The rest of the world has not reacted kindly to President Donald Trump's desire for a 25 percent tariff on imported steel and a 10 percent tariff on aluminum. Ironically, the plan is quite unpopular with many Americans as well, reports Vox.
After Trump's announcement last Thursday, the Dow Jones Industrial Average dropped more than 600 points, the first sign that maybe this isn't such a great idea. The American International Automobile Dealers Association quickly issued a statement against the plan.
"These proposed tariffs on steel and aluminum imports couldn’t come at a worse time," said AIADA President and CEO Cody Lusk in the statement. "Auto sales have flattened in recent months, and manufacturers are not prepared to absorb a sharp increase in the cost to build cars and trucks in America. The burden of these tariffs, as always, will be passed on to the American consumer. Car shoppers looking for a deal will instead find that they are paying a new tax to transport themselves and their families."
The American Automotive Policy Council is also against the tariffs. "We are concerned with the unintended consequences the proposals would have, particularly that it will lead to higher prices for steel and aluminum here in the United States, compared to the price paid by our global competitors," it said in a statement. "This would place the U.S. automotive industry, which supports more than 7 million American jobs, at a competitive disadvantage."
The tariffs would have a significant adverse effect on America auto production, regardless of manufacturers' home countries are, and regardless of the American-made cars bound for export. The additional cost of materials would be passed on to consumers, making cars built here less competitive in the world markets. This leads to less demand, which leads to fewer jobs in the industry.
The issues aren't just limited to the automotive industry. The boat industry, machinery manufacturers, and even the beer industry are concerned about the negative effects of the tariffs on the U.S. economy. It seems the only ones feeling good about the tariffs are the steel and aluminum industries, whose stock prices rose while the market dropped.