Teeing Up Trump Tariffs (higher taxes on U.S. steel consumers)

Wall Street Journal ^ | April 20, 2017

[reaganaut1]

...

Take steel, a Trump preoccupation. One reason for exceptions is that domestic manufacturers have limited capability to produce steel of certain strengths, thickness and flexibility. Most higher-strength steels used in thin-walled pipelines are made overseas. Retrofitting plants to produce a type of steel for one or two projects could delay construction and increase the cost. More U.S. workers would have to be retrained, which may not be practical in the short-term. So contractors often have no choice but to import foreign substitutes.

The American Petroleum Institute chronicled some of these supply challenges in its response to Mr. Trump’s earlier executive order on domestic sourcing for pipelines. On one pipeline project, only five domestic companies were capable of making a particular grade of steel, but none could produce the required quantity, accommodate the pipe diameters and meet the customer’s delivery schedule. Only one U.S. pipe mill bid on another project, and its bid was double that of two international suppliers. It also couldn’t meet technical and safety requirements.

Thanks to the North America Free Trade Agreement, Canadian and U.S. companies can integrate their supply chains. Many steel makers operate subsidiaries in both countries. American raw exports—e.g., iron ore from the Rust Belt and coal from Appalachia—made up 85% of Canadian steel inputs last year, and some were re-imported. Many U.S. pipe mills use Canadian steel slab and coil made from American scrap metal.

Mr. Trump says Nafta is “a disaster,” but the reality is that cross-border economic integration improves efficiency and reduces costs for federal contractors and taxpayers. It also supports jobs in U.S. manufacturing, coal and steel.

[cba123]

Basically, yes.

That is what I am saying. They are very globalist.

They are not literally lying, but that is their agenda.

Big time.

[Lurking Libertarian]

The big government types really don't understand that corporations do not pay taxes - they are passed on to consumers.

Not when a competitor is selling cheaper.

[central_va]

Big government types love income taxes and hate tariffs. Small government nationalists like the opposite.

[Lurking Libertarian]

Tariffs are the one constitutional power (unamended) that the federal government has to raise money, and up until the last century they were how the Federal Government was funded.

Nope. The Constitution gave Congress the power to "lay and collect Taxes, Duties, Imposts and Excises." They didn't use four different words to authorize only one kind of tax.

During George Washington's administration, the federal government imposed a stamp tax, requiring a federal tax stamp on everything from real estate deeds (meaning the federal government was taxing sales of homes and farms within the states) to playing cards. James Madison's administration funded the War of 1812 by a federal tax on bedroom furniture-- there were really federal tax collectors who went door to door in every state and counted how many beds and dressers you had. Lincoln's administration funded the Civil War with an income tax, whose constitutionality the Supreme Court upheld before the 16th Amendment.

As the Supreme Court observed in 1937, our "forbears knew more about ways of taxing than some of their descendants seem to be willing to concede."

[jospehm20]

I don’t believe much that comes out of the globalist, cheap labor express WSJ. That being said, our ability to make all kinds of our own steel is not just economics, it is a strategic issue also. If it costs a bit more it is worth it.

[jospehm20]

I disagree. They do understand that very well. They just do not care.