Trump's tariffs, not immigration, may lead to lost U.S. jobs

President Donald Trump ran his 2016 election campaign based in part on the idea that immigration and unfair trade practices cost American jobs. And he's put that notion into practice.

As his administration executes policies for both immigration and trade, angering allies and rivals from Canada, Mexico and the EU to China, studies released in recent weeks highlight a contradiction in that strategy.

First, take trade. Tariffs on steel and aluminum imports to the U.S. can help local producers of the metals by making foreign products more expensive. But they can also boost costs for U.S. manufacturers that can't source all their needs locally and must import the materials. That costs more for those companies and can lead to higher consumer prices -- and eventually job loss, economists say.

Steel and aluminum production jobs represent a small segment of the U.S. economy -- about 255,000 jobs in steel and 61,000 in aluminum, according to Moody's Investors Service. Yet steel and aluminum tariffs might lead to 400,000 lost jobs in the next one to three years.

A June 5 updated study from consulting firm The Trade Partnership also found the tariffs will hurt workers in all 50 states. Here's how:

  • While the metal tariffs, quotas and retaliation would increase employment in the U.S. by 26,280 jobs in the metal industries themselves, net employment is forecast to sink by 432,747 jobs throughout the rest of the economy. That's a net loss of 400,445 jobs. 
  • U.S. GDP will sink by 0.2 percent annually as U.S. imports decline. That's because U.S. exports will also fall. 
  • Sixteen jobs may be lost for every U.S. steel or aluminum industry job gained. More than two-thirds of the lost jobs would be among production workers and those with low-skill positions.

Then, consider immigrants. Non-U.S. born workers account for about 14 percent of the U.S. population and 18 percent of the labor force, according to a National Foundation for American Policy study on immigration and jobs released in May. In 1970, less than 5 percent of the U.S. population was born outside the U.S., said the NFAP.

Yet the organization found that "having more immigrants reduces the unemployment rate and raises the labor force participation rate of U.S. natives within the same sex and education group." And it found "no adverse effects" for less-educated workers born in the U.S. when more immigrant workers at the same education level entered the country's workforce.

That is, when more immigrants with a higher level of education enter the workforce, more U.S.-born workers with the same schooling were likely to get a job. Specifically, the NFAP found:

  • A 1 percentage point increase in the share of the immigrant labor appears to cut the unemployment rate of U.S. natives among same-sex groups -- women who have the same level of education and men who have the same level of education --  by 0.06 percentage points.
  • A 1 percentage point rise in an immigrant labor force appears to boost the labor force participation rate of U.S. natives in the same-sex education group by 0.05 percent, on average. 
  • Having more immigrants overall "does not significantly affect" U.S. natives' unemployment or labor force participation rate.

"The results may be surprising, but they are consistent with research that finds immigration has little adverse effect on native-born workers' wages and employment," the study said. 

The researchers are quick to point out that this doesn't mean all Americans are doing well. "The results simply point to the fact that immigrants are not to blame for deeper structural forces or circumstances that may have led to dim labor market prospects for some workers."