US reaches deal to lift steel and aluminum tariffs on Canada and Mexico

CNBC ^ | 18-05-19 | Kayla Tausche

[Monrose72]

The United States has reached a deal to lift steel and aluminum tariffs on Canada and Mexico, removing one key obstacle to passing updates to the North American Free Trade Agreement. In a joint statement Friday, the Canadian and American governments said the U.S. will scrap the metals duties within two days. Canada will remove tariffs levied on American goods in retaliation for the steel and aluminum duties. The countries will also: Drop all pending litigation in the World Trade Organization related to the tariffs

[SaxxonWoods]

Before a deal, during negotiations, it’s Trump doing this and Trump doing that and messing everything up.

After the deal, it’s “The USA makes deal”.

[rurgan]

The media and some conservatives criticize Trump on his tough stand on China.

Almost everything in my house is made in China.

Anyone think that one country can survive if another country makes everything they use?

I agree with Trump . China has been waging a trade war against the USA for decades.

He needs to watch Mexico because China will dump steel into Mexico to dump it in the USA by way of Mexico.

[Sequoyah101]

Trump gets all the blame and NONE of the CREDIT. Figures.

This tariff was no big deal really. I built a steel barn in the midst of it last fall. The price of steel did nothing to change my plans. It was an increase but not enough to delay what I wanted to do.

All the wailing was much ado about nothing. Probably much like the chicom mess right now.

[Alberta's Child]

The strongest opposition to these tariffs came from U.S. manufacturers that use steel and aluminum in their products. Imposing tariffs on those raw materials was completely at odds with what the U.S. should be trying to do to support and grow its manufacturing base.

In some cases the tariffs were downright idiotic. Pennsylvania Sen. Pat Toomey railed against them because they completely undermined manufacturers in his own state -- many of which import steel and aluminum from Canada and then export finished products like railroad equipment and aircraft parts back north.

[mowowie]

Hopefully there is a contingency plan making sure they are not a middleman for cheap china steel and ALUMINUM.
Look up Chinese Aluminum waiting in mexico in massive amounts..

[Tallguy]

Trust me, the steel tariffs hit industry hard and caused a perceptible dip in manufacturing output this spring. I work in metal fabrication and my price quotes were only good for 24-hours and the mills reserved the right to jack the price on you unilaterally at the time of order. Can’t engage in commerce that way. Everything slowed down. Aluminum was the worst. Stainless steels were pretty bad too.

Steel building suppliers are sitting on mountains of cheap roll-formed carbon steel. They are more likely to keep prices low just to move inventory. A lot of their material is recycled scrap. Low-grade stuff like ASTM A36.

[Repeat Offender]

Pennsylvania Sen. Pat Toomey railed against them because they completely undermined manufacturers in his own state -- many of which import steel and aluminum from Canada and then export finished products like railroad equipment and aircraft parts back north.

It's thinking like yours and Toomey's that's the reason the steel mills are closed and bulldozed. I wonder how many underemployed folks in PA would've loved to still be working in the mill?

I know my uncle would.

[Chode]

so long as they aren't just a trans-shipping point for Chi-com steel OK, otherwise HELL NO!

[Alberta's Child]

I don't think you really know all the reasons behind the closure and bulldozing of those steel mills. It's far more complicated than you might think.

These tariffs are a perfect example of what drives business leaders to make decisions about their companies. In this case, what makes the tariffs so idiotic is that they are imposed on raw materials like steel and aluminum, but not finished products like cars and aircraft parts.

Imposing tariffs on raw materials without having any tariffs on finished products gives a U.S. manufacturer a huge incentive to produce its steel-based and aluminum-based products outside the country. When you put a tariff on Canadian steel, for example, a company like Ford can save a lot of money by simply producing cars in Canada instead of the U.S. The raw steel has a tariff on it, while the steel in the car does not.

So in this scenario, the U.S. not only doesn't produce the steel ... it doesn't produce the cars made out of steel, either.

[Alberta's Child]

You might be interested in this long video of the history of Bethlehem Steel:

Bethlehem Steel

The quality of the video isn't great -- it looks like it was originally recorded on a VHS tape, then converted to digital format.

It does a good job of describing all of the things that led to the collapse of the company in 2001. It's very even-handed in its criticism. The company fell apart because it was mismanaged into oblivion, and there's plenty of blame to spread around -- management, labor, and even government. The 1959 nationwide steelworkers strike was the beginning of the end for the entire industry.

There are some interesting bits of information they present shortly after the 30:55 mark:

1. In 1957 the company employed 165,000 people in the U.S. and produced 23 million tons of steel. That's the production level for the entire company. At that time the company had 10 plants, 13 fabricating mills, and 10 shipyards.

2. Compare that to one of the most modern steel mills in the U.S. right now: the Calverton, Alabama mill that was constructed around 2010 and is jointly owned by foreign steel giants ArcelorMittal (Great Britain) and Nippon Steel (Japan). That one plant alone employs 1,600 people and has the capacity to produce more than 5 million tons annually all by itself.

"Free trade" didn't destroy the steel industry in Pennsylvania. Modern technology and advanced steel production methods made those mills obsolete.

[Sequoyah101]

Fair enough. All i deal with is structural.

Tarriffs hit prices hard when i used to buy lots of oilfield high end tubulars.

[Tallguy]

I have the same concern. The Chinese have been known for forge origination documents. A lot of the stuff my company manufactures requires that we have complete traceability. Mill test reports, Melt numbers, etc. If the Chinese begin a program of phoney MTR’s to hide the origination of their material, traceabilty goes out the window. When something fails because a component fractured, all that stuff comes into play in a court case so the “paper trail” has to be correct.

OTOH, it should be detectable. The Chinese can’t just wash their metals through any old country... it would have to look like it came from a country that has a significant manufacturing capacity in that product range — like South Korea, for instance.

[bert]

The reason for the tariffs was to shut off steel imports of steel actually produced in China.

Mexico and Canada have obviously prevented the export of steel originally ladeled in China.

Wheat has been separated from China chaff

[Chode]

100%... i've worked for DoD suppliers with the same requirements

trans shipment is a real problem, here's 850,000t/$2BILLION at just one place in mexco

and when cast aluminum sits around tooo long it changes

Chinese Aluminum Giant Is Tied to a $2 Billion Mystery Mexican Stockpile

http://fortune.com/2016/09/09/chinese-aluminum-giant-is-tied-to-a-2-billion-mystery-mexican-stockpile/

[FtrPilot]

I believe the reason for steel and aluminum tariffs is to jump start US steel and aluminum manufacturers. For our security, both economic and military, we must have a domestic source of steel and aluminum.

I believe that POTUS Trump lifted the steel and aluminum tariffs on Canada and Mexico because they have implemented controls to prevent China, or any other country, from dumping steel or aluminum in the U.S. through Canada or Mexico. If they are caught, the penalties would be severe.

I suspect the production costs of steel and aluminum in Mexico and Canada are aligned with production costs in the U.S.