Donald Trump says his tariffs on steel and aluminumn will bring back jobs to the United States. A consulting outfit called The Trade Partnership says he’s right—but only at the cost of losing jobs in lots of other areas:
TTP estimates that the tariffs will, on net, cost about 146,000 jobs, two-thirds of which are production and low-skill jobs. This estimate doesn’t take into account any possible retaliation from our trading partners.
The TTP analysis is based on the Global Trade Analysis Project (GTAP) database. This is a model coordinated by Purdue University that’s widely used, not least by Joseph Francois, the economics professor who serves as managing director of TTP. The GTAP model, says the TTP paper, “is the same model used by the Commerce Department to arrive at the tariff rates it argues will yield increases in U.S. steel production sufficient to bring the industry to 80 percent capacity utilization.”
I’m sure we’re going to see lots of dueling estimates in the near future about the effects of Trump’s tariffs. This is just the first one.