President Donald Trump imposed a tariff on steel and aluminum on March 8th. It taxes aluminum from foreign trade 10% and steel 25% in, to quote Trump “in a very loving way.”
Now some workers will be overjoyed. The idea of the foreign market being less of a threat can be a relief. Especially as over the past five years mills have had to lay off workers in droves or even shut down altogether for periods of time. This hope for rebuilding the industry is why Trump had multiple workers at the signing. He cited that steel workers were the “backbone of the economy” and their influence in him being elected. Ohio should benefit as we employ 11,400 people in our steel industry alone, right?
Well, there’s a flip-side to this. 410,300 people are employed in industries that utilize these metals and thus will be hurt by the tariff being imposed in 15 days. Ohio is one of the four states in the rust belt, the heart of automotive production. The cost of production will go up and that will affect labor and stocks of production companies.
The tariffs of course are to deter the use of foreign raw materials as it hurts labor in the country. Yet, there is also the implications of the automotive industry. Ohio is part of this industry with Michigan, Indiana, and Pennsylvania, accounting for 20% of the United States’ imports.
There is also the implications of other trades. it is not simply a one way street. It is a five-way stop with four lanes on each path sort of mess. What countries will we exempt? What will be the response to our biggest trade allies? Will Canada and Mexico remain exempt?
Politicians on both sides speak opposed and economists see the faults as this will cause a raise in prices involving these materials. We could easily produce all of our steel, but the cost would cause a hike in goods. Hence why trade was even on the table. What comes next?
A trade war.