Posted on 10/13/2007 12:13:41 PM PDT by 1rudeboy
Government Grants Steel Makers' Request to Extend Tariffs to China, India, Four Other Nations
WASHINGTON (AP) -- In a victory for U.S. steel makers, the federal government agreed Wednesday to continue tariffs on imports of certain steel products from China, India and four other nations.
General Motors Corp., Ford Motor Co. Chrysler and other steel consumers had opposed the tariff extension. But ending the tariffs would have increased steel imports, harming U.S. steel makers, said Alan Price, a lawyer for Charlotte, N.C.-based Nucor Corp.
"China has a staggering amount of excess (steel production) capacity," he said.
The U.S. International Trade Commission extended the tariffs on so-called hot-rolled steel from Indonesia, Taiwan, Thailand and Ukraine, in addition to China and India but eliminated them for Argentina, Kazakhstan, Romania and South Africa.
About 60 million tons of hot-rolled steel, used to make autos, household appliances and many other goods, is consumed annually in the U.S., Price said.
Tariffs were first imposed in 2001 and vary depending on the country, but are as high as 90 percent for China. The duties were imposed to counteract what the U.S. and other nations call unfair trade practices, such as dumping or selling a product below production costs.
William Gaskin, president of the Precision Metalforming Association, a group of smaller manufacturers, called the decision "a tough blow for American steel consumers."
The ITC "missed the fact that American companies need steel products at globally competitive prices" and that the U.S. steel industry is competitive, profitable and no longer needs government protection from cheap production overseas, he said.
Under World Trade Organization rules, the U.S. must review the tariffs every five years.
Shares of Nucor rose 20 cents to $58.50 in after-hours trading, after falling 47 cents to close at $58.30 in the regular trading session Wednesday.
Little simplified..
Steel Fabrication is also done here in the states, locally one of the largest employers is NONE UNION. We lost our local sock manufacturing to overseas competitors the last couple of years and it was also non-union. It was the town's largest employer, but alas no longer so.
I am getting tired of everything being blamed on unions, this nation has very small populaces that actually work union.
Non-union people need jobs too.
Exactly!
If I'm not mistaken, I believe the Union-Pacific has filed bankruptcy more times than any other company in history.
It was an appalling boondoggle. The line had to wiggle back and forth through every state congresscritter's district in order to get his vote. This made the railroad unable to compete with more efficient totally private ventures such the Great Northern.
In the end the UP was only kept alive by the creation of the Interstate Commerce Commission. The ICC was a price fixing agency created specifically to shore up the Union-Pacific since so many corrupt politicians had been given stock in it.
Many textile companies have lost out to foreign competition, especially in the Northeast. Some of those firms have relocated to the South in an attempt to tap into lower-cost, non-union, labor. Still, even in the South they can't compete with China and Taiwan. So what do we do? Should be raise tariffs to protect a couple of thousand jobs, or make it free trade which would lower sock prices for millions of US consumers? Sorry, but if someone is thrown out of work by foreign competition, it's simply the market saying: "Invest in yourself and make your labor more valuable." That's really what unemployment compensation is for...to give them time to find another job, hopefully after investing in themselves.
I thought that had to do with giving the proceeds from anti-dumping fines to the allegedly injured firms. Did they rule against the steel tariffs too?
BAD News!!! Why should OUR car makers pay MORE for steel than the FOREIGN car makers that import cars to us!!!
OR DO you think we should become ISOLATIONIST and have nothing to do with OTHER COUNTRIES?
Some of the smaller steel stocks, AKS and SCHN come to mind, have been on an absolute tear lately.
I wish your statement was true. First, over 200,000 US textile jobs have been lost in the US since 1997, not a couple of thousand. Second, you can’t blame the workers, you can blame management. I was in management of one of the largest US apparel firms and sat in the meetings where executives chose to make capital investments offshore instead of modernizing their US facilities so they could compete. The reason — it was faster to bring up the foreign factories than to remodel or build a US factory. Thank permiting and other regulatory costs in the US. US labor can be competitive, even at higher wages. However, US labor is not competitive when “social costs” are added by the government and Wall Street pushes management to invest overseas.
We won WWII because we put our underutilized factories and laborforce to work in the 1940’s. We may lose the next big war because there won’t be factories to convert war production and the manufacturing management and technical knowledge is disappearing as the last generation of US factory workers retires. The US has a strategic interest in retaining a manufacturing base. Too bad the government and Wall Street don’t share that point of view.
The investment community on Wall Street is all about cost reduction, downsizing, and outsourcing. Very few private equity firms or investment banks sink money into new ventures or capital investment in US production. Their focus is on buying US companies and moving the production offshore for a quick buck. It is vulture capitalism.
I agree with your sentiments. These tariffs are bad for consumers and steel consuming industries. The tariffs are good for the union thugs and inefficient producers.
Actually, pretty much the entire U.S. steel sector has been on a tear lately, largely because of the weaker dollar (imported steel more expensive).
Beyond unions, the villains are high taxes, unwieldy regulations, and litigation madness. In the future, high energy prices have the potential to make production in the US non competitive. China has a crash program to construct coal fired and nuclear power plants while the dims impose ridiculous renewable energy mandates and preach conservation.
