It’s a new day and there’s a new tariff looming. President Donald Trump has imposed a 25% tariff on imported steel and aluminum.
That may be good for U.S. producers, but what are some of the other effects? Houston Public Media is reporting the tariffs could raise construction costs in that city.
This tariff will take effect about the time the clock runs out for Mexico and Canada to comply with the president’s demands on the border or face 25% tariffs on goods from those countries.
So what do we know about these latest executive orders?
Rashid Al-Hamoud, chair of the Department of Economics at Texas Tech, joined Texas Standard to discuss. Listen to the interview above or read the transcript below.
This transcript has been edited lightly for clarity:
Texas Standard: First off, how are these tariffs on steel and aluminum different than those imposed by the first Trump administration?
Rashid Al-Hamoud: Well, in addition to the size of these tariffs, these are two and a half times more than the 2018 tariffs. At 25%, these are tariffs levied on all countries that we import steel and aluminum from – not only on selective countries.
So that’s the two differences – one, the size and two, that they involve all countries that we import from. And there are no exemptions and no exceptions, no quota deals, nothing. So that’s how they’re different.
Walk us through the rationale President Trump gave for these latest tariffs.
The rationale, of course, is that we need to protect our domestic industries. We need to enhance our national security. Of course, it doesn’t hurt to generate additional revenues from these tariffs.
So these are primarily the three main rationale that I sort of could get out of the proclamation.
Well, for Texas, are there some areas or industries that you think will be impacted the most by these tariffs? And what do those look like?
Yeah, of course. I mean, any industry that relies on these two metals will be impacted directly. As we know, if Texas were a nation, we would be the sixth largest oil-producing country.
So our oil and gas industry relies heavily on steel. There are 480,000 miles of pipelines in the state of Texas, moving crude oil from point A to B. We have the huge refining facilities that refine crude oil, refining close to 6 million barrels of crude oil a day. So that would be the biggest industry that will be impacted by this.
Of course, in addition to that, we do produce cars. We produce Toyota Tundras in San Antonio or GM has facilities in Arlington where SUVs are produced. Add to that aerospace industry, defense industry… Of course, construction of homes and businesses relies on steel and aluminum as well, from window framing to doors to even nails and screws.
And of course, there are sort of the smaller industries, including breweries in Texas. They are going to be impacted because they rely on foreign steel for their tanks and pipes and, of course, aluminum for their cans.
So, yes, as you can see, there is a lot of industries in Texas that are going to be impacted.
» RELATED: What could tariffs on Mexico and Canada mean for Texas’ economy and consumers?
Well, have other countries responded yet?
Not that I know of. Of course, for sovereignty considerations, countries are going to retaliate. Just like with the initial 25% tariffs on Canada and Mexico, I mean, right away Canada and Mexico came out and said, “well, if you do this, we will do that.”
Of course, we also imposed a 10% tariff on China, which has not been paused yet. So I don’t know what the future of those are. But China said, kind of using poker language, “I see your ten and I raise you five.”
So yeah, countries are going to retaliate again. That’s how the game is played.
