President Trump sent the United States' trading partners abuzz when he announced last week he will be imposing a tariff on imported aluminium and steel. The tariffs will be expected to be 25% on steel imports and 10% on aluminium imports.
The stakes are high. The most conservative estimates suggest many hundreds of thousands of jobs will be lost and consequences will only compound when other countries impose their penalties on the U.S.
In the WSJ: https://www.nytimes.com/2018/03/06/us/politics/gar..., the article says that there is a fundamental divide between President Trump and his fellow Republicans as the president seeks to raise barriers to foreign trade. The president argues that many countries have taken advantage of the United States.
Mr. Trump finds himself at odds with his party's leaders in Congress, like Speaker Paul D. Ryan of Wisconsin and Senator Orrin G. Hatch of Utah, the chairman of the powerful Senate Finance Committee, both of whom have long records supporting free trade. Mr. Hatch, who once delighted Mr. Trump by saying that he was on the way to making his "the greatest presidency" in history, has broken sharply with the White House over tariffs.
In a sharply worded letter on Tuesday to Mr. Trump, Mr. Hatch said that the proposed tariffs would be paid by American manufacturers and consumers, not foreign companies, and would undercut "the overwhelming and immediate success" of the tax overhaul. "Put simply, the proposed tariffs on steel and aluminium imports threaten to undermine that success," he wrote.
Who are the winners? If Trump goes through with the suggested tariffs, the winners are the U.S. steel industry and everyone employed in it because the tariffs will lead to less competition and increased prices.
Who are the losers? Along with U.S. trading partners, there are a few immediate losers in the U.S., too. Any industry that buys steel will feel the effects of higher prices. When steel prices go up, most of these industries, like automakers, appliance makers and construction companies, will see job losses as they struggle to absorb the costs. In the past, these industries have had trouble passing the costs along and tend to cope using layoffs rather than price increases.
With so many opposing views within Trump's inner circle, the cliffhanger remains: Will Trump go through with the tariffs. One sign that Trump is serious about the move is Tuesday's resignation of Gary Cohn, the White House chief economic advisor, who was a vocal opponent of the tariffs.
Hey, monkeys are you for or against the tariffs?