Tariffs on

Steel and Aluminum

 
 

Vocabulary

tough	promise	campaign (2)
tariff	major (2)	aluminum
steel	announce	crack down
boost	crack (2)	enormous
abroad	level (2)	pretty much
hire	field (2)	level playing field
allow	target (2)	disgraceful
ally	retaliate	Speaker of the House
threat	reaction	measure (2)
profit	disagree	profit margin
mill	located	penetration
tinfoil	analysis	regulation
notice	consumer	in essence
harm	expand	aerospace
impact	upward	take issue
affect	reflect (2)	uncertainty
fair (3)	inflation	degree (3)
effect	way more	administration (2)
overall	flood (2)	Federal Reserve
advisor	conflict	protectionism
margin	suggest	disagreement
detail	attenuate	specifically

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Video

 

 
 
 
 

Transcript

Judy Woodruff: President Trump promised during the campaign to get tougher on trade, and today, he took a major step by announcing new tariffs on imported steel and aluminum.

It has led some experts to warn of the possibility of a much bigger trade war.

But at a meeting with industry leaders, Mr. Trump said the U.S. needs to crack down on countries flooding the American market with cheap metals.

And he told business leaders that the move would give them a big boost.

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Donald Trump, President of the United States: “Pretty much all of you will immediately be expanding — if we give you that level playing field, if we give you that help.

And you’re going to hire more workers, and your workers are going to be very happy.

They’re going to be very, very happy.”

And again, what’s been allowed to go on for decades is disgraceful.

It’s disgraceful.”

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Judy Woodruff: Mr. Trump said he would announce which countries would be targeted next week. There would be twenty-five percent tariffs on steel and ten percent on aluminum.

A number of Republican allies, including the Speaker of the House, Paul Ryan, took issue with the president’s decision.

The president has repeatedly threatened to take tougher measures against China. And the Wall Street Journal’s Greg Ip is here to explain what all of this might mean.

Greg, thank you for being with us. Before we get into the reaction to all this, including in the markets, what would tariffs at this level, 25% on steel, 10% on aluminum, generally, what would this mean?

Greg Ip, The Wall Street Journal: “Well, for companies in the United States that make steel and aluminum, it’s great news. Those companies like Nucor or US Steel or Alcoa will have higher profit margins because they can sell their steel and aluminum at higher prices.

It’s good news for their workers; these industries have lost a lot of workers because of import penetration over the last fifteen years. Fewer jobs will be lost; maybe a few jobs will be added.

It’s good news for some parts of the country where those mills are located.
It’s bad news though, for any company that usessteel and aluminum. And that’s a lot of companies, way more companies and workers than actually produce it: automobiles for example, aerospace, the companies that make soda because of the soda cans, tinfoil.

All the consumers, you and I will all pay a tiny bit more, maybe too little to notice, but yes, we will pay more for those products.”

Judy Woodruff: “But in essence, so the president sees winners in this country, but there are others who are worried that the reaction from abroad is going to lead to harm for other parts of the American economy.”

Greg Ip: “Well absolutely, and we have seen this movie before: in 2002, President George W. Bush raised steel tariffs, partly to protect workers in West Virginia.

And the analysis of that decision later showed it actually hurt the U.S. economy because it raised cost so much in industries that use steel.”

Right now, people are worried not just about the immediate impact on the US industry, but what if all these other countries that feel that we have treated them unfairly retaliate?

So not only are those effects hurting us in terms of our consumption of those products, but our ability to sell to those other foreign markets is affected.

Judy Woodruff: “How much does that explain what happened in the financial markets today?”

Grep Ip: “So, I think the negative impact on the stock market reflects a couple of things. First of all, a tiny bit of harm to US growth, a little bit of upward pressure on inflation, at a time when the Federal Reserve is already talking about raising interest rates some more.

Secondly, though, I think it also speaks to the overall degree of uncertainty and concern about this administration.

You know, for the first year of Trump’s presidency, it was all about less regulation and less taxes.

Businesses loved that.

Now they’re seeing the less positive side of it, more protectionism. At the same time, enormous conflict both within the White House, within Trump’s own advisers, and between the administration and its allies in business and the Republican Congress.

Judy Woodruff: “And we were told there was serious disagreement inside the White House, as you are just suggesting, over this. And there was also confusion about whether this was going to be announced today.

We were told at one point it was not . . . and then the president announced it a few minutes later.”

Greg Ip: “Right. And, as you were saying, I think that some of the details have yet to be heard. We don’t know specifically which countries are going to be hit with tariffs, how long they’ll last. And it may be that there are other attenuating factors that will come into play.

So this all creates a lot of uncertainly around the decision.”

Judy Woodruff: “All of which we will wait to see.”

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Questions

1. Everyone was taken completely by surprise when US President Trump announced the tariffs on steel and aluminum. True or false?

2. According to Trump the tariffs will benefit the steel and aluminum magnates the most. He is most concerned for the industry tycoons. Is this right or wrong?

3. Do all Republicans agree with Trump’s measure?

4. According to Greg Ip, will all businesses benefit from the metal tariffs?

5. Are the steel tariffs unprecedented or do they have a precedence? What happened then?

6. Are domestic repercussions the only consequence of these tariffs?

7. How has the stock market reacted to recent events?

 
 

A. The steel and aluminum industries are important in my country. Yes or no?

B. Who are your main trading partners?

C. Is there free trade or are there tariffs, quotas and other restrictions?

D. What will happen in the future?

E. Are people unanimous in their view of tariffs and trade?