From the beginning, the proposal to enact new tariffs on metal used primarily to make cans was pure protectionism that would benefit one company while being costly to consumers and many American businesses.
This time, however, sanity prevailed.
The International Trade Commission (ITC) voted unanimously this week to reject the proposed tariffs, which would have been applied on tin-plated steel imported from Canada, China, Germany and South Korea. The ruling is expected to end a battle lasted months between Cleveland-Cliffs, the metals producer that sought the tariffs, and various groups representing downstream industries and consumers who would bear the cost of the tariffs.
Foreign imports “do not harm U.S. industry,” the ITC concluded, ruling against Cleveland-Cliffs allegations of dumping, or the deliberate setting of export prices to undercut another country’s industry .
“Today’s outcome confirms what we’ve known all along: There was no merit to Cleveland-Cliffs’ claims,” said David Chavern, president and CEO of the Consumer Brands Association, a trade group that represents many of the product suppliers food and household goods which were found to be affected by the tariffs, we read in a statement. “The ITC not only voted today to protect thousands of American manufacturing jobs, but also to preserve the integrity of our country’s trade remedy process.”
This is a tortuous and bureaucratic process, often deliberately opposed to the interests of consumers, as I explored in an episode of Reason‘S Because we can’t have nice things podcast series last year. In the case of tariffs on tinned steel, as in many cases of protectionism, the costs would be spread throughout the economy while the benefits would accrue to Cleveland-Cliffs, who hoped to raise barriers to imported metals as a way to protect their profits.
In the original proposal, Cleveland-Cliffs asked for tariffs of up to 300%. At that level, the Consumer Brands Association estimated that tariffs could raise the price of a single can of soup by 58 cents — a reflection of the fact that the can itself is often the most expensive part of any canned food — at a time where consumers are already struggling with high inflation. Separately, a study by Trade Partnership Worldwide LLC, a pro-trade think tank, found that 600 jobs would be put at risk for every tinplate manufacturing job protected by the proposed tariffs.
Importing tinplate is essential for American-based can manufacturers because the domestic supply of the metal (from Cleveland-Cliffs and other smaller suppliers) is inadequate to meet demand. In 2022, Cleveland-Cliffs supplied just 64% of the volume needed by can makers and delivered just 15% of that volume on time, according to a report from the Can Institute, an industry group that opposed the tariff request and welcomed the ITC ruling.
In January, the Commerce Department narrowed the scope of the tariff request before turning the matter over to the ITC for a final decision. It excluded imports from four other countries – the Netherlands, Taiwan, Turkey and the United Kingdom – from the original Cleveland-Cliffs petition and recommended lower tariff levels than originally requested.
By rejecting that more limited tariff proposal, then, the ITC sent a clear message about how extravagant the original effort was. Cleveland-Cliffs’ call for federal protectionism was obviously a terrible idea, and his rejection is a nice reminder that American industry is not helped by erecting barriers to foreign goods.