President Trump’s announcement Thursday to slap sweeping tariffs on steel and aluminum imports has triggered turmoil across the American economy.
The Dow slid 600 points in the hours following his statement.
The stock market dip reflects the enormous impact that a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum will have on the economy. That’s because so many American industries need steel and aluminum: They’re used to build cars, skyscrapers, roads, bridges, washing machines, refrigerators, and a whole host of other products. More expensive steel and aluminum means higher costs for the American businesses that make these products — higher costs that will likely get passed on to consumers.
Trade groups and businesses didn’t wait long to slam the president’s decision. Some of the country’s most influential industry groups warned that the tariffs would hurt more than a company’s bottom line:
But the outrage didn’t seem to faze Trump. Instead, the president doubled down on his decision in a series of Friday morning tweets.
In another tweet, he claimed that a trade war would actually be good for America:
It may not be as easy as he thinks, based on the reactions from American businesses. Here’s a sampling of businesses and industries that have come out against the steel and aluminum tariffs.
US car dealers: “These proposed tariffs on steel and aluminum imports couldn’t come at a worse time,” Cody Lusk, president of the American International Automobile Dealers Association, said in a statement. “Auto sales have flattened in recent months, and manufacturers are not prepared to absorb a sharp increase in the cost to build cars and trucks in America. The burden of these tariffs, as always, will be passed on to the American consumer.”
Auto manufacturers: “We are concerned with the unintended consequences the proposals would have, particularly that it will lead to higher prices for steel and aluminum here in the United States, compared to the price paid by our global competitors,” Matt Blunt, president of the American Automotive Policy Council, said in a statement. “This would place the U.S. automotive industry, which supports more than 7 million American jobs, at a competitive disadvantage.”
“The President’s pending decision on tariffs and quotas for steel and aluminum trade highlights several unfortunate ironies,” John Bozzella, president of the Association of Global Automakers, said in a statement. “With one stroke of the pen, much of the promised benefit of tax reform and other Administration initiatives aimed at reviving manufacturing and protecting national security could be undercut.”
Boat manufacturers: “The implementation of these aluminum tariffs … will drive up the costs of the aluminum used to manufacture more than 111,000 aluminum boats, such as pontoons and fishing boats, which make up 43 percent of new powerboat sales each year,” Thom Dammrich, president of the National Marine Manufacturers Association, said in a statement. “Further harming the industry, the aluminum sheet our members are forced to source overseas will likely continue to be in short supply in the U.S., destroying our members’ ability to build boats in the U.S. As a result, the jobs of the American workers who build these boats, their engines and components, are now in jeopardy.”
The beer industry: “About 2 million jobs depend on America’s beer industry. We urge the Department of Commerce and U.S. President Trump to consider the impact of trade restriction tariffs,” Felipe Dutra, Anheuser-Busch InBev’s chief financial officer, said on a call with analysts.
Retailers: “Make no mistake, this is a tax on American families,” Matthew Shay, president of the National Retail Federation, said in a statement. “When costs of raw materials like steel and aluminum are artificially driven up, all Americans ultimately foot the bill in the form of higher prices for everything from canned goods to electronics and automobiles. The reality is that there is nothing this country will gain from such a one-sided policy. These tariffs threaten to destroy more US jobs than they will create while sending an alarming signal to our trading partners and diminishing markets for American-made products overseas.”
Machinery manufacturers: Caterpillar’s director of investor relations, Amy Campbell, told Reuters that the tariffs would pose a “challenge” and would put Caterpillar at a competitive disadvantage with foreign competitors.
US business groups: “Business Roundtable strongly disagrees with today’s announcement because it will hurt the U.S. economy and American companies, workers and consumers by raising prices and resulting in foreign retaliation against U.S. exporters,” Joshua Bolten, president of the influential Business Roundtable, said in a statement. “Using ‘national security’ tools to implement tariffs could embolden other countries to impose ‘national security’ tariffs on U.S. exporters or otherwise restrict U.S. goods and services sold to their markets.”
But not everyone disapproves
There are a handful of winners from the proposed tariffs: the companies that produce steel and aluminum in the United States.
The CEOs of the big American steel companies were invited to the White House for Trump’s big announcement. David Burritt, the CEO of US Steel, was thrilled. “This is vital to the interests of the United States,” he said at the White House after the announcement, according to a pool report. “This is our moment, and it’s really important that we get this right.”
As the stock market slid, share prices for his company — and other steel companies — jumped.