Deliberating Trump’s Tariffs

March 15, 2018

For decades American steel and aluminum companies have voiced concern over global competitors, claiming that subsidies in overseas economies have created unfair advantages in the global marketplace.

The Trump administration recently proposed the imposition of a 25% tariff on imported steel and a 10% tariff on imported aluminum. It announced these protectionist policies under the auspices of ensuring that other countries’ trade practices do not undermine domestic production and endanger US national security.

An estimated one-third of the 100 million tons of steel used each year by American business is imported, as is 90% of the 5.5 million tons of aluminum. Therefore, this trade decision is on-track to influence every major facet of the American economy. This has caused many of us in the water industry to wonder what impact the tariffs will have on America’s infrastructure, water conveyance systems, and storage technologies.

Under the Trump administration’s tariffs, a company importing $100,000 of steel would have to pay $25,000 to the government. The additional expense will be passed along to the consumer, experts predict, causing a significant increase in price for goods made with the metal. Prices for tanks, appurtenances, pipe materials, and service vehicles will reflect the increase. Water infrastructure projects across the nation will undoubtedly be affected by the rising costs of construction materials and machinery. As my colleague Arturo Santiago explains here, construction equipment manufacturers will also suffer a significant blow.

Jobs are another concern. While economists predict that the policy may create some jobs in domestic metal-production, it will undoubtedly cost jobs in industries requiring steel and aluminum. According to the Bureau of Economic Analysis, about 17 million Americans work in industries that use domestic steel—6.9 million in manufacturing and 10.1 million in construction. And according to a study by Lydia Cox of Harvard and Kadee Russ of the University of California, Davis, steel-using industries employ 80 times as many people as steel-producing industries. The higher cost of materials may not only reduce the production of goods made in the US, it may reduce the number of workers hired to make them.

We’d like to hear your thoughts. Do you feel that the tariffs are consistent with the administration’s infrastructure improvement goals?

About the Author

Laura Sanchez

Laura Sanchez is the editor of Distributed Energy and Water Efficiency magazines.

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