At the beginning of March, President Donald Trump announced new tariffs on steel and aluminum. Countries importing these goods to the United States would pay a 25 percent tariff on steel and 10 percent on aluminum. Trump said the tariffs are necessary to protect American industry. However, economists and historians disagree, saying that they will actually end up hurting America more than helping it.
Trump wants tariffs on foreign steel and aluminum. But will this actually hurt the American economy?
The idea behind imposing these high tariffs is to protect American steel and aluminum production.
Trump mentioned raising tariffs during the campaign as part of his “America first” economic policy. The logic is that, by imposing tariffs — or taxes — on foreign imports, American businesses are more likely to use American-made steel and aluminum instead. However, American production in these metals is low compared to the foreign competition. In fact, the steel industry employs around 140,000 people while steel-consuming industries employ 6.5 million. Based on volume alone, American steel production can’t meet the demand for what American businesses need. And forcing companies to pay a steep tariff to import won’t help the economy at all.
If American companies are forced to pay more for raw materials, that cost will certainly be passed down to the consumer. This will ultimately result in a higher cost to purchase goods. Consumers will likely buy less as a result. And companies will be incentivized to lay off workers to offset the cost. All of this actually ends up harming American business, rather than protecting it.
Steel workers could be the hardest hit by the increased tariffs
But all of this isn’t just theory or conjecture. We have already seen the negative impacts of increased tariffs on steel.
President George W. Bush enacted import tariffs in 2002. And an independent study from Trade Partnership Worldwide found that higher steel prices cost 200,000 jobs and total lost wages were about $5.5 billion in today’s dollars. That’s a huge economic impact, just like Trump is boasting…but not in the way he has predicted.
Additionally, this situation could be exacerbated as foreign governments impose their own tariffs on American goods in retaliation. The European Union has compiled a list of U.S. products that would receive additional import taxes, including bourbon and Harley Davidson motorcycles. All told, this would amount to a 25 percent tariff on $3.5 billion of goods. This would dissuade EU countries from purchasing American products — further worsening the economic situation. If American companies are making less money, they will have less capital to hire and pay employees. This could result in massive layoffs.
[shortcode-4-AnyClip-Videoplayer]
With the United States and Europe considering tariffs on imports, this situation echoes of a trade war that took place in the 1930s, just before the Great Depression hit.
The Tariff Act of 1930, also known as the Smoot-Hawley Tariff after the bill’s co-sponsors, increased nearly 900 import taxes. In response, nations around the world also hiked their tariffs. This resulted in a trade war that was a contributing factor in worsening the Great Depression.
The World Trade Organization was founded in part to prevent another trade war from happening. The goal of the WTO is to promote and facilitate global trade. Part of the agreement in its founding was that all of the participating countries would lower or remove their tariffs to allow more free trade. Today, the WTO serves as a governing body to work out trade disputes between countries and prevent unnecessary tariff hikes. Trump’s steel and aluminum tariffs were unilaterally enacted by the United States and forces the rest of the world to respond.
Overall, Trump’s reasoning behind imposing new steel and aluminum tariffs doesn’t match up with the economic realities. His goal is to promote and support American business, but these tariffs will only ultimately end up harming it.
string(6369) "
At the beginning of March, President Donald Trump announced new tariffs on steel and aluminum. Countries importing these goods to the United States would pay a 25 percent tariff on steel and 10 percent on aluminum. Trump said the tariffs are necessary to protect American industry. However, economists and historians disagree, saying that they will actually end up hurting America more than helping it.
Trump wants tariffs on foreign steel and aluminum. But will this actually hurt the American economy?
The idea behind imposing these high tariffs is to protect American steel and aluminum production.
Trump mentioned raising tariffs during the campaign as part of his "America first" economic policy. The logic is that, by imposing tariffs — or taxes — on foreign imports, American businesses are more likely to use American-made steel and aluminum instead. However, American production in these metals is low compared to the foreign competition. In fact, the steel industry employs around 140,000 people while steel-consuming industries employ 6.5 million. Based on volume alone, American steel production can't meet the demand for what American businesses need. And forcing companies to pay a steep tariff to import won't help the economy at all.
If American companies are forced to pay more for raw materials, that cost will certainly be passed down to the consumer. This will ultimately result in a higher cost to purchase goods. Consumers will likely buy less as a result. And companies will be incentivized to lay off workers to offset the cost. All of this actually ends up harming American business, rather than protecting it.
Steel workers could be the hardest hit by the increased tariffs
But all of this isn't just theory or conjecture. We have already seen the negative impacts of increased tariffs on steel.
