Steel tar­iffs could hurt U.S. au­tomak­ers

Trump seeks to end dump­ing, but prices for au­tos likely would rise

The Detroit News - - Front Page - BY IAN THI­BODEAU AND JIM LYNCH The Detroit News

Tar­iffs might help U.S. steel com­pa­nies, but a crack­down on im­ports by Pres­i­dent Don­ald Trump could hurt U.S. au­tomak­ers and other in­dus­tries — and raise prices for buy­ers of their goods.

The Trump ad­min­is­tra­tion is con­sid­er­ing tar­iffs on steel im­ports in an ef­fort to squeeze China and other coun­tries that Trump says are de­stroy­ing the U.S. steel in­dus­try. No ac­tion has been taken, but auto in­dus­try an­a­lysts and trade ex­perts say the threats al­ready have cre­ated un­cer­tainty in the mar­ket.

Even though U.S. au­tomak­ers build ve­hi­cles pri­mar­ily from U.S.-sourced steel, econ­o­mists say a pro­tec­tive tax on im­ported steel would give mak­ers of do­mes­tic steel the in­cen­tive to raise their prices — just be­cause they could. That would be a boon for the do­mes­tic steel in­dus­try, but it would make U.S.-made cars more ex­pen­sive and push con­sumers to buy cheaper cars from for­eign com­pa­nies un­af­fected by the tar­iff, econ­o­mists say.

“Prices will go up and peo­ple will buy less,” said Alan Dear­dorff, pro­fes­sor of pub­lic pol­icy and eco­nom­ics at the Univer­sity of Michi­gan. “It’s ironic that in dis­cour­ag­ing im­ports of steel, he may en­cour­age the im­ports of cars.”

The lat­est dis­cus­sions over trade — and steel in par­tic­u­lar — arose af­ter tran­scripts of a Wed­nes­day me­dia ses­sion held by Trump on Air Force One were pub­lished. In a ques­tion-and-an­swer ses­sion, the pres­i­dent de­scribed the in­flux of cheap for­eign steel as “a big prob­lem.”

“They’re dump­ing steel and de­stroy­ing our steel in­dus­try; they’ve been do­ing it for decades, and I’m stop­ping it,” Trump told re­porters. “It’ll stop ...

“There are two ways — quo­tas

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