US President Donald Trump signed a proclamation that will raise tariffs on derivative steel and aluminium imports to cover nails, staples and other downstream products, while studies show that tariffs have hurt the American manufacturing sector and the overall economy, according to report on Sunday.

President Trump said in a proclamation, “I have concluded that it is necessary and appropriate in light of our national security interests to adjust the tariffs imposed by previous proclamations to apply to the derivatives of aluminium articles and steel articles,”

“Foreign producers of these derivative articles have increased shipments of such articles to the US to circumvent,” the existing duties on steel and aluminium imports, threatening to undermine the administration’s actions to address the national security risks, the president further added.

The Trump administration will raise tariffs on imports of derivative steel products by an additional 25 per cent and increases tariffs on imported derivative aluminium products by an additional 10 per cent starting February 8, according to the proclamation.

Last year, in September, the US had imposed fresh tariffs on $112 billion worth of Chinese imported goods, marking a sharp escalation of the bruising trade war between the world’s two largest economies.

Argentina, Australia, Brazil, Canada, Mexico and South Korea are exempt from the additional tariffs on derivative steel products, while Argentina, Australia, Canada and Mexico are exempt from the additional duties on derivative aluminium products, the proclamation said.

Tensions further escalated between the two largest economies after the US said last month that it would increase the tariff rates on all Chinese goods, which included raising a 25 per cent tax on $250 billion of Chinese imports to 30 per cent.

Many economists and business leaders have warned that the Section 232 tariffs on steel and aluminium imports would harm the US economy overall, including workers in other manufacturing sectors that use steel and aluminium.

Higher costs from steel and aluminium tariffs, quotas and associated retaliation by trading partners would reduce US GDP by 0.2 per cent annually, according to a research by Trade Partnership Worldwide, LLC, an international trade and economic consulting firm.

“We find that tariff increases enacted in 2018 are associated with relative reductions in manufacturing employment and relative increases in producer prices,” Fed economists Aaron Flaaen and Justin Pierce wrote in the study released last month.

The dispute between the world’s two biggest economies in July 2018 boiled over into tariffs on hundreds of billions of dollars’ worth of each other’s goods and threatens to engulf all trade between the countries, putting global growth at risk.

Donald Trump launched the trade war as part of his “America First” bid to lower a wide trade deficit with China, but the tariffs imposed thus far have barely made a dent in that gap.

(With inputs from agency)