You may think it’s “just politics.” But what if “politics” starts affecting your bottom line?

President Trump began initiating a series of tariffs intended to strengthen America’s place in the global economy. However, things like steel tariffs are having dramatic (sometimes good, sometimes bad) effects on the metal fabrication industry.

Curious how these tariffs are affecting both this industry and its consumers? Keep reading to get the answers that you need!

New Jobs

First, the good news. President Trump believes that these steel tariffs are the key to boosting the American economy. And in the short-term, he appears to be correct.

The short-term effect of these tariffs has been an increased reliance on American manufacturing. And this has led to the creation of new jobs through aluminum rolling mills in places like Kentucky. We even have flourishing industries related to the passivation of stainless steel.

So far, so good…right? Unfortunately, many fear that this is a bubble that could soon pop due to ongoing trade wars.

The Trade War Begins

President Trump has been frank about the topic of trade wars, claiming they are “easy to win.” However, history has shown the opposite to be the case.

The problem is that tariffs are not one-sided. As American imposes bigger and bigger tariffs on countries such as Canada, these countries turn around and impose their own tariffs on products that America trades for.

America imports more steel from Canada than from any other country. Tariffs cause prices to rise from these countries; meanwhile, as steel and other metals become more scarce within America, our own domestic prices will rise.

A slump in sales of steel and other metals can lead to factories shutting down or relocating (which recently happened with Harley Davidson). In this way, tariffs may represent a net loss, with the country poised to lose more jobs in the metal fabrication industry than we create.

Winners and Losers

One reason why Trump steel tariffs are a controversial subject is that they have created complex effects. Or, put more simply, they have created winners and losers within this new economy.

The high tariff on steel imports means that certain companies within the steel industry are thriving. The math on this is simple: more people are using steel even as steel prices soar, meaning that steel companies such as Nucor will be doing very well indeed.

However, higher prices is not a good change for everyone. Companies (especially smaller ones) being forced to pay a higher amount for such metals must either pass those costs along to the consumer, movie their business, or shut down altogether.

And hovering over all of this is the state of our economy. While the economy is strong, many companies can afford to put up with higher prices on steel and other metals. But if the economy is shaken, the consequences could be severe.

Steel Tariffs: The Bottom Line

Now you know more about how these steel tariffs affect the world around you. But do you know how else to get ready for a changing world?

Here at Lateet, we are all about bringing news you can use. To get ready to learn more than ever, check out our Useful Tips today!