Stock exchanges in Asia closed the day with losses on Friday (Mar. 2) and the financial market in Europe also suffered an impact in the morning, possibly as a result of the US President Donald Trump’s announcement that new tariffs are to be introduced on imported steel and aluminum.
Today, Japan’s Nikkei stock exchange declined 2.5%, as China and Hong Kong registered falls of 0.59% and 1.48% respectively. Shortly after the tariffs were unveiled, the effects were also felt by Wall Street itself, which slipped 400 points.
The decision made by Trump introduces tariffs adding up to 25% on foreign steel bought by the US as of next week, according to the official communication from the White House. Aluminum imports will be tariffed 10%. The protectionist measure was advocated by Trump as key to strength the US metal industry.
“We’re rebuilding our aluminum,” he stated. He accused other countries of “ruining national aluminum,” and blamed errors in the way the US themselves conducted policies in previous administrations.
In Brazil and other markets, major car makers will have to pay more for steel and aluminum in auto production. New tariffs will affect major markets where steel is sold to the US, like China, Japan, and South Korea—the last two among the biggest allies of the US. Brazil is also a big steel exporter for the US market.
Brazil’s Ministry of Development, Foreign Trade, and Services believes that the curbs instituted by Trump on steel and aluminum will affect national exports from both products, which may lead to Brazil’s challenging the démarche with international agencies.
In an official note, the ministry reported that the Brazilian government expects to reach an agreement with the US to evade the tariffs. In case it is proves inevitable, the country may challenge the move at global forums. “The Brazilian government does not rule out complementary measures, on multilateral and bilateral levels, to attempt to protect its interests in a concrete case like this,” the note read.
The US press has dubbed the move “disastrous” and said that it could lead to a “commercial war” between the US and other nations, which would be detrimental to the country.