Trade war could have effect on imported goods, individual families

Gary Romig, president of Summit Steel & Manufacturing and Stephanie Segal, simon chair in political economy at CSIS, discuss the complexities of the ongoing tariff feud.
14:03 | 05/14/19

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Transcript for Trade war could have effect on imported goods, individual families
We'll start at today with a fact check of sorts on this trade war with China the president. Unleashing a flurry of claims overnight on this back and forth on tariffs. We'll start with with the first one today that he tweeted about heats he says. Tariffs have rebuilt our steel industry in the United States he says in fact the steel industry is booming. Back in March 20 ET please to 25%. Tariff on dumped steel from China and other countries he says we now know digging growing industry. We have to save steel for our defense and auto industries both of which. Are coming back strong so is that true how much of that is true or mortar some of the challenges. Facing the economy for more on this wondering Stephanie sit all she's a senior fellow. I at the center for strategic international studies also former US Treasury Department official here Washington joins us now also. With us Bob Woodruff for chief foreign correspondent who's covered China. I'd also happy to have Gary Romain president of summit steel and manufacturing from Reading, Pennsylvania so gets all them. But let's start with Gary because. We just lost scary unfortunately so hope to have Gary back in the second but let's. Scott turned to Stephanie for a conversation on what these tariffs have done on the positive side for the steel industry Stephanie great to see you. By one account. We've learned about 121000 jobs have been added since these. Tariffs have gone into effect that's that's a good thing right. Act adding jobs is certainly a very good thing. I'm I think he could make the argument that the job creation is as much a function of the strong economy which is also again a very good paying I think the problem is when you impose terrorists. What you're actually doing is raising the cost to the end users. Down so we now a market that's being protect dead. And that might help with some of the domestic. Manufacturers. But that and users that are also domestic are actually facing higher costs. They can make a choice as to whether or not they're going to. But the higher costs eat into their profits or if they're gonna pass on those higher costs to consumers. And that then raises the prices the final consumer. I think the fear now win the tariffs being raised from the ten to 25%. Is it's producers are not really gonna have the option of just eating that incremental costs they're going to have to surpassing on that cost. See the end consumer and that's gonna end up hurting Americans. It sure is said and Stephanie by one estimate in the past week Christian sure you've seen the Peterson Institute. For international economics estimated that for average steele's job that was saved. Are created by the tariffs US companies consumers businesses. Will pay an average of 900000. Dollars a year combined in aggregate. Total costs increase because so much relies on steel coming in from out outside the United States. It is it true though that as the president says that did dent the steel industry is booming and will continue to surge will we see a return to the glory days of steel. Of say 304050 years ago. I think those glory days in Seattle and a number of other industries. Are not necessarily coming back if we think of glory days in terms of the number of jobs that are actually create Ed. And that's really just a function of automation which has impacted the steel industry that also a number of different industries. So to the extent you're able to encourage producers to onshore there production and they may well do that but the job impact of such on shoring is really not what it was a few decades ago. And that's why policies bats are on incentivizing. Growth in traditional sectors. Are not really where the job growth is gonna come from job growth is gonna come from an innovation industries. And sound and that's really. We should be putting in place policies there in a Foster growth and those sectors because that's where we're gonna have job creation. It's a sort of a mixed picture on the president's claim on steel certainly jobs have been created the industry is experiencing a bit of resurgence but. In the long term as you say most economists agree that that that that this is not a long term investment industry in terms of major growth let's. Take on the second claim downturn or Bob Woodruff for this one who spent a lot of time in China a Bob gonna put this what do you the president tweeted. Overnight this morning in this morning said that China buys much less from us than we buy from them balance 500 billion dollar soaring great position. Make a product of home in the USA there's no Tareq you can also buy from a non tariff country instead of China many countries are leaving China. He says and goes on to say that it would in fact be much more competitive. For people to body from the United States were much bigger economy he says so. Bob you've studied dead the the trans Pacific trade data relationship there there were youth he does have a right that there's a pretty big trade deficit does not. There is there's certainly that. I'm both sides are going to be affected deeply all the experts tell you this is really to be the consumers and the businesses and both countries will be. You know we'll be damaged by this to matter what happens I think when I can see the real numbers the results of this until. China's tariffs also kicking and what the president of the United States president trump decides. To ultimately do to do but these are two leaders' decision ping of China. And president trump the United States don't wanna give in neither one of them want to be the first ones to fold. And I think that is ultimately going to be the biggest facts that we need to know who's gonna give up what. For the other side in the United States we know that the prices will go up. That prices in China will go up and amount of business in terms of import and export will go down because of these tariffs eventually hopefully they will be. A negotiated out but we know that those in China. Are going to be filled with their own anger as the US sent consumers we'll have a lot of anger. Maybe businesses on both sides will feel some kind of game if it gets. Ultimately what they what they want but in the United States mostly it's politics it's gonna affect initially. But in China where there's not much politics here in that come in that system. There but I think the biggest fear in China is the effect within that country will be. On potential uprisings you know China is right on its edge right now it needs a significant growth economically. And at this