Two briefs make clear that tariffs on steel and aluminum imports have been effective – and removing them will do next to nothing to ease inflation.
The Section 232 national security tariffs on steel and aluminum imports have been in place for a few years now. But – and maybe I’m only speaking for myself here – it seems like only yesterday that we were watching this on cable news, right?
Yeah, that wasn’t a good look. But here’s the truth: The 232 tariffs worked and are still working. While they weren’t explained well to the American public when they were announced in March 2018 – sending the octogenarian billionaire that President Trump made his Commerce Secretary to defend them was an odd choice – these tariffs have created the space for these fundamental manufacturing industries to find their footing after years of strain on them.
And that’s the argument the Economic Policy Institute (EPI) is making ahead of a public hearing on the 232 tariffs at the U.S. International Trade Commission (ITC) next week. In a pair of briefs submitted to the ITC to inform the hearing, it argues:
- The tariffs have allowed the domestic steel and aluminum industries, which were under significant strain because of mounting import competition, to recover – meaning they hired back workers and made large capital investments.
- The problems affecting the international steel and aluminum markets – namely, excess production capacity driven by industries in other countries that aren’t the United States – hasn’t abated. There is still way too much steel and aluminum being made in the world, and too many governments are heavily subsidizing that production. As such, if the tariffs are removed we’ll put our own industries’ viability at risk again.
- The tariffs haven’t had much of an impact on inflation, and removing them will do little fight it too. There’s a lot of talk these days about drawing back tariffs to ease inflationary pressure these days, whether the tariffs are industry-specific or focused on imports from individual countries like China that have long employed unfair trade practices. Here, EPI spells out in economic terms how tariffs have almost nothing to do with inflation, but it’s worth noting that giving the Chinese government a win in the form of tariff reduction won’t help high prices facing American consumers, either.
- And lastly, the tariffs have had almost no effect on the prices facing consumers in steel- and aluminum-using industries.