Steel, Agriculture Cringe at Thought of Trump Import Restrictions
Report Shows Steel Ban Would Take $200 Billion Out of US Economy
A report released this week by the American Institute for International Steel concludes that restrictions on iron and steel imports, as is being contemplated by the Trump administration, would take over $200 billion out of the United States economy and jeopardize tend of thousands of jobs.
Significantly, the economic impact would not be limited to companies that consume imported steel and their logistics services providers, but would also hit US agricultural exporters. That’s because most of the vessels used to deliver steel to Gulf Coast and Great Lakes ports are also used to backhaul agricultural exports to overseas markets.
In early April, the US Department of Commerce undertook an investigation of steel imports under Section 232 of the Trade Act, focusing on whether they represent a threat to national security. Later that month, President Donald Trump ordered the department to complete its report on an expedited timetable. By that standard, the department’s findings are now nearly three month’s overdue.
In 2016 there were 83,952 jobs in the United States generated by imported iron and steel products, according to the report, as well as 24,338 indirect jobs. An additional 1.2 million jobs are with related importers and users of the imported iron and steel products moving through the nation’s seaports.
The report concluded that last year imported iron and steel activity supported $239.8 billion of total economic activity, or about 1.3 percent of the nation’s Gross Domestic Product. Of that, $4.2 billion represents revenue received by companies providing services to the imported iron and steel cargo and vessels. $1.4 billion of that was used to pay the salaries of 26,432 workers and $1.9 billion was used to make purchases of goods and services.
Imported iron and steel also supported $19.4 billion of federal, state, and local taxes an additional $17.1 billion in tax revenue created as a result of the economic activity of the importers.
The consequences to the agricultural sector could involve making US commodities less competitive because the cost to export grain, particularly from the Lower Mississippi River, “will increase due to the restricted number of vessels that will be available to carry grain exports.” Forty-seven million tons of grain were exported through the Lower Mississippi River in 2016, supporting nearly 50,000 jobs in logistics and agriculture.
“With the imposition of import restrictions on iron and steel products,” the report stated, “these jobs in the US agricultural sector are also at risk.”
The trade restrictions contemplated by the Trump administration, the report concluded, “will put at risk nearly 84,000 direct, induced and indirect jobs that are now generated by the handling and transport of the imported iron and steel products, and further potentially impact more than 1.2 million jobs with users of the imported iron and steel products.”
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