Hmmm, let's see: The president, staunch free trader though he professes to be, says levying a stiff tariff on imported steel was necessary to protect the almost 190,000 jobs in the steel industry, which has lost 43,000 jobs since 1998 (United Steelworkers of America figures).
But hey, not a lot of sympathy from the president and his party for the 185,000 jobs that have been wiped out in the textile industry since 1998, with thousands more expected to vanish this year — that's just an unfortunate side effect of free markets, they say. We'll retrain 'em for jobs in the high tech sector (there being, of course, a lot of high tech industries out in rural USA).
The president says the steel decision was an economic one and was needed to protect the fewer than 100 steel plants that are important to our country's economic welfare. Since 1998, 26 U.S. steel plants have filed for bankruptcy. “Imports are killing us,” one industry official said.
Yet, when more than 100 U.S. textile mills and hundreds of small garment operations in mostly rural areas were forced to shut their doors (or move to other countries) because imports were killing them, well, ummm, too bad — but that's globalization, that's competition, and unfortunately some people get hurt in the process.
When cheap imported cotton textiles displace U.S.-made products in American stores, and our cotton growers see their markets go to pot, we're told it's all to the consumer's benefit and, therefore, good for the economy.
An estimated 9 million to 12 million people are employed in over 100,000 U.S. companies that use steel in the manufacture of their products. They say the president's action will drive up the cost of those products for consumers and will result in more lost jobs, with a detrimental impact to the economy. Estimates are that this action could cost as many as eight times the number of jobs saved for steel.
There's no argument that the U.S. steel industry has been under increasing pressure in recent years, or that Korea, Japan, and other countries have been dumping their excess steel into world markets at fire sale prices. It seems not a little hypocritical, however, to justify a protective tariff for the steel industry, while turning a blind eye to the flood of cheap imports in textiles and other sectors.
The greater worry is that this will lead to retaliation by U.S. trading partners, a number of which are already very adept at playing the tariffs/import barriers game. In any trading war, whether small scale or large, American agriculture, hugely dependent on the export market, stands to be hurt big time.
Politics being politics, we can suppose it only coincidence that most of the steel industry is located in states the White House badly needs in future elections, as are nearly half a million current and retired steel workers, who the president promised in his campaign to take care of if they'd support him.
“There's no doubt it was done to make a political point, not an economic point,” one analyst said — a point, we can suppose, that wasn't considered worth making for textiles.
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