New fears about trade wars pushed stock markets Thursday to the red mark after US President Donald Trump said he would cut tariffs on steel and aluminum – movements that, according to many industries, raise prices and jobs.
Trump said he would sign a document to impose a rate of as much as 25 percent on all steel imported in the US, and 10 percent on all aluminum.
"We are going to rebuild our steel industry and return our aluminum industry," Trump said in the White House, flanked by executives from companies in both sectors.
The men at his side were all smiling at the event, but they were one of the only ones to welcome the news.
The Dow Jones Industrial The average fell nearly 600 points to one point or more than two percent, mainly because industrial companies covering the 30 groups would be affected by higher prices for steel and aluminum.
"Both metals are crucial for the production of cars & trucks sold in America today and would significantly increase the sales prices of those vehicles," said the automotive industry lobby group the American International Automobile Dealers Association.
Similar tariffs on steel implemented in 2002 under the Bush administration cost the auto sector 200,000 jobs, AIADA said.
Economist Andrew Hunter of Capital Economics wrote that American steel prices have already risen by 20 percent last year, ahead of these rates. "Rates actually increase the incentives for these other manufacturers to produce offshore to avoid them," Hunter said.
The beer industry has also been thrown out of the battle, because the hundreds of millions of aluminum cans used by the industry every year now have the prospect of becoming 10 percent more expensive.
When the US Department of Commerce recommended tariffs as an option earlier this year, lobbying group The Beer Institute – representing 5,000 breweries in the US, with 2.2 million people – & # 39; draconic & # 39; tariffs and import restrictions … will increase costs and jeopardize US jobs. "
The Commerce Department report advised to submit rates or quotas on steel and aluminum on national security grounds
" Aluminum used for making beer cans is not a national security threat, " said the group.
The Dow ended with the closing of 402 points, after a seesawing day that it saw no less than 743 points.
Heavy equipment maker Caterpillar fell by more than three percent and space giant Boeing returned about the same amount
The Canadian steel company Stelco dropped almost four percent on the TSX Miner Teck Resources, which produces coal used in the steel industry, had a two percent discount The TSX as a whole closed 48 points or 0.3 percent to 15.393.
By contrast, US steel-producing companies took a plunge, AK Steel Holding rose by almost 12 percent, US Steel Corp rose by eight percent, and Nucor rose by 3.6 percent.