by Matthew Pertz, News Editor
President Trump enacted two wide- ranging tari s on Friday, March 16, raising the cost of foreign metals and heightening international tensions with other world powers.
Trump’s actions will raise prices of foreign steel by 25 percent and aluminum by 10 percent. Tari s serve as a tax on consumers; for example, if Pepsi produces soda cans with foreign- bought aluminum, the company will need to raise prices for grocery stores and consumers to make up the cost of the tari without losing revenue. Pepsi, on the other hand, could begin buying American aluminum, but this would still raise final prices.
Installing tari s such as these is one form of protectionism, an economic policy attempting to protect domestic producers, businesses and workers by decreasing foreign imports. Much of the world has reacted negatively to U.S. protectionism. Reuters reported the EU began countering Trump’s action with new tari s against American products like orange juice, makeup and motorcycles.
The American reaction was similarly mixed. Democrats maintained their consistent opposition to Trump’s moves, while the Republican party split sides. The GOP normally holds to strict free trade principles, but Trump’s campaign revealed a space for American protectionism within the conservative movement.
House Speaker Paul Ryan (R-Wis.) broke from Trump in his rst true critique of the president since his election. Ryan said, “I’m just not a fan of broad-based, across-the-board tari s because I think you’ll have a lot of unintended consequences. You’ll have a lot of collateral damage.”
The long-term implications of these moves are still murky. International backlash could either push Trump to rescind the moves or enact further restrictions, igniting a trade war. Additionally, the United States is currently renegotiating NAFTA with Canada and Mexico, and the President declined to enforce these new tariffs against North American countries to force a better deal.
These moves are just another layer in an increasingly complicated global economy. On Monday, Britain and the EU announced a trade deal allowing “Brexit” to occur by 2020, further proving that economic nationalism is an enduring trend and not simply Trump’s ash in the pan.
