President Trump announced a plan to slap heavy tariffs on steel and aluminum imports from Canada this week. His goal is to drive more production back to American soil, where American citizens can benefit from it monetarily rather than sending money into Canadian hands. There may be a few bumps along the way, but the end result should be more jobs on American soil.
• Nearly 16 percent of America’s steel and aluminum comes from Canadian imports. Slapping tariffs on these imports may have a temporary negative effect on both markets. The DOW dropped nearly 500 points overnight based on the suggestion alone.
• We don’t know how, when, or where these taxes will apply yet, but the POTUS did reveal the potential amounts. Expect taxes to hit 25 percent on steel and 10 percent on aluminum if they move forward as-is.
• Trump’s suggested tariffs weren’t received well by other politicians – including the GOP. Republican leaders like Senator Orrin Hatch cautioned against the taxes, suggesting that, “Tariffs on steel and aluminum are a tax hike the American people don’t need and can’t afford.”
• The Administration also suggested the possibility of a global tariff on steel. Such a tax could seriously hamper imports from questionable countries like Russia, China, Brazil, Venezuela, Vietnam, and other long-standing partners. It hasn’t been said yet whether the U.S.A. has the capacity to keep up with the increased demand on home soil alone.
• Foreign Affairs Minister Chrystia Freeland, who serves as a Canadian Member of Parliament for the Progressive Conservatives, also cautioned the POTUS against tariffs. She indicated that Canada will take “responsive measures” if taxed.
• The United Steelworkers Union, the American International Automobile Dealers Association (AIADA), and several other industry-critical organizations warned Trump against instituting tariffs on Canadian imports. The warning claimed tariffs may have the undesired side effect of driving up prices for manufacturers, crippling America’s most crucial industries.
• The Automobile Dealers Association (AIADA) released a statement shortly after the announcement warning consumers of the potential impact on retail pricing. “In addition to paying more for their vehicles, American consumers and workers can also expect to bear the brunt of the retaliatory tariffs other countries will almost certainly place on goods manufactured and exported from the United States,” they said.
• Capital Economics researcher Andrew Hunter agrees. In an email released to the press, he indicated that, “Domestic U.S. steel prices have already risen by 20 per cent since the start the year in anticipation of protectionist measures, which could prove a significant drag on steel consumers like the machinery, motor vehicle and construction industries.
• Though the tariffs may temporarily slow down production or make it more expensive, they also offer Americans the perfect opportunity to double down on exploring new technologies and materials to make production more affordable and keep American dollars on American soil.