President Donald Trump has taken unprecedented actions in levying new import duties, specifically designed to attack the United States’ long-standing trade imbalances. Such unilateral moves have raised the ire of U.S. trading partners, notably Japan and South Korea. Consequently, their steel exports to the U.S. have plummeted.
The new tariffs—originally announced to apply a 25% duty on steel imports—went into effect in March of 2023. This might explain why, upon implementation Japan experienced an unimaginable 16.6% decline in exports to the U.S. South Korea experienced an even sharper drop of 24%. These figures represent a stunning turnaround in the trading relationship between the U.S. and its Asian allies.
Both countries have paid dearly for these tariffs. In March, steel exports hit their lowest volume for that month year-over-year. Just six months later, the massive decrease is a direct result of the newly imposed import tariffs. Now these duties are set to further clog global supply chains and delay cross-border trade.
As we explore below, U.S. trading partners have expressed serious concern about the long-term precedent set by these tariffs. Trade experts have raised concern that these types of unilateral actions risk inciting retaliatory actions and further fueling tensions in trade policy. The purpose of these duties, which the Trump Administration has been using primarily to protect vulnerable domestic industries, is deterrence. The impacts are cascading well outside of U.S. borders.
The impacts of these tariffs go far beyond immediate trade numbers. Global supply chain disruptions can inflate costs even further for both manufacturers and consumers. Other companies may struggle to find these materials at favorable rates. Unnecessary delays to cross-border trade increase costs and undermine U.S. economic growth and cooperation among neighbors and trading partners. At the least, this risks a more fragmented global economy.