Let’s be perfectly clear: Trade policy is complicated. Impeccably credentialed economists who’ve devoted their lives to studying global trade flows disagree vehemently about the causes and correlations of various trade-related phenomena, to say nothing of the best policy practices that they believe nation-states should implement to promote or restrict cross-border flows of goods.
Those whose interest in effective trade policy is more direct, such as executives at U.S. steel firms and other industries whose fortunes rely to some extent on fair exchange, may have a better sense of what works and what doesn’t. But there’s still plenty of disagreement among their ranks.
That’s due at least in part to the fact that trade policy doesn’t produce uniform sets of winners and losers. Small tweaks to import duties or quotas or sourcing requirements can dramatically affect entire industries — and their employee’s livelihoods.
In the following sections, we’ll take a look at six domestic industries that may benefit from tariffs (duties) on goods imported into the United States. Do you know anyone whose job or business might stand to gain?
The American steel industry is the poster child for fair trade, and its component firms are doing quite well thanks to targeted duties on imported metals. Indeed, steel is an increasingly rare bright spot in a manufacturing sector beset by high input costs and contracting employment.
Like foreign steel, foreign aluminum is a top target for U.S. import duties. In March 2018, the administration imposed a 10% tariff on imported aluminum under Section 232 of the Trade Expansion Act of 1962. Though country-specific tariffs have since been lifted, recent court decisions strengthened the legal rationale for Section 232 action.
Distilled spirits are a favored target for retaliatory tariffs imposed to the U.S.’s trading partners. While this is bad news for major distillers that sell worldwide, it’s actually good news for small-batch distillers that produce exclusively for the domestic market.
- Pork and Beef
The same logic applies to two key agricultural products: pork and beef. Agricultural conglomerates that produce pork and beef for global consumption are at risk of retaliatory tariffs, but small-scale farmers whose customers remain stateside may make out well — particularly those who can sell quality products at a premium.
As duties on imported metals take their toll on certain segments of the manufacturing industry, domestic fiberglass producers are picking up the slack. In certain applications, fiberglass is a viable alternative to lightweight, high-strength metals; the niche is having one of its best years in decades.
They Can’t All Be Winners
It’s worth reiterating that not all businesses and industries stand to gain equally from fair trade policy. Indeed, some U.S.-based companies — in some cases, entire sectors of the economy — depend on more or less free flows of goods across national borders. They’re not likely to benefit from import duties on any goods, let alone those in which they have a direct interest.
Does that mean tariffs are never worthwhile, given the perhaps inevitable collateral damage? Not at all — just that it’s important for policymakers to think through the ramifications of any significant change to trade policy before they’re felt on the ground.