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Tags: ross | pennsylvanian | republican | saccone

No Tariff Can Bring Back Steel's Bygone Era

No Tariff Can Bring Back Steel's Bygone Era

By    |   Monday, 12 March 2018 02:09 PM EDT

For the first time in memory there’s a glimmer of hope for peace on the Korean Peninsula. Meanwhile, the potential for a different kind of war looms larger.

President Trump signed decrees this week placing punitive new tariffs on imported steel and aluminum. Last week he made a surprise pre-signing announcement sending shock waves through the markets, caused consternation amongst our allies, and alienated much of his conservative base in Washington, D.C.

Concerns over an expanding trade war were heard across the political spectrum. President Trump had earlier tweeted that t"rade wars are good and easy to win," but few were buying it.

The president fulfilled a veiled campaign promise in imposing the new tariffs. The new taxes and duties are clearly part of his deeply held belief that we’ve been taken advantage of by foreign competitions and that it’s time to put "America First" again. But they bring with them some very negative consequences — both foreseeable and unforeseen.

While the president’s new tariffs won’t undo all of the good that his economic policy is doing — especially through de-regulation and tax reform — but they are an unnecessary and dangerous threat to economic growth and job expansion.

The protectionists promoting high tariffs claim that it preserves American jobs and national security. The truth is that while there may be some marginal job security and even minimal job creation as a result of imposing punitive tariffs, they are grossly outweighed by job losses in other sectors of the economy; they also stifle economic growth.

Tariffs are a tax. The taxpayers are every consumer who will pay more for products as a result of the new tariffs and workers in industries that use aluminum and steel.

There are about 200,000 workers employed in the production of aluminum and steel in the U.S. Meanwhile there are 5.5 million in businesses that use aluminum and steel to produce other products. One study noted that while the new tariffs arguably would help create some 33,464 jobs, they would erase more than 146,000. That’s not a good deal by any reckoning.

Especially with the administration’s far-sighted vision for repairing and improving our infrastructure, the added tariffs are not helpful. The steel and aluminum needed to build bridges and pipelines and upgrade ports can’t be made exponentially more expensive if we’re going to be successful.

National security has likewise been put forward as a justification for tariff barriers to trade.

But look at where we get our aluminum and steel.

The Number one importer of both steel and aluminum is Canada, our neighbor to the north. Hardly an adversary, they’ve been tied to us by mutual defense treaties for decades.

Following Canada are Brazil and South Korea — both allies. China, for all the bluster about them, doesn’t even crack the top ten and accounts for only about 2 percent of our steel and aluminum imports.

The nostalgic view of steel manufacturing, especially for Pennsylvanians and others across the "Rust Belt" is easily understood. But we didn’t lose our steel manufacturing industry because we didn’t make the best steel. It was the cost of doing so, from labor to environmental regulations, that curtailed our manufacturing.

Automation and technology took over. Today steel manufacturing facilities require a tiny fraction of the human workforce necessary a few decades ago.

Technology killed more steel manufacturing jobs than trade. Imposing high tariffs in an attempt to revive a bygone era misses the mark.

Some speculated that the president chose to announce the imposition of tariffs when he did to boost Republican Rick Saccone’s candidacy in the congressional special election in southwest Pennsylvania this coming week.

But the 18th Congressional District illustrates the opposite. You’d be hard-pressed to find a steel mill in the District. The region’s economy has evolved to “Meds and Eds” over the past couple of decades. UPMC is the largest employer in the area, not US Steel. The middle class is supported by jobs in hospitals and universities these days. The big creator of new jobs there is the energy sector and natural gas in particular. Pipelines to transport that gas are vital, and they’ll cost more with high tariffs on steel.

The middle class will bear the brunt of both higher prices for goods and retaliation from other nations which has already begun.

Commerce Secretary Wilbur Ross recently held up a soup can and noted that the increase in its cost would " . . . not be a noticeable thing." Of course he didn’t hoist up a car or a washing machine. Nor did he hold up millions of anything, because it is across the economy that the pain will be felt, both in increased consumer costs and job losses.

Yes, there have been foreign governments that have cheated. They’ve "dumped" steel. They’ve used government subsidies we thankfully don’t offer. They’ve stolen our intellectual property.

Sadly, imposing high tariffs, while punitive, may not put a stop to any or all of that.

High tariffs will, however, hurt American consumers and workers.

Free and fair trade is a much better option.

Charlie Gerow is a political analyst for Harrisburg, Pa.'s CBS affiliate, appearing weekly on its Sunday morning show, "Face the State," which is syndicated statewide. He serves as the first vice chair on the board of directors of the American Conservative Union. He is the CEO of Quantum Communications, a strategic communications and issue advocacy firm. For more of his reports — Go Here Now.

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Today steel manufacturing facilities require a tiny fraction of the human workforce necessary a few decades ago. Technology killed more steel manufacturing jobs than trade. Imposing high tariffs to revive a bygone era misses the mark.
ross, pennsylvanian, republican, saccone
Monday, 12 March 2018 02:09 PM
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