Now That We Have Tariffs on Steel, Are Things Better?

"The President is the biggest and best supporter of the Steel Industry in many years. We are now doing really well. The Tariffs let us compete. Was unfair that the Steel Industry lost its jobs to unfair trade laws. Very positive outcome.”
~Mark Glyptis, United Steelworkers

Now to talk about the concept of reality. While there may be a short term gain in terms of economic benefit, forcing less competition to be in the market, the long term is a more monopolistic industry. What I mean by this is that the steel industry now United Steelworkers now officially has special treatment to protect them from something most all other companies have to deal with in order to stay afloat: competition.

This hurts pretty much everyone, except for United Steelworkers. This has happened in the past with other companies that were being seen as "negative externalities of the market." From railroad tycoons of the late 19th century and early 20th is a perfect example of instances of using government to butt out competition. The railroad tycoons had created a Cartel against the American people by creating price fixing structures. They all got together and effectively raised up the prices of their product so that they could all reap the rewards and benefits without having any level of competition. Yet the part the history books wouldn't tell you about in school, was that the cartels were an absolute sham in the railroad industry.

I mean this by what would eventually happen was, one of the members would seek to gain an economic advantage, and under the table try to lower their prices so they would go with their railroad, leaving less money for the other people. This would happen so often, the cartels would have easily have dissipated on its own until the government had stepped in. Yet, when the government stepped in to help prevent the cartels with the Interstate Commerce Act of 1887, the railroad industry would attempt to welcome it with open arms. This would see as an economic advantage to the railroad industry. Get the government off their backs for starters, end any level of riots that would happen due to displeased customers, and even butt out any additional competition that would arise in local areas. You could not build a railroad just because you had money. You needed to be a member of the Interstate Commerce Act. Within about 12 years, the Interstate Commerce Commission was in full force, and did what it could to keep competition out of the markets.

While this resulted in regulated lower prices, it also destroyed that market for any potential of any new markets and new technologies to arise. Trucking became a large portion of the United States, which was quickly superseded and attempted to be thwarted by the Commerce Act of 1887 to help keep the railroad tycoons in power. Eventually, the commission which composed mostly of railroad tycoon giants, now were slowly but surely being replaced over the course of many years into nothing but trucking industry giants. So it brought on the new series of regulations, passing on the torch of independent tariffs on an otherwise healthy market. Even under duress of a cartel, which would have certainly saw in its dissolution in the late 19th century.

Yet now, we have a new tariff on our mind. Butt out any level of competition that could result in a cheaper product for a favor in a company who will seek to gain economic advantage and butt out any competition that stands in their way. That is what will happen, and what has happened throughout history when a tariff is involved. Even if that tariff is supposed to be assisting the United States, and be a detriment to China, this results in less products being made in the United States and less innovation in favor of more government control when there never needed to be one.

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