What happened to the market after the United States imposed a 30% tax on steel in 2002?

Plummeted! S & P 500 dropped 30% in the year after the tariff decision was announced, the dollar devalued sharply, and the price of the U.S. debt soared.Trump will be on steel and aluminum heavy tax news let the market into turmoil, why investors are afraid of a trade war? Maybe we can find answers from history.The last time the United States made such a big move on tariffs goes back to 2002 when the United States President George W. Bush announced on March 5 that it would apply 8% to 30% of most steel imported from Europe, Asia and South America. The import tariff, the period is 3 years. It claimed that this move was aimed at protecting the domestic steel industry from the impact of foreign steel imports.

Since 1998, U.S. domestic steel companies have been lobbying the government for action. In its view, the cheap steel imported from overseas has had a serious impact. As a result, more than 30 steelmakers in the United States went bankrupt.This decision triggered an uproar and was widely condemned by the international community. The EU complained to the WTO and adopted retaliatory protection measures. Japan, South Korea, the Communist Party of China and Brazil subsequently joined the wave of protests.

In November 2003, the WTO finally ruled that the U.S. steel tariff measures violated the WTO trade principle. It said the measure was not implemented during an import surge and even a slight decline occurred in the U.S. steel import in 2001 and 2002.At the same time, the WTO also imposed a huge amount of 2 billion U.S. dollars in tickets to the United States, which was the largest ever punishment ever imposed by the WTO on member states. President Bush announced the lifting of the iron and steel tariffs on December 3.

In the year when the tariff measures were implemented, the global market was severely put under pressure. The S & P 500 plummeted by 30%. The dollar tumbled simultaneously. The yield of the U.S. Treasury fell sharply, corresponding to the soaring U.S. bond prices.

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