There is a word that sent the world’s markets into a skid…..and that word is tariffs…..and our president pulled the “T” word……
President Trump announced new tariffs on imports of steel and aluminum—25% and 10% respectively—on Thursday, leading some experts to fear a global trade war, the New York Times reports. “Our Steel and Aluminum industries … 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.” Experts say the tariffs could lead to retaliation from other countries (China is talking about tariffs on US sorghum and soybeans and the EU is considering tariffs on US cheese and bourbon), higher prices on goods using steel and aluminum, and possibly an economic slowdown. Nervous investors sent the Dow plunging 500 points immediately after the news broke, reports the AP.
According to Business Insider, the Commerce Department recommended tariffs of 24% and 7%, but it was reported Trump preferred a “round number.” The Times describes a “frenetic and chaotic morning” leading to Trump’s announcement. White House advisers have bitterly debated tariffs for months, and Trump decided only Wednesday to announce them, CNN reports. White House aides were still discussing if the tariffs will apply to all countries or just a handful as of Thursday morning, and a White House official says the policy is not ready to be implemented yet. Advisers were still debating Thursday morning if Trump could announce anything. “Maybe he wants to make an announcement, but the proclamation isn’t ready,” one White House official says. “Without the proclamation, nothing has legal force.” Despite announcing the tariffs Thursday, Trump said he won’t sign the trade measures until next week. At this point, the specifics of those measures are unclear.
Now that the word has been used can Trump make good on his threat?
The Heritage Foundation had a bit to say on this…….
This month, at least four major trade cases will cross President Donald Trump’s desk: (1) a Section 201 (of the 1974 Trade Act) case on solar panels and modules, (2) a Section 201 case on large residential washers, (3) a Section 232 (of the 1962 Trade Expansion Act) case on steel, and (4) a Section 232 case on aluminum. These cases seek to restrict imports from all countries, minus a few exceptions, as a safeguard against alleged unfair competition under Section 201, and on the basis of national security under Section 232.
While the four cases involve different products and sectors of the economy, they have a few simple things in common. First, the domestic industries lobbying the government in each case are trying to use the political process to overcome setbacks in the economic marketplace. Second, the remedies being sought have the potential to cause serious damage to other firms or sectors of the U.S. economy. Finally, any actions taken by the government will increase the prices of the products in question in America.
President Trump’s announcement that he plans to impose a 25% tariff on steel imports and 10% on aluminum is reverberating not just in the US but around the world in the form of jittery stock markets and worries about a trade war. A look at what’s going on:
- Beer, autos: In theory, the move could make things such as beer, autos, and even baseball bats—essentially, anything made with the metals—more expensive, reports CNN. But as the Upshot blog of the New York Times explains, how much of a price increase is unclear. “If your favorite beer producers are looking at paying an extra fraction of a cent for each aluminum can, they might just take on the cost themselves, they might raise prices, or they might split the difference.”
- Biggest suppliers: Brazil, Canada, and South Korea supplied the most steel to the US last year, while Canada, Russia, and the United Arab Emirates were the leaders in aluminum in 2016, per CNBC. One economist warned of “surgical strikes” in retaliation, meaning counter-tariffs on specific products.
Will Congress intercede or will they what cowards do….run and hide behind the petticoats of the president? Or will the mamby pamby Trump change his mind…..you know like he has on immigration and guns….