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There are steel mills down the road from my manufacturing business that were shuttered for decades and reopened when the tariffs came into effect. They were not

There are steel mills down the road from my manufacturing business that were shuttered for decades and reopened when the tariffs came into effect. They were not competitive with Chinese government sponsored steel, that much is true. It’s extremely nice for me that they came back online; they order out of production precision parts from me for their heavy equipment. I’m located just across the river from St. Louis. This is middle America. Most of my consumer products are sold directly, online, but I also sell titanium weed pipes to a local chain. COVID definitely slowed retail sales. I looked into getting my motorcycle parts onto big corporate retail shelves, but the margins are tight. I’m working on that. Business has been good, so I can afford to try new things. Cutting blanks with plasma rather than waterjet and milling steel with air blast rather than coolant, together, might make big box retail rational, for me. The economics of manufacturing: extremely multi-faceted. There is a tendency for successful manufacturers to allow costs to escalate until flexibility is gone. Their employees unionize. Management borrows against the future. Then, the market changes. It’s a rough game. I chuckle when people talk about the right to a job. Sure; that can work if I have a right to sales.

vkou 6y ago
> There are steel mills down the road from my manufacturing business that were shuttered for decades and reopened when the tariffs came into effect. This is a beautiful, heart-warming story that is not really supported by the data. Actually, steel employment in the US declined after the tarrifs were introduced [1]. Net steel production in the US went sideways over the past decade. It rose around the time of the tariffs, but it also fell and rose at other times [2]. The tariffs did, however, cause the cost of US steel to skyrocket [3]. Which is not fantastic for the ~330,910,000 Americans who aren't steel workers (who didn't actually win anything, since employment declined), or owners of steel plants (who I assume did win something, since they reaped the lion's share of the benefit of higher margins). [1] https://www.ibisworld.com/industry-statistics/employment/iron-steel-manufacturing-united-states/ https://www.ibisworld.com/industry-statistics/employment/iro... [2] https://tradingeconomics.com/united-states/steel-production https://tradingeconomics.com/united-states/steel-production [3] https://tradingeconomics.com/commodity/steel https://tradingeconomics.com/commodity/steel
- Qub3d 6y ago
  This is so interesting. What I think we're seeing here in these two comments is the divide between micro- and macroeconomics. I absolutely believe that supply-chain disruptions in steel due to tariffs pushed U.S. plants to re-open in some locations, but I also can see how across the nation the production dropped. Frankly, we won't know the true effects on the tariffs until at least 2026 in my opinion -- these trends happen on the order of decades rather than years.
  - vkou 6y ago
    There's another possible explanation. Plants may have re-opened, but they aren't employing anyone, because of automation, which undermines the 'protect the local economy' aspect of tariffs. Robots don't spend their paycheque at local businesses, and it takes fewer people to build them, then they replace. [1] [1] If that weren't the case, they'd be more expensive than just employing people.

vkou 6y ago

> There are steel mills down the road from my manufacturing business that were shuttered for decades and reopened when the tariffs came into effect. This is a beautiful, heart-warming story that is not really supported by the data. Actually, steel employment in the US declined after the tarrifs were introduced [1]. Net steel production in the US went sideways over the past decade. It rose around the time of the tariffs, but it also fell and rose at other times [2]. The tariffs did, however, cause the cost of US steel to skyrocket [3]. Which is not fantastic for the ~330,910,000 Americans who aren't steel workers (who didn't actually win anything, since employment declined), or owners of steel plants (who I assume did win something, since they reaped the lion's share of the benefit of higher margins). [1] https://www.ibisworld.com/industry-statistics/employment/iron-steel-manufacturing-united-states/ https://www.ibisworld.com/industry-statistics/employment/iro... [2] https://tradingeconomics.com/united-states/steel-production https://tradingeconomics.com/united-states/steel-production [3] https://tradingeconomics.com/commodity/steel https://tradingeconomics.com/commodity/steel

Qub3d 6y ago
This is so interesting. What I think we're seeing here in these two comments is the divide between micro- and macroeconomics. I absolutely believe that supply-chain disruptions in steel due to tariffs pushed U.S. plants to re-open in some locations, but I also can see how across the nation the production dropped. Frankly, we won't know the true effects on the tariffs until at least 2026 in my opinion -- these trends happen on the order of decades rather than years.
- vkou 6y ago
  There's another possible explanation. Plants may have re-opened, but they aren't employing anyone, because of automation, which undermines the 'protect the local economy' aspect of tariffs. Robots don't spend their paycheque at local businesses, and it takes fewer people to build them, then they replace. [1] [1] If that weren't the case, they'd be more expensive than just employing people.