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Yahoo Finance answers: How many steelworkers are there, anyway?

Rick Newman
Senior Columnist

Not as many as there used to be.

President Trump has imposed new tariffs on steel and aluminum imports, a move, he insists, that is necessary to revive domestic industry and bring back manufacturing jobs.

When we asked what questions you want answered this week, several respondents asked for some basics on the steel and aluminum industries. How big are they, anyway? And what will the likely impact of Trump’s tariffs be?

The “primary metals” industries, which includes steel and aluminum, employ about 377,000 people, which is just 0.3% of the entire U.S. workforce. That’s down from 678,000 workers in 1990, when primary metals accounted for 0.6% of all workers.

Source: St. Louis Federal Reserve, Bureau of Labor Statistics

Production, however, hasn’t fallen the way employment has, because metals industries have become far more efficient. Iron and steel production was actually higher in 2017 than it was in 1990. Here are the numbers going back to 1972:

Source: St. Louis Federal Reserve, Bureau of Labor Statistics

Trump’s tariffs are unusual because he’s invoking a little-used law and citing national security as the reason new tariffs are needed. Some readers wonder what that’s all about. The last president to do that was Ronald Reagan in 1986.

The United States imposes dozens of tariffs on all kinds of products every year. That normally happens after a U.S. producer complains about foreign companies dumping products into the U.S. market at artificially low prices. That’s not what is happening with Trump’s steel and aluminum tariffs. Instead, the Commerce Department issued a report in January claiming that there’s a shortage of domestically produced steel available for “critical infrastructure,” which includes things like roads, bridges, ports, waterways and water treatment facilities. Trade experts are deeply skeptical of this novel definition of national security. But Trump does have the authority to impose the tariffs, and he has used it.

What impact will the tariffs have? Probably not as much as initially hoped (or feared). They’ll probably help create some new steel and aluminum jobs, since they essentially direct more business to domestic producers, and allow them to raise prices. But all the producers that purchase steel and aluminum, such as manufacturers of cars, appliances and canned goods, will have to pay more, which could hurt employment in those industries. And industries that purchase those commodities employ 16 times as many people as the steel and aluminum industries.

Plus, Trump watered down the tariffs at the last minute, by exempting Canada and Mexico, two of the top four suppliers of foreign steel to the United States. He also gave other trading partners a way to wriggle free of the tariffs. The stock market fell when Trump first said he planned to impose the tariffs, but rose when those new loopholes were announced. The ultimate impact may be, not much.

Confidential tip line: rickjnewman@yahoo.com. Encrypted communication available.

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Rick Newman is the author of four books, including Rebounders: How Winners Pivot from Setback to Success. Follow him on Twitter: @rickjnewman

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