When President Trump first imposed steel tariffs more than a year ago, he billed them as a means of job creation and a way to revitalize a sluggish but once-thriving industry.
While the 25 percent tariff on imported steel did provide a boon to the manufacturers – raw steel prices surged last year after the announcement – it’s come at a steep cost to the American consumer, according to new calculations from the Peterson Institute of Economics.
For each new steel job created, the average U.S. consumer pays a staggering $900,000, said Gary Hufbauer, a senior fellow at the Peterson Institute; at best, that could create 8,700 jobs across six to eight steel firms. The news was first reported by The Washington Post.
“It’s a very high price,” Hufbauer told FOX Business during an interview on Thursday. “Even if jobs are created by the tariff program, they are very expensive jobs.”
Most of that money, Hufbauer emphasized, isn’t going toward the average steelworker: It’s going directly into the pockets of the steel firms. He was unsure whether wages for the average employee had gone up significantly since Trump announced the tariffs last March (Peterson did not calculate that), but guessed they’d climbed incrementally.
The average steelworker makes an estimated $32,030 annually, although salaries go as high as $48,500, according to data from ZipRecruiter.
“This is not the way you create jobs,” Hufbauer said. “This is not a jobs program, even though politicians -- and not just Trump, I mean all politicians -- when they impose tariffs or restrict trade they talk about the jobs that will be created,” he said.
Plus, any benefit from the tariffs for the steel manufacturers is likely to fade.
That’s because companies that produce steel far outnumber the companies that manufacture it, and the steel tariffs have translated into higher production costs for manufacturers -- and ultimately higher costs for consumers. Last year, the Peterson Institute found that the cost of U.S. steel rose by nearly 9 percent, thanks to the tariffs, sending costs for steel users soaring by $5.6 billion.
“You’re getting a lot of complaints from steel users in this country,” Hufbauer said.
Already, some Republican legislatures are growing frustrated with the tariffs, urging the president to remove existing tariffs and avoid new ones. In a Wall Street Journal op-ed two weeks ago, Sen. Chuck Grassley, R-Iowa, told Trump he needed to remove the metal tariffs, or risk losing his new trade deal with Mexico and Canada.
“If these tariffs aren’t lifted, USMCA is dead,” Grassley wrote. “There is no appetite in Congress to debate USMCA with these tariffs in place.”