In a recent tweet, President Donald Trump described tariffs like the ones he has imposed on America's biggest trading partners as "the greatest!" Rather than correct his boss' delusion, Commerce Secretary Wilbur Ross suggested import taxes on steel and aluminum could in fact be the elusive free lunch we've been waiting for.
In written testimony for the Senate Finance Committee, Ross said a 25 percent tariff on steel imports would lead to the reopening of closed mills, the maintenance of a skilled workforce, new investment in needed R&D, and a potential increase in total production, all of which would allow the domestic steel industry to "achieve long-term viability." While doing the cable news rounds, he added that this miracle would be achieved at a cost of only a few cents per item and would have "a negligible effect" on the economy.
Republican and Democratic senators didn't buy this fantasy, and neither should you. Even if it were the government's role to artificially inflate one sector's profitability, the American steel industry doesn't need the help. It already produces 70 percent of the steel consumed in the U.S., and its executives are richly compensated for it.
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