Response to Trump on steel

In Pennsylvania today Donald Trump said, “When subsidized foreign steel is dumped into our markets, threatening our factories, the politicians do nothing.”

This is false. President Bush imposed tariffs on imported steel in 2002. A month ago the Obama Administration imposed duties on Chinese steel of more than 200 percent and up to 92 percent on steel imported from South Korea, Italy, India, and Taiwan.

Steel is an intermediate good. When you raise protectionist barriers against imported steel as Mr. Trump threatens, you temporarily help U.S. steelworkers. You also raise input prices for American firms that use steel to build bridges and buildings and make cars, and trucks, trains and train tracks, appliances, ships, farm equipment, drilling rigs and power plants, and tools and packaging. Higher input costs hurt American workers in those factories and on those construction sites.

Mr. Trump should ask the workers who make dishwashers at Whirlpool’s plant in Findlay, Ohio whether they’re in favor of more expensive steel. Or he can ask the John Deere workers who use steel at their factories in Iowa, Kansas, Louisiana, North Carolina, North Dakota, Tennessee, and Wisconsin. Or the auto workers at almost any U.S. car and truck assembly line. Raising prices for imported steel hurts all of these American workers.

Yes, the Chinese are selling steel in the U.S. at a low price, called “dumping.” Yes, this hurts the owners and employees of U.S. steel manufacturers. It also helps many other American workers and even more American consumers. And the Obama Administration is using the tools in current law to respond to the Chinese actions.

Trump: “A Trump Administration will also ensure that that we start using American steel for American infrastructure. … We are going to put American-produced steel back into the backbone of our country. This alone will create massive numbers of jobs.”

No, it won’t, and the downside is it would cost taxpayers more. Put another way, any given amount of tax dollars will build less infrastructure. We’ll repair fewer bridges but, by golly, the fixed ones will have ‘MERICAN steel. I’d rather get the best value for every tax dollar we spend on infrastructure, thus ensuring we fix as many bridges as possible.

Mr. Trump’s lines may sound good in steel country, but his policies would harm other American workers, drivers, and taxpayers. On the whole Donald Trump’s steel policy would be bad for America.