Economists at the Trade Partnership have found harmful employment impacts from the Trump administration’s decision to impose tariffs of 25% on steel imports and 10% on aluminum. The administration justified the tariffs under Section 232 of the Trade Expansion Act of 1962, as amended, claiming the imports from mostly U.S. allies “threaten to impair the national security” of the United States. The negative impact of the tariffs may surprise anyone who thinks a protectionist trade policy should mean more jobs for Americans.
The Trade Partnership analysis concluded:
“The tariffs, quotas and retaliation would increase the annual level of U.S. steel employment and non-ferrous metals (primarily aluminum) employment by 26,280 jobs over the first one-three years, but reduce net employment by 432,747 jobs throughout the rest of the economy, for a total net loss of 400,445 jobs;
“Sixteen jobs would be lost for every steel/aluminum job gained;
“More than two thirds of the lost jobs would affect workers in production and low-skill jobs.
“Every state will experience a net loss of jobs.”
One reason for this result is that nearly 40 times more people in America work in jobs that use steel and aluminum than in jobs connected to producing steel and aluminum. “American workers making steel/aluminum: 170,000. American workers consuming steel/aluminum: 6.5 million,” notes trade attorney Scott Lincicome.