Pictured Above: President Donald Trump imposed a 25% tariff on steel imported into the United States from all countries except Canada and Mexico.
President Donald Trump followed through Thursday with a campaign promise to impose stiff tariffs on imported steel and aluminum from all countries except Canada and Mexico.
The 25% tariff on imported steel and 10% duty on imported aluminum will take effect 15 days after Thursday’s order.
“A strong steel and aluminum industry are vital to our national security, absolutely vital,” Trump said during the White House event that featured steel and aluminum workers holding hard hats. “Steel is steel. You don’t have steel, you don’t have a country.”
Although the tariffs affect raw materials, consumers can expect higher costs for products made with imported steel or aluminum, according to the Acton Institute. Farrier industry manufacturers and retailers expect minimal price increases.
“I don’t think it will be as big of an impact,” John Harshbarger of Amarillo, Texas-based Well-Shod told American Farriers Journal. “Most farrier products are already manufactured. You’ll probably see a small price increase in products, but you’ll see that in most anything that contains steel or aluminum.”
Farrier tool manufacturers that use American-made steel, such as Drummond, Wis.-based Bloom Forge don’t expect to see any ripple effects.
“We’re using very expensive material anyway,” explains Roy Bloom, a member of the International Horseshoeing Hall Of Fame. “We’re dealing with tool steel — S7 and H13 — not structural steel. Those are considered super hard. In order to get price breaks on those, you have to order in big quantities. I’m pretty certain that most of those are not made anywhere but here. Maybe it won’t affect tool makers at all.”
The exemption of Canada and Mexico — which are the No. 1 and No. 4 steel suppliers to the United States — will ease the expected price increases.
“We have to protect and build our steel and aluminum industries,” Trump said during the event, “while at the same time showing great flexibility and cooperation toward those that are really friends of ours, both on a trade basis and a military basis.”
Some retailers and manufacturers such as Steve Hoselton of Lexington, Ill.-based Anvil Brand Shoe Co. believe that Trump is trying to put the United States in a better negotiating position with its trade partners.
“Trump puts rhetoric out there to bargain from a position of strength,” says Hoselton, who’s also an attorney. “The U.S. doesn’t have that position unless he threatens a tariff.”
It appears that theory is proving true as Trump announced that the tariff exemptions for Canada and Mexico will be contingent upon the administration’s renegotiations of the North American Free Trade Agreement (NAFTA).
“If we’re making the deal on NAFTA, this will figure into the deal and we won’t have a tariffs on Canada and Mexico,” Trump says. “If we don’t make the deal on NAFTA … then we’re going to terminate NAFTA and we’ll start all over again. I have a feeling we’re going to make a deal on NAFTA.”
The president also announced that his administration is preparing a reciprocal tax program that aims to reduce the U.S. trade deficit.
“Some of the countries we’re dealing with are great partners, great military allies and we’re going to be looking at that very strongly,” Trump says. “We’re going to see who is treating us fairly, who’s not treating us fairly. If China is going to charge us 25% or India is going charge us 75%, … we’re going to be at those same numbers. It’s a mirror tax.”
The European Union, the world’s largest trade bloc that includes a number of integral farrier manufacturing industries that import goods to the U.S., will be appealing its inclusion.
“We had been in talks with our American friends for quite some time to explain to them that whereas we share the concerns over overcapacity in the steel sector, this is not the right way to deal with it,” Cecilia Malmstrom, the European Union’s trade commissioner, said during a panel discussion that was televised by CNBC on Friday. “And it is certainly not the right way to include Europe in that because we are friends, we are allies, we work together, we cannot possibly be a threat to national security in the U.S. so we are counting on being excluded.”