(Bloomberg Opinion) -- It’s been almost two years since President Donald Trump announced, on March 1, 2018, that he would be imposing a 25% tariff on steel imports to the U.S. and 10% on aluminum. “We must not let our country, companies and workers be taken advantage of any longer,” he tweeted at the time.
The tariffs exempted a few countries to start, and were rolled back last May for products from Canada and Mexico, but otherwise still stand. Things have gone pretty well for the country in the meantime. For companies and workers in the U.S. steel and aluminum industries, not so much. U.S. Steel Corp.’s share price, for example, closed at its highest level in almost seven years on the day the tariffs were announced. It has since declined 80%.
Not every steel and aluminum manufacturer’s stock chart makes this point quite so perfectly. The biggest U.S. steel producer, mini-mill operator Nucor Corp., saw its stock price peak in January 2018, not March, and it’s down a mere 31% since then. At the biggest U.S. aluminum producer, Alcoa Corp., the stock peaked in April 2018 and is down 74% since. Those are still sharp declines amid a generally rising stock market, though, and I was unable to find a single publicly traded U.S. steel or aluminum maker that hasn’t experienced something similar since early or mid-2018.
As for the workers, primary metals manufacturers did keep adding jobs for the rest of 2018. But they began shedding them last April and now employ fewer people than when the tariffs were announced.
As described in detail in the current Bloomberg Businessweek, the tariffs have directly harmed some U.S. steelmakers that depend on imported semi-finished steel slabs. For the most part, though, the industry’s troubles seem to be the product not of the metals tariffs but of a global industrial slump. The world’s biggest steelmaker, Luxembourg-based ArcelorMittal SA, has also experienced a big (45%) stock-price drop since mid-2018. Also, as someone who speculated back in March 2018 that the tariffs might help metals manufacturers at the expense of the much-larger industries that use that metal, I feel obliged to report that this doesn’t seem to have happened either, at least not in terms of employment.
What does strike me, though, as I think of the industry sectors that President Trump has gone to bat for in a big way with tariffs and other forms of aid — metals makers, appliance manufacturers, coal miners, and oil and gas drillers sprang immediately to mind — is that hardly any of them have been having a great time of it lately, with all those I just named shedding jobs last year.(1) Meanwhile, the giant technology companies that have been recipients chiefly of the president’s ire keep chugging right along. The causes for these differing fortunes surely go way beyond White House policy, and it’s worth reiterating that the economy overall has been growing and creating jobs. But it does raise some questions about the president’s priorities.
There is an unkind saying about Trump to the effect that everything he touches dies, a reference to the many past business failures with which he has been associated. It’s not entirely true — the Manhattan real estate business is still quite alive, despite his continued involvement in it — and the direction of causality isn’t always clear. With Trump’s economic interventions, maybe it’s just that the man is drawn to things that have their glory days behind them (like golf!). As someone who chose to pursue a career in journalism, I cannot help but have some sympathy with this worldview. But nostalgia seems like a counterproductive motivation for industrial policy. Picking winners is hard enough for a government to do successfully, but you’re stacking the deck against yourself if you focus most of your attention on the losers.
On Tuesday, the president seemed to change his tune a bit on big tech, celebrating the stock-market gains of the “trillion-dollar club” of Google-parent Alphabet Inc., Amazon.com Inc., Apple Inc. and Microsoft Corp. I wouldn’t make too much of that — on the same day the Federal Trade Commission, controlled by Trump appointees, ordered those four companies plus Facebook Inc. to cough up details of past acquisitions for an investigation that might eventually lead to antitrust action. But if Trump ever decides to help the tech giants, look out. A clearer sell signal would be hard to imagine.
(1) According to the Bureau of Labor Statistics, there was an increase in employment in oil and gas extraction over the course of 2019, but an even bigger decrease in employment in "support activities for oil and gas extraction."
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Justin Fox is a Bloomberg Opinion columnist covering business. He was the editorial director of Harvard Business Review and wrote for Time, Fortune and American Banker. He is the author of “The Myth of the Rational Market.”
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