President Trump Thursday imposed tariffs on imported steel and aluminum from the European Union, Canada and Mexico, triggering immediate retaliation from U.S. allies against American businesses and farmers.
The tariffs — 25 percent on steel and 10 percent on aluminum — take effect at midnight Thursday, marking a major escalation of the trade war between the U.S. and its top trading partners.
“It’s more than highly unusual. It’s unprecedented to have gone after so many U.S. allies and trading partners, alienating them, and forcing them to retaliate,” said economist Douglas Irwin, author of a history of U.S. trade policy since 1763. “It’s hard to see how the U.S. is going to come out well from this whole exercise.”
In response, the E.U. said it would impose duties “on a number of imports from the United States,” referring to a 10-page list of targets for retaliation it published in March, which included Kentucky bourbon and Harley-Davidson motorcycles. European leaders also vowed to proceed with a complaint to the World Trade Organization.
“This is protectionism, pure and simple,” said Jean-Claude Juncker, president of the European Commission.
The Mexican government said it would levy import taxes on U.S. exports of pork bellies, apples, cranberries, grapes, certain cheeses, and various types of steel. And Canada levied a surtax on $16.6 billion of American steel, aluminum and other products, as Prime Minister Justin Trudeau pronounced Trump’s claim to be protecting national security an “affront” to Canadians who fought alongside American GIs from World War II to Afghanistan.
So US manufacturers are now scrambling on supply chain issues, because suddenly aluminum and steel just got considerably more expensive, and every cent of those costs are going to be passed along to US consumers. The real issue though will be the tens, if not hundreds of thousands of jobs lost as a direct result of this.
Donald Trump’s long-standing promise to use import tariffs to try to revive the US steel and aluminum industry was opposed by US economists, labor experts, and even the industries themselves—but the White House did it anyway. As a result, over 146,000 Americans will lose their jobs, economists estimate.
Tariffs might protect some jobs in the US steel industry, but far fewer than the number of jobs that will be lost. That’s because steel manufacturers in the US employ far fewer people than industries that make things out of imported steel, like automakers. Just over 400,000 people in the US work in metal-producing jobs, economist Jed Kolko wrote in March. Four and a half million work in jobs that depend on metal.
Employers in the other industries are going to have to pay more for materials, making their products costlier and less competitive. This will force them to cut jobs, economists and industry officials say. Hurting US manufacturers even further, the countries hit by the tariffs will also tax imported US products.
Republicans in Congress called the tariffs “dumb” and “damaging” after the White House announcement, and a US retail industry trade group said they “will raise the cost of doing business for thousands of American companies, including retailers, and will stifle efforts to expand and create jobs.”
The Trade Partnership, a economic consulting group, estimated in March that five US jobs will be lost for every one saved by the proposed tariffs, or about 146,000 jobs in total. That estimate assumed the US’s partners in the North Atlantic Free Trade Agreement, Mexico and Canada, would be exempted from the tariffs.
146,000 jobs lost will be bad enough, but since our largest steel and aluminum importing partner is, you know, Canada, expect those job losses to be much, much higher.
It's going to be bad, folks. And Trump's petty transactional mindset is going to harm millions of Americans. You're not going to want to be a red state Republican in about five months, guys.
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