Tariffs, Quotas, and Retaliation Would Reduce US GDP by 0.2 Percent Annually
Economist Laura Baughman of the Trade Partnership has a March 13 policy paper on the estimated impacts of the steel and aluminum 232 tariffs, now that those tariffs apply more broadly than they did when first announced.
The updated version reflects the current state of play of the tariffs: applicable to everyone, including Canada, Mexico, and the European Union, except those who have swapped tariffs for quotas (Korea, Argentina, and Brazil) as well as retaliation from all the countries subject to tariffs.
According to Baughman, the tariffs, quotas and retaliation would reduce US GDP by 0.2 percent annually, in the short term. While US imports would decline, so, too, would US exports.
The tariffs, quotas and retaliation would increase the annual level of US steel employment and non-ferrous metals (primarily aluminum) employment by 26,280 jobs over the first one-three years, but reduce net employment by 432,747 jobs throughout the rest of the economy, for a total net loss of 400,445 jobs. That means that 16 jobs would be lost for every steel/aluminum job gained.
Over two thirds of the lost jobs would affect workers in production and low-skill jobs. Every state will experience a net loss of jobs.