Aluminum Tariff Follies

Employees work at an aluminum factory on November 23, 2019 ,in Zouping, Shandong Province of China. (Photo by Tang Ke/VCG/Getty Images)

Hang around the trade game long enough and you’ll frequently encounter examples of how bad law, policy, and politics hurt American businesses in infuriatingly dumb ways. What’s going on right now in the U.S. aluminum market ranks up there with some of the dumbest.

I found myself deep in this particular rabbit hole thanks to Magnitude 7 Metals, a Missouri-based primary aluminum smelter whose sudden closure last month pushed Missouri Sen. Josh Hawley to demand that President Joe Biden use the wartime Defense Production Act to magically save the factory. As Reason’s Eric Boehm patiently explained shortly thereafter, the senator’s demand—in somewhat typical fashion—never made much sense because the DPA isn’t some sort of magic “get out of economics free” card that can fix whatever market event politicians don’t like. For Hawley to pretend otherwise is pretty ridiculous stuff.

Dig a little deeper, however, and this is more than just another case of a politician screaming “DEFENSE PRODUCTION ACT” out a Capitol Hill window like Michael Scott declaring bankruptcy. Instead, it’s another teachable lesson regarding the sordid reality of modern U.S. tariff policy, and the high costs, unintended consequences, gratuitous system-gaming, and failed objectives that too often accompanies it.

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