ICYMI: NAVARRO: President Trump’s Aluminum Tariffs Is “Far More Than a Trade Battle”

TLDR

This response to the White House op-ed asserts that imposing aluminum tariffs is economically counterproductive. Tariffs won’t overcome Canadian energy cost advantages, will harm downstream industries, alienate allies, trigger retaliatory measures, increase consumer costs by up to $2B annually, and primarily benefit shareholders rather than workers. Previous similar tariffs in 2018 failed to increase aluminum jobs while costing the economy elsewhere. Better alternatives include targeted agreements addressing Chinese overcapacity, clean energy investments, and strengthening North American supply chains.

When Peter Navarro painted a rosy picture of aluminum tariffs in his USA TODAY op-ed, he spun a compelling story of American industrial revival and national security. It’s the kind of narrative that resonates emotionally — protect our workers, strengthen our borders, make America great again. But this story collapses under the weight of economic reality.

Let’s be frank: the administration claims tariffs will usher in a renaissance for American aluminum production, but they’re selling us fool’s gold. The fundamental problem isn’t foreign competition — it’s physics and economics.

Canadian aluminum smelters run on Quebec’s abundant hydroelectric power. American smelters run on more expensive natural gas. This isn’t about unfair trade practices; it’s about a 40% energy cost advantage that tariffs can’t erase. As Alcoa’s CEO William Oplinger admitted, restarting idled U.S. smelters would be “inefficient” without permanent subsidies and long-term policy certainty.

Meanwhile, the job creation math simply doesn’t add up. For every aluminum worker who might benefit, we risk losing multiple downstream jobs in industries that actually use the metal. Coca-Cola is already planning to shift from aluminum cans to plastic bottles to avoid tariff-driven costs — ironically reducing demand for the very American aluminum we’re supposedly protecting.

The administration’s security argument borders on absurd when you look at the details. We’re imposing tariffs on Canada — our NATO ally, defense partner, and neighbor with whom we share the world’s longest undefended border. The Department of Defense itself recognizes Canadian aluminum as part of our defense industrial base.

By alienating our most reliable supplier, we’re not strengthening national security; we’re undermining it. If Canadian aluminum becomes too expensive, where will we turn? To higher-carbon sources from countries with whom we have more fraught relationships? This isn’t security — it’s self-sabotage.

The EU has already threatened “proportionate countermeasures” targeting $7.5 billion in U.S. exports. We’ve seen this movie before. The 2018-2019 tariffs led to retaliation that cost American farmers $28 billion in lost exports, requiring taxpayer-funded bailouts. Is paying farmers not to sell their crops really the definition of winning?

“Tariffs are paid by foreign countries,” we’re told. This isn’t just wrong — it’s a deliberate misrepresentation of how tariffs work. Every economist knows tariffs are taxes paid by American importers, who then pass those costs to American consumers.

The 25% aluminum tariff could raise consumer costs by up to $2 billion annually. Studies of the 2018 tariffs showed price increases of 1.7-7.1% in affected sectors. These aren’t abstract numbers — they’re real dollars coming out of American wallets at a time when many families are already struggling with inflation.

What’s particularly galling is who actually benefits from these tariffs. It’s not American workers — it’s shareholders of domestic aluminum producers who enjoy artificially inflated prices without actually increasing production capacity. Alcoa gets higher profits while explicitly stating they won’t reinvest in U.S. facilities. How is this helping American manufacturing?

The administration wants us to ignore the evidence from their own previous attempt at this same policy. The Congressional Research Service found no significant long-term increase in U.S. steel or aluminum jobs after the 2018 tariffs, while retaliatory measures cost an estimated 245,000 American jobs overall.

Even Trump’s former advisers have acknowledged these policies didn’t achieve their stated objectives. The global community has universally condemned them as protectionist measures that violate WTO rules. The EU is already preparing $3.6 billion in counter-tariffs targeting key American exports.

Rather than doubling down on failed policies, we should be pursuing strategies that actually work:

1. Targeted agreements addressing genuine market distortions like Chinese overcapacity
2. Investment in clean energy to lower production costs for U.S. smelters
3. Strengthening integrated North American supply chains that benefit all partners

The harsh truth is that aluminum tariffs prioritize political talking points over economic reality. They’re a regressive tax that falls hardest on working Americans while failing to address the fundamental challenges facing our manufacturing sector.

The story of tariffs as economic saviors might make for good politics, but it makes for terrible policy. American consumers, workers, and businesses deserve better than economic fairy tales that leave us all paying the price.