Question

President Trump has raised tariffs on steel and aluminum imported into the United States. Answer both of the following:

1) What exporting countries are affected and how large are the tariffs?

2) What are the consequences for US industries and consumers? Note any differences among them in how they are affected.

Answer 1

1) Exported countries are negatively affected by this, beacuse the producers in US will prefer domestic steel and aluminium over the imported one, as that will be cheaper. The worse affected exporter will be China, as majority of steel and aluminium imported to US is from China.

The tarrif is 25% on steel and 10% on aluminium.

2) Effect on industries-

• This news caused a plunge in stock market, which indirectly affects the industry negatively.
• Also, high tarrifs in certain sectors leads to lower investors in the area, as their biggest concern is profitability.
• Domestic steel and aluminium manufacturers are winners as their pricing will be more competitive compared to imports, and hence, will have a greater demand. However, other domestic industries might not be very happy with the tarrifs.

Effect on consumers-

• Consumers using imported products, especially from EU, Canada, Mexico might lose beacuse of high prices of such goods, which is a result of retailiatory tarrifs by such countries.This includes whiskey, motorcycles, makeup etc.