George Will On Steel Tariffs

See When protectionism is not about protecting America at all. 

"Next, and soon, will come a government decision about the problem, as our protectors see it, of menacingly inexpensive steel imports, concerning which the administration is pretending to deliberate. The charade of thinking will end with the imposition of yet more steel tariffs/taxes, joining the 149 (some as high as 266 percent) already targeting many of the more than 110 countries and territories from which the United States imports steel. Twenty-four of the existing duties target Chinese steel, which is less than 3 percent of U.S. steel imports. America’s supposedly embattled steel industry is producing more than it did during World War II, and every year in this decade more than 10 percent of U.S.-made steel goods has been exported.

Imposition of the new tariffs/taxes will be done solely by the president, exercising discretion granted to presidents by various laws, including one passed in December 1974, when Congress evidently thought that Watergate, then fresh in memory, had taught that presidents were not sufficiently imperial. Then, as now, Congress seemed to think it had more important things to do than set trade policy.

In his new book “Clashing Over Commerce,” Dartmouth economist Douglas A. Irwin explains that the steel industry was a powerful advocate of protectionism until the 1892 opening of Minnesota’s Mesabi iron ore range, which gave steel producers cost advantages that turned their attention to export markets. The industry’s trade problems began when, in July 1959, the United Steelworkers shut domestic steel production down for 116 days — the longest industrial strike in U.S. history — and steel-consuming industries found alternative suppliers and materials. Desperate management purchased labor peace with increased wages that by the 1980s were 95 percent higher than the average in manufacturing, and soon U.S. steel was priced out of foreign markets. Intermittently since then, the industry has sought and received protection.

In 2002, President George W. Bush imposed tariffs that caused steel prices to surge, costing more jobs in steel-using industries than then existed in steel-making. (Today there are upward of seven times more steel-using than steel-making jobs.) The tariffs cost $400,000 a year for every steel-making job saved, and cost $4 billion in lost wages. Especially hard hit in 2002 were three states — Ohio, Michigan, Pennsylvania — that in 2016 voted for today’s protectionist president."

"Most U.S. steel imports come from four important allies: Canada, South Korea, Mexico and Brazil. The coming steel tariffs/taxes will mean that defense dollars will buy fewer ships, tanks and armored vehicles, just as the trillion infrastructure dollars the administration talks about will buy fewer bridges and other steel-using projects."