ECONOMIC BOMB!
King sounds alarm over Trump’s threat to impose levy on aluminium import
ECONOMIST DR Damien King has sounded an ominous warning that the threat of United States President Donald Trump to impose tariffs on imports of steel and alumina is dangerous and will make countries poorer.
There are possible implications for Jamaica and other alumina-exporting countries if the threat materialises, especially with the president making it clear that allies will not be exempted from his tax hammer.
However, according to King, “The US cost of production will rise as Americans pay more than the rest of the world for steel and aluminium, so exports will fall. Europe and Asia will retaliate with their own tariffs.”
World trade, the economist also said, will decline.
“Trump has no idea of the consequences of this bomb,” King said, pointing to a story in The Gleaner highlighting the US president’s push to levy 25 per cent on steel and 10 per cent on aluminium imports in the US.
The warning comes amid efforts in Jamaica to boost alumina export to countries and in turn grow the mining sector.
Alumina is a product used i n the production of aluminium and its demand is dependent on a booming trade in the commodity.
Significant developments in the bauxite industry over the past year have resulted in 15 per cent growth in Jamaica’s mining sector for the October to December 2017 quarter.
King noted that “the benefit of trade is imports, not exports, it i s access to products that lower your cost in your own resources than it would cost to produce them yourself”.
“So, to respond to unfair trade practices with import duties is just making your own economy less efficient,” King, who is also a university lecturer, said.
US media have reported that the president is to make an announcement on the issue this week.