Causal Argument – eaglessb52

The effects of tariffs on the United States

We live in a society where everything is moving faster and faster. We are accomplishing feats in technology never thought possible 20 or 30 years ago. For some people, that can’t be said about our political system. Some people believe that it takes too long for politicians to make decisions that could ultimately benefit society. Politics are changing every day the only issue is that these policies for changes might also bring negatives that can last for a long time.

The economy is a huge factor in making political decisions these days. When bills and laws are being passed the effect on the economy is one of the key factors politicians look at. Sometimes the economy is the reason things don’t get passed. The economy of the country is much lie a business. If the country isn’t going to make money in a decision it won’t happen.

Trump’s big plan was to bring companies that have gone international with importing goods. One method that the government does is impose tariffs on these goods. When a tariff is imposed on a good like steel the price of imported steel goes up which is intended to have companies look to domestic steel for their need. This causes a boost in the domestic steel industry because there is more need for cheaper steel.  This also opens some jobs in the steel industry which allows people out of a job to get back in to the workforce. When these people are introduced into the workforce the overall economy sees a boost.

Something else that happens is that American steel industries can control the supply and demand of this steel. Since more people are coming to them they can create scarcity to drive up the prices of steel in the domestic US. This can lead to a monopoly in the steel industry.  Another downside of this is that companies who mainly import steel and are affiliated with the import of goods sees a massive hit when their customers leave for cheaper domestic steel. When these companies take a hit, people are laid off or out of work to match the demand for foreign steel.

As you can see there are benefits to the effect of tariffs in the steel industry.  The effects not only lead to changes in the industry they’re placed in, but they also trickle over into other industries as well. There are many middle men that go into running a huge industry like steel. Steel is made from taking iron ore and putting it into a furnace and smelting the impurities out of it and adding carbon to it which turns the iron into stronger and more durable steel. Equipment manufacturers also see a boost in sales for new mining equipment. Companies that make vehicles for job sites like iron mining and truckers whose job is it to transport both the unfinished iron and the finished steel see new jobs and more demand for truck drivers. also see a boost in their sales.  The factories that smelt the iron see a boost in employment to meet the demand of these new customers.

Some negative effects of tariffs on steel are best represented in the article, “Trump’s Steel Tariffs Could Hurt U.S. Coal Companies.” In the article it states that Trump’s 25 percent tariff on steel from Canada, Mexico, and the European Union would hurt demand for steel in the U.S. These countries also buy 40 percent of the U.S.’s metallurgical coal, which is the substance used in making steel. Since there’s a dip in the demand for foreign steel it would lead to a dip in the demand for metallurgical coal.

The article makes the claim that tariffs could also be put on U.S. exported to other countries. This means that many metallurgical coal producers would have to cut their prices to retain customers.

 

This leads into another effect of tariffs on things like steel. Our relationships with foreign countries could be at stake if we were to raise prices on things that we trade freely with each other. In the article it mentions that Mexico fired back with tariffs of their own. The Prime Minister of Canada, Justin Trudeau, exclaimed that the tariffs were, “totally unacceptable,” and then went on to say that Canada buys more steel from our country than any other. Canada and Mexico are some of the biggest U.S. steel importers ranking first and fourth respectively.

This could cause a trade war with multiple countries. The problem is things aren’t on America’s side if this were to ever escalate this far. As of right now we are in the midst of a trade war with China. The American government has imposed strict tariffs on Chinese goods and has threatened to take these tariffs even higher. China can use this opportunity to oust us from the center of world affairs and economic globalization as we are slowly but surely pulling out of such practices. China is starting to build a reputation of free trade and build a moral high ground as our government is subverting the world order. As things unfold it may lead to a darker future for the U.S. as we destroy our reputations with the world through tariffs on imports.

Policies that imply quick fixes to strengthen our economy may not always as beneficial. In Trump’s case his strong nationalist mindset leads to him alienating our country to the rest of the world which could cause major shifts in the overall economy of the U.S. and the world. There are good intentions behind them in hopes to build some domestic economic growth. Though this doesn’t seem to be the case with this. Countries and their leaders tend to be upset with these practices. These then lead countries to not buy other goods from the U.S., so those industries are hurt due to lack of demand from foreign exports. This also could spawn a trade war much like the one between the U.S. and China currently going on. Finally, it could cause the U.S. to be shoved out as the economic center of the globalist economy.

References

Bort, R. (2018, June 25). The 4 Biggest Consequences of Trump’s Disastrous Tariff Plan. Retrieved October 24, 2018, from https://www.rollingstone.com/politics/politics-news/the-4-biggest-consequences-of-trumps-disastrous-tariff-plan-628305/
Lee, S. (2018, May 31). Trump’s Steel Tariffs Could Hurt U.S. Coal Companies. Retrieved from https://www.bna.com/trumps-steel-tariffs-n57982093100/
Tao, N. (2018, October 25). Trade war offers China a ‘strategic opportunity’ to seize global leadership. Retrieved October 24, 2018, from https://www.scmp.com/comment/insight-opinion/united-states/article/2169955/how-china-can-turn-trade-war-strategic

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s