Here’s an interesting historical account of the steel industry having long-been associated with tariff protections. I’m struck in particular by the radical increases in productivity described at the end of the article, and the implications for sustained competitive advantage with or without tariff protections in place.
President Trump’s tariffs on imported steel aren’t the first time the industry has gotten protection from the U.S. government. Not by a long shot. In fact, tariff protection for the industry — which politicians often say is a vital national interest — goes back to the very beginning of the republic.
In his book, Clashing Over Commerce: A History of U.S. Trade Policy, Dartmouth professor Douglas Irwin writes that protection for the metal producers began in the 1790s.
“The reason why the steel industry gets protected is not because it’s saving jobs, because ultimately it’s not,” Irwin says. “It’s really saving a very politically powerful industry that history has shown has been very much able to get politicians to act on their behalf.”
But he says there’s another factor at play: the aura of steel as an indispensable industry. That’s a sentiment President Trump voiced as he authorized the new tariffs. “Absolutely vital,” the president said. “Steel is steel. You don’t have steel, you don’t have a country.”