Pandora's Box: Another Look at Steel Tariffs
Mike Mish Shedlock
The Peterson Institute for International Economics (PIIE) reports US Steel Is Already Highly Protected from Imports.
The US steel industry has been the largest beneficiary of special protection from imports for decades, with more than 60 percent of steel imports subject to tariffs at the end of 2017. The average share of all US imports from the world covered by this sort of special protection was only 4 percent as of 2016. Furthermore, special restrictions already cover 94 percent of steel imports from China, which now make up only 3 percent of all US steel imports. On March 8, President Trump announced he is imposing tariffs of 25 percent and 10 percent on all foreign sources of steel and aluminum, respectively—with the exception of Canada and Mexico, as well as possibly others—on the basis that these imports pose a threat to national security.
- Steel has been the largest beneficiary of special protection for decades.
- More than 90 percent of steel imports from China have already been hit with special US steel tariffs.
- Trading partners vary considerably as to who has already been hit with US steel tariffs. China was only the 10th largest supplier of steel to the US market in 2017 ($976 million), largely because 94 percent of those exports were already subject to special tariffs.
- Aluminum has only recently become a beneficiary of special protection.
- Aluminum's special protection to date has been directed exclusively towards China
National Security Lie
Trump's "national security" angle is an obvious lie. Most US steel imports come from allies, including Canada. Most aluminum imports come from Canada.
The above charts represent figures before Trump’s new tariffs of 25 percent on steel and 10 percent on aluminum.
Two weeks ago I commented on the Foolishness of Trump's Steel Tariffs in One Image.
How Not to Sell Cars
It's absurd to believe steel manufacturing jobs will return to the US. Yet, let's pretend they will. What's the cost?
Here's the answer: How to Not Sell Cars: More Steel Tariffs Coming Up.
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.
Not only do the steel tariffs harm US manufacturers that consume steel, they also open the door to other countries imposing tariffs on the US in the name of "national security".
"National security" now means anything any country wants it to mean thanks to Trump's blatant lie.
Mike "Mish" Shedlock.