Tariffs are trump’s hidden tax increase a. barton hinkle godanriver.com electricity transmission and distribution costs


Pennsylvania-based CP Industries, for instance, makes large cylinders to hold gases for the Navy and other customers. Earlier this month, it had to pay a $178,000 tariff for a shipment of steel tubes — “equivalent to about two week’s payroll,” The New York Times reported. At those rates Michael Larsen, the head of the company, wonders: “How long can we last?”

Hence the steel tariffs might protect some American jobs in the steel industry, but they will destroy others. That is the conclusion not only of free-market advocates such as the Cato Institute, but also fair-trade groups such as the Coalition for a Prosperous America. The Coalition concedes that while “the 19,000 jobs gained in the steel and aluminum sectors” would mostly offset job losses elsewhere (such as the 10,000 jobs destroyed in construction), the total effect would be a net job loss of more than 400.

That is the historical norm: For decades, protectionism has hurt the American consumer without much helping the American producer. The cost of each job saved by protectionist measures in the 1980s and 1990s, for instance, was almost $620,000 (in 2017 dollars).

The higher steel prices will inflict costs that often will not be seen directly. Here in Richmond, the bill to erect a new state office building near the Capitol already has risen by $24 million, largely because politically imposed delays led to the use of more expensive construction materials. Higher steel prices will drive costs up further.

About 2,400 Americans work making washers and dryers in the U.S. According to one recent economic analysis, the net annual cost to consumers from the Trump tariffs comes to $1.4 billion — meaning Americans will spend $583,000 per year for every job saved.

That is, assuming the tariffs actually save jobs. They might do so in the washer industry, but they almost certainly will not save jobs overall. The $1.4 billion that would have been allocated to more productive uses will now go to meet the washing-machine tax. ‘Twas a famous victory.

The Tampa Bay Times recently “announced that it would cut about 50 jobs after new tariffs imposed by the Trump administration dramatically increased the cost of newsprint,” reported The Hill a few days ago. “A spokeswoman for the Times confirmed the layoffs … saying they are directly in response to the tariffs imposed on newsprint imported from Canada.” More layoffs likely will follow elsewhere. In the meantime, other papers are reducing page counts, raising prices, or both.

A recent piece in The Wall Street Journal examined the work of economist Jay Zagorsky, who used government data to show that prom night is an increasingly good bargain. In the past 18 years the Consumer Price Index has risen 45 percent — but prom expenses have risen only 25 percent.

“What has kept prices down?” asks reporter Jo Craven McGinty. “The short answer is imports.” Since the turn of the century, prices for women’s dresses and shoes have remained steady, and prices for men’s suits have fallen by nearly one-fifth.

“A lot of these things have been subject to import pressure,” Zagorsky says. “The African flower market is growing tremendously and is pushing down prices around the world. Asia has been producing shoes at cheaper and cheaper prices and at higher and higher quality.”