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SANTA MARIA DEGLI ANGELI (ASSISI), ITALY - 11 JUNE 2018: A worker reapairs a steel pipe with a grinder at the IRON S.p.A. factory, a publicly traded company that makes industrial steel parts, in Santa Maria degli Angeli (Assisi), Italy, on June 11th 2018.

President Donald Trump’s administration plans to impose tariffs on European steel and aluminum imports after failing to win concessions from the European Union, a move that could provoke retaliatory tariffs and inflame trans-Atlantic trade tensions. Until the moment that the American president rendered his decision, Mr. Capponi, the commercial director of IRON spa, was confident the continent would be spared.
Given that IRON is a purchaser of steel, the company might benefit from the American tariffs. Steel now shipped to the United States from mills within Europe might stay here to avoid the tariffs, raising the supply and dropping prices. Chinese producers who export to American shores could divert their product to Europe, amplifying this trend.
But Mr. Capponi was banking on none of this. Even if steel prices decline, his customers are likely to squeeze him for lower prices. More broadly, the American tariffs — justified by the Trump administration as a supposed defense of national security — reverberated as a blow against world trade.

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©2018 Gianni Cipriano
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20180611_NYT_Trade
SANTA MARIA DEGLI ANGELI (ASSISI), ITALY - 11 JUNE 2018: A worker reapairs a steel pipe with a grinder at the IRON S.p.A. factory, a publicly traded company that makes industrial steel parts, in Santa Maria degli Angeli (Assisi), Italy, on June 11th 2018.<br /> <br /> President Donald Trump’s administration plans to impose tariffs on European steel and aluminum imports after failing to win concessions from the European Union, a move that could provoke retaliatory tariffs and inflame trans-Atlantic trade tensions. Until the moment that the American president rendered his decision, Mr. Capponi, the commercial director of IRON spa, was confident the continent would be spared.<br /> Given that IRON is a purchaser of steel, the company might benefit from the American tariffs. Steel now shipped to the United States from mills within Europe might stay here to avoid the tariffs, raising the supply and dropping prices. Chinese producers who export to American shores could divert their product to Europe, amplifying this trend.<br /> But Mr. Capponi was banking on none of this. Even if steel prices decline, his customers are likely to squeeze him for lower prices. More broadly, the American tariffs — justified by the Trump administration as a supposed defense of national security — reverberated as a blow against world trade.