Facing the specter of retaliatory measures, any number of American companies and industries have warned the Trump administration against making the unusual maneuver. A huge collection of agricultural producers, for instance, has expressed concern about import prices, export prices, and other countries putting up trade barriers on flimsy national-security grounds. “The potential for retaliation from these trading partners is very real,” their open letter said. “It is also likely that the United States would not be the last country to cite national security concerns as a reason to restrict imports. In particular, many countries view food security as a legitimate national security concern. If a country as consequential as the United States can cite national security reasons to prevent imports of a sensitive product, others will do the same.”
Any trade barrier that kicked off a tit-for-tat would damage the American economy and the world economy, economists say. “A hypothetical trade war would lead to adverse outcomes in all major economies,” Brian Coulton, the chief economist at Fitch, the credit ratings agency, said in a research note. “The U.S. and the countries directly targeted by the imposition of punitive U.S. import tariffs would see the largest losses of GDP, but global repercussions would be significant, as business and household confidence falls, asset prices weaken, and trade flows are affected more widely.”
More narrowly, experts doubt that Trump’s tariffs would have the intended effect of helping the Rust Belt. It is true that American steel producers would benefit from higher prices, and steel stocks are already up considerably on the prospect. But there are far more manufacturing workers in industries buying steel than selling it, businesses that would suffer from higher input costs. This is not modeling or speculation. Back in 2002, President George W. Bush put tariffs of up to 30 percent on steel imports from around the world, causing domestic prices to spike. That led to about 200,000 people losing their jobs in manufacturing, one analysis found—more than were working in the entire steel industry. Every state experienced job losses, with Ohio, Michigan, and Pennsylvania among the worst-hit.
Thus, manufacturing businesses outside the steel industry are lobbying against the Trump tariffs too. “Inevitably, the imposition of across-the-board higher tariffs or other restrictions on imports of steel into the United States would only widen the existing price gap by increasing the price of U.S. steel and thus the cost of U.S.-built vehicles,” the Detroit car makers wrote in a letter to Commerce. So are economists. “Additional steel tariffs would actually damage the U.S. economy,” reads an open letter to Trump signed by the former Federal Reserve chairman Ben Bernanke and the Nobel laureate Joseph Stiglitz, among others. “Tariffs would raise costs for manufacturers, reduce employment in manufacturing, and increase prices for consumers.”