President Donald Trump’s sweeping 25% tariffs on steel and aluminum from all countries, announced Monday night, may not end up meaning much for consumers and the prices they pay, depending on how they are applied.
While the president said no country is exempt from these tariffs, which are set to take effect March 4, “I still expect the impact on consumer prices to be muted,” Adam Hersh, senior economist at the Economic Policy Institute, told MarketWatch. “The president says a lot of things. It’s not always clear what he actually means, or what will actually happen when the rubber meets the road.”
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“Consumers really didn’t or barely felt the impacts of these tariffs for several reasons,” EPI’s Hersh said. First, Trump eventually lifted the metal tariffs on Canada and Mexico in 2019, and 108,000 products were exempted from tariffs as of mid-2020 because companies were allowed to petition for exclusions, according to EPI.
“A lot of importers didn’t end up paying the tax,” Hersh said. “Even though Trump is saying no exclusions now, in 2018 the measures also initially had no exclusions and the exclusion petition process was added not too far down the road.”
Second, while aluminum is used in a wide array of consumer products, “the cost is a pretty small share of the overall final cost of goods,” he said.