As our business editor reports, the UK now has until the 9 July to finalise its trade deal with the US.
If not, the UK too could face 50% metal tariffs.
“Led by China, global steel overcapacity and production continues to grow, even as overall global steel demand is being impacted by the sharp downturn in the Chinese construction sector,” says the institute’s boss Kevin Dempsey.
Speaking at a rally in Pittsburgh, Pennsylvania – the home of US steel – Trump said the move would boost the steel industry while reducing reliance on China.
“Yes there’s a US-UK deal being negotiated – it’s not actually a deal, it’s more of an agreement […] not a trade deal as such.”
Leaders and companies around the world respond to the US doubling its metal tariffs.
When US President Donald Trump announced Friday that the US would double its steel and aluminum tariffs to 50 percent, he told a crowd of supporters in Pittsburgh, Pennsylvania, that “if you don’t have steel, you don’t have a country.”.
World leaders and corporations have responded to the tariffs, which went into effect today. Some have criticized the most recent tariff increase for adding to the uncertainty in the global economy.
If no agreement is reached with the US, Mexican President Claudia Sheinbaum has threatened to take retaliatory action.
A “productive and constructive” conversation between the EU’s trade commissioner and US trade envoy Jamieson Greer was reported elsewhere.
The UK was somewhat relieved to learn that it would not be subject to the tariff increase because of its trade agreement with the United States. Instead, a 25 percent rate would apply to the UK.
The UK now has until July 9 to complete its trade agreement with the US, according to our business editor. Otherwise, the UK might also be subject to 50% metal tariffs.
US steel producers are firmly supporting the White House, despite the fatigue of foreign allies. “This tariff action will help prevent new surges in imports that would injure American steel producers and their workers,” per the American Iron and Steel Institute. outdoors.
Although we will soon be stopping our live coverage, you can continue reading this story on BBC News: Trump’s 50% metal tariffs go into effect.
Americans are in favor of Trump’s proposed tariffs.
Michael Wendling.
Reporting from Chicago.
People in America’s “rust belt,” the vast region of the Midwestern US that is home to thousands of manufacturing companies, may find discussions about markets and global trade to be a little abstract at times.
The reasoning behind free trade agreements is straightforward for many people here: they sent safe, well-paying jobs abroad, and the ensuing effects on local communities have been nothing short of catastrophic.
Though the economic reality is a bit more nuanced, bear that in mind when you question why so many Americans support a plan that could result in significant price increases.
A relatively new steel plant is located in the Ohio town of Delta, which I visited earlier this year. The economy was uncertain to almost everyone I spoke to in Delta, and even those who didn’t like the president were prepared to take a chance on tariffs.
Most were not concerned about price increases because, they reasoned, they had already experienced a period of high inflation; how could things get any worse?
In western New York State, a rust belt area distant from the financial metropolis of New York City, I heard some of the same themes last month.
Business advocates and union leaders told me they desperately need better-paying jobs. Many Americans believe that tariffs are worth the risk, even though there is no assurance that they will result in the return of those jobs.
Trump criticizes the Fed following weaker job data.
Dearbail Jordan.
senior reporter for business and economics.
The president of the United States is once again targeting one of his favorite targets, the chair of the Federal Reserve, while policy groups like the OECD have blamed Trump’s tariffs for a predicted slowdown in both US and global economic growth.
Interest rates are set by the Fed, which is separate from the government. Jerome Powell, appointed by Trump during his first term in office, serves as its chair.
Recently released US employment data from payroll company ADP indicates that hiring has slowed to its lowest level since 2023.
“ADP NUMBER OUT!!!” “Too Late” Powell must now LOWER THE RATE,” Trump said in response to the statistics on social media. He’s amazing! Europe has dropped nine times!”.
The European Central Bank has been lowering interest rates at a reasonable pace, but since last year, they have been lowered seven times.
However, the US has seen a slower pace, with the Fed lowering interest rates three times in the same time frame. Before taking further action, the Fed has stated that it wants to observe how tariffs affect inflation. In order to determine whether hiring is slowing down or increasing, it will also want to examine official employment data that is due on Friday.
Trump will probably have to wait and see.
US markets begin the day marginally up.
Natalie Sherman. .
reporter for a business publication in Manhattan.
Trading in US shares has begun, and investors don’t seem concerned about the tariffs’ future direction.
