Despite outcry from international allies and members of his own cabinet, Trump enacted a 25% tariff on imported steel and a 10% tariff on imported aluminum last month. The president explained that these tariffs would encourage American independence by forcing local businesses to rely on American made steel. But while the tariffs were enacted with good intentions, their impact has been anything but healthy so far. The stock market sunk for a number of consecutive days after the tariff announcement was made due to many investors worrying about the possibility of a trade war. Expenditures for American businesses of all shapes and colors have risen astronomically, delaying projects and forward movement. It’s only a matter of time until these increased costs trickle down and begin affecting American citizens. Worst of all, the tariffs don’t seem to be fulfilling their purpose in helping American steel manufacturers.
Many of these manufacturers have testified that the tariffs may in fact harm their business instead of help it. With an overload of demand from American businesses unable to shop for steel elsewhere, steel makers will likely be unable to compensate with an equal supply. The US is one of the largest steel importing countries in the world, taking in four times more steel than we ship out. The idea that American steelmakers can makeup for this difference is insane. American steel prices will skyrocket, making competition with other steel makers around the world nigh impossible, ultimately sending the industry into a nosedive.
The list of countries that supply our immense amount of imported steel runs over 110 names long, and includes some of our biggest LNG buyers. One of President Trump’s biggest campaign promises was that he would secure a position of energy dominance for the United States. By supporting the operation of oil and gas companies, he has already succeeded in spades. But these enacted steel tariffs endanger the energy dominance for which we’ve fought so hard to achieve. If the US won’t buy steel from other countries even though it’s being offered at the most competitive rate, they may end up taking the same stance towards our abundant oil and gas supply. Two can play at tariffs, and there’s no shortage of alternative options in oil and gas energy suppliers. One of the largest being Russia, who would happily seize the opportunity to make friends in the oil and gas trade.
All in all, the costs of these enacted steel tariffs simply outweigh the benefits. With Trump steering the wheel, America has come farther than we could have hoped in establishing ourselves as energy export leaders. Why jeopardize this amazing success? American independence has always been a major part of our country’s foundation. And it’s great that Trump is a president who understands and acts on this sentiment. But as the French president Emmanuel Macron said in testimony before Congress today, “Commercial war is not the proper answer . . . We need a free and fair trade, for sure.”
Written by: Chris Stomberg