2). The USA and Its Trade Wars
In March 2018, the US placed 25% tariffs on Steel Imports and 10% tariffs on aluminum imports supposedly on national security grounds. These tariffs were removed for Mexico and Canada, but are otherwise still in force (Some have been surprised that the Biden administration has not removed the tariffs).
Before the tariffs were in place, the US had 150,000 jobs in steel production producing about 50% of the steel the US uses each year. Until12 months ago, the US had 157 million jobs total. And by the way, only about 5% of US steel imports are from China.
a). Who may be helped who may be hurt by these steel and aluminum tariffs?
b). Why do most economists believe that the net GDP change in the US from these tariffs will be negative.
c). Discuss how over the last decade the US and China have benefitted from trade together.
d). Can you make an argument with either microeconomic logic or non-microeconomic logic that one of the two countries has benefited more than the other through our mutual trade. There is no correct answer.