I hope you can take a bit of headline sarcasm because the true story follows.

Trump’s Man of Steel Posturing

Bloomberg reports Trump’s Man of Steel Posturing Makes America Weaker

Trying to protect the steel and aluminum industries as a path to nation-building is a doomed project that will make America weaker, not stronger.

Tariffs of 25% on imported metal that Trump has promised to unveil on Monday will be as ineffective in fostering domestic production as the previous round of restrictions he kicked off in 2018. Since those actions, US production capacity for aluminum has fallen by 32%, while steel is down 3.6%. Only a mad king would expect a different result from trying the same thing again.

Unlike, say, mobile phones, computers, machinery and consumer goods, the US doesn’t get much of this stuff from its geopolitical rivals. Instead, it’s overwhelmingly from allies and countries that the US needs to keep on side, most of all at a time when it can’t afford to stand alone against the rising tide of authoritarianism. Canada and Mexico, the European Union, Brazil, South Korea, Japan and Taiwan combined account for 80% of US steel imports. Add in Bahrain, Qatar, and the United Arab Emirates — home to three of the biggest overseas US military bases — and you’re looking at about 70% of imported aluminum, too.

The two metals are also some of America’s most extensively protected sectors: On top of the 2018 Trump administration tariffs, they are the subject of just under half of the 736 anti-dumping and countervailing duty orders and agreements currently in force.

The US and Canadian aluminum sectors, in particular, operate as a more or less integrated single industry: Canada uses its cheap and clean hydro power to smelt new metal and become the world’s biggest exporter of freshly-smelted blocks, while the US employs its vast consumer market to be the biggest exporter of scrap for making recycled aluminum. That shouldn’t be dismissed as just “waste:” Such recycled aluminum supplies about a third of global demand.

The 2018 tariffs were such a big hit that Trump needs to double up. And please note that Biden kept all of Trump’s tariffs and added more.

Anyone in their right mind would be pleased at getting bargain aluminum from a good neighbor and strong ally using clean hydropower.

But no. Trump sees this very beneficial arrangement as another “emergency” in need of fixing.

Tit-for-Tat and Tat-for-Tit

Also note that Trump Vows US Will Respond to Europe’s Metal Tariff Retaliation

• President Trump said the US would respond to the European Union’s countermeasures against his new 25% tariffs on steel and aluminum, raising the risk of further escalation in his global trade war.
• The EU launched “swift and proportionate countermeasures” on US imports, reimposing balancing measures from 2018 and 2020 and adding a new list of industrial and agricultural goods, worth up to €26 billion.
• Canada also announced 25% tariffs on about C$30 billion of US-made products, targeting steel and aluminum as well as other consumer items, with other countries opting for negotiations to avoid tit-for-tat tariff wars.

Tariff Tradeoff

Investopedia reports How Trump’s Metal Tariffs Could Eliminate 75x More US Jobs Than They Save

In 2018, Trump imposed a 25% tariff on steel and a 10% tariff on aluminum imports in an effort to give U.S. steel producers a leg up and stop job losses in that industry. 

By 2019, President Donald Trump’s tariffs on steel and aluminum had cost the U.S. economy 75,000 jobs among companies that use metals to produce products, and gained 1,000 jobs in metal production.

“The 2018 steel tariffs just called to remind you that steel is produced by a tiny sliver of the economy, but used as an input by a much broader swathe of manufacturers,” Justin Wolfers, an economist at the University of Michigan, posted on X.

The high taxpayer cost of “saving” US jobs

Finally, please consider 2020 article The high taxpayer cost of “saving” US jobs through “Made in America”

President Donald Trump and presumptive Democratic presidential nominee Joe Biden differ on many issues, but government procurement is not one of them. “Buy American, Hire American” was Trump’s campaign slogan in 2016, while “Made in America” and “Buy American” together appear 29 times in Biden’s 2020 policy document. Trump promised to crack down on federal agencies that grant excessive waivers to skirt Buy American rules, and Biden committed to closing loopholes that allow foreign content to creep into American-made goods. Both leaders harbor special affection for manufactures, particularly for iron and steel melted and poured on American soil, and for the merchant marine to carry goods between US ports. The claim of generating well-paid jobs is central to the argument for spending taxpayer dollars solely on American goods.

When presidential candidates agree, the policy must be a political winner. Nevertheless, “Buy American” or “Made in America” as a slogan for excluding imports is an economic loser. We calculate that the annual taxpayer cost for each US job arguably “saved” by Made in America probably exceeds $250,000. We put “saved” in quotation marks because buy national requirements essentially shuffle jobs from other sectors of the economy to the procurement sector. And the shuffling takes a toll on economic efficiency, which shows up in elevated price tags on everything from computers to bridges. On balance, buy national requirements create no new jobs, but they do save jobs in domestic firms that supply government needs, often at a high cost to taxpayers.

Related Posts

April 20, 2018: Fed Study: “Tariffs Kill High-Paying American Manufacturing Jobs and Businesses”

On occasion, Fed economists get things correct even if the voting members get things backward.

November 22, 2024: Should Anyone Care Whether Underwear Is Produced in the US or China?

This ridiculous-looking question gets to the heart of tariff discussions.

February 10, 2025: Trump to Impose 25 Percent Tariffs on Steel and Aluminum, Expect Higher Prices

All US consumers of steel and aluminum will pay higher prices, especially the automakers.

February 26, 2025: Trump’s Tariffs Will Increase the Cost of a Pickup Truck by $8,000.

Trump says it’s full speed ahead with tariffs. It will cost US jobs.

2025 Jobs Saved Analysis

Light truck retail sales in the United States increased to 12.9 million units in 2024.

At $8,000 per vehicle, that’s a cost of $103 billion, how many jobs will that save?

If your answer is a tiny number in the steel industry (perhaps), but hugely negative overall, then you are thinking correctly.

We call this …. Winning!

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