Uncertainty Surrounds U.S. Steel, Aluminum Import Tariffs
On March 8, President Trump signed executive orders imposing tariffs of 25 percent on steel imported into the U.S. and 10 percent on imported aluminum, excluding that from Canada and Mexico. The reaction to the tariffs has been contentious, with pushback from trade groups and both sides of the aisle.
The tariff proclamations appear to point to imported steel and aluminum girders, plates and blanks, rather than articles made of steel and aluminum. As the proclamations stand, stainless steel and aluminum sport bottles and other products used in the promotional products industry are not subject to new import duties. However, recent reports from Reuters and Politico reveal that the president is considering enacting tariffs on $60 billion worth of Chinese imports as a response to an intellectual property theft investigation. The tariffs could target up to 100 products, including electronics, telecommunication equipment, furniture and toys.
The direct impact of these tariffs on the promotional products industry has not been quantified. However, Larry Whitney, director of global compliance for the Polyconcept family of suppliers—Leed’s, Bullet, Journalbooks/Timeplanner Calendars and Trimark Sportswear Group—notes that, “long term, if American manufacturers can’t export goods or U.S.-made products that use steel, and if aluminum prices rise, the result could be inflation or a slowdown in the economy that will be felt throughout the industry.”
Trade and economic consulting firm The Trade Partnership released a policy brief on Tuesday with projections on the steel and aluminum tariffs’ impact on U.S. jobs, including the effects of trading partners’ retaliation. The Trade Partnership expects that the tariffs will positively affect U.S. steel and aluminum producers as well as a handful of related industry categories, with employment in these categories climbing by 26,346 jobs.
The tariffs, however, would have a negative effect on manufacturing and other categories that use steel and aluminum, and ultimately cost 495,136 jobs across a wide range of sectors in the economy. Most of the lost jobs, The Trade Partnership expects, will be in production and low-skill positions.
The Trade Partnership projects that the services sector will be hardest hit, with 442,333 lost jobs. As the largest sector of the U.S. economy, services and related jobs will decline as manufacturing, agriculture and energy sector outputs go down. The projection also accounts for consumers reducing their spending as they respond to higher costs, and unemployment.
Geographically, every U.S. state is expected to be hit by job losses, with the heaviest in California, New York and Texas.
For more on The Trade Partnership’s findings and methodology, click here.