Posted on 09/10/2018 8:36:08 AM PDT by reaganaut1
When President Trump promised to make America great again, the employees at Mid Continent Nail in Missouri probably didn’t expect he would put them out of work. But the steel tariffs imposed in June have the company hanging by a thread.
Mid Continent is the largest nail manufacturer in the U.S. and has been in Missouri for more than 25 years. It had 500 employees at its Popular Bluff plant and was the second largest employer in the small town before the Trump tariffs hit.
The trouble for Mid Continent is that foreign producers making nails abroad use low-price steel and export their production to the U.S. They can offer better prices than their U.S. rival because, as Chris Pratt, operations general manager for the plant, explained in a Journal op-ed last month, the tariffs pushed costs up “overnight” and made the company uncompetitive. “Orders dropped 70% in two weeks, and our workforce shrank from 500 employees to 370,” he wrote.
Mid Continent is seeking a tariff exemption from the Commerce Department on grounds that it can’t find enough of the steel wire it needs in the U.S. Nucor Corporation, a U.S. steelmaker that is reaping profits from the tariffs, objected to Mid Continent’s request and said it could supply the steel wire. Mid-South Wire Company said the same. But last week CNN Money reported that Mr. “Pratt said that neither company on its own could supply enough raw material.”
(Excerpt) Read more at wsj.com ...
Trump should add that tarriff on imported chinese made final products.
But the bottom line is China can make steel cheaper because of UNION REGULATIONS and labor costs.
Plus they leap-frogged our technology,
Mid Continent is owned by Deacero, a Mexican company.
Which is happening here:
a. Nail customers are doing without. Not plausible.
b. Nail customers are delaying their purchase in hopes that the trade war ends, and will make up for their lower inventory by buying more nails in the future. OK, so you get more sales in the future.
c. Foreign competitors, lacking tariffs, are growing their market share. This would be a problem.
d. A domestic competitor has NOT raised its prices, and therefore is growing its market share. OK, so the domestic market has only shifted towards the stronger competitor.
Something doesn’t make sense. 2 steel companies they can supply the steel wire, but the nail manufacturer says they can’t.
Sounds like the company has some other problems it don’t want to talk about.
A-ha,
e. a foreign company is lying to the press, seeking to undermine a policy which hurts its other subsidiaries.
Should’ve figured. Amazing the presstitutes couldn’t uncover that one.
Chris Pratt, general operations manager...?
Geez, he screwed up Isla Nublar, too!
Some of us who are big Trump supporters have pointed out the idiocy of imposing limited tariffs on select products and raw materials. This case illustrates the problem perfectly.
For example, everyone, including the beleaguered American auto industry, has to pay more for steel because of the Reagan administration's restrictions on imports. Even the steel industry is hurt because artificially high prices stimulate the search for alternative materials.
Why is that?
Steel is not penny-ante stuff
I assume they can supply the steel wire at the higher, tariff-protected costs which still places Mid-Continent at a cost disadvantage compared to imported nails.
This is a game of poker. The end game is to get rid of tariffs that other country have on US exports.
But it can’t happen unless we threaten them (credibly) with tariff’s of our own.
We’re in the middle of the process.
That's the hypothesis being used in the administration, but it's not the only one and it remains to be seen if it's the right one. China has 4X our population. They want to grow, and are growing internal consumption. And while we may be the biggest export market, we aren't the only one. There are plenty of places for them to sell into.
#16 They can always build another ghost city.... that falls apart.
64 million empty apartments
http://www.abc.net.au/news/2018-06-27/china-ghost-cities-show-growth-driven-by-debt/9912186
“China taxes high value-added items and leaves basic inputs alone.”
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China taxes American soybeans, which are not high value-added.
They could purchase wire rod (raw material for steel nails) from Keystone Steel & Wire at Bartonville, Illinois or Sterling Steel LLC at Sterling, Illinois. The former seems to be operating at capacity though.
I thought the wife stock for the nails came from Mexico.
The Mexico trade issue was supposedly resolved...
Popular Bluff
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
W.S.J. can’t even get that right. It’s Poplar Bluff.
Poison,
Lots of places want to grow, Hell China and India combined are about a 1.3 of the worlds population.. but desire to grow, and actual growth are 2 different things and take a long long time to happen.
The US consumption is in no way on the verge of being replaced by any single, or even group of nations....
Someday that may not be the case, but it will be the case for a long long time yet.
You cannot replace the US consumer... China knows this.. without it, they risk economic and social instability... which is why, if we ever truly get into a trade war... a REAL trade war... China loses.
Take a look at this:
https://en.wikipedia.org/wiki/List_of_largest_consumer_markets
Now, tell me, what markets on that list is China not already exporting to? The top 3 are the US, the EU and China... China is already active with ALL of the top players... so tell me, where do they get to expand to replace the 13 TRILLION DOLLARS of consumption that the US economy has??? When the nations that are available to them, that they haven’t tapped measure their entire domestic consumption in 200 Billion or less??
China knows it can’t win a real trade war... without US cash influx, its own internal growth and consumption collapses.. they are in full on recession within months if the spigot stops, and political unrest shortly thereafter.
There is no calculus where China wins a trade war with the US... A consumer can always do without.. an producer needs the consumer to live.
Reuters report: China, ExxonMobil discuss $10 billion investment in Guangdong.
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