President George W. Bush enacted import tariffs in 2002. And an independent study from Trade Partnership Worldwide found that higher steel prices cost 200,000 jobs and total lost wages were about $5.5 billion in today's dollars. That's a huge economic impact, just like Trump is boasting…but not in the way he has predicted.
Additionally, this situation could be exacerbated as foreign governments impose their own tariffs on American goods in retaliation. The European Union has compiled a list of U.S. products that would receive additional import taxes, including bourbon and Harley Davidson motorcycles. All told, this would amount to a 25 percent tariff on $3.5 billion of goods. This would dissuade EU countries from purchasing American products — further worsening the economic situation. If American companies are making less money, they will have less capital to hire and pay employees. This could result in massive layoffs.
[shortcode-4-AnyClip-Videoplayer]
With the United States and Europe considering tariffs on imports, this situation echoes of a trade war that took place in the 1930s, just before the Great Depression hit.
The Tariff Act of 1930, also known as the Smoot-Hawley Tariff after the bill's co-sponsors, increased nearly 900 import taxes. In response, nations around the world also hiked their tariffs. This resulted in a trade war that was a contributing factor in worsening the Great Depression.
The World Trade Organization was founded in part to prevent another trade war from happening. The goal of the WTO is to promote and facilitate global trade. Part of the agreement in its founding was that all of the participating countries would lower or remove their tariffs to allow more free trade. Today, the WTO serves as a governing body to work out trade disputes between countries and prevent unnecessary tariff hikes. Trump's steel and aluminum tariffs were unilaterally enacted by the United States and forces the rest of the world to respond.
Overall, Trump's reasoning behind imposing new steel and aluminum tariffs doesn't match up with the economic realities. His goal is to promote and support American business, but these tariffs will only ultimately end up harming it.
Sinking funds are a smart way to stay on track with your savings goals This article includes affiliate links. We may earn a commission if you make a purchase, with no extra cost to you. I make a lot of promises to myself. Sometimes, the promise is that I’ll wake up and go to the
You can get news updates from plenty of sources, but there’s a reason millions of people turn straight to Trevor Noah. The political commentator also serves as a producer, comedian, writer, actor, and television host. He’s been in the entertainment game since 2002! Things took a positive turn for him in 2015 when he became
By Massimo Tornambe Scott Disick, aka “Lord Disick” has gained fame and a devoted following since his appearances on the reality show, Keeping Up with the Kardashians. Disick is renowned for his expensive taste in clothes, cars, and women. The question that millions of fans are asking is: where did his fortune come from? Scott
via TikTok/@ElysiaBerman + Kasjan Farbisz from Pixabay
The ugliest thing about credit card debt is that it’s plaguing millions of Americans all across the country. Hang-on, hang-on before you despair — it’s possible to pay off credit card debt by simply avoiding certain purchases that you’d normally give in to without a thought. The latest social media trend that encourages people to
Nara Smith, Lucky Blue Smith, and daughter Rumble Honey
Matthew Brookes / Oliver Peoples
Imagine this: you marry the man of your dreams. You have two beautiful children with another on the way. You spend your days cooking gorgeous, nutritious meals for your family…. from scratch. You get paid to share your daily life and meals with people around the world. But here’s the catch: half of those people
Why You Need Cometeer Coffee: Coffee You Can Take on the Go
via Cometeer Coffee
This article includes affiliate links. We may earn a commission if you make a purchase, with no extra cost to you. There’s an internet trend that says that everyone has three drinks: one for energy, one for hydration, and one for fun. Hydration drinks are usually seltzer, a sports drink, or good old-fashioned
Most parents welcome visits from their grown-up children. But what happens when the kids head back home when life gets rough and then never leave? This scenario is playing out more and more frequently as 20-something adults try to cope with – or hide from – skyrocketing costs in an increasingly expensive world. Lou Carloza
Kim Kardashian is arguably the most famous woman on the face of the earth. Whether you love her or hate her, there’s no denying the significant imprint she’s left on our culture. While many celebrities shine bright and then burn out, Kim K elbowed her way to superstardom in 2007, when Keeping up with The
You Lose $20K Each Year Just For Being a Mom You may not know this, but there was a time when smoking was considered “liberated” behavior for women. There was a cigarette company Virginia Slims that was created specifically to attract female smokers during the bad old 1970s. The slogan was “You’ve come a long
Experts agree: it’s time to clean your workspace for your most creative era yet Spring cleaning is overrated. In the Spring, I want to go-go-go! Not get bogged down in the minutiae of tidying. But once I get started, I’m one of those people who can’t stop decluttering. So I carve out designated days for
Trump wants tariffs on foreign steel and aluminum. But will this actually hurt the American economy? 
Steel workers could be the hardest hit by the increased tariffs