Local American auto makers can't compete with imports shipped halfway around the world then heavily taxed when they get here. It's not difficult to figure out why they see no irony in their position.
That sort of thing is handy when planning for war.
Free Traitors are costing us jobs.
Worth repeating, in boldface.
Too many Lincoln-worshipping Republicans are completely clueless on the party's checkered past, from trade protectionism to making the world safe for American empire.
They know only that Honest Abe freed the slaves -- some of them, at least -- and kept the Union together by not declaring war against the Confederacy, but otherwise demolishing it.
I’d be one of the first to admit that the US regulation has raised the cost of doing almost everything. Look at power generation. Tree huggers and others who worry about the darter fish find that of more concern than building what needs to be built to make industries more competitive. I find it hard to believe when brownouts occur in CA, they blame Sacramento for their problems and the next weekend they’re out in force picketing the construction of a new power plant.Too much eating cake and not enough cake being produced.
As to vulture capitalism, clearly it does exist. However, the question to ask is what can be done to prevent it. Tariffs don’t prevent it and never will. Face it...on many fronts we’ve priced ourselves out of the market relative to a world economy. Consumers have more choices and they almost always buy based on price, assuming equal quality. The old “buy the union label” doesn’t stretch the budget for consumers. A healthy tax cut, including cuts for business, would do wonders for our domestic economy. Indeed, lower business taxes might induce more foreign investment here. Raising taxes and tariffs won’t do anything to mitigate the problems you mentioned.
Exactly right!
Yes, but quality is secondary to money, money, money!!!
Free trade is great! If you're invested in chinese steel, anyways.
Besides, US unions are evil thieves and deserve to be eliminated. Sorry about the loss of jobs, but that's free trade for you.
I’d suggest the following:
1) Simplify the tax code by eliminating all corporate taxes. With this change go all the special tax credits and other hidden subsidies that distort the economy. The tax code will no longer distort the allocation of capital in the US. For those US businesses that pay the full corporate rate tax rate, their “profits” now increase by over 30% and they have more to invest in the US.
2) Sensible regulation. History has shown the invisible hand will not necessarily protect the health and safety of workers or consumers. Witness Mattel importing lead contaminated toys from China — clearly the company is avoiding the cost of inspection to maximize “profit”. Given the long history of business failing to self police, government inspection is needed to ensure safety of workers and consumers. The way to make the government inspection neutral as far as capital allocation is concerned is to provide the same level of product inspection to both domestic production and imports. Plus, the cost of regulation should be charge on a per unit basis equally to domestically produced products and imports. Instead of all taxpayers subsidizing the cost of inspection, the cost is allocated to the product and the consumers of product pay the regulatory cost.
3) In the same way, allocate the cost the state bears for imports to the unit cost of imported products. Institute a per container charge to cover the cost to the government of the customs service, Coast Guard, and other taxpayer subsidies of imports such as the Army Corps of Engineers dredging of harbors and channels and agricultural inspections. Again, why should the taxpayer subsidize the cost of imports by paying for the infrastructure?
4) End local government subsidies for business. Property tax abatements and worker training incentives distort the efficient allocation of capital.
5) Through fuel tax increases or licensing fees, charge the trucking industry for the real cost of building and maintaining the taxpayer financed road and highway system that it uses. Tolls might be more efficient than licensing fees to ensure the government is not subsidizing truck transportation of goods while railroads are forced to fully fund and maintain the rail lines. In the same way, the full cost of building and maintaining airports as well as the cost of operating the air traffic control, TSA and the FAA should be funded through user fees, not the general revenue.
6) Shift from income to consumption taxes to fund the federal government.
I have mixed feelings about tariffs. During the latter half of the 19th century, the US government was primarily financed through tariffs, not income taxes. This was a period of tremendous economic growth for the economy. Perhaps user fees and inspection fees levied on importers to cover the true economic cost of imported goods on the publicly financed infrastructure are more appropriate in the 21st Century and would contribute to economic neutrality.
One of the key issues in the US regarding the allocation of capital is the short investment horizon. Manufacturing plants are productive assets with 20+ year lives. Wall Street is fixated on 3 month financial performance not 20+ year. In the era of Carneige, Rockefeller, Ford, and Edison when the industrial backbone of our capitalist economy was developed, Wall Street gladly funded the long term investments required to build the economy. Today, these long term investments are being made in other parts of the world where the government subsidizes these investments through tax policy, financing, absence of regulation, or worker incentives such as government paid health care. US capital is flowing to parts of the world where its “risk” is mitigated by government policy. It is also fleeing the US market where public policy favors imports at the expense of domestically produced products. Having worked in US industry for 30+ years I do believe US workers and capital can be competitive if the playing field is truly level. Unfortunately it is not level.
It is in the strategic interest of this country, and our long term economic health to have a productive manufacturing base. Manufacturing jobs provide the economic support for a vibrant middle class essential to our republican form of government and social stability. Without it we will become a third world country of elites and the low skilled masses.
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