Steel: A Great Tarrif User

Fire of Liberty

It looks like the White House is taking a slide on its "free market/free trade" credentials with the re-impositioning of the steel tariffs on imports of steel from Brazil, Russia and Japan. While the President and his advisors might think it's wise to continue these tariffs to help the fledgling US steel industry in Ohio and Pennsylvania, they fail to recall that these tariffs actually hurt the various industries who use steel in their products. That means that the cost of such steel will have dire affects on the manufacture of automobiles, metal buildings, metal roofing, and Lords knows whatever else that is made from steel. Just look what an editorial in The Wall Street Journal had to say about the same tariffs in 2003:

Meanwhile, the tariffs imposed a toll on the rest of the economy--in particular on steel users. U.S. manufacturers that consume steel for products ranging from cars to toasters watched domestic steel prices jump by more than 30%. The International Trade Commission, which released a report at the tariffs' September midpoint, found that in their first year the levies inflicted a $680 million hit on the U.S. economy.

A study done earlier this year for the Consuming Industries Trade Action Coalition went further. It found that higher steel prices cost 200,000 American jobs and $4 billion in lost wages from February to November 2002. Those 200,000 jobs were more than the total number of people employed by the U.S. steel industry itself. That's one reason more than 200 companies and organizations representing steel-consuming and related industries sent Mr. Bush a letter last month begging for relief.

For more on what steel tariffs can do to an economy just look at this by Deroy Murdock over at National Review Online. When will the White House ever learn to cleft to the concept of free trade when it comes to steel and agriculture. Subsidies and tariffs which are imposed to stave off the bleeding of a specific industry end up causing greater harm for the nation. Expert a sticker shock when you try to buy anything made of metal.