Even Adam Smith recognized national security as a possible justification for tariffs on strategically important commodities. But is it a good justification for tariffs on steel and aluminum in the 21st century when the United States has many potential sources of those two items? This month’s Feature Article author, Jon Murphy, a fan of Adam Smith, says no.

The concern about relying on foreign sources of war materials is that they could be unreliable or disrupted. In a world of shifting alliances, geographical concerns, and logistical issues, as in the 18th century Britain of Adam Smith, this fear might be justified. However, in 21st century America, it is less plausible. Most U.S. imports of steel come from solid allies such as Canada (17% of imports, which is 5.9% of total domestic consumption), Brazil (14% of imports, or 4.7% of consumption), South Korea (10% of imports, or 3.4% of consumption) and Mexico (9% of imports, or 3.2% of consumption).8 Russia and China, potentially antagonistic countries, account for only 9% and 2% of U.S. imports respectively (3% and 0.7% of consumption, respectively). Moreover, these are primarily “long steel products,” which are used in construction. Disruptions of steel imports from these nations would not adversely affect U.S. national defense needs. Furthermore, the United States’ main steel trading partners are located primarily along land trade routes; even if the United States were blockaded, the government would still be able to get steel.

This is from Jon Murphy, “Does National Security Justify Tariffs?” Econlib, May 7, 2018.

Read the whole thing.

Jon Murphy is an econ Ph.D. student at George Mason University and, as readers of this blog probably know, a frequent commenter on this site.