Commerce secretary says impact to American consumers of tariffs are 'no big deal

The U.S. Commerce Secretary Wilbur Ross made waves on Friday for his interview on CNBC where he said President  Donald Trump's proposed tariffs would be "no big deal."

Ross said the stock markets on Friday overreacted to the news of the tariffs. The Dow Jones industrial average fell more than 400 points following Trump's announcement. On Friday, the Dow closed at 24,538.06, down 70.92 points from the day before. Both the S&P 500 and Nasdaq closed up for the day.

Ross said he stopped by a local convenience store in Florida to buy his props, which included a can of soup, a can of soda and a can of beer. He used the items to explain the impact on the middle-class family's budget.

What's the story?

President Donald Trump announced a proposal on Thursday to impose a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports. Trump said he would sign the measure “sometime next week.”

During an interview with CNBC, Ross said the tariffs would have "limited impact" on American consumers.

Ross held up a can of Campbell's Chicken Noodle Soup that he said he "just bought" at the 7-Eleven store for $1.99.

"In the can of Campbell's soup, there's about 2.6 cents, 2.6 pennies worth of steel," Ross explained. "So, if that goes up by about 25 percent, that's about six-tenths of one cent on the price of a can of Campbell's soup."

"So, who in the world is going to be too bothered by 6/10 of a cent?" he asked.

Next, Ross used a can of Coca-Cola that he said he bought for $1.49.

He said the can has about three cents worth of aluminum in it.

"So, if that goes up 10 percent that's three-tenths of a cent. It doesn't mean anything," Ross said. "All this hysteria is a lot to do about nothing."

He also estimated the additional cost of a new car.

“There’s about one ton of steel in a car,” he said earlier. “The price of a ton of steel is $700 or so, so 25 percent on that would be one half of 1 percent price increase on the typical $35,000 car. So, it’s no big deal.”

In other words, by Ross' estimate, the average increase on the price of a new car would be about $175.

The White House sharply criticized Democrats who called some families' savings of $75 due to the Tax Cuts and Jobs Act "crumbs."

What did manufacturers say?

"Any new broad-based tariffs on imported tin plate steel — an insufficient amount of which is produced in the U.S. — will result in higher prices on one of the safest and more affordable parts of the food supply," a spokesperson for Campbell's Soup Company told CNBC in a statement Friday.

Other steel and aluminum manufacturers were quick to claim that the aggregate economic effects of the tariffs would result in lost American jobs. For instance, Jim McGreevey, president and CEO of the Beer Institute, estimated that the tariffs could result in thousands of lost jobs in the American beer industry alone.