On March 8, 2018, President Trump used his authority granted under the Trade Expansion Act of 1962 to impose a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports, effective March 28, 2018. Initially, Canada, Mexico, and members of the European Union were exempt from these tariffs, but this exemption was taken away on June 1. Tariffs, or taxes on imported goods, are the most widely used type of trade barrier and are often considered economically inefficient. Do some research on these tariffs and then address the following: 1. What official reason was given for the implementation of these tariffs? 2. Who will receive the most benefit from these tariffs and who will be harmed by them? 3. Relate these tariffs to the economic principle of comparative advantage and discuss what will happen to production and prices of those products that use steel and aluminum. 4. Explain why some American companies might be opposed to these tariffs. 5. What do you think will be the economic consequences of these tariffs, both domestically and globally? 6. Do you believe the implementation of these tariffs was a good idea? Why or why not?
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