US President, Donald Trump, announced on Thursday his intention to impose new heavy tariffs on imported steel and aluminum to protect American producers while critics say it would boost likelihood of a trade war with China.
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The US oil and gas industry on Thursday pounced on Trump's plan to slap tariffs of 25 percent on imported steel and 10 percent on imported aluminum, saying the controversial move would kill energy jobs by raising costs for big infrastructure projects.
Trump believes the tariffs will safeguard US jobs but many economists say they will destroy more jobs than they create.
"It'll be 25 percent for steel and it'll be 10 percent for aluminum ... and it'll be for a long time," Trump said. "We’re going to build our steel industry back and our aluminum industry back."
America’s top energy industry trade groups, which rely on imported steel for drilling equipment, pipelines, liquefied natural gas terminals and refineries, issued statements calling on Trump to scrap the plan.
The tariff plan is "inconsistent with the administration's goal of continuing the energy renaissance and building world class infrastructure," said Jack Gerard, president of the American Petroleum Institute.
Major stock indexes plunged on Thursday afternoon following Trump's announcement. Investor concern about the news rattled the Dow Jones industrial average, which closed down more than 400 points.
Trump has accused China of unfair trade practices. "What they do is they dump massive amounts of product in our country and it just kills -- it destroys our companies and our jobs," he said.
Republicans slammed Trump's plan, warning that it will lead to a trade war with China and leave American consumers paying the price.
"New, huge tariffs on all kinds of imported steel is a big mistake that will increase costs on American consumers, cost our country jobs, and invite retaliation from other countries," said Senator Pat Toomey of Pennsylvania.
Senator Mike Lee of Utah meanwhile said the president’s tariffs would be a "huge job-killing tax hike" on consumers.
"While I am sympathetic to the issues facing domestic steel manufacturers, there must be a better way to address the steel industries concerns, and I hope Congress and the executive branch can identify an alternative solution before these tariffs are finalized next week," Lee said in a statement.
Senator Pat Roberts, who chairs the chamber's agriculture committee, said, "Every time you do this, you get a retaliation. Agriculture is the number one target. I think this is terribly counterproductive for the agriculture economy.”
China has already threatened to limit imports of American soybeans, while the European Union said it will consider action as well.
European Commission Chief Jean-Claude Juncker said the European Union will react firmly and commensurately to defend its interests.
Juncker called Trump’s plan “a blatant intervention to protect US domestic industry" under the guise of national security. He said the Commission will put forth a proposal for countermeasures in the coming days.
"We will not sit idly while our industry is hit with unfair measures that put thousands of European jobs at risk,” Juncker said. “The EU will react firmly and commensurately to defend our interests."
Data shows that Canada supplies 16 percent of American demand of steel versus China's 2 percent.
Canada, which is the largest steel exporter to the US followed by Brazil and South Korea, said on Thursday that it will retaliate against any US tariffs on steel and aluminum product.
"Should restrictions be imposed on Canadian steel and aluminum products, Canada will take responsive measures to defend its trade interests and workers," Foreign Minister Chrystia Freeland said in a statement, adding that any restrictions against Canadian steel imports would be "absolutely unacceptable."
Brazil's industry ministry said the country would consider taking action on its own over Trump’s decision or in collaboration with other countries.
The German Steel Association meanwhile said the US plan of imposing tariffs violates the rules of the World Trade Organization.