President Donald Trump's proposed tariffs may help the U.S. steel and aluminum industries, but they're likely to hurt a much broader group of businesses that employ far more workers, according to most trade experts.
Trump has vowed to impose 25 percent tariffs next week on imported steel and 10 percent on aluminum, which he says pose a threat to America's national security.
By building barriers to imported metal, the tariffs would allow U.S. steel companies to expand production and charge higher prices than they could without broader competition. Those higher prices, in turn, would squeeze the companies that use the materials and potentially the consumers who buy the finished goods.
Many economists, such as Bill Hauk of the University of South Carolina, warn that if consumers must pay more for cars or businesses more for heavy equipment, the resulting slowdown in spending could hamper the economy.
"Putting tariffs on steel and aluminum imports is going to raise prices on those products and is just going to end up costing jobs elsewhere," Hauk said Friday.
Toyota, for instance, put out a release warning that the tariffs would mean higher car prices for American buyers.
The top executive of Charlotte-based Nucor Corp., which employs 950 workers in Berkeley County, welcomed Trump's announcement.
"We are pleased that the president has decided to use all the tools at his disposal to send a clear message to foreign competitors that dumping steel products into our market will no longer be tolerated," Nucor CEO John Ferriola said in a statement Friday.
Other Charleston-area employers that support the tariffs include Century Aluminum and J.W. Aluminum, which have operations off Highway 52 near Goose Creek.
U.S. Sen. Lindsey Graham, R-S.C., said he could agree with some kind of trade action against China but is concerned that across-the-board tariffs could hurt America's allies, such as Canada.
"So I’m going to stand behind the president when it comes to China, but I think tariffs can be problematic," Graham said in a statement.
South Carolina is home to several major manufacturing employers that use steel and aluminum in their products, including Boeing, BMW and Michelin.
"We have Nucor Steel that will benefit from this," Graham said. "We have BMW and all the tires — just about all the tires in America are made in South Carolina — and that may hurt them. So what we have to do is find that sweet spot where tariffs aren’t too broad."
The tariffs could also end up hurting steel and aluminum manufacturers in the long run, according to Hauk, the USC economist. Rather than buying steel and aluminum, manufacturers could simply import finished parts to avoid the tariffs. That could reduce the demand for U.S. steel and aluminum and eliminate jobs.
"I don’t see how this benefits the economy as a whole or even the manufacturing industry," Hauk said.
Trump vowed during his campaign that he would bring back American steel jobs. The industry employs about 140,000 workers, while manufacturers that use the metal employ about 6.5 million, according to a report released Friday by Moody Investors Service.
"Workers in these consuming sectors will likely be hurt by higher steel prices," according to the report.
Many experts are also concerned that U.S. tariffs could prompt countries where American companies sell products to impose their own tariffs, sparking a trade war. Trump sent out a tweet Friday saying "trade wars are good, and easy to win."
U.S. Commerce Secretary Wilbur Ross defended Trump's proposal. He said on CNBC that the tariffs would add only about $175 to the cost of a $35,000 car.
"It's trivial," Ross said.
Hauk said more jobs in U.S. steel mills have been lost to more efficient production methods and technological breakthroughs than foreign competition.
It's true that China is flooding the world market with cheap steel and driving down prices, Hauk added, but the United States gets most of its imported steel — about 16 percent — from Canada.
It wasn't immediately clear if the Trump administration would consider exempting countries that are considered allies from tariffs.