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3 Things to Consider After Trump Makes Tariffs Official: Jobs, NAFTA and Beer

03/12/2018 By

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Our sister site MetalMiner has had its most heart-stopping week and a half arguably since that site was founded, covering the Trump administration’s announcement and subsequent signing of a proclamation imposing broad-reaching steel and import tariffs.

In the time since my colleague and MetalMiner editor Fouad Egbaria gave us a rundown on the market effects, reactions and procurement implications, President Trump’s announcement (which, until last Thursday, was “just that — an announcement — until the formal policy is hammered out and put to paper,” as Egbaria wrote), was finally, well, put to paper, in a way.

“Hammered out” is a different story altogether.

Essentially, the proclamation Trump signed last Thursday kept the announced tariffs at 25% for steel imports and 10% for aluminum imports, with only a few more bits of new policy information.

As reported on MetalMiner, the tariffs will go into effect around March 23, 2018, and will exclude Canada and Mexico for the moment, until NAFTA negotiations finish.

That leaves other countries such as China, South Korea, Japan, Germany and Brazil open to be hit by these tariffs. The president, however, claimed they would be flexible when imposing them, adding that the tariff order may exclude some additional countries and would give him the authority to raise or lower levies on a country-by-country basis and add or take countries off the list as he deems fit.

In essence, many uncertainties remain.

Jobs, Jobs, Jobs

Last Friday, the Bureau of Labor Statistics released the U.S. jobs report, which was far rosier than surveyed economists even expected: 313,000 jobs were added last month, the most since July 2016 and the 89th straight month of gains, a record,” according to the New York Times, citing BLS data. “Economists had anticipated a gain of about 200,000.” 

Wage growth also grew by 2.6%.

These two figures could be a key baseline to measure the short, medium and long-term outcomes of the effects of Trump’s import tariffs.

Interestingly, the number of added jobs just in the last month is more than double the number of  jobs anticipated to be lost as a result of the Trump tariffs — 146,000 or so — according to a frequently cited trade group report and highlighted in MetalMiner Executive Editor Lisa Reisman’s recent commentary. This could potentially lend credence to those that argue the potential economic blow from the tariffs — including job losses — is, well, overblown.

The NAFTA Angle

MetalMiner Editor at Large Stuart Burns took a different tack in the aftermath of the announcement and signing: will the exemptions of both Canada and Mexico within the context of renegotiating NAFTA backfire?

“Either sourcing steel and aluminum from Canada and Mexico poses a threat to U.S. national security or it does not,” Burns writes. “It’s hard to see how the conclusion of a new NAFTA deal would alter the security situation, suggesting the president’s linkage between an exception for Canada and Mexico and the conclusion of a renegotiated NAFTA agreement has little to do with national security and more to do with leverage and protectionism.”

Check out the full article for that perspective.

It’s All About the Beer

I mean, can we at least exempt aluminum can sheet, people?

That’s what the Beer Institute implored the president on behalf of MillerCoors and other biggies in the beer business in a press release after the signing.

“A 10% tariff would be a new $347 million annual tax on America’s brewers and beer importers and could lead to the loss of more than 20,000 American jobs from people whose livelihood depends on the U.S. beer industry,” said Jim McGreevy, president and CEO of the Beer Institute, in a statement. “The majority of Americans oppose implementing these tariffs because they will raise the cost of products, including beer, that Americans eat, drink, and enjoy.”

I don’t want to pay an extra cent or two for my brew! (At least that’s what Commerce Secretary Wilbur Ross maintained would be the maximum cost increase per can, in an interview last Friday morning on NPR.)