While President Trump has touted his tariffs and ongoing trade war as a tool to force manufacturers to return jobs to American soil, the reality in states like Pennsylvania paints a very different picture. Instead of strengthening America’s economy, it has weakened domestic manufacturers by raising their costs, thus making it much more difficult to produce here at home.
That’s why Republican Sen. Pat Toomey has been a continued opponent of tariffs, particularly those on steel and aluminum. In an interview with NPR last summer, Toomey noted that tariffs “disrupt supply chains for American companies, thereby making them less competitive.”
The impact of the Trump administration’s trade war has reached into the heart of American manufacturing. This includes the steel industry in Pennsylvania, due to a 25% tax imposed on imported steel for alleged national security reasons.
In January, the owner of Allegheny Technologies Inc., a Pennsylvania steel company, asked for the Trump administration’s attention to the plight of U.S. steel producers due to massive increases in cost for source materials they need in order to produce steel. The owner notes that “buying American isn’t an option” for these items due to the small size of the market. Thanks to sluggish action by the U.S. Department of Commerce in approving tariff exclusion requests, the company was forced to idle one of its factories, resulting in the loss of roughly 100 jobs.
Although steel tariffs are supposed to reduce foreign competition, some steel companies are allegedly using them as a bludgeon to drive domestic competitors from the marketplace. NLMK USA, one of the largest steel producers in the United States, employs nearly 750 full-time employees in Pennsylvania. NLMK is accusing its rival U.S. Steel of filing public comments against its request to be excluded from the Trump administration’s steel tariffs. NLMK has been forced to pay nearly $180 million in tariffs and is now taking the matter to court. While competition should be expected and encouraged in an industry, using tariff policies as a weapon just illustrates how dangerous a trade war can be.
The burden of tariffs expands beyond industrial steel manufacturing to intermediate companies using steel in their products. Crown Cork & Seal of Philadelphia produces metal packaging for food and beverages. The company has filed over 70 requests for exclusions from the section 232 tariff action to attempt to mitigate the burden tariffs have placed upon their business, which includes use of some metals that aren’t produced in the United States.
Pennsylvania sawmills have also been hurt in the crossfire of the costly trade war. The U.S. lumber sector used to export $2 billion a year to the Chinese market, but since the imposition of the Trump administration’s tariffs, that number has fallen by over $615 million. In retaliation to U.S. tariffs, China imposed a 25% tariff on American lumber, and exports to China fell by nearly 30%. This industry employs hundreds of Pennsylvanians, with finished products from the sawmills feeding into other local industries or directly into the market of local consumers. Hours have been cut at the sawmills as many reduce production due to stifling trade barriers.
The tariffs have also hit Pennsylvania non-profits like Cribs for Kids. Cribs for Kids provides cribs at heavily discounted prices to new mothers and families in order to reduce infant mortality. The Trump administration exempted strollers and other products for infants from the section 301 tariffs against China, yet cribs were hit with a 25% tariff. As a result, Cribs for Kids was forced to raise the price of cribs and reduce the number of cribs it can distribute to needy families and new mothers.
The Trump administration should lift burdensome restrictions on Pennsylvania companies by ending the destructive trade war. In response to the covid-19 health crisis, the administration should prioritize deregulation in the trade sector with as much vigor as the president has professed for the rest of the economy. It is time to reopen America’s flow of trade and allow companies to more rapidly return to pre-covid business without the restrictive burdens of tariffs.
Jacob Plott is a policy associate with the National Taxpayers Union Foundation.
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