When Donald Trump campaigned for the presidency, his attacks on foreign trade drew big cheers from crowds. Now he’s taking steps to turn his “fair trade” rhetoric into reality.
On March 1, the president announced that he would be signing an order to impose a 25% tariff on imported steel and a 10% tariff on imported aluminum. His power to do this comes from a federal law that allows tariffs to be imposed on certain goods if the Commerce Secretary determines their importation undermines national security.
Such tariffs may boost domestic manufacturers of steel and tariffs, possibly even leading to a growth in these industries. However, U.S. businesses such as car makers rely on imported steel. They will be forced to pay higher prices for the inputs they need, as will U.S. consumers. Such tariffs could also provoke retaliatory trade barriers from foreign countries.
According to Christine McDaniel, an economist who works for George Mason University’s Mercatus Center, the president is hurting American workers with this action:
“Import taxes on steel and aluminum will raise the prices of those products, which in turn will raise the price of doing business for U.S. manufacturers. There are more people in U.S. manufacturing sectors that rely on steel than there are in the U.S. steel industry. In terms of the economics, the trade-off does not make sense.”
Other observers praised the move. Dave Burritt, president and CEO of U.S. Steel, said, “it's for our employees, to support our customers, and when we get this right it will be great for the United States of America. We have to get this done.”
The affected nations will likely take their case against these tariffs to the World Trade Organization once the president imposes them.
Do you think that President Trump’s tariffs on steel and aluminum will help U.S. industry? Or will workers be hurt because consumers and the industries that rely on imported steel will be paying higher prices?