Local Economist Breaks Down The Steel Tariffs Impact On Prices

Steel and aluminum tariffs will impact Central Minnesotans.  That according to St. Cloud State Economist King Banaian, who joined me on WJON.  Banaian says these tariffs will have a significant impact in Central Minnesota.  He says we use steel and aluminum for many of the things we manufacture.  Banaian says much of the steel used in this area is imported because he had been coming at a lower price.  He expects the higher cost of steel and aluminum will be passed on to consumers.

Get our free mobile app

Items That Will Be Affected by Tariffs

Steel and aluminum products that will be affected include automobiles, trailers, and cans used for food and beverage products.  Banaian says we don't produce enough steel and aluminum for everything that gets made in the U.S., which is why so much is imported.  Banaian indicates we've seen this before during the first Trump administration in 2018 where aluminum and steel tariffs were applied.  He says the net effect was to save or create about 8,000 to 9,000 jobs in the steel industry at a cost, according to estimates, at about $600,000 per job.

Stockpiling Product

Banaian says many manufacturers anticipated higher tariffs on steel and aluminum and stockpiled product.  Examples include car dealerships adding more cars on their lots.  Banaian believes the affects of the tariffs may not be immediately felt but we could see changes at the end of June or early July.  He doesn't believe these tariffs will lead to a recession but the affects of this particular challenge is unprecedented.

Consumer Spending Unchanged

Consumer spending hasn't changed.  Banaian says the unemployment also hasn't changed much.  He says consumers are still driving and flying at typical rates for vacations.

If you'd like to listen to my conversation with King Banaian, click below.