The United States is on the verge of a trade war.
In March, President Trump slapped a tariff on steel imports from China and other countries to promote job growth in the steel industry here. The consequences of such a move has doubled the price of steel in a matter of days.
Charlotte-based company Howard Steel has reported to Fox Business that the price of steel started rising the second the announcement was made and changed with each passing day.
“As soon as they even talked about a tariff, we were getting price increases, and they were rapidly going up,” Howard said. “What you bought one day, three days later, even that price had gone up. There was nothing consistent. We still haven’t reached the apex, and I don’t know where it’s at,” said James Howard, owner of Howard Steel
Right now, steel costs around $.68/pound, which is up dramatically from $.38 before the tariffs were announced.
Howard says the tariff is good in theory, and promoting American industry is usually a source of pride for companies like his, but in the end, the price increase is just going to be passed down to the consumer.
“The way I feel about it, in theory it’s a good idea, but I hate to say this, sometimes we can be our own worst enemy, and there’s a little bit of greed that goes through there. Anytime you get these price increases, and the orders are still coming in, well they’re just going to give you another price increase,” he said to Fox Business.
The country hardest hit by these tariffs, other than the United States itself, is undoubtedly China. China is where we bought most of our steel previously, impacting the industry here in the States. Now that industries are buying American steel again, it’s hitting China’s pockets fairly hard.
That’s why China retaliated almost immediately, announcing that they will slap their own tariffs on 106 different U.S. exports, such as soybeans, whisky, and cars. They plan to target as much as $50 billion worth of our products, which is scaring literally everyone else into believing a massive trade war between the world’s two largest economies is only about to heat up.
And they’re right.
Trump Targets Chinese Tech
Throughout his campaign, candidate Trump promised to fight back against what he called ‘unfair trade deals’ the U.S. has with numerous countries, like China and Japan. He says we’ve been at a disadvantage and losing billions in trade deficits for decades.
The steel tariffs were just the first part of Trump’s plan.
Next, he says, the focus will be on China’s tech industry as a means of punishment for technology transfer policies that hurt the U.S. Trump hopes to hit $60 billion worth of ‘largely high-tech’ products within the next few months.
Which China continues to improve their technology manufacturing to boost their economy, perhaps Trump is looking to take a swing at the market to remain a global technological superpower.
Not all hope is lost, though.
According to Robert Lighthizer, a U.S. trade representative since the Reagan Administration, it’s an old tactic to announce tariffs to force both parties to the table for renegotiation.
In the end, no one wants to see a trade war that could ultimately hurt both economies. And where the U.S. and China goes, the rest of the world will follow. Hopefully this is nothing more than a negotiation tactic that will lead to better and improved trade relations between the U.S., China, and everyone in between.