Well, what do you know? Trump’s trade war tariffs on steel imported into the United States have seemingly proved that Adam Smith was right to oppose trade wars and mercantilism.
As tariffs on imported steel raise prices, American steel companies are adding new capacity to profit from price rises and less competition.
But who is paying American Steel companies for their product at higher prices? Americans! Who are thus being “taxed” for their consumption by government policy.
The Wall Street Journal editorializes that Ford lost $750 million in potential 2018 profits from the tariff; Caterpillar expects to lose $200 million in profits in 2019; Whirlpool estimates $300 million. Crown Holdings passed its higher cost on to its customers.