President Donald Trump will sign proclamations Thursday imposing tariffs on aluminum and steel imports. He reached his decision following recommendations from the Commerce Department, which conducted investigations to determine whether aluminum and steel imports threaten U.S. national security.
The tariffs have received a mixed reaction. Aluminum and steel industry leaders love Trump's plan because they believe it will boost their businesses. Drew Wilcox, vice president and general manager of Nucor Steel in Auburn, said as much last week in a statement released to The Citizen.
"The Commerce Department was correct in concluding that surging imports impair our national security by limiting the ability of our domestic steel industry to supply national defense and critical infrastructure needs, and the president is taking the appropriate response to this threat," Wilcox said.
But others, including members of Congress from both parties, believe it could have a detrimental impact on the economy. U.S. Sen. Ben Sasse, a Nebraska Republican, referred to the tariffs as "protectionism."
A trio of Democrats, U.S. Reps. Ron Kind, Rick Larsen and Gregory Meeks, authored a letter outlining their concerns about the tariffs. They wrote that the tariffs could increase aluminum and steel prices for U.S. consumers and manufacturers.
On Thursday, Trump linked the tariffs to his promise during the 2016 presidential race to boost the struggling industries.
"We're going to be very fair, we're going to be very flexible but we're going to protect the American worker as I said I would do in my campaign," he said.
Here is what you should know about the tariffs:
HOW WILL THE TARIFFS WORK?
Steel imports will be subject to a 25 percent tariff and there will be a 10 percent tariff on aluminum imports.
WHICH COUNTRIES WILL BE AFFECTED?
The tariffs will apply to all countries that import aluminum or steel. There will be exceptions for Canada and Mexico, two of the leading sources of U.S. steel imports. Canada and Mexico will not pay the tariffs, according to a senior Trump administration official.
The tariffs seem to target, at least in part, imports from China. But steel from China makes up only 2.15 percent of all U.S. steel imports (in metric tons), according to the Commerce Department.
A majority of U.S. steel imports come from U.S. allies — Brazil, Canada, the European Union, Mexico and South Korea.
A Trump administration official said there is a clause in the tariff proclamations that opens the possibility to "alternatives" for countries that have a security relationship with the U.S. If it's determined that there is a sufficient alternative, there is flexibility to modify the tariff order for certain countries.
WHY IMPOSE THE TARIFFS?
The Commerce Department cited the national security impact of weaker domestic aluminum and steel industries. While the orders seek to crack down on imports, the tariffs are also meant to help boost the industries.
Employment in the U.S. steel industry has declined by 35 percent over the past two decades, according to the agency's report released last month.
When the Commerce Department outlined its recommendations, including the tariffs on aluminum and steel imports, it estimated that adopting the recommendations would increase domestic steel production from its current capacity of 73 percent to 80 percent.
National security considerations, though, are a main reason why the tariffs are being imposed. A Trump administration official noted that aluminum and steel are used to manufacture military equipment, such as fighter jets and missiles.
Infrastructure needs are also a concern. Aluminum and steel are used in dams, transportation projects and the power grid.