The White House is touting plans for a $15 billion steel mill in Iowa that could be operational in 2030 and support around 1,700 jobs. President Trump chalks this up as a win for his tariff strategy, saying, “It’s really not that complicated.” The steel tariffs do offer a simple example of the tradeoffs inherent in protection: protected producers gain at the expense of others, and overall output is lower than it would be without the tariffs.
The metals tariffs date back to Trump’s first term, but they were relatively narrow compared to what’s in place now. In 2025, Trump removed country exemptions, expanded the derivatives (metal-containing products) in scope for the tariffs, added copper, and raised the rates to 50 percent. The metals tariffs were restructured in April 2026, and we estimate they now cover more than $300 billion worth of steel, aluminum, and copper goods.
The most obvious effect of the tariffs is to reduce steel imports and raise steel prices in the United States—such that purchasers in the US are paying significantly more than purchasers in other markets.
As of mid-September, US hot-rolled steel cost $1,285 per metric ton, compared with $845 in Western Europe, $480 on the world export market, and $428 in China.
The protection afforded by tariffs allows domestic producers to increase their prices, expand their sales, and invest in additional capacity. But that expansion doesn’t occur in a vacuum. It comes at the expense of steel users and other, unprotected sectors of the economy.
Steel-using sectors are much larger than the steel-producing sector; jobs in the former outnumber jobs in the latter 80-to-1. Imposing higher costs on a larger downstream industry is a recipe for widespread economic losses and smaller, concentrated gains.
Even under their narrower construction in Trump’s first term, these tradeoffs were present.
The United States International Trade Commission estimated that from 2018 through 2021, the tariffs raised steel and aluminum production by $2.8 billion annually, but downstream production fell by $3.4 billion a year, before considering retaliation or other economy-wide effects. Others have estimated that saving jobs in the steel-producing industry comes at an exorbitant cost of $650,000 per job. Estimates also found that exports relying on tariffed metal inputs grew about 0.11 percentage points slower than unaffected products.
It’s easy to see the White House press events announcing steel mill expansions. It’s difficult to see the costs. Countless businesses, large and small, are grappling with higher input costs, and this can cause declines in production and employment. Producers are also facing disruptions to their business, whether from uncertain trade policy or retaliatory measures, that reduce competitiveness and growth.
While the President parades the obvious beneficiaries of protection through the Oval Office, we shouldn’t forget that those gains are paid for by others, including other American businesses and workers. Rather than creating thousands of jobs and adding billions to the economy, President Trump’s tariffs will reshuffle economic activity to protected sectors at the expense of others and destroy some economic output in the process.