Investing.com - President Trump says "trade wars are good", but history suggests otherwise. Here's five things you need to know about the President's decision to raise tariffs on steel and aluminum.
1. Jobs Will Be Saved And Lost
The President wants to protect 170,000 jobs in the steel and aluminum industries.
But an analysis of the Bush steel tariffs a decade ago concluded they resulted in the loss of 200,000 jobs in other industries.
2. Wrong Trade Partner Punished
The President is unhappy about the U.S. trade deficit with China, but China accounts for only 2% of U.S. steel imports. Meanwhile, Canada, with whom the U.S. has a trade surplus, accounts for 16% of steel imports.
3. Higher Costs For Consumers
The tariffs will raise material costs for Ford and General Motors (NYSE:GM) by a combined $500 million a year. That will add $200 to the price of a car.
4. Retaliation Will Hurt
The European Union has threatened retaliation by imposing tariffs on American goods, such as blue jeans, bourbon and motorcycles, which could destroy an estimated 190,000 jobs.
5. Higher Interest Rates
Foreign governments could pull back on their purchase of U.S. government debt, raising interest rates and borrowing costs for companies and consumers.
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