Businesses Duck And Cover As Trump Says Trade War Is 'Easy To Win'
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...But while U.S. steel- and aluminum-makers cheered the president's move, much of the rest of the economy was rattled by the prospect of higher prices for products that use steel and aluminum as well as retaliation by America's trading partners.
The White House downplayed the effect on prices, saying the tariff would add perhaps a penny to the cost of an aluminum can. But consuming companies were not mollified.
"Those pennies add up," said Jim McGreevy, president of the Beer Institute. "Last year, American brewers bought more than 36 billion beer cans."
Multiply that by dozens of other metal-consuming industries. As the Wall Street Journal noted, U.S. steel mills employ 140,000 people. Companies that use steel employ 6.5 million.
"We're really hoping that the president will hear the concerns that the aerospace, soft drink and automobile manufacturers have raised and take a different course before next week," McGreevy said.
A similar dynamic emerged in January when Trump ordered tariffs on imported solar cells. The move was designed to protect domestic manufacturers. But it backfired on the larger industry, according to Abigail Ross Hopper, CEO of the Solar Energy Industries Association.
"It's a straight tax on solar panels," Ross Hopper said. "It's more expensive to build projects and more expensive for citizens to put solar on their roofs. And I think we'll see there will be less solar built than otherwise would have been."
While the tariffs may help the 1,000 or so workers who actually build solar cells in the U.S., they impose new costs on the much larger group building inverters, wiring systems and other components. "There's a healthy solar manufacturing ecosystem here in the U.S.," Ross Hopper said. "So the irony is this tariff is putting the rest of the manufacturing at risk."
Other countries have promised to fight the proposed tariffs on steel and aluminum with import restrictions of their own, targeting Kentucky bourbon, for example, or Harley-Davidson motorcycles. U.S. agriculture could also take a hit.
"Farmers oftentimes get stuck in this tit-for-tat retaliation," said Kristin Duncanson, who raises soybeans, corn and hogs in south central Minnesota. "It just is not good for American agriculture."
Like many farmers, Duncanson is heavily dependent on export markets in Europe and Asia.
"We figure here in Minnesota, about one in every third row of soybeans gets exported," she said.
Duncanson said many farmers have been buttonholing Agriculture Secretary Sonny Perdue at a commodities conference in California this week, hoping he might persuade the president to change course.
"We'll ask him to make sure that the president realizes what these kinds of actions mean to America's farmers and ranchers," Duncanson said. "And I can tell you there's some phones ringing off the hook in congressional offices, too."...
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