Donald Trump
US President Donald Trump and Australia's Prime Minister Malcolm Turnbull as the President of the World Bank Group Jim Yong Kim (R) looks on after the family picture on the first day of the G20 leaders summit in Hamburg, Germany, July 7, 2017. Reuters/Ludovic Marin/Pool

US President Donald Trump has announced tariffs on steel and aluminium imports. Now, the Australian share market has reportedly taken a hit.

The Australian share market suffered one percent falls on Wall Street overnight. The news comes amid fears of a trade war after the US leader’s announcement of import tariffs on steel and aluminium.

The benchmark S&P/ASX200 index has been down 0.74 percent at 5,929.3 points. Following the third day of over one percent drops on US indices, the local market is seen trading under pressure.

Stocks declines worsened amid concerns of a possible trade war following the announcement, with the Dow Jones Industrial Average falling1.68 percent. The S&P 500 lost 1.33 percent.

BlueScope, the biggest steelmaker in Australia, was up one percent at $16.325. Its US operations were in line to benefit from the proposed 25 percent tariff on steel.

During a meeting of US industry officials at the White House, the POTUS announced that he will require tariffs of 25 percent on steel imports as well as 10 percent on imported aluminium. He made a promise to rebuild US steel and aluminium industries, which he believes have been unfairly treated by other nations for decades.

Trump took to Twitter to say that American steel and aluminium industries, along with many others, have been decimated by decades of bad policy and unfair trade. “We must not let our country, companies and workers be taken advantage of any longer - We want free, fair and SMART TRADE!” he added.

Trumps’ promise could possibly mean that the Australian steel and aluminium exports to the United States would be at risk. A report by The Australian states that over $170 million of Australian steel and aluminium exports could be at stake. These exports are primarily through BlueScope Steel. The Melbourne-based company is the only exporter of Australian steel to the US.

There were fears that the move may increase tensions with China. The US and China are the largest investment and trading partners with Australia.

Chinese President Xi Jinping's top economic adviser Liu He was reportedly in Washington for trade talks. Steelmaking and aluminium producers have put pressure on the president to "level the playing field" against foreigners, the Financial Review reports.

American steelmakers have lost three-quarters of their jobs between 1962 and 2005. Based on a study by the American Economic Association, much of this had been a result of an improved production technology.

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