How Trump’s Metal Tariffs Could Eliminate 75x More US Jobs Than They Save

President Donald Trump’s tariffs on steel and aluminum announced this week might boost job creation at companies that make those metals but could cause massive job losses at companies that use them, if history is any guide.

Trump levied 25% tariffs on steel and aluminum imports on Monday. He didn’t grant any exemptions to allied countries, ramping up his controversial campaign of imposing tariffs on trading partners.

So, how is that going to affect the economy? Past experience with tariffs could offer some clues.

2018 Metals Tariffs Could Be a Guide

In 2018, Trump imposed a 25% tariff on steel and a 10% tariff on aluminum imports in an effort to give U.S. steel producers a leg up and stop job losses in that industry. He later granted exemptions to allied countries, including Canada and Mexico.

Those tariffs had a mixed effect.

U.S. steel manufacturers added about 1,000 new jobs as foreign-made steel suddenly got more expensive, making U.S.-made steel more competitive, according to a 2020 analysis by economists at Harvard and the University of California, Davis. The researchers broke down figures from a 2019 study by researchers at Columbia University, the Federal Reserve Bank of New York, and Princeton University.

Unfortunately for the U.S. economy, there are many more industries that use steel than make it. Companies making auto parts, motorcycles, household appliances, various kinds of machinery, batteries, and military vehicles suddenly had their costs increase.

As a result, by 2019, those companies had hired 75,000 fewer people than they would have without the tariffs, the researchers calculated.

In other words, more metal tariffs could damage a lot more U.S. jobs than they save.

“The 2018 steel tariffs just called to remind you that steel is produced by a tiny sliver of the economy, but used as an input by a much broader swathe of manufacturers,” Justin Wolfers, an economist at the University of Michigan, posted on X.