudeau said Canada will impose a 25% tariff on US products worth 155 billion Canadian dollars in response. Canada is also considering taking non-tariff measures to retaliate. Mexican President Sheinbaum also announced that she has instructed the Mexican Ministry of Economy to take tariff and non-tariff measures against the United States.
Negative Impact of Policies
Trade protectionism policies have brought many negative effects. The imposition of tariffs has led to intensified international trade frictions, which not only harmed the interests of trading partners, but also had an impact on American companies and consumers. American companies are facing higher raw material costs, and some companies that rely on imported parts have to adjust their supply chains, increasing operating risks. Consumers have to bear higher prices, especially for some goods that rely on imports.
Trump’s unilateral trade policy has undermined the multilateral trading system established over the years. The rules and authority of the World Trade Organization (WTO) have been challenged, and trade trust between countries has decreased. Many countries have had to take corresponding countermeasures, resulting in a slowdown in global trade growth and chaos in the international trade order. The global industrial chain and supply chain have been severely disrupted. The global layout of enterprises is based on a comprehensive consideration of multiple factors such as cost, market, and politics. Trade protectionism policies have forced enterprises to re-evaluate and adjust their supply chains, increasing uncertainty in the global economy.
