October 2020 Steel Shorts: Brookings Bashes Trump Tariffs

The report goes on to debunk three claims made by tariff supporters: that they have benefitted American workers.

SEATTLE (Scrap Monster): Tariffs imposed by the Trump administration have had few, if any, benefits, a recent report from the Brookings Institution concludes.

The United States collected $79 billion in tariffs in 2019, about double the amount in 2017, and the report notes that, while the White House insists that companies paid these levies, “multiple studies suggest this is not the case: the cost of tariffs have been borne almost entirely by American households and American firms, not foreign exporters. While estimates vary, economic analyses suggest the average American household has paid somewhere from several hundred up to a thousand dollars or more per year thanks to higher consumer prices attributable to the tariffs.”

The report goes on to debunk three claims made by tariff supporters: that they have benefitted American workers; that they have helped the United States negotiate better trade agreements; and, in the case of the Section 232 tariffs on steel and aluminum, that they have improved national security.

Regarding American workers, the report states that, “overall, when economists have attempted to add up the net effect of Trump’s tariffs on jobs, any gains in importing-competing sectors appear to have been more than offset by losses in industries that use imported inputs and face retaliation on their foreign exports.” On trade deals, “the threat of tariffs does not appear to have brought substantial gains to the U.S.” and “in the long run the tariffs likely also contributed to pushing other potential trade partners away.” And as for national security, “while there may be a case for ensuring domestic production capacity for [steel and aluminum], it isn’t clear tariffs are the best instrument (or that they even achieve this goal). These tariffs antagonized many of America’s closest security partners, particularly Canada, which undermined efforts to cultivate a broader multilateral alliance to challenge China.”

Courtesy: AIIS            

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