Trump is right to impose tariffs
Washington is certainly a contentious place these days, and President Donald Trump has undoubtedly been a lighting rod for partisan squabbling.
But despite the rough ride in the nation’s capital, the American people may find reasons to agree with at least one effort undertaken by the Trump Administration, since it could help to grow good jobs and boost the overall economy.
And that’s in the president’s decision to impose safeguard tariffs on a flood of foreign steel currently being “dumped” into the U.S. market.
Steel is uniquely important in successful economies since it’s critical for everything from the solid metal used in cars and buildings to the extremely high-tech, lightweight frames used in military aircraft.
While the United States once pioneered the world’s steel industry, it is now the largest importer of steel — importing nearly four times as much as its exports.
In sharp contrast, China is by far the world’s largest exporter of steel. In an average month, China’s government-owned companies produce nearly as much steel as the U.S. does in one year.
It’s not that China needs all this steel. The government-mandated growth of recent years occurred after China had already produced too much steel for its own consumption.
And so, a reckless combination of state ownership and massive government funding has led to a glut of steel being continually shipped to the U.S. — often at below the cost of production.
Both the government funding for this steel, and the selling of it at below-cost value, are considered violations of world trade law.
But Beijing has shown complete indifference to such rules, especially since their massive exports have led to an ongoing decline in America’s steel industry.
The Commerce Department recently investigated the impact of all this dumped steel. Its findings were disturbing, with Commerce Secretary Wilbur Ross reporting that the quantities and circumstances of steel imports “threaten to impair the national security.”
Thankfully, Trump has announced emergency tariffs on steel imports to help ensure the long-term viability of the industry.
There will be consequences, though, and U.S. companies that buy steel to make lawn mowers, hand tools, and other products will feel the impact. Their overseas competitors will continue buying artificially cheap foreign steel, and will export products that undercut the pricing of American-made products.
Trump should now focus on protecting the entire manufacturing supply chain.
Trump is correct to impose steel tariffs to help the U.S. maintain its long-standing position as an industrial leader. The alternative — losing our steel industry altogether — would leave the U.S. more vulnerable to the whims of other countries, including strategic rivals.
Michael Stumo is CEO of the Coalition for a Prosperous America.