The Trump administration's trade policy made a bold statement with a spontaneous announcement to impose tariffs of 25 percent on steel and 10 percent on aluminum. The president excluded Canada and Mexico, for now. These tariffs could have a large impact on the Michigan economy.
What are tariffs? A tariff is a tax or duty that the government places on a class of imported goods. In theory, these foreign products become more expensive. However, US manufacturers receive a boost as domestic production is not taxed. The hope is that as steel and aluminum from other countries becomes more expensive due to the new taxes, more businesses will turn to American steel and aluminum makers to fill demand.
Michigan is particularly vulnerable to these tariffs because of the role of steel and aluminum in the auto industry. Companies in Michigan play a large role in manufacturing components of vehicles and vehicles themselves. Industry experts are speculating that the tariffs will likely lead to higher costs throughout the automotive industry and its consumers.
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Wednesday, April 24, 2019 | 7:30 AM – 9:30 AM EDT | The Hartford Club