Trump announced after a long going debate that next week he hopes to impose a 25% tariff on steel imports and a 10% tariff on aluminum to boost these struggling domestic industries. This article conveys that this will most likely strain our relationships with steel-producing US allies, and potentially create a trade war with other countries. There is talk of exempting our trade allies from the tariffs, but it has not been determined whether this will be a caveat of the policy. Trumps announcement took a huge toll on the stock market. The Dow took a 500-point dip. There is also concern that this policy will lead to increased consumer prices for products that are made with manufacturing of steel and aluminum as well as lost jobs. It will be interesting to see to what extent and repercussions this policy will have on our relationships with other countries and if the benefits will outweigh the costs.
6 comments:
Before this announcement came out, I had not realized that the President had the authority to impose tariffs with no oversight from Congress or any other supporting institution. I understand the US's tradition of (trying to)keep the government out of the economy, but I really think that there should be some governmental oversight, since, if the administration follows through with these, the only legal authority that can alter it would be the Supreme court (although it's not really a domestic issue and I think it would be unlikely to be taken up there), or the WTO.
I think the effect this statement had on the Dow is very interesting. I think this is a perfect example of expectations for the future and how it effects demand. However I feel like this claim from Trump will not actually happen along with many of the claims he has made and will continue to make. I think the class discussion was very interesting regarding this and especially how if implemented the price of beer could increase.
I think it would only benefit the domestic steel and aluminum industries because the imported steel and aluminum's prices would increase so that the supply would decrease. However, for those industries in the US that needs steel or aluminum as the input would be suffered since the costs of materials would increase and eventually, customers have to pay the extra price for the same good. I don't know if this is a good policy to the US overall or it would actually harm the other US industries.
If these tariffs go through, it may increase jobs available but there will be many jobs lost also. Not to mention the price of goods such as soda, beer and even food packaging aluminum containers will go up. By imposing these tariffs Trump would put a change in motion and only time will tell if it proves to be beneficial.
If this goes through, I will be surprised. I continue to be surprised at how lackadaisical policy suggestions from this administration are - apparently no one from the State or Treasury Departments were informed of these changes before President Trump announced them.
I think this was an interesting article considering the Trump administration imposed Tariffs on aluminum and steel. In my opinion, this is more likely to engage countries that are trading with the United States in "tariff wars"
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