Trump's Trade Policy Shifts into High Gear with Tariffs on Steel and Aluminum

Washington D.C - US President Donald Trump is set to reshape the country's trade policy, using one of his preferred economic tools: tariffs. In a move aimed at bolstering industries in key battleground states, Trump announced Monday that he would impose a 25% tariff on all imports of steel and aluminum into the US from all countries.

This decision comes as the administration reneges on planned 25% across-the-board tariffs on US neighbors Canada and Mexico, which were set to take effect until early March. Instead, the tariffs will be targeted at specific industries, with metal manufacturers breathing a sigh of relief over the reprieve.

While the measure impacts top trading partners, it also marks a significant escalation of trade tensions, sparking concern about inflationary pressures and potential impact on global markets. Economists warn that higher prices could influence the Federal Reserve's decision on interest rates in the coming months and years.

Meanwhile, Trump said he would soon unveil reciprocal tariffs on numerous countries, fulfilling a long-standing campaign promise while generating revenue ahead of Republicans' tax and spending bill. The move is seen as a crucial component of the administration's economic strategy and may yet hold key to brokering an economic compromise with China.

As tensions with Chinese President Xi Jinping simmer, there remains hope for a potential détente between Washington and Beijing. In his latest effort to ease relations, Trump plans to speak with Xi in a bid to settle ongoing trade disputes and navigate a potentially rocky future for bilateral ties.

The impact of these recent developments will be crucial in determining the trajectory of US-China trade policy, as well as implications for global markets and economic stability. As tensions continue to escalate, investors remain vigilant for updates from Yahoo Finance.