Final Thoughts

We’re talking before those heady days of 2018 when Section 232 was put into effect by the first Trump administration. Yes, we wanted to take a look at some of the ghosts of tariffs past. History has shown they don’t always work as intended.

Bush II

In 2002, President George W. Bush imposed a temporary tariff of up to 30% on certain steel imports to protect US steelmakers. This aimed to protect domestic mills from foreign competition and improve manufacturing processes, but it faced international backlash. The World Trade Organization (WTO) ruled that these tariffs were illegal, and they were lifted in 2003 after retaliatory threats from other countries.

Reagan

In 1984, President Ronald Reagan took a different approach. Rather than imposing tariffs, he negotiated ‘Voluntary Export Restraint Agreements’ with major trading partners to limit steel exports and prevent excessive steel dumping. This provided a boost to domestic mills, but also kept steel prices high. These agreements remained in effect until 1992.

Nixon

A short-lived solution was introduced by President Richard Nixon in 1971. His administration imposed a 10% surcharge on all imports to address trade imbalances and stabilize the US dollar. It was meant to protect US industries and address the growing trade deficit. However, it was lifted just four months after being imposed.

Hooverville

Wind the clock back to the Great Depression. President Herbert Hoover signed the Smoot-Hawley Tariff Act in 1930, which put tariffs on hundreds of imports, including steel, to protect American industries from foreign competition. Unfortunately, the act was widely criticized for worsening the Great Depression, as key trading partners retaliated with tariffs on US goods and restricted global trade.

How will history see Trump Tariffs 2.0?

Of course, the easy answer on legacy is it’s WAY too soon to tell. There could even be a few tariffs that this administration hasn’t even thought of yet that come down the pike. The reciprocal tariffs for all US trading partners haven’t even been determined yet.

“Hooverville” was the ironic name of shantytowns that sprang up during the Great Depression. President Hoover was often credited with the conditions that led to their creation.

Could a future ironic version of “Trump Towers” come to pass, or will this period of rapid-fire tariffs lead to a US manufacturing renaissance and the economic prosperity that is hoped for? Well, we’re crossing our fingers and will be reporting on the results all along the way.

While Smoot-Hawley may be pushing it, we know we have a lot of longtime steel industry veterans as readers. What has been your experience with the tariffs mentioned above, and how does it compare to what’s happening today? We’d love to hear from you at info@steelmarketupdate.com. And, as always, thanks for your continuing support!