Not Yet A War, But Ohio Seeing Tariff Effects Of 'Trade Skirmish'

A steel slab coming out of furnace at ArcelorMittal's hot strip mill. (Matt Richmond / ideastream)
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“Protectionism, pure and simple.” That’s how the European Commission’s president Jean-Claude Juncker reacted to U.S. steel and aluminum tariffs on the EU.

Juncker said the EU, just as Mexico and Canada, would impose countermeasures—that is additional duties—on U.S. imports. 

President Trump announced the tariffs in March, but had given exemptions to the EU, Mexico, and Canada. 

So, with the tariffs and retaliation, does this qualify as a ‘trade war?’

“This is a skirmish, except the threats now are real, and the consequences are real,” says Ned Hill, an Ohio State University economist.

“I was visiting a factory in Northeast Ohio and the manager of the product line was pointing out to a series of tires that used to be imported from overseas, now being brought in the United States because of the tariff that was imposed last year, and he was very excited about the fact that the product came back to the United States,” he says. “At the same time, most of his product is made out of aluminum, and there is great uncertainty as to what the tariffs do to actually the price of his core product.  So it’s affecting supply chain decisions, it’s going to affect cost, and it’s going to affect foreign policy as well as economics.”

Hill says the impacts of the tariffs can already be seen in rising steel prices, though there is still a lot of uncertainty as to what comes next.

“Those people that work in metal-producing and steel mills will benefit, but those that work in steel-using industries when the prices go up, are going to be hurt.”

Also in this interview

On whether the tariffs hearken back to the 80s

“It definitely hearkens back to the 80s, but it’s the 1880s, not the 1980s. This is mercantilist thinking which has impacts on consumers.”

On whether America First is burning bridges with Canada

“I think there’s a different conversation Canada vs. Mexico.  In the case of Canada, the integration of the economies is incredibly deep, and there will be a notion of just kind of riding...of just waiting this thing out, with the notion..there’s going to be a national referendum on this in November.  But on the other hand, Canada has to in the face of bare-knuckled, brutal posturing on the part of the United States, has to respond in kind. And that just gives you a negotiating dynamic that is fraught with danger. But the Canadian political system is mature.  Where there’s more danger is Mexico, because Mexico has a history of left-wing populism, so what we’re doing is radicalizing Mexican politics, which works against our long-term interests of having a stable Mexico, and a growing economy in Mexico, not at the cost of U.S. jobs, but in partnership with U.S. jobs.”

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