In an unexpected announcement on Thursday, President Trump said yesterday that he planned to to impose 25 percent penalty on imported steel and a 10 percent penalty on imported aluminum. The measures, which are being proposed to encourage domestic production of steel products, were met with immediate criticism, as they will have a profound effect on nearly every industry, from appliance makers to car-manufacturers and even beer sellers. It would also lead to an across-the-board increase in costs for those who buy those items.
Raising the cost of importing steel and aluminum is meant to help companies who do their manufacturing in the U.S. and disincentivize companies who finish assembling their products overseas for less money. Higher taxes on the products that American businesses use will almost always roll downhill in the form of increased prices for American consumers.
Unlike most tax-plan disagreements, people on both sides of the aisle think the tariffs are a terrible idea. Republicans will invariably get upset about anything that means higher taxes in general, especially if they come at the expense of an American businesses’ bottom line. Democrats, on the other hand, are usually quick to try and put the kibosh on anything that means higher taxes without any surface level and long-term improvement to the everyday quality of American life — i.e cheaper and more immediate access to medical care or increased availability of educational resources and means of social advancement.
Moving forward, when different municipalities need something like a new school built they can expect the materials to cost more — a majority of buildings are supported using steel beams. Need a new fridge in order to stop paying for food that goes bad too quickly? Food preservation appliances will cost more, too. Drive a car? Fifty percent of a car’s parts are steel based. Drive over a bridge to get to work? Expect a fare hike for driving through toll booths, as the cables used in suspension bridges are made of steel. The tariff increase will be reflected in price hikes everyday Americans will need to pay for services they absolutely need.
This isn’t the first time that the Trump administration has come under fire for making a move like this. An April 2017 increase in Canadian lumber tariffs is expected to cost U.S. homebuyers an extra $1,200 per house.
Beyond the prospect of higher taxes for families, the new tariffs could spark a trade war in which other countries essentially ‘punish’ the U.S. for raising taxes on materials that make doing business in their country cheaper. Germany, for example, is one of the highest exporters of steel to the U.S. Imposing taxes on such an important part of their economy will certainly not be ignored.
Countries would punish the U.S. by raising tariffs on exports used by U.S. consumers. If President Trump’s plan goes into action next week as planned, American families could now be squeezed not only by domestic businesses who don’t want to sacrifice profit for the same materials, but also by foreign governments the profits of which have been diminished by the U.S.