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Donald Trump Tariff Essay

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Earlier this week, President Donald Trump introduced a plan that would include a 25 percent tariff on imported steel and a 10 percent levy on imported aluminum from every country, except Canada and Mexico. The tariff is an example of protectionism, which is when the government restricts trade through trade barriers in order to protect their economy. This is because in the last two decades, the domestic steel industry has been reduced by 35 percent, and between 2013 and 2016, the aluminum industry has contracted by 60 percent. Already following the order, U.S. Steel has announced that they plan to restore a blast furnace in Illinois. At the same time, Central Aluminum said that they were looking to devote $100 Million towards a smelter in Kentucky and hire 300 people. Trump plans to stop the importation of foreign steel into the U.S. This has caused some to be worried that this tariff will be detrimental towards consumers and producers, as well as America’s trading partners. Others say that this could be the beginning of a trade war that will leave farmers, ranchers, and …show more content…

The tariff, in this case, is being placed on steel and aluminum in America by President Donald Trump. Due to the tariff, the domestic production of steel will increase from Q1 to Q2. This will, in turn, result in an increase in the price of steel from P1 to P2. Therefore, the tariff will reduce the shortage in the market for steel from Q1 supply/Q4 demand to the Q2 supply/Q3 demand, increasing the price for both domestic producers and consumers. From Q4 to Q3 domestic producers are importing less from America thus decreasing the demand, and from Q2 to QE producers are supplying more, bringing economic growth. The shaded region below shows the revenue the government is receiving from the tariff. In correspondence with the graph below, it can be seen that the new equilibrium under the tariff would be placed at

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