NCPA - National Center for Policy Analysis

Tariffs Punish Steel-Drum Makers

July 9, 2002

In the 1980s, when the Republicans last indulged a steel protection binge, studies from Washington University of St. Louis found that three jobs elsewhere were lost for every job saved in steel. U.S. manufacturers of steel drums -- which are used to ship every kind of fluid from food additives to lubricants -- are getting a lesson in how that comes about.

  • Thanks to a dozen or so small producers, American still leads the world in steel-drum production -- but that may not last.
  • The industry is paying the highest tariffs for raw steel and is crying out for relief -- because it can't get enough of the kind of steel it needs at any price.
  • One small manufacturer, the Trilla Steel Drum Corp, in Illinois, has seen its steel costs jump 54 percent and has had to cut production by 15 percent.
  • The industry has applied for an exemption and a ruling was supposed to come July 3 -- but it has been held up by an avalanche of some 1,200 similar requests from other steel users.

Because the industry is small, observers say, it doesn't have the lobbying clout in Washington to protect itself -- and so comes out on the short end of the stick.

Source: Editorial, "Free Trade Over a Barrel," Wall Street Journal, July 9, 2002.

 

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