The Middletown Press (Middletown, CT)
Tariffs will hurt U.S. economy
The Trump administration’s decision to impose tariffs on aluminum and steel imports drew warnings Friday from businesses and U.S. trading partners that the measure could backfire, provoking a trade war without resolving the problems it’s intended to address.
President Donald Trump said the tariffs, due to take effect in 15 days, are needed to protect U.S. workers. Businesses say the 25 percent tariff on imported steel and 10 percent levy on aluminum will jack up costs, raising prices for consumers and potentially putting people out of work.
Trump has long singled out China as being unfair in its trade practices and for dumping cheap steel on the global markets, depressing prices. But experts say the new tariffs will in fact not affect China much, but rather hurt key allies like the European Union and South Korea.
The move drew consternation outside the U.S.
The Chinese government said it “firmly opposes” the move but gave no indication whether it might make good on threats to retaliate.
“These measures could make a significant impact on the economic and cooperative relationship between Japan and the U.S., who are allies,” said Japan’s foreign minister, Taro Kono.
The EU said it hoped to be exempt from the tariffs, like Canada and Mexico are, or that the issue might be solved in international arbitration at the World Trade Organization.
If not, the EU vowed to retaliate.
“We will have to protect our industry with rebalancing measures,” said Cecilia Malmstroem, the EU trade commissioner, who this week confirmed that EU states are finalizing a list of U.S. goods — from peanut butter to bourbon — to hit with retaliatory tariffs.
The head of Eurofer, Europe’s main steel federation, said Trump’s reasons for slapping tariffs on steel and aluminum were an absurdity and that the move could cost tens of thousands of jobs across the continent.
The tariffs would cost lost trade worth $2.6 billion a year for the EU and $1.1 billion for South Korea, according to Chad Bown, senior fellow at the Peterson Institute for International Economics.
While that is not a lot for the economy as a whole, it would be painful for the individual industry.
“Significant damage in South Korea’s steel exports to the United States seems unavoidable,” the country’s trade minister, Paik Ungyu, said in a statement.
Meanwhile, the tariffs would cost China only $689 million in trade losses, according to Bown’s estimates, largely because the U.S. has already imposed duties on Chinese products.