It came as a great shock last week when President Donald Trump announced new tariffs on steel and aluminum. In the days since, the president has clarified his position many (many) times via Twitter.
“The United States has an $800 Billion Dollar Yearly Trade Deficit because of our “very stupid” trade deals and policies,” Trump tweeted on Saturday. “Our jobs and wealth are being given to other countries that have taken advantage of us for years. They laugh at what fools our leaders have been. No more!”
“We are on the losing side of almost all trade deals,” Trump tweeted on Sunday. “Our friends and enemies have taken advantage of the U.S. for many years. Our Steel and Aluminum industries are dead. Sorry, it’s time for a change! MAKE AMERICA GREAT AGAIN!”
And the pièce de résistance:
“When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win,” Trump tweeted last Friday. “Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!”
Disregarding for a moment the notion that trade wars are good — they’re not — and easy to win — of course they’re not, if they were easy everyone would engage in them all the time, and because everyone wins they’d actually be hard (but we digress) — there is at least some underlying logic in Trump’s reasoning for new tariffs.
Tariffs on foreign goods are always good for domestic manufacturers because it will limit the ability for foreign companies to compete. And even if that wasn’t made clear by the elation of American steel and aluminum producers (who quite literally applauded the president’s decision during a White House meeting last week), the jump in steel and aluminum stock prices is more than herald enough of good times for American metal producers.
That’s where the sound logic ends, more or less.
The administration has touted national security as one of the driving forces behind the increase, and that would make sense if an adversary, say China, was the number one exporter of steel and aluminum to the U.S. But it’s not China, it’s Canada, Brazil and South Korea.
Truly, it will be a dark day when Canada refuses to send steel to the U.S. in a national emergency.
But enough international politics. What about your bottom line, as a college student? How will this affect you?
While steel and aluminum executives put their hands together for Trump’s pro-business, “America first” tariffs, what will the increased cost of metal mean for American workers and businesses who don’t trade on a global scale? Just like anything else, their production costs will go up.
From a locally-owned brewery to a family-owned construction business, more expensive raw materials will affect every facet of the business.
Trump’s cronies are on television trying to convince the American people that a cent and a half increase in the cost of aluminum won’t make much of a difference. Maybe it won’t matter much to the Coca-Cola Company, but what about a local brewery? They use aluminum cans too. And what company buys just a six pack of cans? Obviously, a cent and a half for six cans adds up when you buy in bulk.
It’s difficult to say exactly what the impact of these tariffs will be on an individual producer that relies second-hand on products made of steel or aluminum. But there are a number of industries — including construction, Nevada’s second largest industry — that may be forced to pass on higher and higher costs onto consumers who aren’t seeing their wages rise to meet the change.
However, should prices rise — which we can almost guarantee they will — the effects of that rise will ripple down the supply chain. A can of beer is never just a can of beer. From the mining of the aluminum to the production of the cans to the logistics of shipping those cans, the production of any given thing is never an isolated incident.
So to pretend that the increase of these tariffs won’t have an effect on you is to ignore the obvious.
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