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The News and Media Division of The Insight Partners
Monday, 02 Mar 2020 08:00 pm

Is Trump defending Domestic Industries under the Guise of National Security?

The Trump Administration has always been offered a number of trade deals allegedly with the name of national security. The primary one involves raising a rarely-used provisions of trade law towards investigating whether imposing higher tariffs or import restrictions for steel and aluminum products is defensible by national security reasons or not.

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Donald Trump's brazen move in January 24 towards extension of his formerly imposed "national security" tariffs over steel & aluminum that covered added products wasn’t given a very warm welcome owing to his endless trade wars. However, this latest act was considered important, since for the very first time, Trump with his new tariff was trying help all those industries that were effected due to his previous tariffs. Thus, late January, he delivered a few of aiding tariffs for some of the high-content steel products, such as steel nails & car bumpers. 

Trump had protracted his novel 25 % as well as 10% tariffs on steel and aluminum respectively to the four products that are also termed as metal derivatives. Trump administration’s further defense is led by trade in bumpers (approx. $231 million) as well as steel nails (approx. $231 million).

This novel national security tariffs would possibly mostly hit imports from allies including Japan, the European Union, China and Taiwan. In order to keep in line with this evolving structure of steel and aluminum protection, imports from Canada, Mexico and Australia may be freed, which is significant with economy’s perspective.   

The only positive impact seen with the extension of his so called new national security tariffs is refocus of public consideration towards the fears of surging protection. On the other hand, the extension of tariff has raised a horde of different kinds of fears, including:

  • The policy has negatively impacted several sectors including those very much reliant on steel nails and bumpers, such as construction as well as automakers respectively with an unexpected and unavoidable cost shockwave. Hence, most of the American companies have started holding off their investments, owing to uncertainty of Trump's trade policy. As they are not very sure for the duration of the policy announced.
  • Also, with every phase of his tariffs imposed, One or more American companies have been suffering as Trump’s tariff has resulted at raising their costs by hard-hitting their manufacturing components as well as parts. His frequent tariff hikes is affecting their competitive landscape not only in the US but across the globe. Hence, in order to sustain and remain competitive in markets a few companies have started moving their manufacturing units from America.

In a nutshell, Trump’s endless trade wars with the world is not only effecting other countries but he is also bullying American businesses. In forthcoming days this will not just have a negative impact over the American economy but also America’s relation with other nations. 

This is Part-I of our three-part series on countries using the exception of National Securities for their personel interests. Part-II can be read here and Part-III here

Tags Donald Trump China United States Steel Nails Aluminium European Union Trade War

Neha Pandey

Aware of her elements, Neha writes the best articles across industries including electronics & semiconductors, automotive & transportation and food & beverages. Being from the finance background she has the ability to understand the dynamics of every industry and analyze the news updates to form insightful articles. Neha is an energetic person interested in music, travel, and entertainment. Since past 5 years, she written extensively on sectors like technology, finance and healthcare.


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