Posted on 05/22/2016 10:35:05 AM PDT by Kaslin
China produces more than 820 million tons of steel per year, of which about 100 million tons are exported and sold at a discount overseas. Only about 3 percent of those exports go to the United States, but American steel producers bristle at the competition. So in keeping with the time-honored practice of the US steel industry — "the backbone of American manufacturing," as it proudly calls itself — domestic producers are rising to the challenge.
Are they doing so by making their operations more efficient? By improving the quality of the steel they sell? By cutting their prices to maintain market share in the face of a tough competitor?
Not exactly. They're getting the federal government to punish American consumers.
"The United States on Tuesday said it would impose duties of more than 500 percent on Chinese cold-rolled flat steel, widely used for car body panels, appliances, and in construction," reported Reuters. "The Commerce Department said the new duties effectively increase more than five-fold the import prices on Chinese-made ... steel products."
American steel producers complain that their counterparts in China are "dumping" cheap steel on the US market, benefiting from Chinese tax subsidies to undercut other companies' prices. Because of these "unfairly traded imports," lament Thomas Gibson and Chuck Schmitt of the American Iron and Steel Institute, some US steel mills have had to be shuttered, and 12,000 steelmaking jobs were lost during the past year. p>It is always painful when workers are laid off and once-thriving facilities have to be closed. But the steel industry is far from unique. The US economy creates and destroys millions of jobs every year. No industry is exempt from the upheaval, retrenchment, or losses caused by changes in technology, trade, and consumer demand. The digital revolution has decimated once-formidable companies and careers in fields as different as journalism, instant photography, tax accountancy, and recorded music. Would anyone argue that the government should have suppressed the internet in order to preserve the employment and production patterns of the 1980s? Should the Commerce Department have imposed taxes of 500 percent on e-mail services and word-processing software so preserve the viability of typewriters and stenographers?
For that matter, as economist Don Boudreaux has remarked, should the polio vaccine have been taxed into unaffordability for the sake of all the jobs that were once linked to the care of polio victims?
Sooner or later, competition and disruption challenge every industry and market. The pain they can inflict is real, but far greater and more enduring are the benefits and prosperity they generate. American steel mills are understandably chagrined that competitors from China are beating them on price. But cheaper steel also means more affordable cars, homes, and appliances for tens of millions of Americans. It means more employment at General Motors, Boeing, and John Deere. Jacking up steel prices through "antidumping" tariffs and other protectionist measures makes life more expensive for all of us, and jeopardizes far more jobs than it saves.
There is nothing nefarious about Chinese mills selling steel at bargain prices in the United States and other foreign countries. Companies routinely mark down the price of their merchandise — in clearance sales, as loss-leaders, for promotional purposes, or simply in response to local conditions. The Commerce Department, and the US producers clamoring for punitive tariffs, claim that Beijing is subsidizing Chinese steel exports. Even if that's true, why should Americans object? We aren't being harmed by China's gift — we're being enriched. It is the federal government and its tariffs that harm us, by deliberately making steel more expensive and thereby making US consumers poorer.
For years, American steel companies have bellyached about foreign competition, and for years Washington has responded with quotas, tariffs, "voluntary-restraint" agreements, and other restrictions on free trade. The Obama administration, like the Bush 43, Bush 41, Reagan, Carter, Ford, and Johnson administrations before it, has yielded to the industry's unreasonable demand for more trade barriers and corporate welfare. It's a pity. Nucor, Steel Dynamics, United States Steel and other American producers should be told to man up and face their competition in the marketplace. They shouldn't be rewarded for hiring lobbyists and publicists to wangle special-interest privileges that no business has a right to claim.
It is irrational to attack foreign exporters for not charging us higher prices. And it is preposterous to whine that Chinese steel is being "dumped" on the US market. Steel that enters the United States has been sold by a specific Chinese producer and bought by a specific American buyer. The transaction is voluntary, the price has been mutually agreed to, and the benefits ripple outward through the entire economy. If domestic steel producers want that buyer's business, let them earn it the old-fashioned way, by outperforming their Chinese counterparts on price and quality. Protectionist tariffs are for crybabies, not for the backbone of American manufacturing.
So China can dump until or factories close. Then rack up higher prices. Townhall - Brilliant /s. Why did we have antitrust laws in the USA.
No need for tariffs when countries can employ unfair trade practices. Soon we will all be eating cricket burgers
Since I speak plain and simple English; I’ll presume you are able to comprehend it.
My reference to Tariffs, beginning in the Civil War era, ranged from Morrill in 1861 to Smoot-Hawley in 1930 and encompassed some dozen major Tariffs; and I certainly did not charge Smoot-Hawley w/sole blame.
Obviously, the prime catalyst for the Depression was the catastrophic economic impact of the Great War on Europe. Nevertheless tariffs exercised a powerful cumulative role, a fact both Fischer and Keynes pointed out. Doubtful you ever heard of either of them.
