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    Tariffs

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    Agnieszka Ścisło
    The United States imposed tariffs of 25% on steel and 10% on aluminium in 2018. The Trump administration cited unfair competition from China and national security concerns. However, the WTO found the tariffs violated international trade rules. While the tariffs supported domestic steel producers and employment, they hurt American consumers and downstream industries through higher costs, as well as foreign exporters and global trade. The Biden administration exempted some allies but kept other tariffs in place.

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    Tariffs

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    Agnieszka Ścisło
    20 views2 pages
    The United States imposed tariffs of 25% on steel and 10% on aluminium in 2018. The Trump administration cited unfair competition from China and national security concerns. However, the WTO found the tariffs violated international trade rules. While the tariffs supported domestic steel producers and employment, they hurt American consumers and downstream industries through higher costs, as well as foreign exporters and global trade. The Biden administration exempted some allies but kept other tariffs in place.

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    Economics, tariffs, real world example

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    The United States imposed tariffs of 25% on steel and 10% on aluminium in 2018. The Trump administration cited unfair competition from China and national security concerns. However, the WTO found the tariffs violated international trade rules. While the tariffs supported domestic steel producers and employment, they hurt American consumers and downstream industries through higher costs, as well as foreign exporters and global trade. The Biden administration exempted some allies but kept other tariffs in place.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    20 views2 pages

    Tariffs

    Uploaded by

    Agnieszka Ścisło
    The United States imposed tariffs of 25% on steel and 10% on aluminium in 2018. The Trump administration cited unfair competition from China and national security concerns. However, the WTO found the tariffs violated international trade rules. While the tariffs supported domestic steel producers and employment, they hurt American consumers and downstream industries through higher costs, as well as foreign exporters and global trade. The Biden administration exempted some allies but kept other tariffs in place.

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    of 2

    REAL WORLD EXAMPLE:

    THE EFFECTS OF TARIFFS ON MARKETS AND STAKEHOLDERS


    In 2018, the United States imposed a 25% tariff on steel and 10% on aluminium. The reason
    for imposing these tariffs, according to the Trump administration, was to counteract unfair
    competition from China (antidumping policy) and national security interests.
    According to the US Department of Commerce report (2018), global steel markets are plagued
    by chronic excess capacity caused by subsidies and other anti-competitive policies pursued
    by exporting countries. China, for years, has faced concerns from other countries that it has
    been selling its steel abroad for below-market prices thanks to unfair government support.
    The report also states that imports of steel products pose significant risks to the US. It
    undermines US steel industry, is critical to national defense, the maintenance of critical
    infrastructure, and the competitiveness of many domestic manufacturing industries.
    The Biden administration signed deals with the European Union, Japan and the UK exempting
    them from the tariffs or admitting their shipments up to a certain level as it tried to smooth
    relations with allies but kept the tariffs in full for other countries.
    The World Trade Organization (WTO) has found that tariffs on steel and aluminium imports
    that were imposed by the US violate global trade rules (December 2022).

    Sources:
     Hersh, A.S., Scott R.E., Why Global Steel Surpluses Warrant U.S. Section 232 Import
    Measures, Economic Policy Institute, March 24, 2021,
    https://www.epi.org/publication/why-global-steel-surpluses-warrant-u-s-section-232-
    import-measures/ (accessed December.12.2022)
     Sherman N., Josephs J., WTO says Trump's US steel tariffs broke global trade rules,
    BBC, December 10, 2022, https://www.bbc.com/news/business-63920063, (accessed
    December.12.2022)

    THE EFFECTS OF TARIFFS ON MARKETS AND STAKEHOLDERS:

    Winners:

     Domestic producers of steel (higher producers surplus)


     Domestic employment in the protected industry (higher domestic production)
     The government (tariff revenues)
    Losers:

     Domestic consumers (lower consumers surplus)


     Foreign producers (lower exports to the USA)
     Domestic producers on related markets (higher costs of production when one
    of the factors of production is steel)
     Domestic income distribution
     Efficiency of production
     Global allocation of resources

    Agnieszka Ścisło, Real World Examples


    USEFUL DIAGRAMS:

    Susa – USA domestic supply of steel

    Sw – world supply

    Dusa – USA domestic demand

    Pw – word price of steel

    E – equilibrium point on the USA steel


    market

    Agnieszka Ścisło, Real World Examples

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