The candidates did not name any specific trade tariffs, with a number of different policies brought up interchangeably during the event; Trump touted his successful tariff policies and Harris avoided commenting on the current administration’s continuation of those same policies.
The tariffs that steel market participants are most concerned with fall under Section 232, which were implemented in 2018 by the Trump administration and imposed duties on imports of steel and aluminium at 25% and 10% respectively.
President Joe Biden’s administration has kept most of the Trump administration tariffs in place and, in May 2024, raised tariffs on Chinese imports, including steel, aluminium and electric vehicles (EVs).
“In fact, [the Biden administration] never took the tariff off, because it was so much money, they can’t. It would totally destroy everything that they’ve set out to do. They’ve taken in billions of dollars from China and other places,” Trump said in the debate.
The continuation of Trump’s tariff policy was not surprising when Biden took office in 2020, Dan Ujczo, senior counsel for international trade and transportation at Thompson Hine, told Fastmarkets on Tuesday.
“What we expected to see in the Biden administration in the wake of Trump was not a complete 180 [degree turn] in terms of the tariff policy. The domestic politics on the Democrat side were still favorable to putting on tariffs and keeping many of the tariffs,” Ujczo said.
The Biden administration’s fresh tariffs against goods from China tripled the duties levied under Section 301, with the tariff rate on certain steel and aluminium products increasing from 0-7.5% to 25% in 2024.
Additionally, the Biden administration imposed a 25% tariff under Section 232 on steel and aluminium shipped from Mexico that is melted and poured outside of North America, as an addendum to the United States-Mexico-Canada Agreement (USMCA). The tariff came into effect on July 10.
“We’re doing tariffs on other countries,” Trump said on Tuesday, ostensibly in response to a question about his plans to levy a blanket 10-20% tariff on all imports into the US. “I took in billions and billions of dollars, as you know, from China.”
Trump had raised the idea of a blanket 10-20% tariff on all imports coming into the US during a rally in North Carolina on August 14, when he was talking about how inflation was hurting the average American consumer.
“We are going to have 10% to 20% tariffs on foreign countries that have been ripping us off for years, we are going charge them 10% to 20% to come in and take advantage of our country because that is what they have been doing,” Trump had said during the rally.
Debate moderator David Muir pointed out that such a tariff policy would drive up prices for Americans, since the consumer ultimately pays the price for increased import taxes.
“Your proposal calls for tariffs…on foreign imports across the board,” Muir said on Tuesday. “You recently said that you might double your plan, imposing tariffs up to 20% on goods coming into this country.”
The Center for American Progress, a left-leaning think tank, estimated in an August report that Trump’s proposed tariffs could increase consumer costs nearly $4,000 per year.
Harris dubbed Trump’s blanket tariff as the “Trump sales tax,” which seemed to rile up the former president.
“My opponent has a plan that I call the ‘Trump sales tax,’ which would be a 20% tax on everyday goods that you rely on to get through the month,” Harris said. “Economists have said that Trump’s sales tax would actually result for middle-class families in about $4,000 more a year, because of his policies and his ideas about what should be the backs of middle-class people paying for tax cuts for billionaires.”
Trump also repeated false claims during the debate that Chinese companies are building “massive” automobile factories in Mexico to sell vehicles in the US.
Conversely, the US Trade Representative (USTR) noted the positive effect of the USMCA on the North American automotive industry in July this year, with automakers increasingly investing in zero-emission and hybrid vehicles.
The USMCA’s Rules of Origin for motor vehicles require a specific amount of North American content in the final vehicle to qualify for duty-free treatment under the agreement – at least 70% of a vehicle producer’s steel and aluminium purchases need to originate in North America.
Steel producers in the US, especially those situated close to Mexico’s borders, benefit from Mexican automotive steel demand.
For example, Steel Dynamics Inc’s flat-rolled facility in Sinton, Texas, is targeting the burgeoning Mexican market and is focused on supplying high-strength products in order to capitalize on its proximity to the Mexican production hub of Monterrey.
Trump signed the USMCA Implementation Act into law on January 29, 2020, and the USMCA entered into force on July 1, 2020.
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