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US Steel is idling plants, despite tariffs designed to save them
- skrowl 7y agoThey're idling one in Europe too and have said it's related to global demand. https://agmetalminer.com/2019/06/19/this-morning-in-metals-u-s-steel-announces-idling-of-plants/ https://agmetalminer.com/2019/06/19/this-morning-in-metals-u... "We are idling two blast furnaces in the United States and one blast furnace in Europe to better align our global production with our order book." This is just CNN / anti-Trump journalists trying to blame Trump.
- legitster 7y agoIt doesn't change the fact that, at best, the tariffs had marginal benefits to the one and only industry they were designed to benefit.
- mfatica 7y ago> the one and only industry Not true at all. Agriculture, semiconductors, consumer electronics, and automotive are examples of other industries tariffs are designed to benefit. Steel is one of many.
- arcticbull 7y agoHow are the agriculture, semiconductor and electronics industries supposed to benefit from steel tarriffs?
- ilikehurdles 7y agoThe only one I see potentially affected here is agriculture (specifically, manufacturing for agricultural uses), in that businesses have to spend more on steel or buy lower quality steel because they couldn't afford the higher price.
- Retric 7y agoPolitics makes strange bedfellows. They all benefit from tariffs. Further, by acting collectively it’s easier to get your own pork spending when you support others pork spending. Get several groups who care a lot about their own issues and little for each other’s issues, and you can push polices that most people disagree with. Of course you need to be carful as alliances pool both support and opposition.
- hedora 7y agoI don’t see how any of those other industries can be expected to benefit from the tariffs: The tariffs were designed to hurt agriculture, or at least treat it as acceptable collateral damage. It was obvious the Chinese would retaliate by targeting US farmers, and then they did. How is automotive supposed to benefit from tariffs against Mexico, which the industry heavily relies upon? How do consumer electronics benefit from tariffs on Chinese electronics components when the tariffs simply force production to other non-US countries (where production plants are already ramped up)? Note that the tariffs on Chines components mean that US assembled consumer devices get taxed at 25%, but foreign (non Chinese) assemblers don’t. Semiconductors are mostly made in the US, Japan, and South Korea. How do tariffs on Chinese goods help shore up US dominance there? https://www.worldatlas.com/articles/all-about-the-semiconductor-industry.html https://www.worldatlas.com/articles/all-about-the-semiconduc...
- Retric 7y agoSugar tariffs are what enable the massive corn industry to sell otherwise more expensive product corn syrup as a sweetener. Collectively tariffs are a massive subsidy to US agriculture even if not every farmer beniftis equally.
- pravda 7y agoSugar tariffs are designed to hurt every single American and benefit a few multi-millionaire sugar producers in Florida. Since Florida is a 'swing state', this will never change.
- Retric 7y agoCongress enacted the first sugar tariff in 1789. Politics has changed a lot over time. However, it’s the substitutes of sugar beets outside Florida not sugar cane that provides most US sugar production. That’s currently less relevant at industrial scales where corn is a fine substitute even if it’s a slightly different chemical and not granular.
- drocer88 7y ago
- pjc50 7y agoI work for a US multinational semiconductor company, and the Huawei sanctions took 20% off our share price. It's an interconnected world.
- awinder 7y agoSource article points out that tariffs/threats lead to stockpiling of steel, which lead to more capacity coming online given the sales volumes -- but then companies ate from their stockpiles leading to a double-whammy of increased production / decreased demand. So yes, it's related to global demand -- global demand that went on a primary rollercoaster ride triggered by tariffs. And the news media is rightfully blaming the 1 person (not even party, singular person) for the consequences of their actions. What a sordid state of affairs indeed.
- microwavecamera 7y agoFrom the article you posted: “In response to current market conditions, we are taking actions aligned with our strategy by adjusting our global blast furnace footprint,” the steelmaker said in a release. Hmmm, I wonder what those "current market conditions" could possibly be? Also from the link you posted: As the U.S. and China move toward a resumption of trade talks this month, China has lowered its tariff rates for some other countries, CNBC reported citing an analysis by the Peterson Institute for International Economics. ... Last month, the U.S. raised tariffs on $200 billion of Chinese products, to which China responded with tariffs on $60 billion in U.S. goods.
- forgotmysn 7y agoya shame on them for blaming Trump for his own actions
- hinkley 7y agoNot all things made out of steel have to be made out of steel. If you raise the prices enough, what gets build will adapt to those constraints.
