Import restrictions and higher executive pay go hand in hand

See License To Steel: Trade Restrictions Benefit CEOs More Than Workers by Christine McDaniel of Mercatus. Excerpt:

"As it turned out, new research was released on executive pay and import protection that same day. The paper is by Brian Blank, a finance professor at Mississippi State University, and entitled “Executive Incentives, Import Restrictions, and Competition: Empirical Analysis of Antidumping and Countervailing Duty Orders.” Blank finds that import restrictions and higher executive pay go hand in hand.

Blank identified firms petitioning the government for special protection through antidumping and countervailing duties, as well as firms affected by the countervailing duties. He then examined whether executive pay is any different in firms that sought trade protection compared to the non-petitioning firms that likewise benefited from it.

CEOs of firms tied to antidumping and countervailing duty order requests received compensation in cash and equity incentives, on average, $1 million higher than expected, even after controlling for firm performance and other characteristics. That’s on average 17 percent higher than when the trade restrictions were not in place.

This finding holds across industries. In other words, while steel CEOs get bigger paychecks when they win special protection, so do CEOs in other industries under the same circumstances. What stands out about steel is that the industry appears to be a so-called frequent flyer here, using the restrictions more than any other industry. Over half (53 percent) of all antidumping and countervailing duties are in the industry.  

United Steelworker leadership is on board, although there is little or no evidence that the workers themselves, including union members, are benefiting.

At a time of strong expansion and hiring in the overall U.S. economy, BLS data show that the rate of employment growth in both the steel producing and consuming sectors actually slowed since the March 2018 imposition of steel tariffs, compared to the 12 months before President Trump announced his action based on “national security” grounds. Meanwhile, job growth in the broader manufacturing sector sped up.

According to statistics from the American Iron and Steel Institute, the industrial capacity of steel mills has reached and surpassed the intended goal of 80 percent.

It's time to end the steel and aluminum tariffs.

As signs emerge of an economic slowdown on the horizon, the economy will need a boost. The single largest stimulus package President Trump could sign right now would be a bill that gets rid of all the steel and aluminum tariffs. They have not worked as promised. Their elimination might not help steel industry CEO compensation, but would be welcome relief for U.S. manufacturers."