Results
Since the imposition of the tariffs was fairly recent, there is limited data on post-tariff trade. What data exists, however, appears to be consistent with the predictions of economic theory. Between 2001 and 2002, total U.S. steel imports from Taiwan decreased from $353,458,689 to $300,075,791. This represents a 15.1% decrease in total imports. U.S. imports in seven out of nine individual iron and steel SITC categories in 2002 had decreased since 2001. Total U.S. steel exports to Taiwan also decreased, from $52,201,962 in 2001 to $46,996,053 in 2002, a 9.97% decrease. U.S. exports in six out of nine individual SITC categories in 2002 had decreased since 2001. Although other factors may have contributed to the decreases in trade, such as the sluggish economies in both countries, it is likely that the tariffs caused at least part of the decrease, since the U.S. economy has been in recovery since November 2001, when the government declared that the recession was over. There is also a strong negative correlation, -0.838735, between the tariff rate imposed on a category of steel products and the percent change in the volume of U.S. imports from Taiwan of the same category from 2001 to 2002. It should be noted, however, that the strong negative correlation does not necessarily imply that a higher tariff rate causes a greater decrease in the volume of imports.There is evidence that steel-consuming industries, their employees and U.S. consumers as a whole have actually been hurt by the new tariffs. Francois and Baughman (2003) estimate that 200,000 American jobs in steel-consuming industries were lost due to higher steel prices in 2002. They also note that since only 187,000 American workers were employed in the domestic steel-producing industry in December 2002, more jobs were lost than the total number of workers employed by U.S. steel producers (Francois and Baughman, 2003). Even more telling is the fact that between 4,375 to 8,900 steel jobs are likely to be saved by the new tariffs, at a cost to American consumers every year of $439,485 to $451,509 per steel job protected (Francois and Baughman, 2003). Francois and Baughman (2003) also mention that most U.S. steel-consuming businesses are small (employing under 500 people), and that they are price-takers, while most of the customers of U.S. steel-consuming industries have sufficient market power to affect prices, thus many customers refused to accept the increased cost of U.S. steel-consuming business' goods, either finding cheaper goods internationally or forcing the U.S. steel-consuming businesses to absorb the higher steel costs. Finally, they state that higher steel prices and other inefficiencies related to the new tariffs are forcing consumers to pay a total of between $1.9 billion and $4.0 billion a year, and decrease U.S. national income by $500 million to $1.4 billion a year (Francois and Baughman, 2003).
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