Posted on 02/20/2018 5:01:29 AM PST by reaganaut1
The economy is picking up steam, but President Trump could reduce the benefits of his tax cuts and regulatory rollback with protectionism. This risk became more serious after the Commerce Department on Friday recommended broad restrictions on aluminum and steel imports that would punish American businesses and consumers.
Last year the President directed Commerce Secretary Wilbur Ross to investigate whether steel and aluminum imports threaten national security under Section 232 of the Trade Expansion Act of 1962. Commerce concluded that they do and has proposed quota and tariff options to mitigate the putative harm. But the evidence in Commerce’s reports belies this conclusion. And the wide-ranging economic damage from restricting imports would overwhelm the narrow benefits to U.S. steel and aluminum makers.
Start with national security, which Commerce construes broadly to include “economic welfare.” There’s little risk that the U.S. couldn’t procure sufficient steel and aluminum for defense even during a war. Defense consumes 3% of U.S.-made steel and about one-fifth of high-purity aluminum. U.S. steel mills last year operated at 72% of capacity while aluminum smelters ran at 39%. Both have ample slack to raise production for defense and commercial demands.
Commerce says only one of five aluminum smelters in the U.S. produces the high-purity metal required in defense applications. “Should this one U.S. smelter close, the U.S. would be left without an adequate domestic supplier for key national security needs,” the report says. But Commerce also notes that “Canada, which is highly integrated with the U.S. defense industrial base and considered a reliable supplier, is the leading source of imports.”
(Excerpt) Read more at wsj.com ...
Because globalism has been so good for American heavy industry for the past 50 years.
Spare us the bulls*** WSJ.
The only workers within US borders the WSJ has ever cared about are the illegal cheap-labor ones.
“when other countries retaliate”
Other countries already have tariffs on us.
Yeah I have to agree, the WSJ is not a conservative news outlet. Instead they always push the narrative that supports their globalist benefactors.
Globalism is the stuff for science fiction and socialist tomes.
Tariffs are the best form of defense from dumping. China has been dumping to undermine our steel and aluminum industry. The labor unions have also been a strong impetus to close factories. RIght to work laws combined with tariffs should cause a rebirth of American manufacturing.
Of course, a lot of labor union bosses and drones will suffer...as will Democrat Politicians.
Bump!
In addition, I believe America needs these kinds of industries to be in place and reduce America’s dependence upon obtaining these supplies from economic & military adversaries.
I think I smell spin. Stories like this are put out for a reason and that reason is not to educate us.
There may be a small increase in prices. With better paying jobs and wage growth that will be absorbed. There will be growing pains as American industry tools up.
America was looking at a future as a service economy. We have renounced that path. The only thing that remains is making the path towards a strong manufacturing base the most efficient and least disruptive it can be. These doom & gloom stories always assume that there is no ability to adjust as situations develop. POTUS & Wilbur have been discussing quotas before tariffs kick in and reduction on tariffs for NATO allies. There is room for fine tuning as our manufacturers expand, hire & train.
Commerce says only one of five aluminum smelters in the U.S. produces the high-purity metal required in defense applications.
Could there be a reason for this?
Maybe other nations subsidies their aluminum and steel industries while placing tariffs on American steel and aluminum.
I am not an expert in any of this but wouldn’t it be to our advantage (in time of emergency) to have our own production of these vital materials.
And to be honest I would rather pay a little more for American products then cheap Chinese junk that breaks within months of buying.
The globalists at the WSJ also think that the invasion of illegal aliens is a benefit to America. Outside of Hollywood, they are the most clueless bunch in the country.
The WSJ is not to be trusted on immigration or global trade.
Here is the problem with steel commodities; We can’t produce enough to export. We no longer have the capabilities or resources. So for THIS trade deal, we don’t have leverage (unless there is a way to parley this with something else that has not been reported).
The only scenario I can see is the price of metals going up. As it stands right now, new commercial construction costs are rising rapidly. The construction industry is now in a boom. By the end of this year, new commercial construction could be cost prohibitive and blunt the growth of the economy. The construction industry is in a hiring frenzy right now. If the costs get too high (as they did in 2009), the industry will cool, businesses will stop building and stop new hiring.
US independence in critical industries is a basic security issue. We must have the capacity to produce our minimum defense AND economic needs. A bit more than that would be better.
The world is dumping metals and killing our industry. China sends metal to many countries and has them pretend it came from that middleman. They do this to skirt our law.
Wilbur Ross, a financial genius, says this is fact.
We will prosper more having those plants and jobs here. Wages will rise, jobs will be created, and the offending nations can remove any tariffs simply by discontinuing their illegal practices
Logistic costs very often out-weighing concerns of labor costs. Tariffs force the decision to move raw material processing and manufacturing closer to the end user. This may be the right time for the tariff...
“If the costs get too high (as they did in 2009), the industry will cool, businesses will stop building and stop new hiring.”
—
Or, if there is a demand, they might invest more to keep building to meet the demand.
Technically, they’re right. If you close off foreign imports, then the users of the metals will pay more, driving up their costs and prices - driving down sales and jobs.
But it’s not all about jobs, it’s also about NATIONAL SECURITY. We need to keep some semblance of manufacturing in this country. I don’t like the idea of outsourcing all (or most) of our manufacturing capability.
As to jobs, Trump is taking care of those impacts on the other end, by deregulation and many other reforms.
These tariffs can certainly raise the costs of raw materials in the construction industry. But who knows, they may be artificially low now anyway because of predatory pricing on steel and aluminum? The construction industry already benefits from artificially low wages because of there persistent and widespread use of illegal workers.
Regardless, we need basic industries in this country. These are among the most basic. Additionally, these tariffs protect not only these industries, they send a message that we will protect our other basic industries as well. A good example of a tariff that did this was the so-called “Harley Davidson tariff” 20 years ago or so.
We put tariffs on softwood lumber coming out of Canada earlier this year. Prices went from $350 to now over $500.
http://www.cmegroup.com/trading/agricultural/lumber-and-pulp/random-length-lumber.html
But employment in wood products manufacturing was lower in Jan 2018 than in January 2017.
https://www.bls.gov/news.release/empsit.t17.htm
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