Ironing Out Details: Trump’s Steel Tariff

If you’ve been paying attention lately, you’re likely aware that we have a highly controversial administration in office right now. One of the more recent proposals by the Trump administration has been to impose a 25% tax on imported steel and 10% on imported aluminum. Certain countries will be exempt. Several automotive companies are disappointed in the move, despite having operations in the United States. Why is that? Let’s break down a few key points.

Past & Present

It’s worth noting that under President Bush, there was a steel tariff as well. However, it did not work out well, negatively affecting GDP and employment, so the plan was scrapped. Fast forward, and this legislation is being proposed right at a time when automakers are looking to streamline and globalize their product lineups. Thus products imported from elsewhere, even if they only have a portion of foreign parts, could see price increases. OEMs will also see higher manufacturing costs.

Automakers such as Ford and Toyota released statements saying they advocate for free trade, and that these tariffs could inadvertently affect suppliers for key products. Additionally, many analysts are concerned that this could turn into a “trade war” situation, with nations such as China retaliating.

Here’s a short list of affected steel and aluminum products from IHS Markit:

• Carbon and alloy flat products
• Carbon and alloy long products
• Stainless flat and long products
• Unwrought aluminum
• Aluminum bars, rods, and profiles
• Aluminum wire
• Etc...

There are other products as well. For a more complete list and additional info, follow the links provided below:

• https://ihsmarkit.com/solutions/trump-steel-aluminum-tariffs.html?utm_source=google&utm_medium=ppc&utm_campaign=pc9700-5&gasc_id=844978700&gasc_label=9lBJCNuIoHMQjLT1kgM&gclid=Cj0KCQjwodrXBRCzARIsAIU59TIIl0F1KMho_H3uDj5P94n_GszKOhvMXqpXG_p2p8reUInKwE-Zh7QaApHoEALw_wcB
• https://www.google.com/amp/s/www.nasdaq.com/article/how-trump-tariffs-could-impact-the-us-auto-industry-cm932848/amp

What are your thoughts on this? Personally, I’m concerned about long-term trade wars as well. And these tariffs could lead to the discontinuation of some products I’m thinking. It’s also possibly another reason why Ford has decided to exit the sedan market all together in the United States. Especially since they want to enact their “One Ford” global strategy and streamline platforms.

I also recommend making a deal on something you like (if it's predominantly foreign-made) while it's on sale or before further tariffs are enforced. I've heard rumblings of additional tariffs after a recent meeting with OEMs...

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