Let's use rough numbers just as examples in this all. trump puts tariffs on steel, doubling prices from $500 a ton to $1,000 a ton. This means that American steel producers will make $500 extra profits off of every ton of steal they produce, so a great time to be an American steel producer.
But a terrible time to be a US car producer, or any of the other US manufacturers that use steel as an input. They have to pay $1,000 a ton, where the rest of the world is paying $500 a ton.
trump realizing there is a problem for US car producers, makes an exception for them. If they buy foreign steel, the US taxpayers will refund them the cost of the tariffs. Obviously, if they buy American steel, they are out of luck. So US car producers have to buy only foreign steel, driving down demand for American steel.
Let's recap: all American manufacturers, except a few favored industries, have to buy steel at double the price as foreign manufacturers, which prices American manufacturers out of the market. The few favored industries have to buy from foreign steel producers. American steel producers sell much less steel, but at a much higher price set by the government, which means they can never compete with the outside world.
But what about the long term effect? No one in their right mind would make a 20 to 50 year investment in this chaos. trump is changing tariffs mid-speech. he mostly does it based on who he last talked to, so if the white house intern enjoys riding an ATV, ATV's get favored treatment, but if the intern enjoys riding a moped, mopeds get favored treatment.
But a terrible time to be a US car producer, or any of the other US manufacturers that use steel as an input. They have to pay $1,000 a ton, where the rest of the world is paying $500 a ton.
trump realizing there is a problem for US car producers, makes an exception for them. If they buy foreign steel, the US taxpayers will refund them the cost of the tariffs. Obviously, if they buy American steel, they are out of luck. So US car producers have to buy only foreign steel, driving down demand for American steel.
Let's recap: all American manufacturers, except a few favored industries, have to buy steel at double the price as foreign manufacturers, which prices American manufacturers out of the market. The few favored industries have to buy from foreign steel producers. American steel producers sell much less steel, but at a much higher price set by the government, which means they can never compete with the outside world.
But what about the long term effect? No one in their right mind would make a 20 to 50 year investment in this chaos. trump is changing tariffs mid-speech. he mostly does it based on who he last talked to, so if the white house intern enjoys riding an ATV, ATV's get favored treatment, but if the intern enjoys riding a moped, mopeds get favored treatment.