The SandP 500 is up 0.3 percent, the Nasdaq is up nearly 0.5 percent, and the Dow Jones Industrial Average is up roughly 0.2 percent.
This comparatively subdued response obscures the significant actions taken by certain companies in response to Trump’s declaration of his intention to increase metals tariffs.
The US steel manufacturer Cleveland-Cliffs, for instance, saw a more than 20% increase in value following the announcement.
As a result of speculation that Trump will approve a sale to Nippon Steel, US Steel’s stock is also trading much higher than it did a few weeks ago.
Trump surprised a lot of people by doubling metals tariffs.
Natalie Sherman. .
reporter for a business publication in Manhattan.
Donald Trump has acted to safeguard American steel and aluminum production for the second time since March, raising tariffs on the metals to 50%.
Although he gave several weeks’ notice before making his first move, many were taken aback by this choice.
Many American companies are shocked that Trump would do this, pointing out that past tariffs have shown that while higher prices may help US steel and aluminum producers, the many, many more US businesses that use these materials will suffer as a result.
According to a 2020 analysis of Trump’s first term’s more modest metals tariffs, employment in manufacturing and construction fell by 75,000 while about 1,000 new jobs were created.
This time around, Erica York, vice president of federal tax policy at the Tax Foundation, predicts even more severe job losses.
She states that “there is some of the strongest evidence against tariffs on intermediate inputs like steel and aluminum, finding they are much more harmful because they increase the cost of production in the United States.”. To double down on this kind of tariff in particular is just incredibly stupid. “..”.
Trump’s tariff plan has the support of most US steelmakers.
Mike Wendling.
reporting from Chicago. .
US steel companies are firmly supporting the White House on tariffs, despite the apprehension of international allies.
I found a statement applauding Trump’s decision to raise tariffs to 50% this morning from the American Iron and Steel Institute. They claim that the import taxes will safeguard US businesses and save jobs.
Kevin Dempsey, the institute’s director, says, “China is leading the world in steel overcapacity and production, even as the sharp decline in the Chinese construction sector is affecting overall global steel demand.”.
“With these difficult global circumstances that don’t seem to be getting better, this tariff action will help stop fresh import spikes that would harm American steel producers and their employees. “,”.
During the institute’s annual conference in Washington, the CEO of Cleveland-Cliffs, one of the nation’s leading steel manufacturers, strongly supported tariffs yesterday. According to Lourenco Goncalves, he hopes that there are as few external exceptions to the tariffs as possible.
There is less certainty among certain metal producers, such as multinational aluminum producers. Automobile manufacturers and other businesses that purchase metals have also issued warnings about potential price increases. However, the White House plan is generally supported by the domestic steel industry.
Trump’s remarks regarding the tariff increase: “No steel, no country.”.
On Friday, US President Donald Trump declared that tariffs on steel and aluminum entering the US would be doubled to 50%.
Trump claimed the action would strengthen the steel industry while lowering dependency on China while speaking at a rally in Pittsburgh, Pennsylvania, the birthplace of American steel.
“A nation cannot exist if its citizens lack steel. You are unable to create a military and lack a nation. “What are we going to do? Let’s go to China to get our steel from the army tanks,” Trump stated.
In addition, he promoted it as a means of preserving American steel.
“At fifty percent,” he stated, “they can no longer get over the fence.”. Like never before, we will reintegrate Pennsylvania steel into the backbone of the United States. “,”.
Trump claimed to have been informed that steel imports into the US are occurring “in such quantities and under such circumstances as to threaten to impair the national security of the United States” in the decision he signed last night.
Quick overview: Response to Trump’s tariff increase worldwide.
Beijing.
The president is scheduled to meet with Chinese leader Xi Jinping this week, according to the White House, in the hopes of reducing tensions and accelerating a trade agreement.
“I like President XI of China, always have, and always will, but he is VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH!!!” Trump wrote for his Truth Social account earlier today.
According to the AFP news agency, Chinese Foreign Ministry Spokesman Lin Jian responded to questions about the comments at a routine press briefing by saying that “the Chinese side’s principles and stance on developing Sino-US relations are consistent.”.
EU.
On the fringes of the OECD ministerial meetings in Paris today, EU trade commissioner Maros Sefcovic reported having a “productive and constructive discussion” with US Trade Representative Jamieson Greer.
He declared, “We’re moving at a good clip and moving in the right direction to keep the momentum going.”.
