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.
Actually, they have it down. Somewhere along the line the Chinese hive overlords have seen a strategic benefit to subsidizing the creation of excess manufacturing infrastructure in their collective while our quasi freely elected officials have actually seen it fit to not only subsidize, but to go into debt to create a sea of whiners, moochers and parasites.
From the ground up the infrastructure of China is oriented towards militaristic expansion of ideology toxic to human freedom and individuality. I’m all for free trade between free and consenting individuals but to even hold the discussion that trade is somehow “free” between a constitutional republic and a system where every brick laid was placed upon the rotting corpse of an unwilling participant in collectivist evil is bullshit.
American economic might is the victim of a cosmopolitan mentality which favors “The World” over our nation.
While that's not going to happen because of the way it works in China, protectionism lets our domestic steel industry loaf along with outdated manufacturing processes. The same argument was made with Japanese steel back in the 1960's. Japan replaced their plants because we bombed them into dust during WWII. They replaced them new technology while the US limped along with 1890's furnaces. Maybe it's time for the US to get competitive again and for the steel unions to start asking for realistic wages given foreign competition instead of US consumers being asked to subsidize an inefficient industry.
What should piss you off even more is: Guess who keeps the tariff and import taxe revenues, but did absolutely nothing to earn them, yet you pay higher prices?
Free Traitors™ like Jacoby are helping them every step of the way.
You got the idea you see different causes for our current mess.
So corporations can pocket the margin? F that.
A lot of the ChiCom steel exports is not up to snuff. It’s chemistry does not match the accompanying paper work. In other words the heat numbers are faked.
Excise taxes funded a large amount of the entire federal budget (up to 95%) until the 1910s. Tariffs had almost no impact on the federal budget (only 8 - 15% total federal income) during the 1930s:
https://en.m.wikipedia.org/wiki/Tariffs_in_United_States_history
Tariffs allowed businesses and individuals to not have income tax for 120+ years.
All taxes are penalties. Is it better to tax income, sales, property, or imports to least disincentivize our economy? This is not a hard question to answer.
The Smoot-Hawley meme is a contrived Free Traitor™ propaganda fantasy. So you want me to believe some obscure trade bill gets the blame for the Great Depression? Goebbels would be proud. Free Traitors™ need to either become Americans again, leave or go to the gallows.
That worked well on Jap cars didn’t it? In the 70’s Cheap rusty jap cars sold cheaper then cheap rusty US cars. The answer of course was tariffs and import restrictions. The result was superior Jap cars with tariffs.
Completely overlooked, since liberal and dems love to tax things and empower unions, was how energy and environmental laws drove the car business to the Japanese. Our country beat the drums of unfair competition, Governemt subsidies, the menace of Japs taking over our country, etc.. But is was our own idiotic policies that did it.
China is not the problem. Coke is a reguirement for steel making. Try building a coke plant in this country. How do you make steel without coke?
I am yet to be convinced that US industry freed from the heavy hand of government taxation and regulation cannot compete against anyone.
What if that other country decides (for the sake of argument) that the carbon content of steel is cheaply raised by throwing live dissidents into the melt?
How someone gets made into a corpse in a regime 180 degrees from the founding ideals of the republic doesn’t really matter, you’re dead if you were worked to death in a “great leap forward” building steel mills in reality or if you were “tossed in to raise carbon content” in a hastily constructed analogy.
One of the reasons the Soviet Union lasted so long was due to the wests bankers and power players ameliorating conditions that would have otherwise been unbearable to the populace in the long run. We loaned and gave them money and food, and like China, conveniently “lost” technology to them that facilitated their evil existence.
It’s ridiculous to have an argument about “free trade” with an entity that considers and plans with the idea that their “trading partner” is the enemy and whose society is built upon a mountain of corpses cemented with human misery.
Arguing about the necessity of both tariffs and protectionism in general at this point is like arguing whether to put a tourniquet on a bleeding soldier during the civil war and pausing to contemplate the reason for the war, discussing states rights vs slavery. Just rendering first aid doesn’t solve the root cause of the problem which is the war. What?! Just put the tourniquet on the poor guy before he dies. We will discuss the reasons for the war later.!
The same Free Traders lament the budget deficit care not one wit about trade deficits.
I did some shopping at The Home Depot yesterday, looking at all those beautiful tools of every description. Hardly any were made in the United States, most were made in China that I checked, which is something that should warm the hearts of plenty of posters on this site. They were all American companies, by the way.
But why give an over arching all intrusive fascist government who creates the problem the power to impose balance by levying even more taxes and regulations?
Reform is necessary. We have, over the last 60 years, suffered from bad government. A mob mentality seeking wealth distribution by force has seized the public. We are like Athens and Rome in their decline.
But please do explain how a tariff on Chinese steel will help build coke plants in the US.
What the tariff will do is cause use steel fabricators to pay Union inflated prices for steel. That will in turn cost more jobs in steel fabricators than those lost in basic steel making. There is similar situation in sugar vs the confectionary business.
No they are not American companies. There are importers, warehousers and marketeers. But they are not manufactures but just fronts for the ChiComms..
Seems all Free Traitors™ defend the status quo and the income taxes. The Father of the Country was a protectionist.
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