Report: Tariffs Will Cost US Jobs
President Donald Trump’s tariffs on steel and aluminum imports will cost five jobs for American workers for every one gained. Although the tariffs, will increase employment in steel and aluminum production, it will decline in every other sector of the US economy, according to a report from the Trade Partnership. And that doesn’t include any employment effects from retaliation against United States exports, only of the tariffs themselves, the report emphasized.
Trump announced his intent earlier this month to impose tariffs of 25 percent on all US imports of steel and 10 percent on US imports of aluminum, other than from Canada and Mexico. The White House has since announced exemptions from the tariffs for imports from several other countries.
The report finds that the tariffs will have positive impacts on US steel and aluminum producers, but negative impacts on producers who use steel and aluminum. The tariffs will increase US iron and steel and aluminum employment by 33,464 jobs, but will cost 179,334 jobs throughout the rest of the economy, for a net loss of nearly 146,000 jobs.
In the manufacturing sector alone, job losses in other sectors (36,076) would cancel out job gains for steel and aluminum producers. Workers in the fabricated metals sector will lose 12,800 jobs, vehicles and parts manufacturing workers will lose over 5,000 jobs, and jobs on other transportation equipment industries will be reduced by 2,180.
“Two thirds of the lost jobs affect workers in production and low-skill jobs,” the report noted. We are also able to disaggregate the employment effects by skill level. Production workers, machine operators, office and administrative workers, sales staff, and farm workers will bear the brunt of the tariffs, while managers, professionals, and will account for one-third of the net job losses.
Service sector jobs will be hit the hardest. Consumers will have reduced spending power when they are hit by higher costs and lost wages and will pull back on spending. Spending on services like education, entertainment, and healthcare will suffer as a result, as will employment in those sectors.
The steel and aluminum tariffs, the report concluded, “would reverberate throughout the US economy in ways that will, on balance, reduce US employment.”