Trump's Tariff War: Metal Edition
"...a lot of cost, and a lot of chaos," says Ford Motor CEO Jim Farley.
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Trump’s New Tariffs
Tariffs are taxes that a government places on imported products. On February 10th, Trump placed 25% tariffs on all steel and aluminum coming into the U.S. from other countries. The companies bringing in the steel and aluminum will pay taxes to the government, meaning they are actually paying more for the materials than they did last week.
Why Did Trump Do This?*
As he signed the executive orders, Trump repeated that if companies purchase American-made steel and aluminum, they would not have to pay any tariff. The logical conclusion is that Trump is trying to get companies to buy from American manufacturers. Of course, logic (and reality) plays far too small a role in Trump’s head. Let’s break it down, turning to Trump’s own words.
“This is the beginning of making America rich again.”
UNLIKELY. A mere two days later, the Labor Department reported an unexpected growth in US inflation. The tariffs threaten to raise prices even more. Meanwhile, we’re still waiting for egg prices to drop….
“These foreign companies will move to the United States, will make their steel and aluminum in the United States.”
DUBIOUS. Guess how long it takes for a company to build a steel or aluminum manufacturing plant in the U.S. A day, a week, a month? Nah, not even close. Try several years.
“All you have to do is make it in the United States. We don’t need it from another country.”
FALSE. The vast majority of American manufacturers use steel to produce goods - they don’t make steel itself. So about that American-made steel…
“As an example, Canada. If we make it in the United States, we don’t need it to be made in Canada. We’ll have the jobs. That’s why Canada should be our 51st state.”
BRUH.
Tariff Math
Back in 2018, Trump 1.0 imposed a similar tariff and now claims that it returned 120,000 jobs to the U.S. But even if that is true (we, along with many experts and economists, find that number suspect), tariffs always lead to complicated equations. However, the end result is the same: higher prices for consumers and damage to American manufacturing. This result is due to other countries’ retaliation with their own tariffs (like the European Union placed on Kentucky bourbon and Harley-Davidson in 2018).
Libertarian think tank Competitive Enterprises Institute pointed out the errors in Trump’s tariff equation:
“Even as an election-year stunt to appeal to Pennsylvania and Ohio voters, the math doesn’t add up. There are more people working as manicurists than in the steel and aluminum industries combined.”
CEI stated that tariffs now “make even less sense,” yet here we stand on the brink of a global trade war.
The Bottom Line
Trump promises to impose more tariffs in the near future, but even if only those on aluminum and steel are in effect, you can bet that-
Americans will pay more for new cars, especially those made in the U.S. (But somehow Trump will also “save” the US auto industry?).
Prices will rise on all goods that require steel or aluminum, even if those goods are produced in the U.S.
Workers in industries that use steel and aluminum - like auto parts and machinery - will lose their jobs as their companies’ costs increase.
What can you do?
Spread the word about the tariffs and their impact on social media. Here’s a great post from Congresswoman Jasmine Crockett to get you started!
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Check out other articles in our series Trump 2.0: Even More Scary & Corrupt.
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*This is truly a question for the ages. It’s impossible to know why Trump does anything. Further, most of what he does seems to be because he is an immoral, vindictive asshole.