A report by the IHS Markit estimates the impact of the Trump administration’s 232 and 301 tariffs. The report says that about $265 billion of imports will hurt the U.S. economy from the effect of higher prices, causing an average lost GDP of $290 billion a year for 10 years. Equipment manufacturing executives have attributed the increasing costs of manufacturing in the U.S. to the tariffs, costing businesses up to $2.7 billion each month, and have caused exports of American products to drop by 37 percent.
The report also states that the tariffs will suppress job gains by 260,000 over 10 years. Consumers will pay higher prices and reduce their real spending by $23 billion per year.
Specific impacts on the equipment industry include tariffs that will increase costs of producing U.S. agriculture and construction equipment by 6 percent. With its higher steel-related product content, the costs of producing U.S. mining equipment will increase by 7 percent.
According to the release, there are currently tariffs on $250 billion dollars worth of imports from China as a result of the Trump Administration’s use of Section 301 of the Trade Act of 1974.
“This report shows that tariffs continue to take a toll on U.S. equipment manufacturers, who will pay significantly more to manufacture equipment in the United States in the coming years,” said Dennis Slater, president of AEM. “Tariffs on steel, aluminum, and Chinese imports, as well as the potential for additional tariffs, are driving up the cost of production, delaying capital investments, and impeding job creation for our more than 1,000 member companies.”