On March 8, US president Donald Trump formally announced new tariffs on imported steel (25 percent) and aluminum (10 percent). The tariffs are a defense, Trump said, against unfair foreign trade practices that have undermined domestic production of steel and aluminum, industries important not only to the country’s economy but also to its national security.
Critics of the tariffs have warned that they will cause prices of steel and aluminum products in the US to rise, and that they may cause other countries to retaliate with similar measures against US exports, sparking a trade war. In fact, even before Trump officially adopted the tariffs, the EU had formulated a plan for a possible trade response that would affect more than 100 US-made products.
So will the tariffs ultimately help or hurt the US? Chicago Booth’s Initiative on Global markets put that question to its Economic Experts Panel, whose response was unanimous: new tariffs on steel and aluminum will not improve Americans’ welfare.
Some respondents noted that while the tariffs will not help most people, they will give a boost to a small group directly involved with steel and aluminum production. “It will improve some Americans’ welfare and hurt many others,” wrote Christopher Udry of Yale. “On balance, it's a very costly way to help those who gain.”
David Autor, MIT
“Simple answer is no! Complex answer is that this could be a strategic gambit in a longer game that deters abuse of free-trade agreements.”
Response: Disagree
Oliver Hart, Harvard
“A robust result is that free trade increases national income. The cases where this is not true are rare and hard to spot.”
Response: Strongly disagree
Larry Samuelson, Yale
“A small number of people, engaged in steel and aluminum production, will benefit from these tariffs, at great cost to many others.”
Response: Strongly disagree
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