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Steel News March 13, 2018 05:30:59 AM

Import Tariffs to Cost More Than 5 Jobs for Every 1 Created

Paul Ploumis
ScrapMonster Author
Trump on March 8 signed a presidential proclamation imposing 25 percent tariffs on most steel imports and 10 percent tariffs on aluminum imports from most countries.
Import Tariffs to Cost More Than 5 Jobs for Every 1 Created

SEATTLE (Scrap Monster): More than five jobs will be lost for every one gained as a result of the tariffs imposed on steel and aluminum imports by President Donald Trump, a consulting firm has concluded.

Trump on March 8 signed a presidential proclamation imposing 25 percent tariffs on most steel imports and 10 percent tariffs on aluminum imports from most countries. The Trade Partnership, in a report released three days earlier, projected that across-the-board tariffs at those levels would add more than 33,000 iron, steel and aluminum jobs but would cost nearly 180,000 jobs throughout the rest of the economy. The biggest losses – more than 142,000 jobs – would be in the services sector, including trade and distribution (more than 34,000 jobs), construction (more than 28,000 jobs), and business and professional services (more than 22,000 jobs).

“Services sectors are hit the hardest for several reasons,” the report stated. “First, as the largest component of the U.S. economy, services are key inputs into the output of every U.S. sector, so as manufacturing, agriculture and energy output decline, so too do services output and related jobs. Second, consumers have reduced spending power when they are hit by higher costs (of a new car, a new washing machine, etc.) and, for many, lost wages from unemployment. As a result, households pull back on spending; services like education, entertainment and even healthcare are on the front lines of the spending reduction impacts, with additional attendant job losses.”

The job estimates are based on Trump’s initial indication that the tariffs would apply to all countries, but in the end, he at least temporarily exempted Canada and Mexico. Also, the report noted that the projections “do not take into account any potential retaliation against U.S. exports; only of the tariffs themselves.”

Courtesy: AIIS