The Untold Story: Tariffs are Driving Job Creation

BY JEFF FERRY

It’s been just six months since the first of the Trump administration’s tariffs went into effect and the job gains are already visible. The Coalition for a Prosperous America’s “Tariff Job Creation Tracker” shows over 11,000 jobs have been created or announced since February 1, and that includes only cases where companies have announced specific job counts. Other companies have also said they intend to add jobs, but we’ll wait for those numbers before adding them to our tally. Including the multiplier effect of manufacturing jobs, which is typically estimated at between five and 10 service jobs supporting each manufacturing job, it’s reasonable to think that an additional 77,000 service sector jobs could be created thanks to the tariffs.

In general, these are good-paying jobs in strong, stable industries. And the process is just beginning. With more tariffs being implemented, such as the so-called “second tranche” of tariffs recently announced on 279 lines of Chinese imports, we should expect to see more job creation in the months ahead for affected domestic industries.

A good example of the job creation now underway is the expansion of Magnitude 7 Metals, in New Madrid, Missouri. A privately-owned American company, Magnitude 7 purchased aluminum smelting facilities from Noranda—which had gone bankrupt, largely due to international competition that has forced roughly 90 percent of US aluminum smelters out of business. In March, Missouri Governor Eric Greitens spoke at Magnitude 7, praised the company for relaunching the smelter and creating jobs offering average annual pay of $64,000. In total, our tracker shows 2,899 jobs have been announced or created in the aluminum industry since February.

In the steel sector, industry leaders like Nucor and US Steel have announced expansions and re-openings of previously shuttered facilities. Nucor also plans to build a new greenfield steel mill in Frostburg, Florida, creating 250 jobs at an average pay of $66,000 a year. Smaller steel companies are expanding, too. Big River Steel is investing in its Arkansas mill to double production capacity to 3.3 million tons annually. Big River is also planning a second mill in Brownsville, Texas, which will employ 500 steelworkers. Our tracker shows a total of 4,960 new jobs planned in the steel industry.

The solar panel industry was the first industry where the administration announced tariffs, back in January. Some doom-mongers predicted disaster for the industry. Instead, the solar industry is booming. Roughly 10 solar manufacturing companies have announced investment and job creation in solar manufacturing facilities, from Oregon to Florida. In April, First Solar Corp. announced a $400 million expansion at its Ohio plant, which will create 500 new jobs. A manufacturing operator at First Solar earns about $37,000 a year, and a development engineer earns $97,000.

Our tracker shows new solar jobs at 1,150 so far. New jobs in the washing machine industry—which has also received tariff support—are at 2,100. Add up those four categories and you get 11,100 new jobs. And that’s without counting jobs that will be created in the diverse industries and sectors where the administration is levying tariffs on Chinese imports worth $50 billion a year.

The United States made a huge mistake in the 1990s and early 2000s, when it allowed entire manufacturing supply chains to move to Asia. Manufacturing is too important for wealth and income creation to allow so much of it to move overseas. Further, manufacturing success is not about individual products or stages of production dispersed over different countries thousands of miles apart. Skills and knowledge tend to cluster together, and they grow and develop best in close proximity. It’s especially good news to see domestic growth in broader supply chains—like iron ore miner Cleveland Cliffs planning a new processing facility in Toledo expected to create 1,200 new jobs.

Across the industrial world, there is growing awareness that local and in-country production is coming back into fashion. The corporate strategy of saving a few cents on every input by disaggregating production and locating it all over the world is going out of fashion—and is not simply the result of President Trump’s tariffs, or of China’s blatantly offensive IP theft.

Tariffs present a twin solution. They not only address the issue of jobs lost due to imports, but they also address China’s flagrant violations of trade and intellectual property norms.

Jeff Ferry is Research Director at the Coalition for a Prosperous America (CPA).