President Donald Trump signed proclamations March 1 imposing tariffs on steel and aluminum, which he said he is doing to help protect American industries. A 25 percent tariff was placed on steel while a 10 percent tariff was placed on aluminum.
“Today I am defending America’s national security by placing tariffs on foreign imports of steel and aluminum,” Trump said at the meeting where he signed the proclamations.
Trump said Canada and Mexico were exempt from the tariffs as a “special case.”
Brian Peck, an expert in trade agreements at University of Southern California, said he disagrees the tariffs will protect American industries. Peck said because Trump has already exempted steel and aluminum imports from Canada and Mexico and might exempt other additional countries, it devalues what these tariffs may provide.
“The Trump administration argues that the volume of these imports is a threat to national security because it is weakening United States steel and aluminum manufacturing companies to a point that they could not supply our military needs in a time of war,” Peck said. “Although these tariffs may offer some relief to the U.S. steel and aluminum manufacturers, it lessens that relief because he already exempted imports from Canada, which is our largest source.”
Peck said these tariffs will affect regular consumers, not just the military.
“The tariff on aluminum will raise the production costs for productions such as beverage cans, autos, appliances and so on, which will impact all consumers of these and other products that use aluminum,” Peck said. “In addition, manufacturers of products that use aluminum are also affected with higher costs, which will make their products more expensive and less competitive.”
Peck said the tariff on steel has the same effect as aluminum.
“The tax on steel increases the cost of production for products like autos and appliances,” Peck said. “It also is raising the cost of infrastructure projects.”
Peck said he is worried that because of the tariff, a trade war is at risk. He said the European Union has already threatened retaliation.
“I do think a potential trade war is in works depending on the final decision of which countries will be impacted,” Peck said. “The threat from the EU has already drawn a reaction from President Trump that could further escalate trade tensions and make a trade war more likely.”
Jeffrey Nugent, an economics professor at USC, also said he also fears this tariff could spark a trade war internationally.
“Increasing the tax on both aluminum and steel is a very bad thing,” Nugent said. “I believe that this is more than likely going to trigger retaliation from other countries.”
Nugent said if a trade war does happen, it would severely hurt U.S. exports, manufacturers and workers. He believes the way Trump has handled these tariffs is putting American industries in danger, and Trump should have done it a completely different way.
“A much better approach would be to get away from the tax cuts and begin to reduce the large and rising U.S. fiscal and balance of payments deficit,” Nugent said. “This would be reducing the need for financing by China.”
John Copper, an international studies professor at Rhodes College, said he believes the tariffs will actually help American industries and is not worried about a trade war.
“A trade war has been in progress for some time that we have been losing,” Copper said. “The U.S. is in fast decline. Europe is worse, Russia and Japan also. The global trade system is unsustainable. Perhaps Trump can fix it, perhaps not.”
