The US job market shows why one of Trump’s biggest arguments for massive tariffs doesn’t make sense

President Donald Trump Chip Somodevilla/Getty Images

  • President Donald Trump rolled out the new steel and aluminium tariffs on Thursday.
  • Trump and other officials have argued that the tariffs will help protect US jobs in the metals industry.
  • Long-term labour market trends and recent data show that a huge boon for those industries is unlikely to happen.

Since his announcement of new steel and aluminium tariffs, President Donald Trump has argued the move is necessary to safeguard American workers and bring back jobs. But recent data pokes holes in Trump’s rationale.

“We want a lot of steel coming into our country, but we want it to be fair, we want our workers to be protected,” Trump said Thursday before signing an order on the tariffs.

Other administration officials echoed the argument.

“This is an industry that is in serious condition if you turn to the steel industry since 200,000 we’ve lost over 50,00 jobs, since 200 we’ve lost 40,000 in aluminium,” a senior administration official said Friday. “So these industries are industries which the president has said we need to be a country, we need to national security, and they are under significant threat.”

But Friday’s jobs report and long-term labour market data doesn’t completely support those arguments.

The overall US labour market continued to improve in February, with 313,000 new jobs added last month. Even industries that Trump says he is trying to protect are seeing strong growth.

Friday’s jobs report showed that broad manufacturing employment jumped 31,000 for the month and continues a slow and steady grind upward. Employment in primary metals manufacturing increased by 4,000 from the month before, is up 14,000 in the past year, and is 35,300 above its financial crisis low. Employment in the sector does, however, remain well below pre-crisis levels.

Long-term shift

But the number of people employed in the steel industry has been declining for decades, while steel production remained relatively even.

US steel production is off from its highs in the 1970s, but the amount of raw steel produced has remained relatively range-bound since 1983. At the same time, the number of workers in the steel industry has fallen off, so the real decline in the US steel industry employment may be from technology and productivity gains, rather than foreign steel.

The American Iron and Steel Institute has pointed to increased productivity, meaning that fewer workers are needed to provide the same amount of steel.

“Labour productivity has seen a five-fold increase since the early 1980s, going from an average of 10.1 man-hours per finished ton to an average of 1.9 man-hours per finished ton of steel in 2014,” a 2015 report from the group said.

Looking outside of the steel industry, most studies estimate that a loss of jobs from industries that use steel and aluminium as inputs for their products could be far greater than the jobs boost for the metals industry.