President Trump’s new tariffs on steel and aluminum imports are facing an avalanche of false criticism.
Naysayers argue that tariffs will raise prices, spark a trade war and do nothing to bolster America’s military preparedness — the official rationale for the move.
But in wartime, aluminum and steel are essential to make tanks, planes and other weapons. The aluminum and steel industries are in dire straits, with many plants idle or operating far below capacity while cheaper metal flows in from other countries. Premiere management consultants McKinsey Co. explain that most producers “lack the cash for investments needed to remain viable in the long run.” Their outdated plants and equipment prevent them from using newer, more cost-efficient production methods and adapting to world competition.
Tariff-bashers claim in war, the United States could rely on foreign suppliers. That’s ridiculous. Uncle Sam can compel our manufacturers to make defense needs a priority — but not foreign producers. The biggest suppliers targeted by the tariffs are Brazil, South Korea, Russia and Turkey. Should our nation’s victory in war hinge on them?
Tariff opponents argue that US military needs for steel and aluminum amount to only 3 percent of domestic production. That’s now. But in a major military conflict, those needs would soar. In World War II, domestic steel producers had to boost production over 200 percent to meet military demands.
Critics claim tariffs will raise steel prices. That’s questionable. The opposite is more likely to happen, industry experts suggest. Tariffs will shift demand to domestic steel, enabling plants here to operate closer to capacity. That will bring down the unit price of American-made steel — not raise it. That’s Econ 101.