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Trump steel tariffs backfired

Trump steel tariffs backfired

Donald Trump may have thought he was protecting the US steel industry by imposing tariffs on imported steel from Canada and elsewhere, but it has had the opposite effect. And even though the tariffs have been lifted the job losses created by the imposition of tariffs have been permanent—nowhere more so than in Michigan.

According to Reuters, Detroit’s  Great Lakes Works – once among the state’s largest steel plants – has shut down steelmaking operations and put 1,250 workers out of a job. A year before the June layoffs, plant owner United States Steel Corp called off a plan to invest $600 million in upgrades amid deteriorating market conditions. Nationally, the steel industry has been shedding jobs for the past year – since before the wider economic downturn caused by the COVID-19 pandemic – and now employs 1,900 fewer workers than it did when Trump took office, according to U.S. Labor Department data.  rump’s strategy centered on shielding U.S. steel mills from foreign competition with a 25% tariff imposed in March 2018. He also promised to boost steel demand through major investments in roads, bridges and other infrastructure.

While the tariffs failed to boost overall steel employment, economists say they created higher costs for major steel consumers – killing jobs at companies including Detroit-based automakers General Motors Co and Ford Motor Co. Nationally, steel and aluminum tariffs resulted in at least 75,000 job losses in metal-using industries by the end of last year, In all, the trade war had caused a net loss of 175,000 U.S. manufacturing jobs by mid-2019.But higher steel prices resulting from the tariffs dented demand from the Michigan-based U.S. auto industry and other steel consumers.

Michigan’s heavy reliance on the steel and auto industries puts Trump’s trade policy in sharp focus ahead of the Nov. 3 presidential election in this battleground state.

Biden leads Trump in Michigan by 8 percentage points, according to a Reuters/Ipsos state opinion poll of likely voters conducted from Sept. 29 – Oct. 6, widening his lead from a few weeks earlier.

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