According to the BBC’s US partner CBS, the EU “strongly regrets” Trump’s plan regarding steel and aluminum, warning that it “undermines ongoing efforts to reach a negotiated solution” with the US and that the bloc was prepared to retaliate.
Mexico.
According to Economy Minister Marcelo Ebrard, Mexico is seeking to ask for a waiver of the higher tariff.
Ebrard claimed that it was “unfair” because, according to CBS, the US imports less steel than it exports to Mexico.
He stated, “It is illogical to impose a tariff on a product in which you have an excess.”.
European stock markets are still quiet for the time being.
Jordan, Dearbail.
Senior economics and business reporter.
Over the course of the day, stock markets in the UK and other European countries have managed to make some gains.
The London-based FTSE 100 is up 0.27%. The Cac-40 index is up 0.65% in France and the Dax is up 0.61% in Germany.
Some market observers are taken aback by the relative calm, particularly in light of US President Donald Trump’s earlier social media posts regarding the challenges in negotiating a trade agreement with China.
“I have always liked President XI of China and I will continue to do so, but he is very tough and very difficult to work with,” he declared.
In addition, nations have until Wednesday to present plans to the US to evade Trump’s so-called “retaliatory” tariffs, which have been put on hold but are set to take effect in five weeks.
Therefore, the stock market calm may not last.
“I think we can expect some higher volatility in the coming days, up to the end of the pause in tariffs,” says Amelie Derambure, a senior portfolio manager at Amundi, an asset management company.
US steel tariffs may still affect manufacturers in the UK.
Michael.
Senior reporter for business and economics.
Although the government is relieved and UK steel producers have generally applauded the exemption from the higher 50% tariff on steel imports to the US, the sector has cautioned that UK companies may still suffer significant consequences.
It’s because global suppliers may decide to offload their goods elsewhere, diverting a large amount of steel that was originally headed for the American market to the UK market. This is because orders to the US, the largest economy in the world, are impacted by import fees.
Steel producers in the UK claim that this is already the case and have urged the government to act to restrict the quantity of steel imported into the country, which they claim is driving down prices and negatively affecting their operations.
“The UK market is being overtaken by imports, which is lowering steel prices and reducing market share. UK Steel CEO Gareth Stace stated, “While we are working to stabilize exports to the US, we must not lose sight of our domestic market.”.
This demonstrates that, even though lower US tariffs are generally welcomed, the UK economy may still be impacted in other ways.
According to the head of the UK industry group, uncertainty is the main problem.
According to the secretary general of the International Chamber of Commerce UK, uncertainty is “the bigger issue” and the UK-US agreement is “mostly damage limitation.”.
Chris Southworth says the deal “will make a difference” in an interview with the BBC News Channel, but he also says we need to start talking about “real trade deals” and look beyond it.
The United States and the United Kingdom are negotiating a deal, but it’s more of an agreement than a deal. [not a trade agreement per se]. “,”.
He claims the UK should anticipate “continued uncertainty” in the near future and that it is “incredibly difficult” to monitor the evolving picture with tariffs.
“In a sense, that’s the larger problem here,” Southworth goes on.
Considering how quickly things are changing and evolving, it is nearly impossible for US steel producers and UK exporters to make any significant investment decisions for the future. “,”.
A “direct impact” on growth will result from investors holding off and waiting to see what happens, which “is not good news for anybody.”.
Because the US trade deal has not yet been implemented, UK businesses are in a state of uncertainty.
Jordan Dearbail.
Senior economics and business reporter.
One thing that Trump’s recent actions regarding steel and aluminum tariffs have brought to light is that the trade agreement that the UK government announced with the US in early May has not yet been externally signed.
According to the government at the time, Keir Starmer had negotiated a reduction in the steel tariff from 25% to 0%, “meaning UK steelmakers can carry on exporting to the US.”.
However, a 25 percent tariff will be applied to imports into the US as of right now. Although this is less than the 50% that other countries face, it is still a significant tax.
The government also announced that, as part of the trade agreement, car export duties will drop from 27.5 percent to 10 percent, with a quota of 100,000 British automobiles. Additionally, that has not been decided.
The reciprocal agreement on beef imports and exports between the US and the UK hasn’t either.
According to a government spokesman, the agreement will be implemented “at pace” going forward.
However, it leaves companies in limbo as they consider expansion and investment. For businesses, uncertainty is the one thing they cannot tolerate.
