Manufacture This

The blog of the Alliance for American Manufacturing

Domestic industry is rebounding, argues EPI study.

It’s been months now since the Trump administration raised tariffs on steel and aluminum tariffs, citing the faltering of domestic industries as a national security concern. The industries had long complained about the growth of excess capacity and overproduction in China, where that growth is fueled by a raft of government subsidies.

A lot is typically written about the steel tariffs, because steel makes up a larger market. But what has the impact of tariffs been on the aluminum market?

A new report from the Economic Policy Institute tackles this question directly. At a press conference today the author and tariff advocates argued the tariffs have actually kinda worked:

  • U.S. primary aluminum production is projected to increase 67 percent between 2017 and 2018.
  • Restarted smelters and expansion projects will create more than 1,000 new jobs and generate more than $100 million in new investment.
  • Downstream aluminum rolling mills and extrusion operations have continued expansion, investment and hiring plans.

As for claims the tariffs are tantamount to a “tax on beer,” the report has this to say:

The structural decline of the popular beer industry is strictly a product of changing tastes and structural change within that industry.

My expert opinion: I think plenty of people in America are still buying (and drinking) plenty of beer in spite of any real or imagined tariff effect on prices.

Read the report here.