To be clear, these tariffs would be in addition to the many, many other metal tariffs the United States has imposed over the years, including the steel and aluminum duties levied in 2018 by President Donald Trump. That episode provides a useful case study, one whose lessons U.S. officials still haven’t learned: While those tariffs were imposed ostensibly to protect our national and economic security, they instead harmed the U.S. economy and geopolitical standing.
After all, they benefited the relatively small U.S. steel industry at the expense of the much larger American sectors that use steel, such as the manufacturers of automobiles and household appliances. At the time the tariffs were announced, the number of jobs in U.S. industries that relied on steel or products made from steel was roughly 80 times the number of jobs within the steel production industry itself, according to estimates from economists Kadee Russ and Lydia Cox.
Trump’s tariffs helped drive steel prices sharply higher in the United States than they were in other countries, which meant all those downstream U.S. firms had to pay more. This in turn led to an estimated 75,000 fewer jobs in manufacturing than would have existed in the absence of the trade restrictions.
As for the few jobs within the steel industry that were protected by the tariffs, they came at a high cost. U.S. consumers and businesses paid more than $900,000 per year for every job preserved or created, according to estimates from the Peterson Institute for International Economics.
The tariffs also irritated our allies, such as the European Union and South Korea. While Trump’s trade rhetoric emphasized conflict with China, many of his tariffs, these ones included, were global. In fact, Trump’s steel tariffs disproportionately hurt our friends. That’s because earlier presidential administrations had already imposed their own tariffs on Chinese steel; these prior rounds of tariffs had effectively blocked China from much of the U.S. market even before Trump got involved.
Some of our allies then issued retaliatory tariffs on U.S.-made products, such as bourbon and motorcycles, which meant even more pain for American firms and their employees.
President Biden has (mostly) chosen to keep Trump’s metal tariffs in place, or swap them out for different but still restrictionist measures, such as import quotas.
Which brings us to the tinplate tariff case.
The proposals for these tariffs came about through a different process, after the United Steelworkers union and one of the few U.S. firms that still makes tinplate, Cleveland-Cliffs, alleged they’d been hurt by too-cheap tinplate imports from countries such as Canada, the Netherlands, Germany and China.
Similar dynamics are at play today as in 2018: The universe of manufacturing workers whose employers use tinplate vastly overwhelms the number of workers at tinplate producers, by a more than 30-to-1 ratio, according to calculations from Cato Institute scholar Scott Lincicome drawing on data from the International Trade Commission and Census Bureau.
Even if one cares only about protecting union jobs, the case for tariffs is not much better. Downstream consumer firms employ more than seven times as many unionized workers as do tinplate producers (about 23,000 vs. 3,000), Lincicome estimates.
Other employers and employees further up the canned-good supply chain worry they’ll get hurt, too. For example, farmers of vegetables that get canned have said they worry their products would no longer be affordable, given that some of the higher canning input costs might get passed along to consumers.
And consumers themselves might have something to say about this. They have already been struggling with high price growth for groceries. Even worse, the buyers of canned rather than fresh produce and meat are disproportionately low-income.
As for the international impact: Interestingly, China is the only country mentioned by name in a recent United Steelworkers news release about the case. But U.S. tinplate imports predominantly come from other (diplomatically friendlier) countries, whose products would be subject to tariffs, too.
Some critics have demanded the Biden administration block the tariffs from happening. Truth is, for this particular kind of tariff case — unlike some other flavors of tariffs, such as Trump’s steel duties — Biden’s political appointees have relatively little leeway to intervene. Congress has written U.S. trade law so heavily in favor of protectionism that there’s a good bet the Commerce Department and International Trade Commission will impose more tariffs, regardless of the collateral damage for workers, consumers or diplomatic relations.
Still, given Biden’s choices when he did have more wiggle room to determine duties, it seems hard to imagine he’d complain.
