In the News
Trump commits to hard protectionism
1st March 2018
It has been a while coming but we now appear to be on the verge of the Trump administration making a decisive move towards a protectionist stance with the imposition of high tariffs on imports of steel and aluminium.
Handy quote for revision! "Free trade has widely distributed benefits and concentrated costs, while a tariff that is meant to help a particular industry has concentrated benefits and widely distributed costs." https://t.co/TTsVnS4Ggw #econ4
— Tutor2u Geoff (FRSA) (@tutor2uGeoff) March 3, 2018
This will be an important issue for students to keep on top of, not least the potential for retaliatory action by China and the European Union. How might UK steel manufacturers be affected? The USA will impose a 25% tariff on steel imports and 10% tariff on aluminum but it is unclear whether some allies of the US will be given exemption from the import barriers. Mexico has already threatened retaliation.
The Wall Street Journal did not hold back in their criticism of the Trump announcement:
Mr. Trump seems not to understand that steel-using industries in the U.S. employ some 6.5 million Americans, while steel makers employ about 140,000. Transportation industries, including aircraft and autos, account for about 40% of domestic steel consumption, followed by packaging with 20% and building construction with 15%. All will have to pay higher prices, making them less competitive globally and in the U.S.
Steel tax https://t.co/kJoRO6FaO9
— BBC World Business (@BBCWorldBiz) March 2, 2018
President Trump says he will put 25% tariff on imported steel, 10% on aluminum. Here’s our July 2017 graphic explaining how these tariffs would affect American consumers: https://t.co/I4tGeFnBYq pic.twitter.com/Vuho9ktMEt
— Bloomberg Graphics (@BBGVisualData) March 1, 2018
UK steel exports worth £360m a year could be hit by Trump’s tariff, Biz Department told me before today. That’s a hell of a lot of British jobs.
— Ben Riley-Smith (@benrileysmith) March 1, 2018
Mexico to retaliate if US slaps tariff on its steel — source https://t.co/G38Ev4BoJU
— Financial Times (@FT) March 1, 2018
MillerCoors statement: We are disappointed with President Trump’s announcement of a 10% tariff on aluminum. While we won’t know the details for a week, the Department of Defense recently reported that aluminum does not cause any national security issues. (1/3)
— Molson Coors Beverage Company (@MolsonCoors) March 1, 2018
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Geoff Riley
Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.
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