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Steel tariffs hurt manufacturers downstream, data shows

February 07, 2020 / Making SenSe

It has been nearly two years since the Trump administration first imposed tariffs on steel and aluminum. New data and research are beginning to emerge on the impact that these tariffs, which are taxes on foreign steel and aluminum, have had on steel and other U.S. manufacturing industries. Tariffs are often presented as trading off domestic producer gains against consumer losses, but applying tariffs on goods used as inputs into production can magnify losses as price distortions pass through the supply chain. While the 2018 tariffs did reduce steel imports, a stated goal, they also caused steel prices for U.S. firms to rise, putting downstream U.S. manufacturing industries at a disadvantage relative to foreign competition. The Trump administration has announced that it will now expand tariffs to cover certain derivative products that use steel and aluminum, such as nails, tacks, wire and cables, to protect them against competition from foreign suppliers who do not pay tariffs on steel.