U.S. President Donald Trump may hope his tariffs on imported steel and aluminum will create new jobs—or at least protect existing ones—but researchers at the Federal Reserve Bank of New York say the opposite outcome is more likely, Bloomberg reports.
“The new tariffs are likely to lead to a net loss in U.S. employment, at least in the short to medium run,” Mary Amiti, Sebastian Heise and Noah Kwicklis write in a new blog post on the Fed bank’s website. “Although it is difficult to say exactly how many jobs will be affected, given the history of protecting industries with import tariffs, we can conclude that the 25 percent steel tariff is likely to cost more jobs than it saves.”
The post comes on the heels of a warning from the Fed’s Beige Book on Wednesday that trade concerns were clouding an otherwise positive outlook.
The New York Fed trio cited a 2003 paper by Trade Partnership Worldwide LLC, a Washington-based consulting firm that advocates on behalf of various industry groups, which concluded the effects of similar tariffs imposed by President George W. Bush in 2002 led to the loss of 200,000 jobs across the U.S. labor market.
