The Donald Trump administration is reportedly taking a step back in terms of its tariff policies, as officials mull to narrow its broad tariffs on steel and aluminium products.
According to two separate reports by The Financial Times and Bloomberg, the US Trade Representative’s Office is looking into ways the steel and aluminium tariffs could be rolled back.
Last year, US President Donald Trump had abruptly hit steel and aluminium imports as he raised the tariffs on them to as high as 50%, which has resulted in a rise in price of domestic machines made with those metals including washing machines and microwave ovens.
According to the Bloomberg report quoting a person familiar with the situation, the USTR office is now looking for ways to resolve complications spawned last year by the Commerce Department’s efforts to rush out Trump’s US tariff decisions.
The US government has not yet released any official communication regarding the development.
What changes are expected?
The Trump administration is now scrambling to review the list of products affected by the US tariffs on steel and aluminium, three people familiar with the knowledge of the matter were quoted as saying by FT.
According to the report, the officials are now on the lookout to scrap tariff on some of the products and halt any expansion of the list. Instead, they now want to launch more targeted national security probes into specific goods.
The White House has communicated to companies that adjustments are in the works, but details and timing remain unclear, as per the person cited by Bloomberg.
Why is the Trump administration making a U-turn?
Trump’s taxes on US imports have also come under increased scrutiny as they not only hit trade partners hard, but also cascaded to higher prices of household items that use steel or aluminium.
As per the people cited by FT, the US trade representative’s office believes that the 50% steel and aluminium tariffs are hurting American consumers as prices of everyday items like pie tins and food and drink cans start to increase.
Donald Trump’s tariff blitz has pushed US duties to their highest level since before the World War II but the President has repeatedly insisted that they are positively affecting the economy.
Officials now feel that the US tariffs are “too complicated to enforce”, one of the persons told FT, and that they now needed to be overhauled.
Trump last year imposed a 50% levy on foreign steel and aluminum in a measure aimed at Chinese overcapacity. The step wound up hitting other major trading partners hard, including Canada, the EU, Mexico and South Korea.
This week, Trump’s tariff policy came under increased scrutiny in Congress and in separate reports by the Congressional Budget Office and the Federal Reserve Bank of New York — both of which said American consumers and businesses are shouldering most of the costs of his tariffs. That runs counter to his repeated assertions that they’re paid by foreign exporters.