By the Number:
19,000 in Steel and Aluminum Factories;
6,000 in Service Industries
25,000 in Manufacturing Industries
US steel and aluminum factories will add thousands of jobs in the wake of President Donald Trump authorizing tariffs on imports, offsetting job losses in other industries but also slowing down economic growth by a very small percentage in the short term, according to a study by the Coalition for a Prosperous America.
The study by the nonprofit organization which supported President Trump’s 25 percent tariff on steel imports and 10 percent tariffs on aluminum concluded the US economy will add about 19,000 jobs. And the services sector will add another 6,000 jobs.
However, there’ll be roughly 25,000 job losses in the manufacturing sector – slowing down the economy by 8/1000 of 1%, or $1.4 billion, in the short term.
“The net job loss is close to zero, and the reason for that is steel prices and aluminum prices go up far less than the tariff amounts,” said Jeff Ferry, research director for the Coalition for a Prosperous America. “The net gain comes from a couple of places; first, the steel and aluminum jobs have higher wage and incomes than average manufacturing jobs, so the economy benefits from growth in industries with higher pay levels than average.
The study applied the GTAP (Global Trade Analysis Project) economic model that’s widely used by federal government agencies to model international trade flows, Ferry added. It found that the volume of steel and aluminum imports would go down by 37% in the first full year of tariffs.
“In the long term, although we haven’t modeled this, in my view the more investment we get in steel and aluminum industries, the more opportunities there are to make profit, industries will invest in people and equipment which will benefit the overall economy,” Ferry said.
“Also, the purpose of the tariffs was for national security; our steel and aluminum industries were struggling and shrinking due to global oversupply and weak prices caused by massive increase in production in China, and we want to those industries stable and profitable.”
The study comes as many other forecasts say the import tariffs would largely hurt downstream sectors of the economy that use raw steel and aluminum to make consumer products such as automobiles and beverage cans.
For instance, Harbor Intelligence said on March 1 that Trump’s aluminum tariffs would boost production jobs by about 1,900, but 23,000 to 90,000 U.S. manufacturing job will be lost.
The Associated General Contractors of America which opposed the measure said many of their members have been told by their steel providers that their prices will be increasing significantly, effective immediately, because of the tariffs.
“We continue to believe that the best way to help grow U.S. steel and aluminum production is by boosting investments in infrastructure that will help our economy expand while increase demand for steel and aluminum products,” AGC spokesman Brian Turmail has said. “The tariffs may provide short term help, but the broader economic damage they are likely to prompt (particularly through a trade war) is likely to dampen demand for steel and aluminum products.”