Trump’s argument that tariffs would protect American workers ‘seems terribly misguided’

And industries that use those metals to make other goods collectively employ nearly 20 times as many people as steel and aluminum producers.

The White House’s position is to protect the steel and aluminum industries from unfair foreign competition. But the rationale of protecting workers by imposing tariffs “seems terribly misguided,” Tom Porcelli, RBC’s chief US economist, said in a note on Thursday.

In January, 376,500 people worked in primary-metal manufacturing, which includes steel and aluminum production. An additional 38,700 people worked in metal-ore mining. Combined, that’s 415,000 workers.

“Just for context that is only about 2 months’ worth of job gains or an extremely small 0.28% of total jobs,” Porcelli said. “Yet the folks in downstream manufacturing (i.e. the consumers of steel) employ 16x (!) as many people. Now, the negative impact from these tariffs on those downstream industries from a margin and employment perspective is difficult to predict, but it is rather obvious that the winners/losers ratio seems extremely skewed…”

“We must protect our country and our workers,” Trump also tweeted on Friday. “Our steel industry is in bad shape.”

Indeed, employment in metal manufacturing still hasn’t recovered from its pre-recession peak in 2008.

But history shows that tariffs could hurt the overall jobs market. The tariffs President George W. Bush imposed on steel cost industries that rely on it an estimated 26,000 to 200,000 jobs. Additionally, studies of protectionism for the steel industry in the 1970s showed that American consumers paid $290,000 more in increased downstream costs to save a single job.