This should go in the plus column. It gave domestic producers a breather and a window of opportunity to get their acts more competitive for when the tariffs ended a year or two later. It worked. This last week for example, a freighter load of steel made in Cleveland set sail for Belgium, the first American steel shipped to Europe in like thirteen years. They have another shipment to Europe scheduled for August.
“This should go in the plus column.”
Only if you failed basic economics.
It raised the price of steel here and punished businesses and consumers who made and bought items made of steel. It was a stupid vote buying ploy.
For example:
http://www.townhall.com/columnists/WalterEWilliams/2006/07/12/the_pretense_of_knowledge
Another example of the seen/unseen problem is the Bush administration’s 2002 steel tariffs. The tariffs’ seen beneficiaries were steel industry executives, stockholders and the approximately 1,700 steelworker jobs saved. According to the Consuming Industries Trade Action Association, higher steel prices, resulting from the tariffs, caused thousands of job losses in the steel-using industries. Since companies that used steel had to pay higher prices, they became less competitive domestically and internationally.
And this
http://www.gmu.edu/departments/economics/wew/articles/03/stupidity.html
Both of these scenarios are applicable to the Bush administration’s 30 percent steel tariffs imposed last year. Those tariffs caused the domestic price for some steel products, such as hot-rolled steel, to rise as much as 40 percent. The clear beneficiaries of the Bush steel tariffs were steel industry executives, stockholders and the approximately 1,700 steelworker jobs that were saved. Tariff policy beneficiaries are always visible but its victims are mostly invisible. Politicians love this. The reason is simple. The beneficiaries know for whom to cast their ballots and the victims don’t know whom to blame for their calamity.
According to a study by the Institute for International Economics, saving those 1,700 jobs in the steel industry cost American consumers $800,000 in the form of higher prices for each steelworker job saved. That’s just the monetary side of the picture. According to a study commissioned by the Consuming Industries Trade Action Association, higher steel prices have caused at least 4,500 job losses in no fewer than 16 states - over 19,000 jobs in California, 16,000 in Texas and 10,000 in Ohio, Michigan and Illinois. In other words, industries that use steel are forced to pay higher prices and the products they produce become less competitive and they must lay off workers.
The average hourly wage of steelworkers ranges between $15 and $20 plus fringe benefits; so we might be talking about an annual wage package averaging $50,000 to $55,000. Here’s my question to you: how much sense does it make for American consumers to have to pay $800,000 in higher prices to save a $50 to $55 thousand-dollar-a-year job? It’d make better economic sense for Congress to pass an Aid to Dependent Steelworkers Act whereby we’d tax ourselves so as to give each of those 1,700 steelworkers, whose jobs were saved, $100,000 year so they might take off and live in a nice beachfront condo in Florida or Bermuda. While less costly to Americans than President Bush’s steel tariffs, it has no political future. The handout would make the protectionist policies apparent and hence repulsive to most Americans.
Plus column? Only if you were a steel worker or company. For everyone else, it was a big minus.