Trump’s Tariffs: Trade War Fear, Job Cuts, Cost Increase And More

U.S. president launched tariff plans on imports from countries like Canada, Mexico, and China in the first phase while he is on to imports from other countries with a reciprocal tariff plan. However, this is giving a bitter result already as it raised fears of a trade war and much more.

After announcing on Monday 25% tariffs on all steel and aluminum imports beginning March 12, the businesses and industries within the US are likely to face a negative impact of tariffs. The previously announced tariffs triggered a fear of a trade war and countries like Mexico, Canada, and the European Union condemned the tariffs, and Japan, and Australia are seeking exemptions from the duties.

The Trump administration is targeting a gain in manufacturing acceleration and the creation of more jobs with the tariffs to build domestic industry, but the previous round of restrictions in 2018 proved the fall of US production capacity for aluminum by 32% and Stee is down 3.6%.

The tariffs imposed by Trump in 2018 created 1,000 new jobs in the US steel industry, but those 1,000 jobs eventually cost US customers $900K more. Also, the 75,000 jobs expected to have been added in industries making cars and other products using steel did not happen due to the rise in steel costs, further increasing the price of steel products.

Companies ranging from Coca-Cola, Ford, and Coty to many other smaller appliance firms expect to be affected by Trump’s moves. Coca-Cola said it might shift to more plastic bottle manufacturing rather than relying on metal imports. General Motors said it cut inventory in its international plants by 30% to 40% before Trump’s Jan 20 inauguration.

Trump’s tariffs could really affect small businesses. Small businesses run on very small margins, and a 25 percent increase in any product will hurt them. So, small business owners need a strategy to tackle the increase in costs amid tariffs.