President Trump’s threat to impose steel and aluminum tariffs has trade economists concerned about how United States trade partners could respond.
According to Virginia Tech Associate Professor Jason Grant, who opposes the proposed increased tariffs, trade economists fear retaliation from other countries should the U.S. follow through with the suggested 25 percent steel and ten percent aluminum tariffs.
“As opposed to safeguards or antidumping and countervailing duties, the proposed steel and aluminum tariffs for national security reasons could be in place indefinitely,” said Grant. “And the proposed imposition of these tariffs on the basis of national security will leave the U.S. vulnerable to retaliation by some of our biggest, and perhaps most important, trade allies.”
· The immediate target for retaliation toward the proposed tariffs are in product lines for which we have a trade surplus, which happen to be farm products – from corn and soybeans to wheat and sorghum.”
· “Both China and the EU have already indicated that they would impose tariffs on U.S. food and agriculture products if the U.S. places tariffs on steel and aluminum.”
· “The proposed tariffs stand to disrupt substantial two-way trade between the U.S. and Canada, Mexico, and South Korea.”
Grant is an associate professor of agricultural and applied economics in the Virginia Tech Department of Agricultural and Applied Economics. His research expertise is in the area of agricultural trade, specifically with regards to bilateral and regional free trade agreements, as well as tariffs and non-tariff measures. Grant has performed economic analysis for the Office of the Chief Economist of the United States Department of Agriculture, including an analysis that quantified the benefits and drawbacks to the controversial Trans-Pacific Partnership in 2016. Grant directs the Virginia Tech College of Agriculture and Life Sciences’ Center for Agricultural Trade, which promotes agricultural trade through research, education, and outreach.
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