Historic Shortages
Over 300 US manufacturers sent a Letter to Biden this month, protesting scarce metal materials and unsustainable prices.
Manufacturers in the United States currently face historic shortages of readily available and globally priced steel and aluminum products at a time when the country is relying on our sector to help drive the economy and overcome the unprecedented challenges caused by the COVID-19 pandemic.
The temporary increase of 4,800 steel industry jobs in the United States since 2018 recorded by the Bureau of Labor Statistics is not directly attributable to the Section 232 tariffs and is dwarfed by the 6.2 million American manufacturing jobs at risk in steel- and aluminum-using industries. On some products, American businesses pay 40 percent more for similar steel compared to their European counterparts — an unsustainable situation for any U.S. employer.
Mr. President, we support a strong and thriving steel and aluminum industry, but producers today simply cannot meet demand and the tariffs create a tax that only manufacturers in the U.S. must pay.
Failed Tariffs
The WSJ comments on the letter to Biden.
High prices, low supplies, and financial records for steel makers: It sounds like a perfect time to end Mr. Trump’s tariffs. The latest jobs report said manufacturing employment fell 18,000 in April. It’s 515,000 below the pre-Covid mark of February 2020. With the stroke of an auto-pen, Mr. Biden could lift the burden of 25% tariffs on steel and 10% on aluminum, helping the economy emerge from the pandemic. So what is he waiting for?
Make US Steel Jobs Great Again
Trump thought he could make steel jobs great again.
He failed. Moreover, Trump had to lie to get those tariffs.
National Security Ruse
Trump labeled steel production a national security item. He said the same thing about Volkswagen car imports.
His National Security Tariff Ruse was so bad the Pentagon would not even go along.
In an undated memo released to the media, Defense Secretary Jim Mattis wrote that “imports of foreign steel and aluminum based on unfair trading practices impair the national security.” But he added that, “As noted in both Section 232 reports, however, the U.S. military requirements for steel and aluminum each only represent about three percent of U.S. production. Therefore, DoD does not believe that the findings in the reports impact the ability of DoD programs to acquire the steel or aluminum necessary to meet national defense requirements.”
US Manufacturing Employment
Don’t blame NAFTA. Manufacturing jobs peaked 15 years before NAFTA then rose for a number of years after NAFTA.
Jobs are down because productivity is up, globally.
Trump’s Tariff Failure
Trump repeatedly said tariffs are good and trade wars are easy to win.
He failed miserably.
If Biden tries, to make US steel jobs great again, he will fail too.
Biden Reversal?
Biden should reverse Trump’s policy now.
Will he?
Unfortunately, I doubt it. Biden will not want to upset his union pals even though it is crystal clear the tariffs are net damaging to US consumers and businesses.
Mish
Well, that is because NAFTA was *not* the first nail in the coffin. It was MFN for PRC (China), later renamed as PNTR. Manufacturing jobs peaked in 1979, the year before China got MFN status.
(And make no mistake, a lot of this devastation was bipartisan. BJ Clinton made more of Reagan’s dreams come true – NAFTA, Crime Bill, gutting of social safety nets, financial deregulation, media and telecom deregulation etc.) than any Republican was able to, including Reagan himself).