To Keep His Promises to Steel, Trump Will Have to Break Many Others
On the campaign trail, Donald Trump made a lot of economic promises to Americans, promises that indicated his dedication to increase the number of jobs here in the United States. So far, his economic policies have been doing just that, but his recently signed plan to raise tariffs on steel and aluminum imports threats to undermine those gains, and hurt the very people he so sincerely promised to help.
Marc A. Thiessen is an expert in American Presidential leadership. He discussed why the tariffs are going to be counterproductive in the long term, citing five examples of areas which will be hurt: bringing back auto industry jobs, discouraging American manufacturers from sending jobs overseas, rebuilding our infrastructure, achieving energy independence, and rebuilding the military.
Trump promised to champion forgotten Americans, but imposing a 25 percent tariff on steel and a 10 percent tariff on aluminum will hurt more of the forgotten Americans than it helps. The American steel industry employs about 140,000 people, while steel-consuming industries employ 6.5 million. This means Trump is imposing a tax — tariffs are taxes — that will hurt the 6.5 million in order to help the 140,000.
President Trump promised to bring back jobs to the Ohio, Michigan, and Pennsylvania area, specifically in the auto industry. The problem is that his tariff will have the same effect on the industry as the steel tariff of 2002.
According to one independent study, the 2002 steel tariffs imposed by President George W. Bush cost 200,000 jobs because of higher steel prices, including 10,553 jobs lost in Ohio, 9,829 lost in Michigan and 8,400 in Pennsylvania. Total lost wages were about $5.5 billion in today’s dollars.
The same group now estimates that Trump’s proposed tariffs will cost 179,334 jobs— which is more people than the total number of people working in the steel industry today — and will result in a loss of five jobs for every job gained.
Not only will there be job losses because of higher costs, but the tariffs will give companies an incentive to go north to Canada to avoid the tariff, taking jobs with them, leaving Americans either in the same, or worse conditions.
Another one of his campaign promises was to improve America’s infrastructure, which the administration is working on. But how can our country afford to make those repairs when the raw materials needed are 10% or 25% more expensive?
[T]he tariffs will drive up the cost of virtually every infrastructure project, reducing both the number of new projects and the number of jobs created, while making the state, local and private-sector investments he wants to leverage far less likely.
His promise to work towards energy independence is also problematic with the tariff, as almost every single energy project requires aluminum or steel. Higher costs for the materials will lead to either delays or cancellations in these projects, making that goal practically unachievable.
And finally, the military cannot be rebuilt if the price of the needed materials is even higher. Contrary to the national security argument, the tariff will actually hurt us in the long term.
Raising the price of steel and aluminum will increase the cost of new ships, planes and other military hardware — which means we can afford to procure fewer of them, harming our national security.
Thiessen concludes his discussion of the issue by mentioning the fact that other nations are considering retaliatory tariffs of their own, which will further harm American industry by making exporting more expensive. The European Union is considering a 25% tariff on Harley-Davidson motorcycles, and key swing states could be targeted through tariffs on agricultural products.
The bottom line is that trade is necessary and good for American consumers and producers. Slapping an import tax on certain vital resources is only going to harm all Americans in the long term, and inevitably create broken campaign promises to those who so firmly believed in them.