Last month, Agriculture Secretary Sonny Perdue endorsed a quota system to limit importsof foreign steel. Such a system would replace current American tariffs on Canadian and Mexican steel.
Agriculture companies appear to be overjoyed at his proposal, since the gesture could persuade Mexico to drop its retaliatory tariffs on U.S. farm products like dairy, corn, and soybeans. But for everyone else, this prospect is bad news.
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Tariffs should absolutely be removed, but quotas are not the answer. A quota system would make it impossible for many firms, particularly those in the oil and gas, automotive, medical supply, and tire industries, to import the specialized steel parts they need. The energy industry specifically would have to cancel projects due to a lack of parts. As a result, American workers would lose their jobs and consumers could face higher energy prices.