Can Trump’s steel aluminum tariffs revive US manufacturing control?

President Donald Trump recently imposed 25% steel and aluminum tariffs to restore fairness in global trade and protect domestic producers.

The administration may be striving to return to an era in which industrial output contributed to the outlook for America’s growth.

With the global economy in place to take effect next month, industry experts and economic observers are debating the effectiveness of the president’s trade pursuit.

Meanwhile, the White House may be considering recent data and broader market development.

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New orders surged at a faster pace, but the survey showed rebounds in production and employment.

According to the Federal Reserve, industrial production has increased at a level better than expected in consecutive months.

Furthermore, capacity utilization (a measure of how much production capacity is being used) reached 77.8% in January, the highest since August.

Economists are reluctant to attribute these positive data points to the White House tariff plans, waiting for more sustained numbers before reaching conclusions.

The industry as a whole has responded favorably to the actions of the new administration.

Kevin Dempsey, president and CEO of the American Iron and Steel Institute, welcomes Trump’s comprehensive strategy to restore fairness as Steel has been negatively affected by “unfair trade practices” around the world He said he is doing it.

“Due to foreign government subsidies and other trade government policies, the global overcapacity of the steel industry reached 573 million tonnes in 2024,” Dempsey said in a statement in the Epoch Times.

“This excess capacity could be fuelled by a surge in harmful imports to our markets if not red, and the issue of steel overcapacity is limited to any country or region of the world. Not there.”

Manufacturing expects profit

Comerica Bank Chief Economist Bill Adams said the coming years could be a boon for the US manufacturing sector.

He noted that the industry has been anemia over the past two years despite high federal and state investments in manufacturing.

According to Adams, manufacturers expect Trump’s tariffs to benefit them.

“Manufacturing research shows that many industry leaders believe they can benefit more than lose from protectionist economic policies,” Adams said in a note to the Epoch Times. Masu.

“An increased risk appetite for manufacturers could contribute to more capital expenditures and inventory accumulation in 2025.”

The president’s efforts aim to protect US manufacturing from unfair foreign competition and counter measures from other countries that have flooded the world’s largest economy with cheap, subsidized products.

However, experts are encouraging officials not to declare an early victory, as there may be bumps along the way.

Experts rate Trump’s tariff nuts and bolts

Economists perused the president’s first steel and aluminum taxation in 2018 and 2019, assessing the potential positive or negative impact of the new administration’s tariff plans.

Indeed, there is a treasure trove of research and data examining Trump’s tariffs continued by his successors, highlighting the advantages and disadvantages of these trade efforts.

On the inflation side, the Federal Reserve Economist concluded in a 2019 paper that balloon input costs outweigh the positive contributions of protected industries.

“As the positive effects from import protection are offset by the major negative effects of increased input costs and retaliatory tariffs, this leads to an increase in US manufacturing as relative cuts in employment,” he said. They write.

“The increase in tariffs is also linked to relative increases in producer prices due to higher input costs.”

However, the data shows that the first edition of the tariffs did not raise overall consumer prices. They have slightly increased the prices of certain products, including steel and aluminum.

“This also happens when many industrial and valuable metals are already rising,” Turnquist said. “Many of these benefits have occurred in recent weeks as we begin to replicate the risks of acquisitions not just across aluminium and steel, but across the metal spectrum.”

According to ING’s product strategist Ewa Manthey, tariffs will raise US aluminum prices in the short term, affecting producers and consumers.

However, trade struggles are bearish for aluminum prices as global economic growth slows and leads to a trend in long-distance inflation.

New data reveals price pressures in the manufacturing sector are rising.

In addition, monthly surveys confirmed that input costs increased at the fastest pace in two years, resulting in a significant increase in sales prices.

Still, the administration’s tariffs are “100% necessary,” as they are targeting China in particular, says Justin Evans, CEO and founder of contract engineering and manufacturing company Evanswerks.

“China is not our friend, and China has been betting the system against the US for 25 years,” Evans said in an interview with the Epoch Times.

“Traditional economists are 100% correct that tariffs can hurt the US in the long run. The economists need to understand that there is a nuance in this situation and take advantage of tariffs on China. Doing it is actually the best long-term benefit of the US.”

As for the labor market, it remains to be seen whether these efforts will rejuvenate manufacturing employment.

The key issue is automation, which is common in manufacturing.

57% of Americans say new tariffs will affect costs, while 51% believe that it hurts our consumers more than foreign countries.

43% believe that if new tariffs help boost American manufacturing and protect domestic employment, it is “worthy.”

Also, more than two-thirds (68%) say higher costs are the main barriers to buying more US products.