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Flaaen and Pierce found tariff-driven input costs caused net job losses.

The Claim

In a 2019 study, Aaron Flaaen and Justin Pierce found that U.S. industries facing higher input costs from tariffs, including steel-consuming manufacturers, experienced net employment losses rather than gains.

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The Short Version

The claim accurately reflects the study’s main finding: industries more exposed to tariff-related input-cost increases saw employment decline on net, rather than rise. Flaaen and Pierce found that the negative input-cost and retaliation effects outweighed the smaller employment gains from import protection. The wording is slightly compressed because the 2019 paper was a Federal Reserve working paper at the time, and “steel-consuming manufacturers” is an example rather than the paper’s formal category.

Caveats

  • The 2019 document was a Federal Reserve working paper; later peer-reviewed publication does not reverse the finding, but the label matters for precision.
  • The paper also found small positive employment effects in some tariff-protected industries; the losses were concentrated in industries more exposed to input costs and retaliation.
  • “Steel-consuming manufacturers” is a reasonable shorthand for high input-cost exposure, but the paper estimates effects using exposure measures rather than a single named sector category.

The Receipts

  1. Disentangling the Effects of the 2018-2019 Tariffs on a Globally Connected U.S. Manufacturing Sector

    Aaron Flaaen (Federal Reserve Board)

  2. Disentangling the Effects of the 2018-2019 Tariffs on a Globally Connected U.S. Manufacturing Sector

    Justin Pierce (Federal Reserve Board)

  3. Disentangling the Effects of the 2018-2019 Tariffs on a Globally Integrated Manufacturing Sector

    Federal Reserve Board of Governors (FEDS Working Paper)

  4. Disentangling the Effects of the 2018-2019 Tariffs on a Globally Integrated Manufacturing Sector

    Aaron Flaaen (Federal Reserve economist personal repository)

  5. Disentangling the Effects of the 2018-2019 Tariffs on a Globally Integrated Manufacturing Sector

    Yale University Department of Economics

  6. Steel Tariffs and U.S. Jobs Revisited

    Econofact

  7. Disentangling the Effects of the 2018-2019 Tariffs on a Globally Connected U.S. Manufacturing Sector

    RePEc: Federal Reserve

  8. Disentangling the Effects of the 2018-2019 Tariffs on a Globally Integrated Manufacturing Sector

    Justin Pierce (Federal Reserve economist personal repository)

  9. The Long-Term Impact of Steel Tariffs on U.S. Manufacturing

    Yale University Economics Department

  10. The Long-Term Impact of Steel Tariffs on U.S. Manufacturing

    Lydia Cox (Academic Research)

+ 1 more sources — see the full list on Lenz

Filed Under

Aaron FlaaenJustin Pierce

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