Tags: consumer | tariffs | aluminum | steel

Analysts: Consumers Unlikely to See Major Price Effects From Tariffs

Analysts: Consumers Unlikely to See Major Price Effects From Tariffs
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By    |   Friday, 01 June 2018 01:38 PM

Analysts said that consumers are not likely to see major price increases as a result of tariffs on imported steel and aluminum, the Los Angeles Times reported.

One of the reasons is that during the manufacturing process, any large cost increases in the original raw materials get filtered out of the final price of the product, according to the LA Times, and another reason is that competition in some markets will cause some companies to have to absorb the increases.

One factor is the time lag between increasing prices and when manufacturers will actually pay for new steel and aluminum.

For example, the price of the aluminum and steel that companies buy to make aircraft, cars, beer cans, and other items has already gone up since mid-February when the Commerce Department called on President Donald Trump to set tariffs, the LA Times noted.

"We believe the tariff is already priced into the current premium number. The premium metal would have been about the same level as now without the news today," said Doug Hilderhoff, head of North American aluminum analysis at CRU, referring to the Trump tariff announcement.

The tariffs, 25 percent on steel and 10 percent on aluminum, will affect imports from the European Union, Mexico, and Canada.

Leaders in the EU, Mexico, and Canada slammed the tarifffs.

Canadian Prime Minister Justin Trudeau tweeted:

Cecilia Malmstrom, Europe's top trade commissioner, said that the tariffs are illegal.

"We will now trigger a dispute settlement case at the WTO (World Trade Organization), since the U.S. measures on steel and aluminum clearly go against agreed international rules," Malmstrom said Friday, NPR reported. 

"A trade war makes everyone worse off," said USC finance professor Larry Harris, The Los Angeles Times reported. "

Higher tariffs will discourage foreign consumption of our exports and that will hurt employment in the United States and lower the prices we receive for our exported goods and services," Harris said, The Times reported.

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Analysts said that consumers are not likely to see major price increases as a result of tariffs on imported steel and aluminum
consumer, tariffs, aluminum, steel
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2018-38-01
Friday, 01 June 2018 01:38 PM
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