ECON 2200 MACROECONOMICS

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Tariffs on Aluminum and Steel
The President of the United States of America, Donald Trump signed a policy that imposed tariffs on aluminum and steel that will be imported into the country. Tariffs aim at ensuring the local industries are protected from competitors. Donald Trump argued that some countries had been dumping their cheap metal to the USA market hence disadvantaging the firms in the country. For example, South Korea is linked with the supply of cheap steel from China. However, the tariffs are exempted on Mexico and Canada since they are USA’s allies. Additionally, Trump stated that Australia would also be exempted since they have been good friends. The countries that are mainly targeted by the policy are Egypt, Brazil, and China (Ballhaus, n. p.).
The policy will affect the economy of the United States both positively and negatively. The positive consequences include the following. One, the local industries that had collapsed due to the competition will be revived. Dumping of cheap metals will be reduced, and hence the sales of the Aluminum and steel industries in the USA will be increased. Secondly, more employment opportunities will be created. Also, the decrease in imports will boost the economy of the country. The plan will also improve the Gross Domestic Product (GDP) of the United States for the reduced dependence on the imports (Pettinger, n. p.). The tariffs may also negatively affect the United States. Countries affected by the importation tariffs may also apply tariffs on the imports from the USA.

For instance, the exportation of agriculture products to the countries affected by the tariff will be hard. The policy will also reduce the trade cooperation between the USA and other countries. The lack of stiff competitors may lead to the exploitation of metal purchases through increased prices.
Works Cited
Ballhaus, Jacob. “Trump Signs Metals Tariffs Sparing Some Allies”. WSJ, 2018, https://www.wsj.com/articles/trump-to-meet-metal-workers-as-aides-ready-tariff-rollout-1520517821. Accessed 17 Mar 2018.
Pettinger, Tejvan. Economicshelp.Org, 2018, https://www.economicshelp.org/blog/glossarhttps://www.economicshelp.org/blog/glossary/tariffs/y/tariffs/. Accessed 14 Mar 2018.