International Observation: US Imposition of Steel and Aluminum Tariffs Raises Questions About Cost Pass-Through

Allies were severely impacted and launched countermeasures one after another.

Japan's Minister of Economy, Trade and Industry traveled to the United States to negotiate with the U.S. Secretary of Commerce, hoping to obtain tariff exemptions for Japanese steel and aluminum products. However, the U.S. side did not provide any clear answer.

Since the U.S. steel and aluminum tariff policy officially took effect on the 12th, Japanese officials have publicly expressed disappointment and dissatisfaction, believing that this move will not only impact Japan-U.S. trade but also negatively affect the global economy and the multilateral trade order. Japan exports a large quantity of steel and aluminum products to the U.S. annually, and related industries will face considerable pressure.

The Australian Prime Minister also stated bluntly that the U.S. refusal to grant tariff exemptions to Australian steel and aluminum products was unreasonable. Australia will continue to strive for policy easing, but will not introduce retaliatory tariffs for the time being to avoid exacerbating domestic inflation.

The EU's attitude is even tougher, having announced retaliatory tariffs on a significant amount of U.S. goods. EU leaders expressed deep regret over this move, believing that the U.S. tariff policy will impact employment, drive up prices, disrupt supply chains, and add uncertainty to both economies. While the EU is willing to negotiate with the U.S., it has also clearly stated that it will not allow unreasonable tariffs to harm its legitimate economic interests.

Rising costs put pressure on the entire population.

Authoritative British media outlets have pointed out that US industrial production is highly dependent on imported steel and aluminum, and the new tariffs will impose a significant economic burden on related domestic industries.

Policy changes coupled with soaring costs have plunged downstream industries in the US, which consume large quantities of steel and aluminum, into operational difficulties. Related institutions estimate that the tariffs will significantly increase the cost of imported steel and aluminum and related processed products. Industry experts analyze that the employment scale of downstream industries such as automobiles and machinery is far greater than that of the steel and aluminum industry itself; the tariffs will only benefit a few upstream companies, while most players in the supply chain will suffer losses, and ultimately, the costs will be passed on to ordinary consumers.

Looking at the actual situation across various industries, production costs in sectors such as construction machinery and beverage packaging have risen significantly, and companies have been criticized for adjusting their production and packaging plans. Several years ago, trade barriers already impacted the US can manufacturing supply chain, forcing many production lines to shut down, and price increases for canned food have become a trend.

Industry institutions predict that in the coming year, construction costs in the US will rise significantly, greatly increasing the cost of new housing and further exacerbating the economic burden on first-time homebuyers.

Confidence under pressure, recession looms.

Multiple media outlets and industry insiders are concerned that the US's hasty imposition of steel and aluminum tariffs and its frequent use of tariffs are creating chaos and uncertainty in its domestic economy. Markets, businesses, and ordinary citizens are finding it difficult to make long-term plans, and fears of an economic recession continue to rise.

Some economists analyze that steel and aluminum tariffs will weaken the international competitiveness of US goods, suppress domestic demand growth, and in the long run, only drag down the domestic economy.

Currently, the US economy is already experiencing increased volatility, with high inflation proving difficult to curb. The new tariffs will further increase the cost of living and hinder the Federal Reserve's efforts to cut interest rates. Many businesses are also feeling bewildered by the frequently changing tariff policies, and the complex global supply chain is shrouded in significant uncertainty.

Tariffs are pushing up prices, increasing the financial burden on households, and directly impacting consumer confidence. Several authoritative confidence indices have recently declined sharply, marking their worst performance for the same period in many years. People are more worried about future inflation trends, and many predict that their financial situation will further deteriorate.

Economic data also signaled a cooling trend. The US economic growth rate slowed significantly in the fourth quarter of last year, and institutions predict that the economy will contract significantly in the first quarter of this year, with overall downward pressure continuing to increase.