President Donald Trump’s primary justification for imposing a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum is to save American jobs. He also argues that the added costs of these imports will encourage a strong domestic metal manufacturing industry that is crucial to the defense needs of the United States.
Neither assertion is borne out by the facts. The tariffs are likely to cause far more lost jobs than they create. Our trading partners are furious and banding together to isolate the United States. This poor decision will have little effect on our ability to meet national security needs.
China, Trump’s main target, is unlikely to break a sweat because of the tariffs. Canada and Mexico, two of our biggest metals suppliers, will be excluded from the tariffs while trade negotiations continue.
As Trump tells it, the U.S. steel industry has been decimated by unfairly cheap products dumped here by China. In reality, 70 percent of the steel used in the United States is manufactured domestically. By far, our biggest foreign supplier of steel is Canada, followed by Brazil and South Korea. China, in 11th place, provides less than 1 percent of the steel the United States uses. And China already faces 24 internationally agreed-upon duties on steel it exports to the United States.
Trump’s tariffs on aluminum are equally misguided. The United States can never be truly self-reliant for aluminum, because all metallic aluminum is made from bauxite mined abroad. What’s more, aluminum production is intensely dependent on cheap electricity unavailable in the United States. That’s why Canada, with its inexpensive hydroelectric power, is also our greatest supplier of aluminum, providing about 50 percent of what we use. China sells us about one-fifth as much aluminum as Canada.
Even so, Trump’s tariffs could save a handful of jobs in the steel and aluminum industry. The steel industry here has lost 14,000 jobs since 2000, and the aluminum industry 13,000. But many of those jobs were killed by automation. And compared with the number of jobs the tariffs could create, the number they could eliminate is massive.
When imported steel and aluminum cost far more here than elsewhere, many jobs manufacturing planes, cars, tractors, tools, factory machinery, robots and rebar will go to those cheaper nations. That’s why America’s leading employers, trade unions and economists, even his own advisers, are practically unanimous in panning Trump’s plan.
Trump wants a big win he can show his base on jobs, and that’s understandable. He’s not wrong to accuse China of unfair trade practices toward the United States. China’s currency manipulation, theft of trade secrets and imposition of tariffs that make it all but impossible to sell many American products there are intolerable. Instituting two huge tariffs that hammer close allies and metals suppliers, like Brazil and South Korea, while leaving China unscathed is a misconceived policy. The rest of the world is ready to form trade alliances against us that could eventually benefit China. And the tariffs could drive away high-paying manufacturing jobs to nations where steel and aluminum can still be bought at low prices, places where the leaders care less about splashy headlines and more about economic bottom lines. — The editorial board