slows that down there could be the significant impact. On the ground. And certainly president trump is hoping to use that as leverage to balance out that that trade relationship both parties though as you alluded to Bob. Up on Capitol Hill Republicans and Democrats are really sounding the alarm today. About what this will mean for America's families the costs of they will pay. Because of this back and forth which many lawmakers say nobody in which nobody wins to listen. What should. Have been done is all of the allies should have been lined up. To join us in the effort to put pressure on China. And because that wasn't done. In effect American beyond what he's got the brunt. Of all of death. He hasn't had a lot of news you obviously the cost is passed on to consumers know there impacts their there clearly impacts on the and economy. And we're feeling farm country. Spring Gary Rome right now who I think has joined us that went to signals back east. The president of summit steel manufacturing in Reading, Pennsylvania Gary it's great to see you we've had John before arms so what it. We'll talk with the steel industry and a second but since here. In farm country here just up the way wanted to ask you do you feel when impact do you worry about an impact these tariffs or have on prices. That you in your Fam will pay. I'm not so concerned about the cost of my family I had the luxury of been in the business were up thirty plus years. I watched it disintegration of those steel industry throughout all time. And the number of manufacturing jobs lost. Our more significant mind and then be. Cost to the individual extremely. Ali wow I proctor to. Now. I think we've already got over the years it actually. You can't guess. The company earned and the countries. Transformation over here in my opinion we've industrialized China at this. At the Baxter most of my fracturing in this country. And Stephanie sea gull that the tariffs on steel and aluminum that Gary is talking about. Well they certainly may be supporting that industry GM and Ford just as example both companies have said that they will cost. Them about a billion dollars each to make cars which in turn will turn to the consumer. Hot and then there are these tariffs on consumer products it's not just announced that the consumer products. And you've studied this the consumer products is where the biggest bite could be for families right the things that we pick up at Wal-Mart and target that. Come straight from China. Right I think China is Saddam is certainly an exporter of range. Is imports to this country's so. Of course that terrorists are put on those items are going to be passed through done to US consumers that if I can go back to the point that Gary. Jess raised on there is a very legitimate concern about the way that China. Does business and the fact that China. Is able to simultaneously. Protect its own domestic industry. And then acts sports on access capacity to the rest of the world and put a lot of unfair competitive pressure on the rest of the world. So there is absolutely an issue that the trump administration has com has tapped into and his right to trying to drafts but adds. Quotes that you played back from Capitol Hill it needs to be approach that is multilateral. And nature because the issue is one that is in fact global. And the way to maximize the chances of our success is going to be partnering win its. With allies and partners. Arm to take on something that is mutual concern in China. In Bob you know the Chinese better than most. You know we hear. I've met again members of both parties we hear the president say they simply don't respond they haven't responded to the WTO years of pressure. To try to equalize things and rectify some of these. If these practices with Marchionne and other things. Is there or is there anything that they would respond to short of tariffs if tariffs won't work what what what will work. Well that's a question we have it's very difficult for us to influence within that country in fact if you look at all this controversy happening now in terms of trade this is not going to be a trade is not hog trade this is going to be war trade. If this happens but anyway this is the biggest tool that that the United States has right now in terms of how much we buy from them how much we self of them. At what price but the one that's not being raised at all in this potential negotiation. Oilers home. You know some battle arguments between the United States and China. Is it not really raising much human rights as an issue they would everybody out there in the world of human rights would really like it if the United States does a lot more than it's doing. In China for example we just got back from the province of change I'm a northwestern part of China. Where this eight largely. Growing horrific incident that's happening what China is going and really. Cracking down on the wieger people which is the of the ethnic group Muslim ethnic group in that country. With a pretty much denying them almost all freedom. And that destroying their culture. If that continues to go on this could be. Perhaps one of the most horrific human rights incidents in the United States right now. The EU the US has raised this with China but it and in this negotiation. Process these tariffs. Between China United States they're not raising matter also that's certainly one of the most significant desires by those in and that in the human rights side of this. And Gary real quick here of Omega president of some of steel manufacturing up their Reading, Pennsylvania want to give you the last word here. What where how would you like to see this and how would you like to see this this play out it. What would you be happy if the tariffs went away now that there that the president has achieved some gains in your sector. Well I I think for ross' estate heir. Trends actually it's a transactional price. Ass belongs to our customer. They are or. If it goes away. Yet prices would go lower I don't know that. We would have it would happen very much impact. Exactly the opposite is happening or happened or. Potential customers. Hitting our web site and coming to us but all over the country. Actually outside on how colleague to us that two years ago would now consider it so sorry. Opportunity and a boom or Austin why ever larger customers who. Are worried about Sharon. And and their ability to ID products were sold crosses the exact opposite it is an opportunity that we haven't seen it. Many many years. All right Gary roaming thanks for your perspective important or hear from you in your industry in Pennsylvania appreciate your time also thanks to Stephanie symbolic CSIS. I an economist great to see Stephanie and Bob Woodruff has always terrific to have our chief foreign correspondent with us here.

This transcript has been automatically generated and may not be 100% accurate.

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