Markets on Wall Street dipped Thursday as the Trump administration announced it was dropping exemptions on steel and aluminum tariffs for its biggest trading partners: Canada, Mexico and the European Union.
The move, announced after months of threats, was swiftly greeted with concern and promise of retaliation from those nations.
As a potential trade war brews, for Minnesota’s Iron Range, at least, the tariffs come as welcome news for a region and economy built on steel.
"We’re more optimistic about our economic situation more than we’ve been in recent years," said Kelsey Johnson, president of the Iron Mining Association.
Johnson said the 25 percent tariff on imported steel will spur more demand for iron ore from domestic iron and steel makers.
"That means the prices are better, which means more people are going back to work, that we could have a potentially have a higher demand."
Johnson said two US-based steel manufacturing facilities had call backs almost immediately when the tariffs were first introduced in March.
Both utilize Iron Range taconite.
College of St. Scholastica economic professor Tony Barrett says, while it’s good news here at home, retaliation could hit our pocket books, from Kentucky Bourbon, to Harley Davidson.
"American Consumers will pay more for products. It’s the net loss to our economy," Barrett said.
For example, a consumer could expect to pay $50 to $100 more for a pick up truck with the tariffs.
"You add that up over 330 million Americans, it becomes a chunk. It’s happening in industry after industry," Barrett said.
At the end of the day, Barrett says the problem boils down to over capacity, due in part to China.
"You can impose tariffs on European made steel. But the fact is, too much steel, when there is too much of any product, the price is low, and that puts stress on manufactures."
The Trump administration’s biggest concern remains steel exports from China, which are already subject to tariffs.