Because it bears repeating the obvious: No, steel and aluminum tariffs are not good for U.S. manufacturing and its workers. That’s because there are far fewer workers employed by companies that: make These metals are use These metals are used as inputs for products (e.g. cars, kitchen appliances). The ratio of steel-using jobs to steel-making jobs is about 75 to 80 to 1.
Rising input costs place downstream companies and workers at a competitive disadvantage. We saw this happen in 2018 when then-President Donald Trump imposed steel tariffs around the world. As expected, U.S. steel prices soared, far exceeding prices in other countries. Researchers Kadie Russ and Lydia Cox calculated that these tariffs resulted in about 75,000 job losses across downstream manufacturers within two years.By the way, that number Further job losses for U.S. exporters in the face of painful counter-tariffs imposed by other countries.
Metal tariffs weren’t the only Trump-era tariffs to backfire economically. As we have previously noted, at least four separate studies have shown that the cost of various import tariffs imposed by President Trump (on Chinese products, washing machines, solar panels, etc.) is largely or completely eliminated in the form of higher prices. It turns out that Americans are paying for it.
This has proven useful for some of Trump’s political opponents. In campaign ads and speeches, Democrats also (correctly) accused President Trump of raising the cost of back-to-school shopping and Christmas gifts. Among the more high-profile critics was then-presidential candidate Joe Biden.
In 2019, Biden said of President Trump’s tariffs on China, “President Trump may think he is taking a tough stance on China.” “All he has done as a result is that American farmers, manufacturers, and consumers lose money and pay more money.” Biden’s 2020 campaign site similarly said Trump He claimed that his “tariff war” had cost hundreds of thousands of jobs.
Biden was right. However, once he won the election, his attitude completely changed. As president, Biden extended (almost) all of President Trump’s tariffs. Alternatively, in the case of steel and aluminum, he replaced some of the tariffs with slightly different trade barriers (such as import quotas). Biden extended Trump’s tariffs even though they contradict other parts of his economic policy, including increasing competition and cutting the economy. consumer prices or accelerate the deployment of clean energy.
President Trump is currently campaigning on the promise of imposing a new 10% global tariff if he is granted a second term. Economists warn that his plan is likely to reignite inflation and cripple both the U.S. and global economies, with the exact degree of destruction determined by how other countries choose to retaliate. are doing.
Biden rightly pointed out the folly of these plans: Just days ago, the White House warned in a statement About the devastating inflationary effects of President Trump’s proposed tariffs. And in Pittsburgh on Wednesday, Biden quickly forgot his own warning. Indeed, in addition to plans to increase tariffs on Chinese steel, he also signaled support for new tariffs on China’s shipbuilding sector.
After all, the U.S. shipbuilding industry is struggling. Part of the reason is, as you might expect, high input costs, including materials such as steel..
The best thing to say about Biden’s proposed tripling of tariffs on Chinese metals is that they may not stand a chance. why? China doesn’t sell much steel here anymore anyway because it has already imposed tariffs on so many types of Chinese metals, both under the Trump administration and under previous presidential administrations. Chinese steel will account for only about 2% of US steel imports in 2023, so an increase in the price of Chinese steel may not have a significant impact on overall market prices. (“Biden basically puts Chinese steel on double-secrecy probation,” said trade researcher at the Cato Institute scott linthicum. )
Still, Biden’s tariffs are by no means unconscionable. A White House news release hints at continued pressure from unions to limit steel imports from Mexico. Mexico is actually one of our country’s top steel import destinations. Meanwhile, the Biden administration is vigorously defending his predecessor’s tariffs in court. If successful, these efforts would make it easier to implement Trump’s next round of tariffs, or even Biden’s, despite repeated warnings from Biden.
Perhaps President Biden should consult with presidential candidate Biden. He might learn something.