- clarkmoody 7y agoThat's right. The presence of alternatives or substitute goods is a moderating force on price increases. The classic example is what meat to buy for dinner: beef has gotten expensive, so it's time to grab the chicken or pork this week. Your choice to choose an alternative to beef will help bring the price back down. We could take the example further to other people's choices, the butcher's response to reduced demand, etc, but we'll stop with: the economy is vastly complex, and all changes in conditions produce complex responses.
- mooreds 7y agoThis site always reminds me of the amazing complexity of the free market economy: https://wonderfulloaf.org/ https://wonderfulloaf.org/ (Horribly busted on Firefox :( )
- legitster 7y agoMy grandfather worked in a machine shop over 30 years ago. Even back then they worked mostly with imported product. According to him, the US steel was very low quality - aimed at industries that needed such huge amounts of it that shipping was expensive and quality wasn't an issue. If that is still the case, then demand for US steel is determined by infrastructure investment, not trade.
- forgingsheep 7y agoI'm not saying he was wrong, but it's certainly an over simplification. I don't know where he was getting his steel, and it seems very likely that the source of US steel near him was of really low quality. The US steel near me is generally higher quality than the chinese steel around here. For simple hot or cold rolled steel, both are fine. If you need nice steel, or nice case iron, the Chinese material is bad. You can't really grind any chinese cast iron that I have seen precisely, and none of the steel that I've seen from there has been clean or dimensionally accurate. For most uses, that doesn't matter, and it is totally fine. The European and American tool steel is FAR FAR better than anything that I've seen from china. I tend not to use chinese HSS for steel, since it breaks so easily. Source: taking a break from machining steel on a bridgeport
- legitster 7y agoYeah, completely anecdotal. Also not sure of where they imported steel from. But it is interesting to hear that quality does differ region to region based on the local needs. Again, that makes the case that imported steel vs domestic steel isn't a clear cut issue if proximity matters.
- forgingsheep 7y agoI do imagine he was correct for what he was talking about too, I just don't want people to get the impression that US steel is all crap.
- nordsieck 7y ago> I'm not saying he was wrong, but it's certainly an over simplification. Precisely. In the knife world, many (dare I say most) of the best tool steels used for knife making are made by Crucible Industries, a US company. For example, the dominant steel used to make knives for bladesports[1][2] is CPM M4. ___ [1] http://www.bladesports.org/WP/ http://www.bladesports.org/WP/ [2] https://www.youtube.com/watch?v=YkemT5ciBnw https://www.youtube.com/watch?v=YkemT5ciBnw
- baybal2 7y agoChina is the biggest steel consumer in the world. Would US steel been in an any much functioning state, it would've been busy exporting, but no...
- bsnnw 7y agoLol!!!
- vertline3 7y agoChina produces so much steel that it is often accused of dumping.
- baybal2 7y agoChina produces so much steel that even it itself can not consume it all. Yes, Chinese steel output is going UP with vigor despite steel mills being closed left and right! India is extremely protectionist with steel, but even it, with its own construction boom going on, gets overflown with semi-legally imported Chinese steel.
- throwaway2048 7y agoSteel production in China is heavily state subsidized, its a relic of old communist policies focused on heavy industry growth.
- bsnnw 7y agoI thought for a moment that this was actually real news then I realized it was fake!
- bsnnw 7y agoIn China I think that we should be more concerned with the fact that rich men are building steal buildings to store their capital in. That’s such a waste of resources. How dare you waste our resources investing in steal infra that sits around like empty ghost villages.
- bsnnw 7y agoNot to worry folks this is fake news we can ignore.
- chr1 7y agoThis may seem unrelated, but if US was willing to worsen its relations with china, and introduce tarifs punishing its own economy, it should have done it as sanctions against the horrible things China does to people in Xinjiang. Stories told by Kazakhs who were released from concentration camps in China are terrifying [1], and USA is one of the few countries that could actually help. [1] https://translate.google.com/translate?hl=en&sl=auto&tl=en&u=https%3A%2F%2Fles.media%2Farticles%2F863622-zavodnoy-mandarin https://translate.google.com/translate?hl=en&sl=auto&tl=en&u...
- smileysteve 7y agoIt would help if the U.S. had a leg to stand on; the official numbers point to us having higher incarceration per capita; and both the public perception and medical statistics point to rape being expected in prison.
