After weeks of negotiation, the Trump administration put steep tariffs on imports of steel and aluminum today. The decision will punish the US’s closest allies, including Canada, Europe and Mexico. It drove the Dow Jones Industrial Average down over 200 points in US morning trading.
The administration says the tariffs (25% for steel imports, and 10% for aluminum imports) are being applied because reliance on imports is damaging US “national security.” But, after exempting Argentina, Australia, Brazil and South Korea, the nations that will be hurt the most are the US’s closest allies.
All together, nations that trade with the US are expected to suffer billions of dollars in annual losses, the Peterson Institute for International Economics estimates:
Mexico has already responded with its own announcement of tariffs on US products. The EU has also promised to retaliate, setting off a trade war between the two massive economies that has been completely unthinkable since the end of WWII.