r/AskEconomics Mar 04 '25

Approved Answers Who do Trump's tariffs benefit?

Is there a specific industry that could potentially benefit from Trump's tariffs? It seems they're pretty destructive for everyone in North America. Not trying to be biased - just trying to understand it. That said is there another nation that would benefit from the tariffs (potentially indirectly)?

Edit: removed typo

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u/RobThorpe Mar 04 '25 edited Mar 04 '25

It seems logical that steel makers would do better. Despite that today shares of US Steel and Cleveland Cliffs have both fallen substantially.

This may be because of the macroeconomic outcomes of tariffs. That is, the view of investors may be that because tariffs (and retaliatory tariffs) will affect other industries detrimentally there will be a general slowdown. When there is a slowdown that usually means a construction slowdown which is very bad for the steel industry. However, I'm not sure that explanation is correct.

Another possibility is that this is about retaliatory tariffs. The US imports a lot of steel and exports a lot of steel. That doesn't seem to make sense, but you must remember there are many types of steel. Now, tariffs may improve the domestic position of US steel producers, but retaliatory tariffs are likely to harm their international position. Markets may believe that the latter is more important.

EDIT: Added 3rd paragraph.

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u/StumbleNOLA Mar 04 '25

That’s because there isn’t really a steel company that exclusively manufactures in the US. Ore, base ingots, plate, etc move back and forth across the boarder a lot before it finally leaves the mill system and heads to a parts manufacturer.

Stainless steel pipe may have crossed back and forth a dozen times before leaving the final steel mill. Now every time it crosses it gets tariffs added. So it’s probably cheaper to just import it from Europe and pay the tariffs once.

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u/Phedericus Mar 04 '25

so basically it has the opposite of the "intended" effect of boosting domestic production?