Speeches & Floor Statements
Posted on March 5, 2018
16 years ago today President George W. Bush announced tariffs would be imposed on steel imports from several countries – the goal was to help protect the domestic steel industry.
It was a good goal – but it backfired.
Last week President Trump announced that he intends to impose new tariffs on imports of steel and aluminum – for the same reasons.
The problem is that tariffs are big taxes that will raise consumer prices.
These new tariffs may save a few jobs in plants that produce steel and aluminum, but they will destroy many more jobs in auto plants that use steel and aluminum.
This is especially bad news for Tennesseans because one third of our state’s manufacturing jobs are auto jobs with more than 900 plants in 87 of our 95 counties.
It will now be cheaper for some Tennessee auto parts suppliers to move outside the United States, buy steel and aluminum there and then ship finished parts back to our country.
These new tariffs will hurt more than U.S. auto manufacturing.
The President indicated this morning that a final decision hasn’t been made.
I hope that before he makes a final decision, he takes into consideration the choices that companies such as Electrolux are making—which demonstrate that broad tariffs are bad for American workers and would cost American jobs.
Here is one example of the damage the proposed steel tariff does in Tennessee to a home appliance manufacturer who uses 100% American steel:
Immediately after the tariff was announced last week, Electrolux, Europe’s largest home appliance manufacturer, announced that it was putting on hold a $250 million expansion in Springfield, Tennessee. Electrolux has made multiple investments in Tennessee with plants in Memphis in Springfield, and employs more than a thousand Tennesseans.
The company said, “unfortunately, this decision gives foreign appliance manufacturers a cost advantage that is hard to compete against.” Note that Electrolux said foreign appliance manufacturers.
Electrolux buys all of the carbon steel it uses in its Tennessee plants from American steel mills.
The new tariff is expected to cause American steel mills to raise their prices to match the new higher price of imported steel.
The result of the tariff therefore will be higher costs for Electrolux and fewer jobs in Springfield, Tennessee making home appliances with 100% American steel.
Instead there will be more jobs overseas making home appliances with 100% foreign steel.
The new U.S. tariffs on imported steel will have raised the price of all steel sold in our country so appliance manufacturers with plants here in the United States will have a hard time competing with foreign plants.
We should learn our lesson from 2002 when President Bush imposed similar tariffs and they backfired—according to one widely-cited independent study, the tariffs raised consumer prices and ‘[m]ore American workers lost their jobs in 2002 to higher steel prices than the total number employed by the U.S. steel industry itself.’
President Bush’s tariffs also led to retaliation as other countries threatened to impose new tariffs on American exports which would have cost even more U.S. jobs.
On Friday, the Wall Street Journal editorial board reminded readers, “Steel using industries in the U.S. employ some 6.5 million Americans, while steel makers employ about 140,000. Transportation industries, including aircraft and autos, account for about 40% of domestic steel consumption, followed by packaging with 20% and building construction with 15%. All will have to pay higher prices, making them less competitive globally and in the U.S.”
The backlash to the 2002 tariffs was so strong that President Bush terminated them.
It would be better if President Trump terminates the idea of these new tariffs even before they are implemented.
I ask consent to include in the Record a copy of the Wall Street Journal’s March 2 editorial on tariffs.
And, since history can often serve as a guide, I ask consent to include in the record two speeches I delivered on the U.S. Senate floor in 2003 summarizing the disastrous effect President Bush’s proposed steel tariffs had on U.S. jobs.