Mar 4, 2018 3 min read

At an Oval Office meeting in August, President Trump is said to have exclaimed, “I want tariffs! Bring me tariffs!”

On Thursday, he got them. The White House announced it would be imposing 25 percent tariffs on imported steel and 10 percent on aluminum.

To paraphrase the oft-quoted line from the Hollywood classic “All About Eve,” fasten your seat belts. It’s going to be a bumpy ride.

The administration’s proposal was made over the objections of some of the president’s own economic advisers and congressional Republicans. Trump reportedly sees the tariffs as a way to strike back at unfair trade practices, with China specifically in the crosshairs. In the long run, Trump also apparently views this as part of a longer effort to bring industry back to the United States and for smokestacks to sprout once again in places like Pittsburgh and Youngstown, Ohio.

The likelihood of the industrial economy of 60 years ago returning is, at best, chimerical. Cities like Pittsburgh have long since moved on from their smokestack legacies, investing resources in education and medicine. If Pittsburgh’s air were as smoky as it was in the days when men in white-collar jobs had to bring a second shirt with them to the office because the first would be speckled with soot by lunchtime, it would not be a finalist for Amazon’s second headquarters.

And even in the profoundly unlikely circumstance that the domestic steel industry regained its former preeminence, chances are it wouldn’t employ nearly as many people as it did in its heyday, not with many of the tasks in manufacturing now being carried out by robots.

The tariffs may be the fulfillment of a campaign promise for Trump, but it will likely be an economic loser for most Americans. The Dow Jones slid shortly after the announcement – not helped, admittedly, by indications outlined almost simultaneously from new Federal Reserve chairman Jerome Powell that interest rates could go up to keep the economy from overheating. This also invites retaliatory tariffs on products that we export, and will be a loser for domestic industries that depend on large quantities of steel and aluminum.

Like to guzzle beer or a soft drink out of an aluminum can? You’ll be paying more for it, since about half of what you’re paying for is the aluminum.

Of more consequence, though, is its probable impact on the American auto industry.

Teetering on the edge of collapse at the onset of the Great Recession, it has since stabilized. But steel tariffs promise to drive up prices, drive away customers and put a crimp in employment. Steel is no small part of making a vehicle. In fact, about 25 percent of the cost of manufacturing one is paying for the steel. And, as The Detroit News pointed out, tariffs on aluminum and steel likely will erase any benefit manufacturers received from the tax cuts that were approved late last year, and make even more improbable President Trump’s hope of kicking the annual economic growth rate over 3 percent.

Oh, and it will also raise the cost of steel just as the administration is trumpeting ambitious plans to rebuild America’s infrastructure.

As Bloomberg noted, “For decades, the U.S. government has tried now and then to protect the steel industry, and those efforts have consistently harmed consumers, undermined manufacturers, inhibited growth and impeded innovation, all without obvious benefits.”

It looks like this is a lesson we will have to learn all over again.