The Trump administration says a steel tariff will be announced in the next 2 weeks to preserve American industries. John Stossel says that won’t work.
George Bush tried a similar tariff. Steel production hardly rose at all, and 200,000 jobs were lost in American industries that depend on steel.
Trump is also using the 25% tax as leverage to get Canada and Mexico to renegotiate the North American Free Trade Agreement. He calls the current deal “such a disaster.”
But Stossel says NAFTA has been good!
Avocados were once rarely eaten in America. They were hard to find in the winter because American producers can’t grow year-round. Mexican farmers can, however, and since NAFTA, Americans buy 4 times as many avocados.
American producers weren’t hurt much — they still grow roughly the same amount they did before NAFTA. But consumers are much better off.
People think NAFTA harmed manufacturing. Trump points out that “before NAFTA went into effect, there were 285,000 autoworkers in Michigan. Today, that number is only 160,000.”
That’s true, but it’s mostly due to technology, not trade. Robots do work humans once did.
Looking at total production of cars and car parts, American auto output is up since NAFTA.
Stossel points out that trade also enables amazing things like iPhones. Apple gets raw materials from 63 different countries, and sends the raw materials to 34 different countries for processing. Multiple countries then assemble the products. All that helps make phones affordable, and profitable to produce.
Stossel says: Yes, trade hurts some Americans. But it helps many more of us.