Your reference to Goebbels is an ignorant slander typical of the pretentious buffoons who inform themselves from junk sites infested w/assorted like minded hysterics, who insist they own the truth. Why of course they do!
South Carolina didn’t think so and late neither did most of the south.
Imports are mostly handled through brokers who prevent that from happening by making sure the seller and uncle sugar are both paid by the buyer.
If the importer has paid for the goods but then for some reason refuses to pay the tariff then yes you are correct the goods will be impounded and sold. But if the goods are not paid for then there is no way to collect the tariff. The goods are still owned by the seller.
But no one would seek to avoid a tariff by bringing goods before customs would they? No they avoid tariffs by avoiding customs and that can them sent to jail. One thing is for certain if you refuse to pay your taxes men with guns will eventually take you to prison.
The name they use are old-time American companies.
I think the U.S. steel producers should argue this on an environmental platform. It should be a requirement that imported steel be manufactured in a facility with equal or better pollution standards as their U.S. competitors.
Wealth is only created by the transformation of raw materials into usable goods.
Not anymore I guess.
We are going to make an app worth $1.99 instead. Big economy booster.
If tariffs do not cause a decrease in imports, that is restrict them from coming in, then what is they are supposed to do? Simply raise revenue?
Honest question, are you familiar with the term "dumping"?
Buy a Daisy Red Ryder bb gun. No where on the packaging is it marked made in China. But it is. The marking is stamped on the gun itself, very tiny writing.
“The print is tiny or non existent.”
Correct, and if it is American made, it will be emblazoned very prominently, along with the stars and stripes. But, you don’t see that very often.
In our dealing with Japan in the 70’s and still today we don't have “free trade” we have government subsidized trade.
In our dealings with China we don't have “free trade” In this country we tax a business 35% and then we allow consumers to buy products that are subsidized by that amount and more by a foreign government.
There is no country in the world that can compete with the US factory worker for output per hour, we lead the world but the rest of the world is not taxed at 35% so there is no way we can compete we have to add 35% to our prices right off the top.
Anti-Dumping laws are already on the books but the last 3 administrations have chosen not to enforce them, it's a shame.
If we were smart in this country we would remove all taxes from business, business does not pay the tax they raise their prices and the consumer pays the tax in the form of higher prices.
If we get rid of the business tax and enforce anti-dumping laws (government subsidized manufacturing) we would lead the world in manufacturing, again.
“Sounds like tariffs are restrictions. If tariffs do not cause a decrease in imports, that is restrict them from coming in, then what is they are supposed to do? Simply raise revenue?”
Yes, but in a way that encourages US employment.
“But no one would seek to avoid a tariff by bringing goods before customs would they? No they avoid tariffs by avoiding customs and that can them sent to jail. One thing is for certain if you refuse to pay your taxes men with guns will eventually take you to prison.”
The beauty of tariffs were that it was comparatively easy to note ships and tax their cargo. This is much harder with sales, use, or income taxes, but easy again with property and inheritance.
Tariffs are the easy way to tax, and that was how our founding fathers saw it, too.
Businesses and individuals had no income taxes to pay for 120 years, so they could sell like crazy with no penalty, but they paid a penalty when buying foreign-made goods.
You don't think moving back to no income taxes is a good idea, EconJack?
spoken like a true Etrog
—”Chinese steel benefits from cheap labor which makes an unfair price differential. A tax can balance the price differential and then forces the Chinese manufactures to compete on the merits of their metal versus our metal. “
You don’t realize it, but you sound like a LIBERAL: “It’s unfair!” Waaaaa!
No it’s not.
You would prefer to conveniently ignore the fact that labor is much cheaper in China than here. If so, then we import cheap goods and creatively figure out what we can sell to them at a higher labor rate. Cheap goods for us are a boon to the economy.
HOWEVER, it means the labor force has to adapt as we continually have over the centuries. In economics, it’s called “creative destruction.”
You would probably be complaining about the invention of Cotton Gin that put thousands of workers out of work: “It’s not fair!”
Anyhow, trade is one place where Trump needs to be schooled by the famous free-market economists like Von Mieses and Milton Friedman.
I have faith he’ll hire some smart economists to guide him away from foolish trade protectionism. It’s one thing to negotiate competitive deals, but it’s another to start taxing and trade wars.
“I have faith he’ll hire some smart economists to guide him away from foolish trade protectionism”
I hope you are correct but look how many folks even here want protection from competition. They know instinctively that competition would improve schools but can’t make the leap to manufacturing.
If somebody wants to sell steel at half price we should buy as much as we can use before the poor dumb suckers realize they have made us rich.
Creative destruction = road to socialism.
I hope the economic douche bags that have been running this country into the ground get completely ignored by Trump. God help us if he starts listen to people like you.
Globalist Free Traitors™ only have themselves to blame for the rise of socialism in the USA.
Cuckservative ping.
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