Donald Trump hasn't yet announced the details of his new tariffs on aluminum and steel, but Wilbur Ross, the Secretary of Commerce and a faux billionaire, appeared on CNBC this morning to defend the controversial policy.
Ross used a can of Campbell's Soup to stress his point about what he calls insignificant price increases from Trump's tariffs."In a can of Campbell's Soup, there are about 2.6 pennies worth of steel. So if that goes up by 25 percent, that's about six-tenths of 1 cent on the price on a can of Campbell's Soup," Ross contended. "I just bought this can today at a 7-Eleven ... and it priced at a $1.99. Who in the world is going to be too bothered?"
As a rule, I'm not sure it's a good idea to have wealthy Republican cabinet secretaries argue that rising food costs are irrelevant, though at first blush, Ross' pitch probably seems like a reasonable argument. But sometimes consumers buy steel-based products that are much bigger than a can of soup. How about a car?
Ross went on to argue there's about a ton of steel in every car, adding, "The price of a ton of steel is $700 or so, so 25% on that would be one half of 1% price increase on the typical $35,000 car. So it's no big deal."
In other words, once Trump's tariffs kick in, the price of an average car would go up $175, which according to the Trump administration, is "no big deal."
But that's not quite compelling, either. If an American family receives $175 from the Republican tax cut, for example, we're supposed to believe that's an extraordinary sum. Now we're also supposed to believe it's trivial?
What's more, millions of U.S. consumers buy cars every year. When each of them start paying for Trump's new tariffs on those purchases, the result is a change that effectively looks like multi-billion-dollar tax hike.
But even if we were to put that aside, what Ross didn't mention is the likelihood of other countries imposing retaliatory tariffs. Indeed, earlier today, the European Union announced plans to respond to Trump's new tariffs on aluminum and steel with their own on motorcycle, bourbon, and jeans.
And that's just the EU. Other trading partners are preparing similar moves.
Is there a point at which this starts to look to the Trump administration like "a big deal"?