Tariffs remain a hot topic in today’s political landscape, with the Trump administration's tariffs on steel and aluminum standing out as a recurring theme.
While many of these tariffs are unprecedented, the history of steel and aluminum tariffs stretches back to past administrations — from President Donald Trump’s first term in office, to the policies of former President George W. Bush in the 2000s, offering key lessons.
"You can protect domestic steel producers, but it comes at a very high cost," said William Hauk, an associate professor at the University of South Carolina.
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According to Hauk, these costs include higher prices for consumers, job losses for workers, and downstream impacts that extend beyond steel or aluminum industries.
"And frequently they'll retaliate and impose tariffs on U.S. exports. You saw this in 2018," Hauk noted.
In 2018, China retaliated after President Trump imposed tariffs, targeting U.S. agricultural exports and subsequently hurting American farmers.
"Some of the U.S.'s trading partners have gotten pretty, pretty sophisticated about analyzing industries that are, say, politically sensitive and dependent on exports and use those as leverage to retaliate," Hauk explained.
He added that the revenue generated by the steel and aluminum tariffs in 2018 ended up subsidizing domestic farmers due to their losses.
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Alex Durante, a senior economist at the Tax Foundation, labeled the economic impact a net loss.
"The costs to those industries completely outweighed any benefits that the domestic producers of steel and aluminum experienced. And that was pretty much the conclusion as well of the Bush steel tariffs in the early 2000s," Durante stated.
The steel and aluminum tariffs enacted under George W. Bush were initially intended to last several years but were lifted after less than one.
Given the historical ineffectiveness of steel tariffs, Hauk questioned why they are again on the table. He pointed to political influences.
"A lot of America's steel producers tend to be concentrated in, say, like Pennsylvania, Ohio, which tend to be somewhat swing states in presidential elections, which probably gives the steel industry a certain amount of outsized influence in political debates," he said.
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