Donald Trump's tariffs hurt American workers and ruin relationships with our allies New tariffs on U.S. allies' steel and aluminum are bad news for businesses that rely on special parts. This achieves the opposite of national security.

Donald J. Boudreaux | Opinion contributor

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Last week, President Trump imposed tariffs on steel and aluminum imported from Canada, Mexico and the European Union. He claims the move will strengthen national security.

He's dead wrong. The tariffs will weaken the United States, protect jobs in inefficient industries while preventing job growth in efficient ones, and harm relationships with our allies.

Trump unilaterally imposed the tariffs by invoking Section 232 of the Trade Expansion Act of 1962, which allows the president to curb any imports in the interest of national security. Section 232 has only been used twice. President Carter banned Iranian oil imports in 1979 in response to the hostage crisis. And President Reagan blocked Libyan crude imports during a 1982 standoff with terrorist-sponsoring dictator Moammar Gadhafi.

Even though most steel imports come from allied nations, the Trump administration still claims that importing these metals threatens our national security. According to the president, we need to strengthen the U.S. steel and aluminum industries now, so that we are prepared to rapidly churn out tanks, planes and other armaments if a major war were to break out.

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"Our steel industry is in bad shape," President Trump recently tweeted. "IF YOU DON'T HAVE STEEL, YOU DON'T HAVE A COUNTRY!"

Nonsense.

The U.S. steel industry is perfectly healthy. Steel companies' earnings rose by $2 billion between 2016 and 2017. These firms created 8,000 additional jobs between January 2017 and this January.

If a war did break out, American steel and aluminum plants could easily accommodate the military’s heightened demand. These plants are operating well below capacity. In 2017, about 30% of steel mills' capacity, and 60% of aluminum smelters' capacity, went untapped. And right now, the Department of Defense consumes just 3% of all American-made steel and 20% of U.S.-made high-purity aluminum.

The White House's stated national-security rationale is patently ridiculous. The true goal of the tariffs is economic.

The president and his team believe the 25% tariff on steel and 10% tariff on aluminum will force companies to purchase more metals from U.S. suppliers, thereby creating jobs for the metal workers who form part of his blue-collar base. "Corporate America might complain," reasons Commerce Secretary Wilbur Ross, "but the president is taking up the banner of Mr. and Mrs. America."

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The White House is partly right — the tariffs will spur hiring in the steel and aluminum industries. However, they'll cause job losses in every other sector. For every American job in steel production, there are 80 jobs in downstream sectors that would be negatively affected by higher steel and aluminum prices. The tariffs could cost U.S. consumers up to $9 billion per year.

Take the Vollrath Co., a bakeware manufacturer in Wisconsin. Aluminum tariffs are poised to cost Vollrath $6 million per year in added input costs. The company, which was considering creating 25-50 new jobs this year, is no longer hiring.

New tariffs would particularly disrupt America's burgeoning energy industry. Oil and gas pipelines often use foreign steel because there are only about two dozen U.S. steel mills that make pipeline parts. For some specialized parts, there's not a single American manufacturer. Even if pipeline builders want to buy American, they can't. Tariffs would punish these builders, forcing them to lay off workers and forgo new projects.

Already, Globalization Partners, a multinational staffing firm based in Boston, told Reuters that one of its clients scrapped a planned $800 million U.S. energy project. Several other clients are thinking twice about investments due to "uncertainty" surrounding steel tariffs, according to chief executive Nicole Sahin.

All told, pipelines support 300,000 jobs at refineries and more than 440,000 jobs in the manufacturing, chemical and other industries. Making it harder to build new pipelines would harm workers, raise energy bills for consumers and American factories and offices, and increase America’s imports of oil.

President Trump's tariffs will weaken the economy and alienate our allies. So much for strengthening national security.

Donald J. Boudreaux is a professor of economics and Getchell Chair at George Mason University.