The Commerce Department has officially declared a trade war on cheap tin cans.
Last week, the department gave a green light to placing new tariffs on tinplate steel—the metal used to manufacture tin cans and a wide variety of other consumer goods—imported from Canada, China, Germany, and South Korea. While the new tariffs are far less extensive than the absurdly high trade barriers originally requested by Cleveland-Cliffs, an Ohio-based steel company that is one of the few companies in America to make tinplate steel, the tariff decision once again underlines the arbitrary and cronyist nature of federal trade policy.
As Reason previously reported, Cleveland-Cliffs had asked the Biden administration to slap tariffs of up to 300 percent on tinplate steel imported from eight countries. Because the tariff-petition process is heavily skewed in favor of companies seeking protectionism—among other things, the Commerce Department is forbidden from considering how higher tariffs might impact other parts of the economy, including consumers—industries that need reliable access to tinplate steel were prepared to take a hit.
The Consumer Brands Association (CBA), which represents more than 2,000 companies including Campbell Soup Company and other brands that stood to be harmed by the tariffs, estimated that Cleveland-Cliffs' proposed tariffs would have added about 58 cents to the cost of the average canned food product. A separate study by the Trade Partnership Worldwide LLC, a pro-trade think tank, found that 600 jobs would be put at risk for every steel-making job protected by the proposed tariffs.
Last week's announcement from the Commerce Department triggered sighs of relief. The department rejected Cleveland-Cliffs' proposal for tariffs on tinplate steel imported from the Netherlands, Taiwan, Turkey, and the United Kingdom, and the tariffs approved on other imports are significantly lower than what had been requested.
"The Department of Commerce's final duty levels on imports of tin mill steel products largely reject incredulous claims from Cleveland-Cliffs that would have significantly hurt consumers and domestic manufacturing jobs," David Chavern, president and CEO of the Consumer Brands Association, which opposed the imposition of the tariffs, said in a statement.
The final word on the tariffs falls to the International Trade Commission (ITC), which must give its own approval to the Commerce Department's decision before the duties are put in place. The ITC heard testimony on the proposed tinplate steel tariffs and is expected to vote on the proposed tinplate steel tariffs at its meeting in February.
Still, the whole process leaves a bad taste in one's mouth. A single American company was able to file a petition asking unelected bureaucrats to punish its competitors (along with many downstream businesses and consumers) in order to goose its bottom line, triggering a review process that cost taxpayer resources and forced other businesses to play defense in a game that's deliberately rigged against them.
That the end result is merely less terrible for consumers than it might have otherwise been is a small comfort. There's no good reason for the government to block Americans' access to cheaper tin cans.
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