Mint Quick Edit | Trump’s metal tariff hike: Malleable logic
Why should the US double its aluminium and steel import duty to 50%? As estimated, such protection lost 75 jobs in other industries for each job created in steelmaking. Again, more harm may be done than good.
The US has doubled its tariff on steel and aluminium imports to 50% from Wednesday, citing a threat to national security. The UK has been spared, thanks to a deal it struck recently with America.
For other exporters, the US market’s barrier has just gone up significantly. President Donald Trump sees this as necessary to safeguard American manufacturing jobs.
Also Read: Self-harm alert: Trump’s ‘man of steel’ ambitions will make America grate again
But that’s a puzzling view. Similar tariffs imposed during his first tenure in 2018 were estimated to have created 1,000 extra jobs in steel, according to an Economist report, but at the expense of an astounding 75,000 jobs that were destroyed in sectors using the metal as an input. User-industries suffered a hard blow as their costs rose.
Also Read: Andy Mukherjee: Importers hit by Trump tariffs could turn to ‘glocal banks’
From an employment perspective, more harm was done than good. Why the Trump administration has doubled down on this approach is hard to understand. By one old theory of autarky, national security is better assured by keeping the production of raw materials, such as key metals, at home.
Also Read: A trade arrangement that leaves out the US could trump Trump’s tariffs
This could mean valuing jobs in steel and aluminium factories more than those in car plants or beverage can-making units. Trump, though, has made no such distinction. Again, more may be lost than gained.
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