CLEVELAND, March 13, 2018 /PRNewswire/ -- Two months after
placing tariffs on imported washing machines and solar panels,
President Trump imposed tariffs on steel and aluminum imports last
week. The tariffs will increase the cost of imported steel and
aluminum by 25% and 10%, respectively. While this advances
President Trump's America First
agenda, a number of US trading partners are seeking exemptions or
planning retaliatory tariffs, and the overall impact on the
American economy is uncertain.
While Canada and Mexico are temporarily exempt while the future
of NAFTA is being negotiated, the tariff is applied uniformly to
all other countries, some of which are reconsidering their business
relationships with the US. For instance, even before the tariff was
formally announced, Sweden's
Electrolux placed its planned $250
million plant expansion in Tennessee on hold. Although Electrolux
utilizes US-produced steel at its plant, the company anticipates
that the cost of appliances produced in the US will increase and
has postponed investment in US operations as it evaluates the full
impact of the tariff.
Another potential impact is a shift away from US manufacturing.
The markets for appliances and motor vehicles in the US, two
industries that use significant amounts of steel and aluminum, are
supplied by both domestic production and imports. As manufacturing
these products in the US becomes more expensive, imports may have a
competitive advantage on price, which would counteract the
president's intention with the tariffs.
The tariffs will benefit workers directly involved in steel and
aluminum production. Still, the number of American workers in
steel- and aluminum-using industries is substantially higher than
workers in the steel and aluminum production industries. An
increase in the cost of imported steel and aluminum will likely
cause price increases on finished goods. For expensive products
such as heavy machinery, motor vehicles, recreational vehicles, and
boats that are still produced in the US in significant numbers, the
cost increase will be noticeable. "At the end of the day, the
tariff will hit consumers where it matters most, their wallets,"
says Freedonia analyst Kyle Peters.
"US businesses will also find it harder to compete overseas, as the
cost of their product becomes more expensive."
For more information, see Freedonia's studies covering
appliances, HVAC equipment, machinery, motor vehicles, and
recreational boats and motor vehicles. Browse by category here:
https://www.freedoniagroup.com/ReportsAndStudies.aspx
About The Freedonia Group – The Freedonia Group, a
division of MarketResearch.com, is a leading international
industrial research company publishing more than 100 studies
annually. Since 1985 we have provided research to customers ranging
in size from global conglomerates to one-person consulting firms.
More than 90% of the industrial companies in the Fortune 500 use
Freedonia Group research to help with their strategic planning.
Each study includes product and market analyses and forecasts,
in-depth discussions of important industry trends, and market share
information. Studies can be purchased
at www.freedoniagroup.com and are also available on
www.marketresearch.com and www.profound.com.
Press Contact:
Corinne
Gangloff
+1 440.684.9600
cgangloff@freedoniagroup.com
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SOURCE The Freedonia Group