US manufacturers blame Trump-era tariffs for swelling inflation

US manufacturers blame Trump-era tariffs for swelling inflation

American manufacturers believe that the Trump-era import tariffs are to blame for swelling inflation across the United States, a report says.

The administration of former President Donald Trump implemented tariffs on products including lumber, steel, and semiconductors, claiming the move would protect American companies from cheap imported products from China and other countries.

However, US companies, which import the goods and pay the levies, have, for long, opposed the tariffs and now are pushing for the administration of President Joe Biden to lift them, The Wall Street Journal reported on Sunday.

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They contend that tariffs contribute to rising prices and product shortages that are accompanying the post-pandemic recovery.

“I have had 15 price increases from my primary steel supplier since September,” said Scott Buehrer, president of B. Walter & Co., a Wabash, Ind., maker of fabricated metal products. “What’s the justification for these tariffs when you have sky-high steel prices?”

Buehrer said he has decreased his payroll by 10% to reduce costs as the prices of rolled steel increased almost three times as much since last fall.

Early in May, Buehrer’s company along with over 300 manufacturers wrote a letter to Biden, asking the Democratic president to immediately end 25% tariffs on steel and 10% levies on aluminum.

The Biden administration has already said it is reviewing the tariff policy but noted there were no immediate plans to lift the tariffs.

The Trump administration first imposed tariffs on steel and aluminum imports from several countries, including Canada, Mexico, and Turkey, in March 2018.

Trump claimed that “aggressive foreign trade practices” related to the trade goods amounted to an “assault on our country” and the American steel industry.

The former US president then announced several rounds of tariffs on Chinese goods. The two countries exchanged tariffs on more than $360 billion in two-way trade.

Last year in September, nearly 3,500 US firms — including major corporations such as Tesla, Ford Motor, Target, Walgreens, and Home Depot – took legal action against the Trump administration for imposing tariffs on Chinese goods.

The WSJ also said in its report that some economists argue the tariffs have had only muted effects on prices and that their removal will not help ease the price pressure.

Labor unions and the steel industry, the report said, are calling on Biden to keep the metal tariffs in place, saying in a May 19 letter that the policy has enabled the industry to “restart idle mills, rehire laid-off workers and invest in the future.”

“The tariffs have been in place since 2018 and there has been no inflationary pressure since then,“ said Roy Houseman, legislative director at United Steelworkers. “The US has put trillions of dollars of stimulus in the economy. That is going to impart some inflationary pressure.”

 

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