When President Trump on the first day of March said that the U.S. would impose a 25 percent tariff on imported steel and a ten percent tariff on imported aluminum, many economists predicted that this spelled trouble for the industries that rely on steel and aluminum for their products.
The Trump administration postponed imposing the tariffs on Canada, the European Union, and Mexico until June 1, saying it wanted more time to try to negotiate agreements that might have allowed these countries to win exemptions from the tariffs. But none of those trading partners reached a deal with the U.S. by the deadline. The tariffs were imposed when the calendar flipped to June.
Yet there are few signs that the tariffs are having a negative effect on America’s metal using industries. In fact, American businesses that make the most use of metals are adding jobs at a rate that is four times as fast as the broader economy, according to data from the Department of Labor.
The fabricated metals sector–where workers transform metal into intermediate or end products other than machinery, computers and electronics, and metal furniture–added jobs in March, April, May and June. Over that period, employment in fabricated metals grew by one percent, compared with just a quarter of a percentage point growth in the broader economy. In June alone, fabricated metals added 7,000 jobs.
Machinery manufacturing added jobs in each of the four months since the announcement, including 5,000 in June. Employment in the sector grew by a whopping 1.7 percent.
Transportation manufacturing, the sector that includes automakers and aerospace, added jobs in March, April, and June. During the period it grew by 15,000 jobs, or 0.9 percent.
It is possible that the businesses hiring these workers are feeling their profits squeezed by tariffs. But the workers in these industries are seeing job opportunities grow rapidly.
Wages for the workers are rising as well. The hourly wage for non-supervisory workers in machinery manufacturing and fabricated metals rose by around 0.8 percent between March and June, an annualized rate of 2.4 percent. Wages in transportation rose 0.7 percent, for an annualized gain of 2.1 percent.
These gains were celebrated by trade economist Alan Tonelson on twitter:
And not just fabricated #metals. #Jobs are up on net over last 4 months in big metal-using sectors #machinery and #transportation equipment. #trade #steeltariffs #steel #aluminum #tariffs #manufacturing #ChickenLittle https://t.co/9SyRNvg0Wt
— (((Alan Tonelson))) (@AlanTonelson) July 6, 2018