Why do U.S. presidents insist that tariffs work? Hoover, Carter, Bush, Obama, and now Trump.
Last week, the president proposed slapping a 25 percent on steel imports and 10 percent on aluminum imports. This would be in addition to the multiple tariffs, duties, and restrictions the Trump administration has instituted since Inauguration Day.
Democrats seem to be in support of the levy, but many Republicans, conservative media outlets, and free market organizations are opposing Trump’s latest idea.
In case the president reads this, here are five other reasons to oppose these steel tariffs:
- Former President George W. Bush implemented steel tariffs in 2002: as many as 200,000 jobs were lost, there was a shortage of steel, and prices spiked as much as 80 percent.
- Former President Barack Obama instituted a tariff on Chinese tires: 5,000 jobs were lost, other industries suffered from retaliation, and the retail sector was demolished.
- The U.S. steel industry is thriving: it accounts for 70 percent of the market, business is booming, and production surged five percent last year.
- Domestic production of raw steel has remained the same for the last 40 years.
- Trade deficits are irrelevant because it doesn’t affect consumers or economies.
Stop the madness!
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Protectionism can save jobs. In the USA the best measurement of the cost per job saved to the rest of the country is about $1 million per job saved. Saving one job might provide $100,000 in gains to the worker and the employer who benefit from the protectionism, but cost the rest of the country $1,000,000. Since the million dollars is just one third of one cent per person in the USA, no one notices it.
To save a million jobs via protectionism would cost the country a S1 trillion which would be about the same impact as a very severe recession. To save 10 million jobs via protectionism would cost the country a S10 trillion. That would make the USA a poorer country than Mexico. That would mean it would be likely the people born in the USA would be going to Mexico to work as servants and dishwashers. The degree of impoverishment that would result from that much protectionism is usually only associated with severe natural disasters or wars. Trump is no Reagan on trade. Trump is a protectionist.
https://seekingalpha.com/article/4148256