Donald Trump widens his attack on global trade with steel and aluminium tariffs

Good morning and welcome to White House Watch. King Abdullah of Jordan will meet Donald Trump in Washington today in what is likely to be a tense encounter. For now, let’s talk about:

• Steel and aluminium tariffs

• A warning from Midwest dairy farmers

• The government purge commander

Tired of tariffs yet? Donald Trump sure isn’t. 

Yesterday he imposed 25 per cent tariffs on all steel and aluminium imports from March 4, threatening fresh chaos in commodity markets and widening his global trade conflicts.

Retaliation threats have started to roll in, with the EU saying it would apply “firm and proportionate countermeasures”.

While ostensibly Trump’s move is to protect domestic steel producers, it could sharply raise costs for any US manufacturer that imports metals and will probably hurt Washington’s allies.

US officials said the tariffs were a response to “surging exports” of the metals to America and “undermining US producers of steel and aluminium”.

While Mexico and Canada were given a 30-day reprieve from blanket levies earlier this month, they’re right back in the US president’s crosshairs. In 2023, the two nations were, along with China, the biggest exporters of steel and aluminium products to the US. These tariffs could also potentially hit countries such as Brazil, Germany and South Korea.

Trump’s move, which he first promised over the weekend, sent US metals prices soaring to big premiums. Downing Street played down the tariffs’ potential impact on the British economy, despite the country’s industry warning they could be “devastating”.

Targeting metals like this revives one of the biggest trade moves from Trump’s first stint in the White House. In 2018, he imposed 25 per cent tariffs on steel and 10 per cent on aluminium against most countries, citing national security, before extending them to the EU, Canada and Mexico.

Back then, US imports of metals fell immediately. Washington’s levies hit about €6.4bn of EU steel and aluminium exports, and Brussels later imposed its own tariffs on about €2.8bn worth of US imports. 

Despite many exceptions on many products, some companies — especially in the auto industry — were rocked by the uncertainty and rising raw materials costs. Domestic steel producers also took the opportunity to push up their own prices.

Last call for your questions on Trump’s trade agenda. Write to us at whitehousewatch@ft.com with your name and location and we may answer them in a newsletter next week.

The latest headlines

What we’re hearing

While Elon Musk is the infantryman in the Trump administration’s purge of the federal workforce, the operation’s commander is Russell Vought — and he’s ready to traumatise US bureaucrats.

Vought, who co-authored “Project 2025”, became Trump’s budget director on Friday and subsequently assumed the role of acting director of the Consumer Financial Protection Bureau, a federal regulator established in the wake of the global financial crisis. He immediately ordered a halt to almost all its operations.

“He’s going to make a lot of people’s lives worse. That’s where, obviously, I think I would like people to focus their attention,” Michael Linden, a former US budget official under Joe Biden, told the FT’s James Politi. 

Right after the election, Vought set out how Trump 2.0 would assault the bureaucracy, and test the limits of presidential power: “Bureaucracies hate the American people,” Vought told rightwing media personality Tucker Carlson. “Trauma” must be inflicted on the civil service to stop it from being “weaponised against the country”, he added.

For him, it’s a divine calling: “God has given us a particular purpose for a particular time,” he said.

Vought has no love for foreign aid, opposes reproductive rights and is salivating for finance and energy deregulation. He’s also sceptical of the Federal Reserve’s special protections as an independent agency.

“I am not a huge fan of the Fed,” Vought told Carlson.

Viewpoints