- shrimp_emoji 7y agoThe state massively rounding up religious minorities and harvesting the organs of its prison population is practically the same thing as being incarcerated in a non-restorative justice system with shitty incentives where prisoners assault each other. Btw, judging Nazi Germany for the Holocaust while celebrating Columbus Day? You don't know how bad you look right now. XDD
- wavefunction 7y agoMany of the people in US prisons belong there. The same can't be said of the inhabitants of Xinjiang concentration camps.
- smileysteve 7y ago> Many of the people in US prisons belong there. Legally, do they belong there, "many" of them have been sentenced by a jury or judge; though often not with a jury thanks to aggressive plea bargaining. Do the prisons also have a legal obligation to protect prisoners from undue harm like rape? But it also points to issues in our legal system. When the per capita number of warrants in Ferguson is > 1.5. When 3 strike laws and mandatory minimums lead to life in prison for non-violent offenders. But also, if 4% of death row inmates are innocent; do we suppose that number is higher or lower for lesser sentences? for those that took plea deals? For those where the police have been corrupt. https://www.newsweek.com/one-25-executed-us-innocent-study-claims-248889 https://www.newsweek.com/one-25-executed-us-innocent-study-c...
- fknewsnetwork 7y agoThis is fake news paid for by China we can ignore! CNN is satire news!
- maxxxxx 7y agoI think it's pretty clear that for the tariffs to work you have to play a long game. It's not like the capacity is there immediately so it needs to be built up slowly. and it will only be built up if the investors have confidence that the tariffs will still be in place once they built up the capacity. If I had a company I would be very hesitant to build up US capacity because there is a good chance the tariffs will be removed again soon. I think right now everything is in limbo which is not good for anybody.
- supertiger 7y agonot necessarily, last time the same tariff play worked for Japan, and Japan arguably never recovered since.
- jjwhitaker 7y agoIf plans for diversifying supply and finding alternative markets for goods impacted by retaliatory tariffs had happened first, much of the short term impact of what are basically import taxes passed to consumers could be assuaged or limited like if Apple had built alternative supply chains. However, we have lost long term markets for goods like soy beans that will take years to recover (see the farm bailouts pushed by the current administration to cover these costs) while not hedging against other short term losses or even building the increase in taxes into a credit so citizens see a net 0 from the tariffs. Tariffs can be influential in trade negotiation but must be used like a scalpel, skillfully restricting trade in areas that don't cripple domestic industry while pressuring the other economy. this is incredibly difficult against such a large trading partner as China without building up alternative supply of goods or shoring up domestic capacity first. Blanket Tariffs, unless against a small country with small or specific exports, will hurt everyone involved much more than an existing deal. Meanwhile, promises of future gains from a new deal are just that, promises by politicians who already have the largest record of lying to the public and blocking any transparency like in the documented obstruction of the special counsel investigation. Usually, the costs are never made up by future gains and promises fall short if reveal themselves at all. For steel, it may be that different countries have taken to what they can make the most profit from, diversifying production globally to meet demand. Domestic industry compensates for foreign competition by either doing it better/cheap/more profitable or specializing in ways that competitors can't like massive production of cheap steel foreign competition can't match touch due to high shipping costs or developing and producing a specialty steel that nobody else can match. If this specialization moves to an extreme so one type isn't made domestically at all, that's going to hit consumers and industry hard. It will take time to increase capacity or shift production, potentially away from more profitable and established goods, to meet demand. That lapse in supply could be huge, give US companies a cheap way into that market, but at the cost of further government intervention, higher taxes, and a step away from capitalism which allowed countries to specialize and decrease costs long term. In this example, that supply drop opened an opportunity to other countries like Russia who are conveniently dropping millions on a project in Kentucky. If US steel can't compensate and foreign groups are able to push into the domestic market anyway, what does the tariff do to help domestic industry at all? We are in limbo then, with goods sitting around or being taxed higher to hopefully get a better deal than what exists. If that falls through, we are all much worse off from all this.
- jayd16 7y agoThese tariffs are such a terrible idea. Not only does it hurt US manufacturing which has to pay for more expensive steel, lowering the competitiveness of US goods (and thus steel demand!) It also isn't guaranteed to help US steel manufacturing because the tariffs are only targeting China. We could easily be in a situation where we're paying more for Japanese steel (for example) with not much benefit to US steel workers.