Trading

Looming Tariff Increases – AAF – American Action Forum

Executive Summary

  • The Trump Administration has announced new tariffs on Canadian aluminum and French luxury goods that could take effect in the coming months.
  • These two new tariffs combined would increase the total impact of tariffs on U.S. imports by $7.1 billion, and annual consumer costs would increase by $906 million as a result.
  • If imposed on schedule, the tariffs could make economic recovery from the COVID-19 recession more difficult.

Introduction
The Trump Administration could reimpose tariffs on Canadian aluminum and levy new tariffs on French luxury goods within the coming months. As the global COVID-19 pandemic continues to hamper international trade, these tariffs – along with any resulting retaliation – will add new burdens to an already strained world trading system. Based upon 2019 import data, U.S. and retaliatory tariffs currently impact $460 billion of U.S. imports and exports and cost consumers $57 billion annually. The tariffs on Canadian aluminum and French luxury goods would increase the impact by $7.1 billion worth of imports and increase annual consumer costs by a further $906 million as a result.

Tariffs on Canadian Aluminum
In June 2020, there were many reports that the Trump Administration would reimpose tariffs on Canadian aluminum as early as July 1, 2020. The Trump Administration had originally imposed a 10 percent tariff on aluminum in March 2018 as part of its Section 232 actions. Then in May 2019, the United States exempted Canada, along with a handful of other countries, from the aluminum tariff. While the tariff has yet to be restarted
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