President Donald Trump is moving ahead with tariffs on steel and aluminum, hoping to revitalize U.S. industry and to protect our national security. Here are some facts to know as these headlines continue:
- Tariffs on imported steel will be 25 percent; aluminum, 10 percent.
- Canada and Mexico will be excluded as the U.S. discusses its national security and the North American Free Trade Agreement with both countries.
- The option remains open to modify the tariffs on other countries, and Australia is one the president has already alluded to.
- The tariffs will go into effect March 23.
These tariffs will be imposed under a law that allows America to take whatever action necessary to defend our national security, and both steel and aluminum are considered critical to this end.
The big downside is that this new tariff will likely create increased tensions with Republican leaders, just as it seems there is beginning to be unity in the party. This could cause some temporary—or even continued—dysfunction within the Republican Party, but it will quickly be set aside if we start to see negotiations with other countries, and as we add up the dollars this could mean for American businesses and their employees. For instance, the proposed wall could be built with these extra funds, not to mention a new competitive environment for international markets that begin to open up to American companies.
The other aspect of these tensions within the Republican Party is that the vast majority of Republican voters will be on the side of President Trump, and that fact should help calm some of the rhetoric and tensions during an election year.
But keep in mind this also has the possibility of dramatic impact on the negative side for markets. It certainly could slow the advance of a growing economy, as some companies may be tapping the brakes right now, but all of this is likely to be short-lived assuming these tariffs don’t lead to a full-blown trade war.
Dan Celia is President and CEO of Financial Issues Stewardship Ministries, Inc., and host of the nationally syndicated radio and television program “Financial Issues,” heard daily on more than 600 stations across the country and reaching millions of households on the National Religious Broadcasters Network, BizTV and Dove-TV. To learn more, visit www.financialissues.org.