Trump is getting ready to fire the first shot of a trade war

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• President Donald Trump is reportedly set to announce tariffs on imports of steel and aluminum as soon as Thursday.
• The move is a concrete step toward the more protectionist trade policy that the president promised, and will likely prompt retaliation from other countries including China.
• Increased trade protectionism, and possible retaliatory measures could increase the fears of a broader trade war.

President Donald Trump is reportedly set to announce new tariffs on imports of steel and aluminum on Thursday, a move that could trigger serious economic repercussions.

"Our Steel and Aluminum industries (and many others) have been decimated by decades of unfair trade and bad policy with countries from around the world," Trump tweeted Thursday morning. "We must not let our country, companies and workers be taken advantage of any longer. We want free, fair and SMART TRADE!"

The tweet came after multiple reports that Trump was planning to impose new restrictions on steel and aluminum imports, the result of a months-long investigation by the Department of Commerce.

Bloomberg's Jennifer Jacobs and Joe Deaux reported late Wednesday that the president told aides he wants tariffs, or a tax on imports, of 25% for steel and 10% for aluminum. There could be exceptions for certain countries, according to the report.

These figures would be higher than the 24% tariff on steel and 7% tariff on aluminum that the Commerce Department recommended on February 16. Previous reports indicated Trump was leaning towards 25% on steel because it is a "round number."

The decision was set off by a Section 232 investigation, a move which allows the Commerce Department to evaluate the national security risks of certain imports and recommend trade restrictions.

Additionally, according to the Wall Street Journal's Jacob Schlesinger, the Trump administration had requested that steel and aluminum executives come to the White House on short notice for a meeting.

The move is likely to trigger retaliation from other countries. China is already looking into restrictions on US exports of sorghum and soybeans, both of which are important crops for American farmers. Additionally, the European Union was said to be mulling tariffs on US agricultural products like cheese and bourbon.

In the worst case, a cycle of ever-more protectionist trade policies in response to other countries' moves could result in a trade war, an eventuality that trade officials such as World Trade Organization Director General Roberto Azevedo have been warning against.

Economists worry the increased trade protections could result in the downstream prices of many goods that use steel and aluminum to increase, leading to inflationary pressures in the US economy.

For instance, beer producers warned after the Commerce Department's recommendations that an aluminum tariff could drive up the cost of beer cans and lead to possible price jumps.

While these price jumps could be limited to a few sectors or goods, the possibility of increased protectionist activity from Trump and retaliatory measures by other countries poses a greater problem for the US economy. With investors and economists already keeping a close eye on inflation and the Federal Reserve's reaction to price increases, Trump's move could also spark concerns of a broader economic slowdown.