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Defense industry braces for hit from Trump tariffs | TheHill

posted onJune 3, 2018
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Article snippet: The defense industry is bracing for the fallout from the Trump administration’s decision to impose tariffs on steel and aluminum imports from Europe, Mexico and Canada. The 25 percent tariff on imported steel and 10 percent tariff on aluminum, which went into effect Friday, is expected to raise costs for the U.S. defense industry, biting into its bottom line. Though U.S. defense firms primarily buy steel and aluminum domestically, the tariffs are likely to lead to increased prices in the U.S., said former Pentagon official Andrew Hunter, a senior fellow at the Center for Strategic & International Studies. “The whole point of the tariffs is to allow those suppliers to raise prices and they’ve already started doing so. It’s definitely going to increase costs. And of course that ultimately leads to increased costs for the taxpayer,” he said. The tariffs are also likely to make ally countries less inclined to buy U.S.-made defense systems, should they have to absorb added costs associated with the trade rules, Hunter added. President Trump first announced the tariffs in March, citing national security concerns. He imposed them under Section 232, a law that allows tariffs to be imposed for national security reasons. The defense industry lobbied against the tariffs and quickly spoke out against them, warning they would lead to retaliation by trading partners. The European Union and Mexico are already poised to hit back with tariffs on U.S. exports. “We have concer... Link to the full article to read more

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