It is extremely foolish to think steel tariffs will increase employment or reduce the deficit. But here we go anyway.
In a move guaranteed to cost US jobs, the U.S. Imposes 266% Duty on Some Chinese Steel Imports.
Jobs at Risk
There are about 6.5 million workers at manufacturers that use a lot of steel, but only 140,000 steelworkers, says Moody’s.
“Workers in these consuming sectors will likely be hurt by higher steel prices,” Moody’s said. “Domestic manufacturers could also eventually switch to importing whole components of finished products that are made from steel to reduce their product costs, which would lead to reduced domestic steel demand in the long term.”
The Brookings Institute explains How Trump’s Steel and Aluminum Tariffs Could Affect State Economies.
When measured by total volume, the nation’s largest states dominate steel and aluminum imports. Texas, California, Illinois, Michigan, Louisiana, Pennsylvania, Ohio, and New York all import more than $2 billion annually in steel and aluminum products, together accounting for 60 percent of the nation’s total. Aside from Texas, California, and Louisiana, these states concentrate in the Northeast and Midwest’s Rust Belt. Given the large size of their economies, disruptions to trade in these states have significant potential to influence national economic growth and key industry sectors like automotive manufacturing, chemicals, and oil and gas production.
Louisiana presents a particularly notable example. Oil and gas drillers and petrochemical producers in that state rely on imported steel and aluminum to support their operations. The Port of New Orleans imported 2.48 million tons of steel in 2017, accounting for 30 percent of its tonnage.
Illinois, the nation’s second largest importer of steel products, imports 41 percent of its steel from Brazil. Illinois also imports 29 percent of its aluminum from China, as aluminum is increasingly used as a substitute for steel in the U.S auto industry.