White House levies on aluminium and steel imports from anywhere in the world sharply widen a rapidly ensuing economic conflict. Along with some of the UK’s most economically vulnerable constituencies, the likely victim here is our planet.
‘If elected Donald Trump’s proposed tariffs would damage the economies of United States, China and Europe and set back climate action.’ Four months later, and here we are.
The London School of Economics Grantham Research Institute on Climate Change and the Environment published its warning late-October 2024. Within days, the US election had swung in favour of the Republicans, ushering in a second and – it has to be said – far more effective and aggressive term for the Make America Great Again leader.
News breaking this morning that 47th President Donald Trump was now targeting global steel and aluminium supply chains with tariffs is just the latest in a rapid succession of economic gambles Washington seems willing to take.
A 25% tariff will now apply to all imports of these vital metals from anywhere in the world. This includes China, Mexico and Canada – the three countries most targeted by Trump’s tariffs this year. But they also now include almost 200 more that weren’t, including the biggest single market on the planet – the EU.
Ursula von der Leyen, President of the European Commission, announced reciprocal measures to the tune of tariffs on US imports worth $28billion. This is likely only the beginning of a major standoff between leaders which will spill into swathes of other industries and sectors.
The White House argument – that America has been unfairly subject to covert taxation by countries and blocs that impose import levies on goods made Stateside, usually in a bid to protect domestic industries – has more than a whiff of the truth about it. But Trump would also be the first to advocate protectionism , particularly when you’re dealing with anything he considers to have the upper-hand.
In and amongst the debate, steps are rapidly being taken to try and reduce reliance on global trade in general. Given the country is now fighting trade wars on four separate fronts – Canada, Mexico, the EU and China – this is understandably especially visible in the US.
Last week, mass deforestation was greenlit in many of the National Parks which, ironically, directly feed into the very identity of America the current administration so vehemently supports. Authorities overseeing these vital expanses of nature have seen funding decimated by same government’s rabid efficiency drive, marking a double-pronged assault.
Trees will need to be felled in order to mitigate the impact of timber tariffs which are a core aspect of the US-Canada economic conflict. Given the new steel and aluminum tariffs were only introduced today, it’s far too early to understand how this might be mitigated.
The last time this happened, in 2018 during Trump’s first term, domestic US steel and aluminium production did ramp up. This morning, current United States Secretary of State Mark Rubio told an audience in Dublin this was a priority aim of the new tariffs. But seven years ago the effects were consistent only in their inconsistencies. As Reuters explained earlier this week, higher production costs slowed growth in many economic areas even as output grew. And job creation was ‘a mixed bag’.
In 2020, Michael Cary published research conducted at the Division of Resource Economics and Management, West Virginia University: Molecules of inefficiency: How tariffs impact carbon intensities, carbon dioxide emissions, and the environment.
It’s a complex analysis, but the long and short was tariffs introduce uncertainty, volatility and therefore inefficiency into the international market for whatever they apply to. This intensifies carbon use-per-product, which means even as volume falls in certain parts of the process, emissions remain the same.
‘Additionally, since carbon intensities rise and overall carbon dioxide emissions do not decline, regional concerns over environmental quality and health should be raised,’ writes Cary. ‘The paper concludes with a discussion of how these results impact policy decisions pertaining to instruments for promoting sustainability.’
Coupled with the common understanding that tariffs are most felt in falling consumer spending and demand, and it becomes more difficult to fully support the idea that there can be genuine economic winners and losers from the new wave of tariffs that seem driven by anger more than clear strategy. Nevertheless, this is the game now playing out.
Although far from a star player – perhaps not even on the starting lineup – the economic sanctions now being placed on steel and aluminium imports into the US are going to hurt the UK. Sheer cost of production means both industries are already in dire straits in Britain, partly due to national governments failing to incentivise and support.
Last year’s cull of 2,500 jobs from Indian-owned Tata’s Port Talbot steelworks, a result of switching to cleaner electric furnaces, is a case in point. The same people – those working in the plants, most of which are in areas of relative economic depression and represent the last vestiges of once-thriving industrial heartlands – are now likely to suffer once again from politics they don’t really have a part of or a say in. Much like the other biggest loser here – our planet.
Image: yasin hemmati / Unsplash
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