The quartz tariff case and why tariffs cause net job loss

Last year, domestic quartz surface product manufacturers filed a petition with the US International Trade Commission (ITC) seeking relief from quartz imports. The ITC subsequently determined that those imports caused serious injury to domestic producers. Following a remedy hearing earlier this week, the Commission is currently deliberating on whether to impose a 50 percent tariff on quartz imports.

Following the ITC’s injury determination, I examined how these tariffs would push up prices and limit the range of quartz surface products available to consumers. Since quartz is embedded in a wide range of residential construction and renovation projects, the effects are not confined to the product itself. They appear downstream as higher project costs and fewer material choices.

Tariffs affect more than prices and consumer choice. By raising input costs in industries like construction, tariffs influence hiring, wages, and employment throughout multiple sectors. What is often framed as job protection in one industry typically translates into job losses in many downstream industries.

Same story, different industry

In the quartz safeguard proceeding at the ITC, competing employment claims have already been filed. Petitioners argue that import restrictions could support roughly 500 jobs in domestic quartz production. The respondents, by contrast, estimate that higher input costs could place 6,434 jobs at risk across fabrication, installation, and related construction activities.

A quartz tariff would result in roughly 13 jobs lost for each job saved. That imbalance reflects the labor intensity of downstream construction and installation activity relative to upstream manufacturing.

Quartz provides a current example, but it is far from unique. A report from the International Monetary Fund analyzed tariffs across 151 countries from 1963 to 2014. It concluded that tariffs not only have negative effects on economic output, they “result in more unemployment, higher inequality, and real exchange rate appreciation.” This pattern is consistent with US tariff episodes:

• The aluminum and steel tariffs under Trump’s first administration resulted in an estimated loss of 75,000 jobs.
• Solar panel tariffs in 2018-19 created 2,000 new manufacturing jobs, while eliminating 62,000 jobs in solar installation, engineering, and project development.
• In 2019, Moody’s Analytics estimated that Trump’s trade war with China cost 300,000 jobs from 2018 to early 2019.
• Obama’s tire tariffs saved a maximum of 1,200 tire manufacturing jobs at the expense of 2,531 retail jobs.
• Sugar tariffs and quotas in the early 2000s caused a net loss of approximately three confectionery manufacturing jobs for every job preserved in sugar growing and harvesting.
• Steel tariffs under the Bush administration did not generate any gains in local steel employment, but sacrificed as many as 200,000 jobs.

How tariffs negatively reshape employment

The recurring employment pattern in tariff cases is not accidental. It reflects how tariffs affect modern supply chains. While the protected industry may experience localized gains in output and employment, those gains are typically concentrated in a relatively small segment of the economy.

Because downstream industries are larger and more labor-intensive, even modest input cost increases translate into broad adjustments in labor demand. Firms respond in different ways. Some absorb reduced margins, others raise prices and risk losing demand, and many adjust by slowing hiring or scaling back planned expansion. These firm-level adjustments aggregate into broader changes in employment.

The real job accounting of tariffs

The quartz safeguard case highlights a familiar imbalance in tariff policy with respect to employment effects. Petitioners emphasize job gains in domestic production, while downstream industries point to a much larger employment loss.

This case is representative of how tariffs transmit through supply chains and employment well beyond the industry they are intended to protect. In addition to employment effects, tariffs also raise consumer prices and reduce overall economic output by making production more expensive and less efficient.

For these reasons, the ITC should not impose tariffs on quartz surface products. Those who advocate for tariffs believe that tariffs are a silver bullet for economic growth. In reality, tariffs are not a form of job protection. They illustrate the nasty tradeoff of saving some jobs while sacrificing many more livelihoods in the process.