WASHINGTON, March 1 (Xinhua) -- U.S. President Donald Trump saidhere on Thursday that he would impose tariffs on imports of steeland aluminum products, in a move he said would protect U.S.industry, but which experts said could hurt U.S. producers and facelegal challenges from trade partners.
The United States is set to impose 25 percent of tariff on steelimports and 10 percent for aluminum, Trump said after a meetingwith business executives.
"We'll be signing it next week. And you'll have protection for along time in a while," said Trump.
News of the tariffs immediately hit sentiment on the WallStreet, with the Dow slumping over 500 points, more than 2 percent,in late trading.
Daniel Ikenson, a senior fellow at the Cato Institute, said onThursday that trade restrictions could hurt U.S. producers byexposing them to competitions from foreign rivals with lowerproduction costs capable of offering lower prices in the U.S.market.
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U.S. actions would face legal challenge by other World TradeOrganization members, and they would also invite other members toinvoke national security to protect favored industries, saidIkenson.
European Union (EU)'s trade chief Cecilia Malmstrom has saidthat EU would seek retaliation measures if the Trumpadministration's 232 trade investigation brings damage to Europeansteelmakers.
It's still unknown whether Trump's announcement on Thursdayrefer to blanket tariffs for all countries.
In April last year, Trump ordered the Commerce Department tostudy the impact of steel and aluminum imports on national securityunder seldom-used section 232 of the 1962 Trade Expansion Act.
Two weeks ago, the Commerce Department unveiled itsrecommendations for Trump to restrict imports of steel andaluminium products due to national security concerns, which drewoppositions from U.S. lawmakers and businesses.
According to the recommendations, the United States couldintroduce at least 24 percent tariff on all steel imports from allcountries and at least 7.7 percent tariff on all aluminium importsfrom all countries.
Trump's announcement on Thursday was higher than bothrecommendations.
Wendy Cutler, former Acting Deputy U.S. Trade Representative andnow vice president at the Asia Society Policy Institute, said "theimposition of tariffs on steel and aluminum will also reverberatethroughout the U.S. economy and possibly negate some of thebenefits of the recent tax cuts."
"Downstream users, such as the automotive, aircraft, and boatindustries, will pay more for inputs," she said.
"This decision appears to closely reflect one of the CommerceDepartment's options for across the board action with no countryexemptions, meaning it could also impact U.S. allies, includingJapan, Korea, Canada and Mexico," she said.
The Department of Defense (DoD) has cautioned against a backlashfrom U.S. allies like Canada and South Korea.
"DoD continues to be concerned about the negative impact on ourkey allies regarding the recommended options," Defense SecretaryJames Mattis said in a memo sent to the Commerce Department.
In response, Canadian Trade Minister Francois-Philippe Champagnesaid that any U.S. tariff or quota imposed on Canada's steelindustry would be "unacceptable."
Canada is the largest steel exporter to U.S. market, with steelimports from Canada accounting for 16.1 percent of the U.S. totalsteel imports in 2017, according to data released by the U.S.Commerce Department.
Brazil and South Korea ranked the second and third largest steelexporters, with their shares at 13 percent and 10,2 percent,respectively. Steel imports from China only accounted for 2 percentof the U.S. total steel imports last year. Enditem (Wang Naishuiand Wang Wen in New York contributed to this story)
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