The Start of Trade Wars: Trump’s Controversial Tariff Causes Layoffs
Several weeks ago, Trump once again made a controversial move aiming to impose tax tariff on foreign steel and metals. The President said the latest move will put the American metal industry into the limelight.
Trump Imposed 25% tariff On Steel Metals Ignited Trade Wars
The tariff can generate more jobs which increase companies’ productivity. This puts them in a global position to compete against other metal industries in the international market. Aside from that, the country can now maximize its profit from the importation and exportation. President Trump even said he would rather not trade with other countries if it means losing around $100 billion profit due to a lax tariff on import metals.
As usual, Trump’s latest move created a swirl of uncertainty in the international market. Giant countries such as China, Japan, United Kingdom, and the EU warned the President to reconsider his decision. If he pushes through his actions, it may lead to a devastating international trade war. These countries will retaliate by imposing an increased tariff on import metals from American’s US bikes and big brands such as Harley-Davidson and Kentucky Bourbon.
The President Remains Unfazed
Aside from that, the US’ booming economy and stock performance in the trade market plummeted down, especially in the metal industry. Many investors pulled out their shares in fear that they will lose their profits due to Trump’s impending trade wars. Despite the huge criticisms he received from the business and metal sector, Trump maintained his coolness and said that he loved trade wars.
He said that what he’s doing benefits the Americans first, so he’ll act on it without hesitation. He didn’t care if other countries would see his tariff as a threat for trade wars. He welcomed their retaliation. For now, President Trump continues to fulfill his campaign promises.
Americans Diminish Their Purchasing Power
At first, giant metal industries such as Keg welcomed Trump’s move since they could see huge potential and opportunities from the said proposal. However, now that they’re feeling the burden of taxes, the mind was quickly changed. Ever since Trump ascended into office, Czahor noted an astounding increase in metal prices up to 35%, according to the data presented by S&P Global Platts. The CEO said they preferred buying metals from the Chinese importers because it’s more affordable compared to purchasing it locally.
However, now that the imposed tariff on imported metals took effect, the price increased up to 4%. The company encounters a crisis when their cost of buying the steel won’t sum up to their profit anymore. The metals served as the organization’s blood since they’re the main supplier of America’s aluminum cans, craft beer, cocktails, wines, and even vehicles.
America’s Largest Steel Manufacturer Announced Layoffs
The imposed tariff prompts the Keg company to increase their price for their steel products. Unfortunately, increasing the price of metals create a domino effect on the American society. Since most companies rely on their products for their goods and services, this means they, too, will increase their pricing. For example, a large manufacturer of canned goods in the country will have to increase its price because the cost of production rises up.
In turn, the end consumers will bear the heavy burden of buying the products. Once the customer’s purchasing power diminish, they reduce their spending to keep tight on their budget. The country may have gained patriotic customers, but the business sector is losing their sales and profit in the process. This dreadful scenario prompts the company to announce their layoffs. From having around 30 employees before, the management arrived a painful decision to relinquish 10 workers.
This recent layoff produced an opposite effect on Trump’s promise of job growth. However, Czachor reiterates that the company will continue to thrive until the President can fix this problem. He hopes the US steel industry can still boom in the next couple of years.
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