Posted on 05/17/2016 10:12:24 PM PDT by traumer
The US has raised its import duties on Chinese steelmakers by more than five-fold after accusing them of selling their products below market prices. The taxes specifically apply to Chinese-made cold-rolled flat steel, which is used in car manufacturing, shipping containers and construction.
The US Commerce Department ruling comes amid heightened trade tensions between the two sides over several products, including chicken parts. Steel is an especially sensitive issue.
US and European steel producers claim China is distorting the global market and undercutting them by dumping its excess supply abroad.
(Excerpt) Read more at bbc.com ...
” you really think the Chinks would fill our orders”
My lovely wife was born in Shanghai, and I find this kind of language very offensive!
FWIW, the Chinese steel industry is a prime example of failed communism. They determined how many stell mills to open by communist fiat in their economic planning.
After they were opened, they realized they had built between 3x to 5x too many mills for their demand.
When they allowed the mills to produce, they drove the market prices down below the cost to produce steel.
Their communist committees would then decide which ones could operate, and cease production in the other 4 mills, now creating shortages to drive back up the market prices.
The response time of the policy decisions was greater than the market responses by months to years.
2 years ago they were supposed to close about 2/3s of their plants to solve the problem. Looks like they changed their minds again.
To make the problem worse, when operating, the competition was so fierce, their QC became useless, and their steel was frequently grossly substandard. Reliability was absent.
There are many industries who now rule out the procurement of any Chinese made steel, when QC is requisite.
Tax/tariff might not be such a bad thing in this situation.
Well, that’s one that President Trump won’t have to wast time on.
Yup, there’s blame to go around in plenty. The idiot management of the US steel makers contributed to their own downfall - while nicely illustrating another downside of tariffs. When a domestic company gets a protective tariff erected in its favor, they sometimes assume that said tariff will be permanent and slack off instead of becoming more competitive.
The famous Harley Davidson tariff requested and passed by Ronald Reagan, for example, is currently one huge reason why Harley is disintegrating financially today and desperately trying to attract younger buyers. You see, Harley didn’t bother with modernizing their offerings after the tariff was passed - they didn’t significantly upgrade their engines or frames or anything for years and years and years after. Instead, they came up with radically successful new marketing techniques appealing to patriotism, heritage, traditionalism, and fans of old biker movies to enable them to sell the same old 1970s uncompetitive garbage on into the 2000s with only grudging revisions and minimal updates overall.
The problem is that now that all the Baby Boomers to whom that marketing appealed are getting to the age where most of them can no longer ride motorcycles, they’ve discovered that the next generation of potential customer simply isn’t interested in what they offer because it’s so old, antiquated and primitive by the standards of the rest of the industry. Nostalgia marketing doesn’t work with them because they’re not old enough to remember the 1950s and 60s when Harleys were actually reasonably competitive. There are other, better American bikes out now (Indian, for example) that 1. Are better in pretty much every way and 2. Actually use mostly American parts, unlike Harley’s current attempts to keep themselves afloat with Chinese parts so patriotism isn’t an effective marketing tack either.
Harley recently introduced a copy of the 1982 Honda Shadow 500 and 700 in order to regain customers and get non-Boomers interested. These are some of their most advanced machines featuring those exotic 1980s technologies like “water cooling” and “integrated transmission”. Yes, that’s right, Harley has *just* reached the point that the rest of the industry was at more than *34* years ago.
As the median Boomer age passes 80, I wouldn’t be surprised to see Harley go bankrupt - and a lot of it traces back to the Harley Tariff.
The unions played a part in most of our lost manufacturing jobs.
I remember all those “made in America” signs in Wal-Mart.
This is the crux of the free trade issue. Dumping is not free trade, it is economic warfare.
We export over $2T in goods and services each year. Someone's buying, and American producers see Asia as their great new growth opportunity.
Do you really want to shut it down?
If this gets out of hand you’ll have a deepening worldwide Depression followed by a real shooting war — probably with nukes this time. BTW, I think we’ve been in a Depression since 2008.
Who has the most to lose in a trade war? The people with the giant deficit (us) or the people the giant surplus (them). They will back down.
I’m old enough to remember when you bought something it both worked and lasted. Unlike the single use crap prevalent today.
Also remember how free trade was sold.
Like when I need my mind to be vaporized with BS.
Steve Keen's work on Debt Deflation is far more useful. You'll only need a sophomore course in Ordinary Differential Equations to follow it, but it clearly shows the limit cycling that we are experiencing as a result of non-linear responses to feed forwards in our economy, inputs which have no rational basis and actually drive the system unstable.
But hey, why bother you with facts? You got tabloid economics on yer side! Almost as good as Marxist twaddle!
Dr. Walter Edward Williams,the John M. Olin Distinguished Professor of Economics at George Mason University, is not your run-of-the-mill commentator. If you wish to dismiss his premise, why not refute it with facts instead of ad hominem attacks?
Think I just did binky. Perhaps you're mathematically challenged? Nothing a good undergraduate Controls course couldn't solve, but since you probably don't have the prerequisite's anyway, what's the point?
Lemme know when you can dispute Dr. Keen's work, which is far, far ahead of the lightly algebraic and primarily anecdotal ( I hesitate to call it "empirical") claptrap that passes for graduate education in "economics" in the U.S.
“My lovely wife was born in Shanghai, and I find this kind of language very offensive!”
My apologies to your wife. As George Carlin says they’re only words, it’s the context. I was making reference to the Chinese “leaders,” and in that context, to my mind, the perjorative term fits. BTW my oldest daughter is married to a man who is half-Japanese, and he’s about the nicest fellow you’d meet.
“The unions played a part in most of our lost manufacturing jobs.”
Actually the unions only did what unions do, “beat the drum” for unwarranted pay increases. As I see it, it was the Steel Industry’s business “leaders” who capitulated to their demands causing their own demise. In that regard they mirror the domestic auto industry, only they tanked earlier and didn’t get a government bailout.
>I also hear where obama will be lowering the taxes on U.S. Steel manufacturers to 15% and removing 132 EPA regulations that provide negligible benefits to the environment but cost industry over 1.2 billion a year.
You mis-spelled ‘Congress’.
I’m sure it’s in the same desk drawer as the one where they remove the 180+ duplicate/over-lapping ‘Federal aid’ programs/departments (you remember, that report from a short few years ago, right?)....
Sure they’ll pick it up, right after the F&F, IRS, Benghazi hearings/findings.
>But, what about the jobs of those who use steel? Those that make washing machines, and cars, and buildings? Because it cost more to buy these things, demand for them goes down. And jobs are lost. I don’t care which way you decide to go on these matters, I just don’t want you to have your head up your @$$ when you make the decision.
Damn. I didn’t know steel was a ‘one-time’ use product! Here I was, ignorant, thinking, “Why not recycle?”.
See, you learn something new, everyday!
>To be fair, you’d be correct - if our government hadn’t waited so long that our domestic steel industry is all but dead. The problem now is that there’s no way in hell our domestic steel producers can scale up to meet such demand in anything like a timely fashion so instead prices will go up and we’ll still be buying Chinese steel.
Prices only go up to, and until, the point where it becomes viable to re-enter the market (competition).
Biz don’t just sit on their @sses going, ‘Whoa is me’. They will fill any vacuum created to make bank.
Course, it would help if (R) gets govt out of the way; but maybe I should type when (T)rump gets govt...
We both lose. Trade is not a zero-sum game. The way to go about this is to deregulated and insentivize manufacturing here. But the greenie’s on the Left don’t allow that.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.