US Steel and Aluminum Tariffs

Tariffs have long been a tool used by countries to manipulate the global market (Trade Policy Effects with Perfectly Competitive Markets, 2024). One such tariff that garnered a global and domestic reaction was President Trump’s tariff on US Steel and Aluminum in March 2018. Many argued that the tariff would cause job loss on a global and domestic scale. The implications of the tariff and what led to its implementation can be measured economically and politically.

Economic and Political Factors
Economic Factors
Partial equilibrium analysis completed by the Commerce Department fueled its suggestions for Trump to place a tariff on US Steel and Aluminum imports (Trade Policy Effects with Perfectly Competitive Markets, 2024). The commerce director only reflected on the implications of steel imports within the steel industry. This bolstered a negative reaction from many private companies and politicians because the steel import affects many sectors. For example, steel and aluminum are products that are used to make cars, large buildings, and aerospace products.
Political Factors
The political factors affecting the tariff on Steel and Aluminum were both domestic and global. Private lobbyist groups and political personnel all sought retaliation against Trump for initiating the tariffs (Trade Policy Effects with Perfectly Competitive Markets, 2024). A major concern was that the tariffs would lead to trade wars. Additionally, countries who were directly affected by the Tariff, like Canada for example, initiated counter tariffs to express their disagreement and to put political pressure on the US. The outcome Canada and other countries were looking for was a Nash equilibrium. A Nash equilibrium is when countries will initiate counter tariffs and change the way they trade for their countries best interest in response to another country doing the same (Trade Policy Effects with Perfectly Competitive Markets, 2024).
Trade Outcomes
The argument that the US ultimately becomes the winner with the US Steel and Aluminum tariffs can be made. Considering in states like Ohio, foreign trade competition accounted for more than one third of total manufacturing jobs lost between 2009-2014 (Bhatia et al. 2018). This can implicate that the tariffs placed can bring back steel and aluminum production back to US soil. Encouraging job creation and rejuvenating the economy. The losers with trade tariffs can be other countries like China who account for one of the largest of steel imports to the US.
Trade History
According to the Global Steel Trade Monitor the US traded 26.3 million metric tons of steel in 2019 this reflected a 78% growth since 2009 (2021). However, in 2019 the import volume declined by 15% compared to 2018 (Global Steel Trade Monitor, 2021). Trade barriers can be what had a significant impact on 2019 decline on imports and its growth rate.
In summary, the US needs to strengthen domestic production capabilities, foster better trading relationships with countries to create reliable trade partners and adapt to the changing market. The Steel and Aluminum is a dynamic and crucial economic factor for the US and informed decisions are important to shape the future of the industry.

References
Bhatia, K., Cutler, W., Gordon, D., Harris, J., Hill, E. N., Lute, D., … & Wyler, T. (2018). US Foreign Policy for the Middle Class: Perspectives from Ohio (pp. 3-4). S. Ahmed (Ed.). Carnegie Endowment for International Peace.

203. (2021). Global Steel Trade Monitor. International Trade Administration | Trade.gov. https://www.trade.gov/data-visualization/global-steel-trade-monitor

Trade Policy Effects with Perfectly Competitive Markets. (2024). Github.io. https://saylordotorg.github.io/text_international-trade-theory-and-policy/s10-trade-policy-effects-with-perf.html