A former Trump official is warning that the President's decision to impose tariffs on different products, with aluminum and steel being the latest case, will cause "significant rattling" to the stock market.
Marc Short, who was Trump's director of legislative affairs, said in an interview that despite the president's claims, consumers will be the ones paying the price of the tariffs. "The president has a set of advisers who just are far more committed to the economic theory that tariffs work, not just the national security theory, but also the economic theory. They believe this will generate revenue," he claimed.
"Again, it's important to remember it's the American importer that pays that fee and so it's actually a tax on Americans and it raises consumer prices," Short added. He went on to warn that the decision can have "national security implications" for the country and could cause "significant rattling to the stock market that has so far been very excited about Trump's presidency because of the deregulatory and tax perspectives."
Trump imposed similar tariffs on aluminum and steel during his 2017-2021 presidency to protect US industries, which he believed faced unfair competition from Asian and European countries.
While the European Commission said Monday it had not received any official notification of the tariffs, French foreign minister Jean-Noel Barrot said the European Union will counter in kind and "replicate" any measure. "We will react to protect the interests of European businesses, workers and consumers from unjustified measures," the European Commission said in a statement reported by AFP. About 25% of European steel exports go to the U.S., consultant Roland Berger told the outlet.
Canada, which Trump threatened to impose a blanket 25% tariff on, is the largest source of steel and aluminum for the U.S. Brazil, Mexico and South Korea also stand to be largely impacted by the decision.
Trump's threatened tariffs on Mexico and Canada are on hold for a month after both countries reached agreements with the administration, largely related to immigration enforcement. The government did go ahead with 10% tariffs to Chinese products. Beijing responded with targeted tariffs on products like liquefied natural gas and coal.
The Chinese tariffs cover $14 billion worth of US goods, while the tariffs announced by Trump cover $525 billion worth of Chinese goods, Goldman Sachs said.
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