Economy

Steely Trump takes his officials by surprise

President jolts markets by announcing tariffs on steel and aluminium imports

President Trump with leaders from the steel and aluminium manufacturing industries in the White House on Thursday. He announced stiff tariffs on imported steel and aluminium beginning next week. Photograph: EPA

Sat Mar 3 2018 - 05:05

A cynic would be forgiven for thinking Donald Trump was trying to bury bad news. After a tumultuous few days which saw the US president lose his trusted adviser Hope Hicks, accept that his son-in-law Jared Kushner will no longer have top security clearance in the West Wing, and publicly fume about his attorney general Jeff Sessions, Trump jolted markets by announcing sweeping tariffs on steel and aluminium imports on Thursday.

While some form of announcement had been expected when Trump gathered more than a dozen steel and aluminium chief executives at the White House, a formal confirmation of the policy had not been expected, with officials still discussing possible options with the president. However, Trump took his officials by surprise, announcing a 25 per cent tariff on steel and 10 per cent on aluminium.

The announcement immediately disrupted markets, a sign of the political pushback that was to come. While China is in Trump's sights, Germany, Canada and Mexico are also big steel exporters to the US.

However, the pushback was not just international. Trump's latest move has left many in his own party scratching their heads. Republicans are not supposed to be the party of protectionism. "You'd expect this policy from a leftist administration, not a supposedly Republican one," said Nebraskan Republican senator Ben Sasse.

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Many are worried about the impact higher steel prices and a possible trade war could have on their re-election hopes in November’s mid-term elections, and could erase the boost they enjoyed following the tax cut package.

Others are concerned about the more immediate impact of rising input prices on manufacturers in their own constituencies. Millions more Americans work in industries that use steel and aluminium than manufacture the metals. However, these details appear not to concern the president.

As he continues to see his ratings fall and tries to bat off the looming Russia investigation, proving to supporters that he delivered on his "America first" policy appears to be his primary focus.

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