Industry insider bucks Trump’s argument that tariffs will fuel job growth in manufacturing: Here’s why

As Donald Trump has begun to unveil his trade policy, the main feature of which is tariffs, some industry insiders are rebuking his argument that these import duties will greatly increase the number of manufacturing jobs in the US.

Tariffs are an engine for job growth, argues the White House

One of the first industries to see tariffs imposed is steel, where, in the short term, higher-priced imports are expected to increase demand for domestic production. President Trump has also stated on many occasions that his imposition of tariffs aims to increase manufacturing jobs in the US. The White House has been quick to highlight media that agrees with this opinion, but some within the industry are not confident the president’s plan will work.

Some industry leaders don’t share President Trump’s vision

At the industry level, higher prices across the board could lead to a decrease in demand for steel as buyers reduce their orders and wait to see if prices fall. If producers respond by further limiting production, the demand for labor could fall rather than increase, at least in the short run.

Nevertheless, Greg Husisian, the chair of the international trade and national security practice at Foley & Lardner, who spoke with Supply Chain Drive’s Kate Magil, is more optimistic. Husisian believes that tariffs could increase demand for domestic steel, leading to an increase in price, which could “push steelmakers to increase domestic production capacity.” That increase in “domestic production capacity,” however, is not expected to meaningfully increase the number of jobs in the sector.

Why increased domestic production might not create more jobs

Here, we find a contradiction in market forces and an explanation of why the increase in domestic production will not automatically lead to thousands more jobs in the sector.

If domestic companies increase supply by boosting production and demand remains constant, prices, according to foundational economic theory, should fall. In other words, profit margins could shrink as the retail value of the commodity falls, but the costs of production—labor and the equipment necessary—rise. Companies are unlikely to push production to the level required that would threaten their margins, which helps to explain why job growth within the sector is not an automatic outcome of increased demand for domestic production.

“The one thing I know it won’t have a big impact on is U.S. steel manufacturing jobs,” Husisian explained when speaking with Magil. “Never going to happen” was how the industry expert described the possibility that the US could get 300,000 workers involved in steel manufacturing in the US. Though industry leaders see areas where marginal job growth could materialize, Husisian sees the return of hundreds of thousands of workers employed in the sector as a pipe dream.

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