NCPA


Policy Issues

NCPA Publications

Both Sides

Editorial Opinions

Audio/Visual


NATIONAL CENTER FOR POLICY ANALYSIS
HOME / DONATE / ONE LEVEL UP / ABOUT NCPA / CONTACT US
Steel Tariffs Prove To Have Been A Very Bad Idea
Daily Policy Digest

Tax Issues / Tariffs & Federal Excises

Thursday, August 15, 2002
Many economists forecasted serious economic dislocations would arise from the Bush administration's steel tariffs imposed in March. Now the proof is in. Steel prices have risen by 30 percent to 50 percent. And at an aptly named hearing, "Unintended Consequences of Increased Steel Tariffs on American Manufacturers" before the House Small Business Committee, owners of small steel-using businesses outlined woes caused by the tariffs -- and the threats posed to their continued operations.

  • They reported they are unable to obtain the kinds of steel they need to manufacture their products.
  • The shortages are forcing them to lay off workers -- many of whom, ironically, are members of the United Steelworkers of America.
  • They face steel price hikes of up to 54 percent -- meaning not only higher prices for American consumers, but also less competitive prices overseas on the products they make for export.
  • Economist Laura Baughman testified that eight times as many jobs will be lost in steel-consuming businesses as may be saved among steel producers.
She and Joseph Francois of the Consuming Industries Trade Action Association estimated that 5,000 to 9,000 steel industry jobs might be saved by the tariffs -- but at a cost of around 36,000 to 74,000 other jobs. They estimate the economic loss of each job saved in steel manufacture at more than $400,000.

As it that weren't bad enough, we've angered our global trading partners and undercut our arguments for freer world trade.

Source: Pete du Pont (National Center for Policy Analysis), "Paying a Price for Steel Tariffs," Washington Times, August 15, 2002.

For more on Tariffs & Federal Excises
http://www.ncpa.org/iss/tax
12770 Coit Rd., Suite 800 - Dallas, TX 75251-1339 - 972/386-6272 - Fax 972/386-0924
601 Pennsylvania Ave. NW, Suite 900 South Building - Washington, DC 20004 - 202/220-3082 - Fax 202/220-3096
Copyright © 2002 National Center for Policy Analysis - All rights reserved.