Interview: U.S. steel, aluminum tariffs to have widespread adverse impact, Argentine economist says

Source: Xinhua| 2018-03-15 11:43:00|Editor: Lu Hui
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by Victoria Arguello

BUENOS AIRES, March 14 (Xinhua) -- The U.S. tariffs on imported steel and aluminum will impact more than the industries themselves in many countries, including Argentina, a leading Argentine economist said.

These countries will not only see their revenues take a hit, but employment and other areas will also be indirectly affected, Mariano Feliz, a member of the Critical Economy Society of Argentina and Uruguay, said.

The move is bound to lead to a fall in jobs and income, as well as a lower demand for inputs and machinery for the two industries that carry significant weight, Feliz said.

Currently, 0.6 percent of U.S. steel imports and 2.3 percent of its aluminum imports are from Argentina, according to Argentina's Foreign Affairs Ministry.

The 25-percent tariff on steel and 10-percent tariff on aluminum would additionally affect the Argentine industry supplying steel tubing for the oil sector, and primary products made of aluminum, which together account for more than 720 million U.S. dollars in revenue for the South American country, the economist explained.

Besides, it will trigger fierce global competition.

"All of the world's producers will be looking to unload in other markets what they cannot sell in the United States, pushing prices and profits downward, and invading markets such as Argentina's," Feliz said. "To the loss of Argentine exports to the United States, you have to add the impact of the rise in global competition in these fields."

President Mauricio Macri has been pushing hard against the tariffs, asking for Argentina to be exempted.

Argentina's Steel Chamber, whose members include at least six of the country's biggest producers, including the Techint Group, has also expressed dismay at the U.S. measure and is backing the government's bid to win exemption for Argentina.

But "apart from diplomatic pressure, there's little that Argentina can do," Feliz said.

"Metal workers are part of the base that supports the Trump administration, mainly white blue-collar workers who voted him into office in rejection of the neoliberal policies of former governments," Feliz said.

During the presidential campaign in 2016, Donald Trump courted this group by promising to protect their jobs.

While "protectionism won't solve the problems for this U.S. segment, it emerged as a favorable move for the working people in an election year," Feliz pointed out.