Although the ongoing trade wars between the United States and China may seem inconsequential to most Americans, the tariffs imposed by the US will likely affect the prices that many people pay on everyday goods. As US President Donald Trump continues to stand by his intention of imposing tariffs of 25 percent on imported steel and 10 percent on imported aluminum, prices on consumer goods will continue to creep up as a result. Here are three common goods that will be affected by these tariffs:
Automobile: Clearly a tariff imposed on steel and aluminum will have big ripple effects on the automobile industry. Not only will American consumers see price increases on most vehicles, the tariffs also have the potential to lead to job loss. A report analyzing the effects of the 2002 steel tariffs imposed by the administration of former President George W. Bush demonstrated that the regulation led to the loss of 200,000 American jobs in the auto industry.
Soft Drinks And Beer: The costly aluminum tariff will greatly affect any industry that relies on massive quantities of aluminum to package its products. The Beer Institute trade group claims that the tariff will cost American consumers an estimated $347.7 million in taxes as well as lead to the loss of over 20,000 domestic jobs.
Canned Goods: Because the tinplate steel used in the manufacturing of cans is now under the tariff provision, this industry will also be greatly affected by the new taxes. The Can Manufacturers Institute said that this type of steel accounts for approximately 60 percent of the production cost of a can. The institute estimates that this will cost the industry about $1 billion in annual costs if factoring in a 5 percent tariff.
In addition to the impact on the cost of goods, the tariffs will also greatly affect the investment industry, especially those related to foreign companies. On the heels of Trump’s tariff announcement, Swedish appliance manufacturer Electrolux stated that it would halt plans for upgrades and expansions at a plant in Tennessee because of fears of a significant increase in the cost of steel in the US. The US also faces the threat of overseas retaliation as the European Commission vows to fight back against the tariffs.