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US President Donald Trump, in a meeting at the White House on February 27, 2018, ordered the imposition of stiff and strict tariffs on the importation of steel and aluminum. The move, seen as a hallmark of keeping his campaign promises is bound to have numerous effects the world over. In its wake, the imposition of tariffs is expected to rattle the stock markets and cause trade wars between the US and several of its trade allies, especially in the European and Asian regions (Swanson, 2018; Jacobs & Deaux, 2018).
In my opinion, the imposition of such tariffs should be handled with a softer approach. President Trump should initiate discussions and negotiations with the US trade partners and strike a deal rather than suddenly bombard them with such news.
The announcement to impose a 25% tariff on steel and 10% on aluminum imports, despite the expected wrangles, will have a few winners. First is the US steel makers, who in spite of a rising demand, have not been able to meet the demand, resulting in the importation of more steel. A second category is the factory workers in steel and aluminum manufacturing plants. This category of beneficiaries may find more and better jobs.
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The losers in this announcement include the United States’ trade partners who have been importing steel and aluminum. This list includes Brazil, China, Mexico, and Canada. Asian steel makers have been having a rough time over the past few years, and this announcement is bound to add to their operational and financial woes. A third loser in the development is the relationships that the US has built for a long time, which may end once the tariffs are put in place. In addition, the US steel and aluminum secondary users may get losses on the high costs of importations if the local producers cannot meet the demands.
References
Jacobs, J., & Deaux, J. (2018, March 1). Trump Expected to Announce Stiff Steel, Aluminum Tariffs. Retrieved from Bloomberg – Politics: https://www.bloomberg.com/news/articles/2018-03-01/trump-is-said-to-likely-impose-stiff-steel-aluminum-tariffs
Swanson, A. (2018, March 1). Trump to Impose Sweeping Steel and Aluminum Tariffs. Retrieved from The New York Times: https://www.nytimes.com/2018/03/01/business/trump-tariffs.html
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