Veronique de Rugy, a senior research fellow at the Mercatus Center at George Mason University, expertly describes the negative effects that Donald Trump’s recently proposed 25 percent tariffs on steel and 10 percent on aluminum would have on the U.S. economy in this New York Times piece:
Indeed, import taxes — putting aside rhetoric about defending jobs — are well-known to have devastating effects on consumers. They are quite effective at lining the pockets of shareholders in protected industries….
According to the United States International Trade Commission, other serious consequences of the tariffs included difficulties obtaining steel in the quality and quantity desired, a shift to sourcing finished parts from overseas, and relocating domestic steel-consuming facilities abroad.
Does that sound like what’s best for American workers and consumers? Instead of bringing jobs back to America and fighting off imports, the tariffs led to more jobs shipped abroad and more imports of final, rather than raw, goods. In other words, if your company uses steel to make pipes or refrigerators, you may decide to simply produce your own products abroad rather than paying artificially inflated prices on steel in order to make them in the U.S.A
According to the article, 6.5 million people in the U.S. are employed by industries that rely on steel and aluminum for inputs to their finished product. An input that will become noticeably more expensive with a tariff. This increased cost of inputs will put pressure on these companies to cut back on workers and wages, or to produce those goods overseas.
Also harmed would be U.S. companies that export their goods. Even without any reciprocal tariffs imposed by other nations on U.S. goods, if foreign nations sell less steel and aluminum to the U.S., that means they have fewer U.S. dollars with which to buy American-made exports.
WRAL.com has this article outlining what North Carolina industries that could be negatively impacted:
In 2014, the last year a comprehensive state report was published, North Carolina exported $31.2 billion in goods, led by chemicals and pharmaceuticals, machinery, transportation and aerospace equipment, technology components like semiconductors and agricultural products…. North Carolina pork exports account for $600 million in trade every year, according to the North Carolina Pork Council,
Poultry and tobacco industries are also mentioned as major North Carolina exporters that could be harmed by a reduction in trade.
Trump’s tariffs are crony protectionism, that will protect a relatively few companies while taxing U.S. consumers; and also likely to cost far more American (and NC) jobs than it preserves.