TRUMP'S NEXT TARIFF TARGET: Trump is preparing to impose a new round of 25 percent tariffs on steel and aluminum imports later this week, a move set to please domestic metal makers but that could smack other U.S. industries with higher prices. One step back: Trump in February said he intended to dramatically tighten the tariffs he imposed on steel and aluminum in 2018 using Section 232 of the 1962 Trade Act, which allows the president to restrict imports to protect national security. Trump’s new plan, which takes effect March 12, includes raising the 10 percent tariff he imposed on aluminum to 25 percent, matching the rate that has been in place on steel for nearly seven years. The tariffs are sure to be welcomed by U.S. steelmakers who have been lobbying the president to reject pressure to water them down by providing exclusions. But tariff hikes could raise prices for a broad range of American industries that import metals: everything from can manufacturers to automakers to the defense sector — many of which are already feeling the brunt of 25 percent tariffs on Mexico and Canada. Robert Budway, president of the Can Manufacturers Institute, which represents U.S. metal can manufacturers and suppliers, told Morning Trade that Trump’s tariffs would have unintended consequences: “While we are supportive of the president's attempts to level the playing field against unfair trade practices, to use his words, trade policy needs to use a scalpel and not a sledgehammer, especially for essential items like canned foods.” Going deeper: In an escalation from his first administration, Trump’s new policy would end tariff “exclusions” for individual steel products, striking down an avenue that allowed domestic users to request tariff waivers for steel and aluminum products not made in the United States. It could also expand the list of “derivative” steel and aluminum items, referring to downstream products. What steel and aluminum hikes could hit: Trump’s tariffs could raise prices for house hardware items, mechanical and electrical machinery, auto and aircraft parts, furniture, sports equipment and other items. Prices could also rise for rail and plumbing parts, tools like bolts and screws, home appliances, larger machinery such as backhoes and elevators, and more. "In our experience, 232 tariffs have had the opposite effect of creating more steel supply,” Budway said. “If there's no exclusions, the price of imported tin mill steel and primary aluminum from Canada will rise. Ultimately, the consumer will bear the cost of higher inflation.” Signs of strain: The tariffs could come into force days after Trump did not rule out a recession this year when asked in an interview, despite reiterating positive expectations about the country’s long-term economic future. “There is a period of transition, because what we’re doing is very big,” Trump said on “Sunday Morning Futures with Maria Bartiromo.” They would also come at the same time that the rosy economic outlook that greeted Trump’s return to the White House begins to dim: The unemployment rate ticked up to 4.1 percent in February, and polls show that people don’t think the Trump administration is doing enough to address the economy, even as they are pleased with its performance on other issues. Lutnick on tariff impact: Commerce Secretary Howard Lutnick, meanwhile, on Sunday said Americans should “absolutely not” fear a recession. “Yes, some products that are made foreign might be more expensive, but American products will get cheaper, and that's the point,” he said on NBC’s “Meet the Press.” Want to receive this newsletter every weekday? Subscribe to POLITICO Pro. You’ll also receive daily policy news and other intelligence you need to act on the day’s biggest stories.
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