A Rare Win for Sanity in U.S. Tariff Policy
The U.S. International Trade Commission voted unanimously to reject a nakedly protectionist proposal that would have made canned goods more expensive.
From the start, the proposal to enact new tariffs on the metal used primarily to make tin cans was naked protectionism that would have benefitted one company while being costly for consumers and many American businesses.
This time, however, sanity prevailed.
The International Trade Commission (ITC) voted unanimously this week to reject those proposed tariffs, which would have been charged on tin-plate steel imported from Canada, China, Germany, and South Korea. The ruling should put an end to a monthslong battle between Cleveland-Cliffs, the metal manufacturer that sought the tariffs, and various groups representing the downstream industries and consumers that would have borne the tariffs' cost.
Imports from abroad "do not injure U.S. industry," the ITC concluded, ruling against Cleveland-Cliffs' allegations of dumping—that is, the deliberate pricing of exports in order to undercut industry in another country.
"Today's result confirms what we've known all along—there was no merit to Cleveland-Cliffs' claims," David Chavern, president and CEO of the Consumer Brands Association, a trade group representing many of the food and home goods suppliers that stood to be harmed by the tariffs, said in a statement. "The ITC not only voted today to protect thousands of American manufacturing jobs, but to preserve the integrity of our country's trade remedy process."
That process is a windy, bureaucratic one that is often deliberately stacked against the interests of consumers—as I explored in an episode of Reason's Why We Can't Have Nice Things podcast series last year. In the case of the tin-plate steel tariffs, as with many instances of protectionism, the costs would have been diffused across the economy while the benefits would have accumulated for Cleveland-Cliffs, which hoped to raise barriers to imported metal as a way to protect its own bottom line.
In the original proposal, Cleveland-Cliffs sought tariffs of up to 300 percent. At that level, the Consumer Brands Association estimated that the 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 when consumers are already battling 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 tin-plate steel-making job protected by the proposed tariffs.
Importing tin-plate steel 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 percent of the volume needed by can makers and delivered only 15 percent of that volume on time, according to a report by The Can Institute, an industry group that opposed the tariff request and cheered the ITC's ruling.
In January, the Commerce Department narrowed the scope of the tariff request before passing the matter over to the ITC for a final determination. It excluded imports from four other countries—the Netherlands, Taiwan, Turkey, and the United Kingdom—from Cleveland-Cliffs' original petition and recommended lower tariff levels than had originally been sought.
In rejecting that more limited tariff proposal, then, the ITC has sent a clear message about how outlandish the original effort was. Cleveland-Cliffs' request for federal protectionism was obviously a terrible idea, and its rejection is a nice reminder that American industry isn't helped by raising barriers to foreign goods.
