In tweets calling for trade war, Trump reveals he doesn’t know how tariffs work

"Trade wars are good, and easy to win."

REBEKAH ENTRALGO
MAR 2, 2018, 9:51 AM

On Friday morning, President Trump expressed his support for trade wars, even though his unexpected announcement of imposing tariffs on foreign steel on Thursday rattled the markets.

“[…] trade wars are good, and easy to win,” Trump tweeted.

Donald J. Trump
?
@realDonaldTrump
When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!
5:50 AM - Mar 2, 2018
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26.2K people are talking about this

A few hours later, Trump added that the United States steel industry is in danger, and without steel, there is no country.

Donald J. Trump
?
@realDonaldTrump
We must protect our country and our workers. Our steel industry is in bad shape. IF YOU DON’T HAVE STEEL, YOU DON’T HAVE A COUNTRY!
8:01 AM - Mar 2, 2018
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20.5K people are talking about this

Trump’s plan would impose a tariff of 25 percent on steel imports and 10 percent on aluminum, but he did not specify whether certain countries would be exempt from the tariffs. This approach towards penalizing foreign steel is an attempt by Trump to make good on a campaign promise of protecting the American steel industry, but could have, what House Speaker Paul Ryan called, “unintended consequences.”

Unfortunately for Trump, tariffs are taxes and aren’t necessarily paid by countries like China, but more so by American consumers of Chinese goods. These tariffs will also likely have the adverse affect of rising the prices of American goods that rely on steel.

As The New York Times put it:

The most immediate losers are the industries that rely on steel and aluminum as an input and will face higher prices. That includes some of the nation’s biggest industries: the automobile sector; aerospace; heavy equipment; and construction. In short, the chassis of a Ford, the body of a Caterpillar bulldozer, the wings of a Boeing aircraft, and the steel girders inside a New York skyscraper are all about to get more expensive.

Following the tariff announcement on Thursday, some American breweries voiced their concerns that an aluminum tariff would raise the costs of their products.

“Anything that raises our raw material costs will affect the bottom line,” Henry Schwartz, founder and CEO of Milwaukee brewery MobCraft Beer told the Milwaukee Journal Sentinel.

According to the beer industry experts, for every dollar worth of beer produced in the U.S., brewers spend about a dime for cans and roughly five cents for aluminum. This small amount will quickly add up, considering brewers produce more than $55 billion worth of beer annually.

Read more
https://thinkprogress.org/trump-doesnt-understand-how-tariffs-work-5a00bbd94403/