The Peterson Institute responds to Commerce Secretary Wilbur Ross's March 2 interview about steel and aluminum tariffs on CNN with Erin Burnett. The conversation on Twitter is reproduced below.
2/ Here is the PIIE study @ErinBurnett referenced on @CNN showing that a past US tariff on Chinese tires saved 1,200 jobs, but cost 3,700 retail jobs. US consumers paid $900,000 per job saved. Data calculations available for replication. https://t.co/V7081L96NF
3/ WTO rules allow tariffs in select cases. US protections already exist for steel—it’s why only 3% of US steel imports are from China. The new tariffs will raise costs for US auto, other manufacturers, where 40x more Americans work than in steel mills. https://t.co/WRmu11PWvP
4/ Tariffs are no free lunch. US will lose market share in autos and manufactures, raise prices for our consumers, and other countries may retaliate, destroying other jobs. Instead, the US should mobilize allies to pressure China to reform. https://t.co/lAMGpKXKR0
5/ Yes, PIIE forecast for trade surplus following #NAFTA was wrong because we did not foresee collapse in Mexican investment/growth in ‘94-95. Was mistake to try to precisely forecast that or net job creation. We learned from our analytical mistakes 25 years ago.
6/ But we got main forecast right. US gains big on net from #NAFTA from growing two-way trade. N. America more competitive globally. Auto sector gained from regional supply chains, agriculture grew, migration fell, Mexican energy sector developed. https://t.co/5ffm8TSZTw
7/ Bigger question: Why is Trump Admin using bilateral surpluses as measure of success? Normal in trade to have deficits w/ some countries. Trade deficits go up in good economic times. Mexico’s surplus in ’94-’95 grew as its economy crashed. Not worth it. https://t.co/0GjaExa7si
8/ Trade balance depends on larger factors like gov’t spending/tax cuts & exchange rates, not tariffs or FTAs. Even President’s 2018 @WhiteHouseCEA report says no evidence tariffs reduce trade deficits. Also, consider how FTAs aid and align allies for US national security. pic.twitter.com/nxdcIBY2z2
9/ No clue what @SecretaryRoss referring to on claims @PIIE got forecasts wrong on KORUS or China. We argued for the real benefits of having China subject to WTO rules and S. Korea-US trade growing, which both proved right.
11/ Since WWII, US has led global rules-based economic system that’s fostered prosperity, prevented trade wars, let alone military conflict. Study after study shows the benefits of the system for all parties. The US is leader with benefits, not victim. https://t.co/V1LJcFfd9t
12/ Technology far bigger factor than trade in which jobs are created/lost, so must prepare ALL workers for the future—not just give handouts to special interests. Investment, retraining, tax credits will help workers succeed. 95% of world’s potential customers live outside US.
13/ @PIIE strives to provide rigorous, intellectually honest, nonpartisan research. We post our data so results can be replicated. We maintain independence from funders, who are disclosed & have no say in results. Happy to stand on our record & debate @SecretaryRoss on the facts. pic.twitter.com/tFRMGdc94a
