What Steel Tariffs Would Mean For Consumers
SCOTT SIMON, HOST:
President Trump's decision to put stiff tariffs on imported steel and aluminum has drawn praise from leaders of those industries in the U.S. But the move has also drawn widespread criticism that the tariffs could cost U.S. consumers and be the first shot in a global trade war. NPR's John Ydstie joins us in our studios. John, thanks so much for being with us.
JOHN YDSTIE, BYLINE: My pleasure, Scott.
SIMON: Let's begin with cost to consumers. Metals are used in thousands of products...
SIMON: ...Soup cans to airplanes.
YDSTIE: Candy wrappers.
SIMON: Well, how much is it going to raise prices then?
YDSTIE: Well, you know, we really don't know for sure. The president is saying essentially that imported steel will be taxed at 25 percent and imported aluminum will be taxed at 10 percent. That's going to raise the price of all steel and aluminum in the U.S. And that's going to boost the cost of all the products that are made from those metals. Now President Trump's commerce secretary, Wilbur Ross, played down the effects on consumers on CNBC yesterday while holding up a can of Campbell's soup. So let's listen to that.
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WILBUR ROSS: In the can of Campbell's soup, there's about 2.6 pennies' worth of steel. So if that goes up by 25 percent, that's about six-tenths of one cent on the price of a can of Campbell's soup.
SIMON: OK, not much. But that's for a can of soup.
YDSTIE: Right. And Ross added that the price of an average automobile could increase a couple of hundred dollars. So for a lot of people, the cost increases could offset much of President Trump's tax cut. And Republican Senator Orrin Hatch, a big supporter of those tax cuts, criticized the president's decision. Hatch called the tariffs a tax hike the American people don't need and can't afford.
SIMON: John, what are the chances that other countries will now retaliate with their own tariffs?
YDSTIE: Well, it's very good. In fact, the European Commission president has singled out Harley Davidson motorcycles, bourbon - American-made bourbon and Levi's blue jeans as potential subjects for retaliation. The Chinese have threatened to put tariffs on U.S. soybeans. And, you know, this is the big danger, that this spirals into a tit-for-tat trade war that hurts American producers and workers and consumers and really hurts the whole global economy.
SIMON: But President Trump tweeted Friday morning trade wars with other countries would be good and easy to win.
YDSTIE: Yeah, but he's getting a lot of pushback from former economic advisers to both Republican and Democratic presidents. And in fact, Gary Cohen, Trump's own top White House economic adviser, reportedly opposed the tariffs. And in addition, a lot of Republican lawmakers - dozens of companies have warned that the tariffs are going to be harmful.
SIMON: One of the ideas behind tariffs for those who approve of them is that it will open up more jobs in the U.S. steel and aluminum industries. Is that realistic?
YDSTIE: Well, U.S. steel and aluminum companies say they will hire more workers. But one study shows that for every worker in the steel industry, there are 80 Americans working in steel-using industries like the auto industry and the aircraft industry. And they could be hurt. And studies of previous efforts to create steel jobs with tariffs like one during the George W. Bush administration found they didn't work. So I think it's likely this move will cost more jobs than it saves or creates.
SIMON: Is it clear to you, John, that this will go through at all because it hasn't been signed, right? And we don't have the final details.
YDSTIE: That's right. The president gave the headline numbers. But it was clear that the rest of the administration wasn't really on board yet. And the details are apparently still being worked out. There are certainly serious lobbying going on from countries and companies who want exemptions. We'll see. We should know more next week when the president says he'll sign the paperwork.
SIMON: NPR's John Ydstie, thanks so much.
YDSTIE: You're welcome, Scott.
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