Commentary: Trump’s Tariff on America

Do you remember when you were a kid, spending a summer afternoon at your local pond? I always wanted to throw rocks as far towards the other shoreline as I could. I loved watching them splash into the still water and see the ripples spread in all directions. But no matter how hard I threw that rock towards the other shore, the ripples I made with that rock always hit my shore first.

The same thing has happened with Trump’s proposed tariff on imported steel. After making his announcement to US steel executives on March 1st, America woke up this week to find their domestic supply of steel had sky rocketed in price. At my company, Curbtender Inc- a manufacturer of garbage trucks and street sweepers, we received 22% – 26% price increases from all our American producers of raw steel. How can this be? Trump intended to throw a rock at China, but America is the one being rocked by the ripples instead.

The reality is that as soon as Trump made the tariff announcement, American steel executives made their own decision to raise their prices proportionately. How could they possibly pass up such an opportunity to increase profits? Trump’s tariff acts as a barrier to competition and competition is what prevents prices from rising. With a competitive barrier removed, American producers of steel are understandably now charging more for the same product. But American manufacturers and American consumers are the ones footing the bill for the steel industry’s artificially propped-up profits.

As you may have seen in LinkedIn’s Daily Rundown , a “nonpartisan study from The Trade Partnership found that the proposed tariffs would add 33,000 steel and aluminum jobs, but cost 179,000 in other industries.”

Costs for manufactured items in America absolutely are going up as a result of this tariff. My own company will be raising prices across the board on Friday, March 16th. But it’s not because imported steel is expected to cost 25% more. It’s because our American steel suppliers have already proportionately raised their prices.

Imagine if your state deemed McDonald’s to be some great evil for selling cheap hamburgers. If they decided to deal with this problem by slapping McDonald’s with a 25% tax, would Burger King and Wendy’s keep their prices the same? Of course not. They would seize the opportunity to go up in price and make more money. That would be great for those business owners, but terrible for anyone that purchases fast food.

Likewise, the big winners of Trump’s steel import tariff are American steel executives and a few communities in steel production areas. The losers are small manufacturers and the American economy.

Trump had previously made great economic gains thanks to his tax policies and changes to business regulations. But now he threatens all of America’s economic progress with artificial cost increases and looming trade wars.

Mark Watje is President of Curbtender. He can be reached at MWatje@curbtender.com. Original article can be found at: https://www.linkedin.com/pulse/trumps-tariff-america-mark-watje/?trackingId=LckkXABiNmG8BPiie5cUiw%3D%3D.

*The content of this article does not reflect the official opinion of Waste Advantage Magazine. The information and views expressed lie entirely with the author.

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