1. Trump’s Bad Decision on Steel & Aluminum Tariffs
2. Tax Cuts Gaining Popularity Despite Great Media Lie
3. What Americans Are Doing With Their Tax Cut Windfall
Trump’s Bad Decision on Steel & Aluminum Tariffs
The White House announced late last week that President Trump will enact new protectionist tariffs of 25% on imported steel and 10% on aluminum. This move set off fears of a new trade war as foreign trading partners most affected by the new tariffs are expected to retaliate with new tariffs of their own that will hurt US industries.
Protectionist trade policies have rarely worked as intended and have numerous unintended consequences. Tariffs on imports, in this case steel and aluminum, almost always result in higher prices to American consumers, as will be the case this time around. Thus, this is a bad decision by President Trump.
Criticism of Trump’s latest tariff decision has been widespread on both sides of the political aisle and across the media. President Trump says his decision was predicated on the need to protect American jobs and bolster national security. It will do neither!
On the issue of protecting American jobs, here are the only numbers you need to decide where you stand on this tariff issue:
The steel-making industry in the US, which stands to benefit from the new 25% tariff, employs only about 140,000 Americans. The steel-using industries, which will be hurt by the tariff, employ apprx. 6.5 million Americans – this according to The Wall Street Journal in a report out last Thursday. That report argued:
Donald Trump made the biggest policy blunder of his presidency Thursday by announcing that next week he’ll impose tariffs of 25% on imported steel and 10% on aluminum. This tax increase will punish American workers, invite retaliation that will harm U.S. exports, divide his political coalition at home, anger allies
abroad and undermine his tax and regulatory reforms.I couldn’t agree more!
While these new tariffs on steel and aluminum will initially benefit steel and aluminum producing companies in the US by making them temporarily more competitive, the result for all the rest of us who consume products that include steel and aluminum will be higher prices over time.
Since consumer spending accounts for almost 70% of GDP, this will be bad news for consumers and thus bad news for the economy over time. It is reported that numerous high-level advisers in Mr. Trump’s administration urged against the decision. Yet based on his comments over the weekend and on Monday, he appears to be committed to sticking to it.