Macroeconomic Effect of The U.S. Tariff on Steel and Aluminum

Abstract

In the context of deglobalization, the United States proposed a trade policy of imposing tariffs on steel and aluminum in March 2018. This paper first discusses the possible motivations behind the tariff levitation by the United States. It also analyzes the impact of US tariffs on its trading partners and itself under the unilateral tariff model and the bilateral tariff model. The conclusion of the analysis is that the impact of this US trade policy on the economy of steel and aluminum importing countries, especially in the long run, is not as pessimistic as imagined. And considering the impact of the tariffs, as well as the EU and China’s trade countermeasures on the U.S. economy, the U.S. should perhaps reassess what this policy has brought to the U.S.