Steel Tariffs: The Impact on the U.S. Economy
“The recently enacted tariffs on steel and aluminum have created an uncertain investment climate for both domestic and foreign firms, causing companies to rethink their supply chain strategies and put their expansion plans on hold,” said Stephen Gray, president and CEO of Gray Construction.
In a recent trade move, the White House enacted a 25 percent tariff on foreign-made steel and also a 10 percent tariff on aluminum. From U.S. trade partners to global companies with vast supply chains, reactions have been strong.
On June 1, the exemptions on Canada, Mexico and the European Union (EU) expired. To retaliate, the EU said they will impose a 10-page list of tariffs on U.S.-made products, including bourbon, motorcycles and various food products. Mexico also responded with tariffs on U.S. pork bellies, apples, cranberries, grapes, certain cheeses, and various types of steel. As well, Canada followed with a surtax on American steel, aluminum, coffee, candy, pizza, and quiche.
China was not granted an exemption, so it took its case to the World Trade Organization (WTO). Other countries are also responding with either their own disputes or with new trade agreements with the U.S.
Stephen Gray and Barry Zekelman, executive chairman and CEO of Zekelman Industries, recently discussed their reactions to President Trump’s decision to impose tariffs on allies, such as Canada.
“Of significant concern is the impact the tariffs pose on foreign direct investment (FDI). More than 70 percent of Gray Construction’s current business is with international customers. Could the tariffs discourage further investment and expansions from international companies? The answer is unknown at this point,” said Gray.
For more information on the steel tariffs and economic growth, visit Area Development magazine’s “Steel Tariffs to Prevent U.S. Economic Growth.”