Quantifying the Impacts of the US Section 232 Steel and Aluminum Tariffs

Abstract

The Trump Administration is proceeding with unilateral measures to address what it has characterized as “unfair” trade, risking retaliation, but banking on a threat of massive escalation to extract a favorable outcome for itself. Notwithstanding widespread speculation that the threats to impose tariffs on steel and aluminum imports from its major allies would not be acted on, the Administration announced on 30 May 2018 that import duties of 25% on steel and 10% on aluminum would be imposed on imports from Canada, Mexico and the European Union. These countries had been granted an exemption due to expire on 1 June 2018 when the duties were first imposed in March 2018. This note complements the analysis of the potential impacts of these tariffs by contributing computable general equilibrium model simulation impact estimates.

Keywords: Trade and National Security, Tariffs, Steel, Aluminum, Section 232, United States

JEL Classification: F13, F14