Trump’s Tariffs and the Common Man

Protectionism is sold as good for workers, but the overwhelming evidence is the opposite

WSJ editorial. Excerpts:

"here was the conclusion of a study of Mr. Trump’s last trade wars, written in 2019 by two Federal Reserve economists: “We find that U.S. manufacturing industries more exposed to tariff increases experience relative reductions in employment as a positive effect from import protection is offset by larger negative effects from rising input costs and retaliatory tariffs.”"

"Since 2018, when Mr. Trump began his tariff spree, which President Biden has mostly continued, manufacturing employment in the U.S. is up modestly, 3.4%, according to federal figures. That increase looks like the continuation of a trend that began in 2009, and it’s still roughly a quarter below the employment peaks of the 1990s."

"Employment in iron and steel mills and ferroalloy manufacturing, compared with when Mr. Trump announced his metal tariffs in March 2018, is up 800 souls, or 1%. Yet in the same period, employment in steel-product manufacturing from purchased steel fell by 1,600 workers, or 2.8%."

"In their earnings calls after nearly a year of Mr. Trump’s metal tariffs, steel makers bragged about record profits, whileWhirlpool, Caterpillar and others lamented new costs. Ford pegged its annual hit at $750 million, and the profit-sharing checks sent to its factory workers “would be 10 percent higher were it not for tariffs,”"

"“U.S. tariffs continue to be almost entirely borne by U.S. firms and consumers,” said a 2020 analysis by economists at the New York Fed, Princeton and Columbia. A study by the Peterson Institute for International Economics found that each job created or saved by Mr. Trump’s steel tariffs cost $900,000. His tax of up to 50% on imported washing machines fared little better, according to a 2019 estimate, supporting 1,800 jobs at a cost of more than $800,000 each."

"After Mr. Trump’s import tax was imposed, prices on washers went up 11.5%, or about $86"

"If preserving one Ohio job in steelmaking kills two Michigan jobs in steel manufacturing, well, it takes breaking eggs to make a protectionist omelet. Pressed to react to studies saying that jobs saved via tariffs cost the public nearly $1 million apiece, Mr. Lighthizer  [Robert Lighthizer, Mr. Trump’s chief tariff strategist] praises the virtues of inefficiency."