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Tires, Steel, and Aluminum Tariffs


Steel, aluminum, and tire tariffs are regulated by the US even in modern times. Their impact on the domestic and foreign economies has different consequences. For example, in 2018, the United States rebalanced metal tariffs to the worst for the European Union, to which the EU immediately responded with measures. However, in 2019, for Mexico and Canada, the import and import duties on aluminum and steel were abolished entirely (Long, para. 4). Such a protectionist trade policy in those years had a particular impact on the well-being of citizens within the country. Research has shown that tariff changes in foreign policy have raised the prices of final domestic products, altering the supply chain and reducing aggregate real income in the United States (Amiti, Redding & Weinstein, 208). Another consequence of such a policy is unemployment and less investment in the economy, in connection with which the researchers unanimously urge the US government to open trade (York, 1). Both sellers and buyers who could spend this tariff on other goods suffer from this fact.

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Short-term and Long-term Jobs Impact

The dependence of employment on tariffs in the short term is asserted to be negative. In research, as a rule, a relatively short period, no more than a medium-term, leads to a net loss of jobs, even though the program aims to maintain them (Amiti, Heise & Kwicklis, 177). It is connected again with the same reasons voiced above: reciprocal measures of foreign policy states; higher prices for goods and services within the country; changing the chain of proposals; lack of investment in the economy and unemployment. While there are many more jobs in steel than in aluminum, in the latter, tariffs have resulted in more jobs while maintaining the same output (Georgitzikis et al., 61). In the long term, there are several scenarios, but at the moment, the COVID-19 pandemic has made its adjustments, causing an economic shock around the world and the first severe crisis in recent years, which makes forecasting more difficult.

Tire Tariffs

Obama’s tire tariffs have also been a disaster for the American economy. First, due to the increase in prices for the end-user, companies suffered losses in retail trade. Second, as a consequence, jobs were lost again that the Obama program was supposed to save (Xiong, 576). It may appear that tariffs only have negative consequences, but much better effects can be achieved with more skillful risk management and calculating the effect of the terms of trade, which should be greater than the inevitable losses.


The tariff certainly has the power to influence the economy of a vast country. Firstly, the tariff will generate income in the short term, but it can have catastrophic consequences immediately, due to which all income will disappear. Second, the tariff always increases the product’s price for the end consumer, which is always negatively reflected in sales and supply chains (Bown & Irwin, 4). In the two cases discussed above, it turned out that the introduction of the tariff leads more to unemployment than to the preservation of jobs. Steps to open sales and deeper analytics can help address these issues and change the impact of tariffs for the better. It is not for nothing that the trend towards open sales after World War II stimulated an increase in employment, productivity, and, as a result, corporate income. Although the US has historically advocated open trade, the current situation with introducing new tariffs shows the opposite.

Works Cited

Amiti, Mary, et al. “Will New Steel Tariffs Protect US Jobs?”. No. 20180419. Federal Reserve Bank of New York, 2018.

Amiti, Mary, et al. “The impact of the 2018 tariffs on prices and welfare.” Journal of Economic Perspectives, vol. 33, no. 4, 2019, pp. 187-210.

Bown, Chad P., and Douglas Irwin. “What Might a Trump Withdrawal from the World Trade Organization Mean for US Tariffs?” Peterson Institute, 2018.

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Georgitzikis, Konstantinos, et al. The aftermath of US tariffs on aluminium imports. An assessment of tariff impacts and a review of the EU aluminium industry. Publications Office of the European Union, 2021.

Long, Heather. “US, Canada and Mexico just reached a sweeping new NAFTA deal. Here’s what’s in it.” Washington Post, 2018.

Xiong, Bo. “The implications of US punitive tariffs on Chinese tires for rubber exports from South-East Asia.” Journal of the Asia Pacific Economy, vol. 22, no. 4, 2017, pp. 575-586.

York, Erica. “The impact of trade and tariffs on the United States.” Tax Foundation: Fiscal Fact, vol. 595, 2018, pp. 1-9.

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