Earlier this year, President Trump imposed a 10% tariff on aluminum imports and a 25% tariff on steel imports. The tariffs were imposed under Section 232 of the Trade Expansion Act of 1962 after the Department of Commerce’s investigation found that steel and aluminum imports were a threat to US national security.
The Section 232 tariffs were the first major salvo by the Trump Administration. Since then, there have been tariffs against $250 billion worth of Chinese goods. President Trump has threatened to impose tariffs on other Chinese imports. So far, the Trump Administration has managed to renegotiate NAFTA and KORUS (United States–Korea Free Trade Agreement). Under the new NAFTA that’s been renamed “USMCA” (United States–Mexico–Canada Agreement), the US will gain access to Canada’s previously protected dairy industry. USMCA also calls for more regional content in the automotive industry.
In the United States (SPY), Walmart (WMT), Alphabet (GOOG), and Apple (AAPL) have been opposing tariffs on Chinese goods (FXI). President Trump’s tariffs have been accompanied by rising protectionism in other countries. Fearing diversion of steel exports after the Section 232 tariffs, several countries have taken trade actions against steel imports, which we’ll discuss in the next part.