The President brought in the executives from the steel and aluminum industries and they wanted tariffs across the board. One might argue that of course these executives like this because it saves their industry but only want to focus on what about costs increases?
Let look at these (the sky is falling) cost increases:
A 6-pack of aluminum cans – the cost will go up 1 ½ cents.
An automobile on average will increase $175.
A Boeing 777, a $330,000,000 airplane will go up $25,000.
Let’s see: Would the typical rational thinking American be willing to pay a cent and a half more on his 6-pack of beer in order to have a steel and aluminum industry?
Obviously your knowledge of economics and manufacturing is lacking.
It's not just the cost of the raw materials that will get passed on to consumers. It's the cost of the raw materials PLUS the cost of labor PLUS the markup ALL THE WAY THROUGH the manufacturing process. You think the cost of a plane will only go up by the cost of the raw materials? No way. That cost will ripple through all the subcontractors and small manufacturers that touch any piece of that plane that is made of steel or aluminum.
Let’s look at what has happened to the steel and aluminum industry because OF TRADE IMBALANCE:
We’ve lost 6 smelters since 2013, down to 5 smelters and only 2 of them are at full capacity, we are running at a 43% capacity rate and one is producing high grade aluminum for defense applications.
This tells me that demand for steel and/or aluminum is declining OR that our prices are out of line with the market.
Now let's take a look at the top two US steel companies. How are they doing?
Nucor's income statements (net profit):
2015 +679 million
2016 +81 million
2017 +796 million
US Steel showed these net profits:
2015 -$1.642 Billion
2016 -$440 million
2017 +387 million
Here's their stock performance over the past two years. Does it look like they are failing?
China now controls 55% of the aluminum market and 50% of the steel market. In 2000 we were the largest aluminum producer in the world, today we have 1.5% of the global market and China’s got 55%.
How much iron ore and bauxite does China have compared to the US? Maybe our days as a steel producing giant is over?
We charge 2.5% tax on cars coming in, other countries around the world charge 25% for our cars coming into their country. …
The EU charges a 10% tariff on US cars and trucks. The US charges a 2.5% tariff on imported cars and 25% on imported trucks and commercial vans.
But for us to charge 25% on steel and 10% on aluminum to save these industries has some screaming that THE SKY IS FALLING!
Why should the government step in and "save" these industries? Why not let the free market sort it out?
The US steel industry is losing market share--THE SKY IS FALLING!!
The mentality that we should continue to do nothing about fair trade imbalance and to neglect that we will lose our steel and aluminum industries defies common sense.
What's so special about the steel industry? Why does it need to be protected?
Why don't we simply blow up Chinese container ships that are carrying steel?
