EDITORIAL: Donald Trump’s steel tariffs will work against his infrastructure plan

Donald Trump’s hot mess of a tariff proposal threatens to undermine his pro-growth economic agenda. But it also could hinder his push to improve the country’s infrastructure.

The president announced last week that he would impose a 25 percent tariff on imported steel and a 10 percent duty on aluminum. The move, passed off as a matter of national security, will drive up prices for American consumers on scores of products and probably result in a net job loss for the country.

Many Republicans — including House Speaker Paul Ryan — have publicly asked Mr. Trump to reconsider this destructive approach to commerce. Instead, the president unleashed a Twitter barrage defending the levies while downplaying the potential ramifications and calling trade wars “good and easy to win.”

On Monday, the president was still at it, saying he would back off the tariffs for Canada and Mexico only if the countries agree to certain terms on a renegotiated NAFTA deal.

How much of this is Trump bluster as part of the “art of the deal” remains to be seen. But if the president truly believes his own rhetoric on trade and sparks retaliatory policies, his administration will have little chance of hitting the growth numbers necessary to keep the national economy on a healthy trajectory.

In addition, Mr. Trump’s tariff subverts a key aspect of his domestic agenda by driving up the costs for the construction companies and suppliers that the president hopes will help him unleash an infrastructure spending binge.

“When you talk about any increase in project costs or materials prices when you don’t have revenue sources that are keeping pace with those project costs, you’re ultimately going to be able to perform less work,” Alison Premo Black, chief economist with the American Road and Transportation Builders Association, told The Wall Street Journal this week.

The Journal reports that the construction industry is responsible for about 43 percent of U.S. steel consumption. Highway and other transportation-related projects constitute a large portion of that usage.

“We are equipped to deal with normal levels of price fluctuations,” David Stueckler, CEO of a Houston construction company told the paper, “but something like a tariff could put increases into the range that are very difficult for us or owners to deal with.”

The president hopes to use about $200 billion in federal seed money to lure states and private interests to go on a $1 trillion infrastructure spending spree over the next decade. But his politically motivated attempt to protect the U.S. steel industry and its unions threatens to not only harm U.S. consumers, but to diminish the effectiveness of his own proposal.

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