A year-and-a-half ago, Bush announced the steel tariffs, and everyone in that industry — here in the US — applauded it, as well as numerous economists and analysts. Now, of course, the tariffs are contributing to massive unemployment here in Michigan. To quote the Detroit News:
The higher steel prices have helped the steel industry but wreaked havoc on scores of other manufacturing companies. Michigan’s extensive network of auto parts suppliers has been particularly hard hit. The companies use steel as a basic building block for their products. They say the tariffs, which range from 8 to 30 percent, have had a devastating effect on their industry by raising their costs. They say they have laid off more workers than have been saved in the steel industry.
Executives for auto parts suppliers and other steel-intensive businesses rallied on Capitol Hill Oct. 7 to ask lawmakers and the Bush administration to end the steel tariffs.
The steel industry has long been a changed industry, and unions, bureaucrats, and myriad special interests want to keep these outdated, behemoth steel companies afloat, under the pretext that they can compete with lean, modern, steel importers.
The steel intensive businesses like the auto suppliers cannot pay the tariff-induced high prices and be expected to compete. The auto companies had already negotiated price concessions from suppliers in previous years to help curtail the massive costs of them having to give huge incentives — rebates and 0% financing — in order to sell their cars and drive up market share. The suppliers are stuck with the bills post-concession, as the feds come along and jack up their production costs.
In a report evaluating the impact of the tariffs after 18 months, the International Trade Commission estimated U.S. businesses lost $680 million. Nearly one-fourth of all steel-consuming companies, and 51 percent of auto parts suppliers, had shifted jobs overseas, and 34 percent said they would add jobs if the tariffs were terminated.
It’s funny how industry analysts will agree with the disaster brought about by the tariffs, yet they chide in with suggestions such as ”more government help with the burgeoning health care costs and retirement obligations manufacturers must fund to a much greater extent than their foreign competition.” So again, let’s spread the misery and costs from the steel industry to the auto industry, and when that causes a ruckus, take the costs from the auto industry to the individuals and families. It’s too novel an idea to let hapless, bloated, inefficient companies go out of business, I suppose.
It’s not government that “helps.” It’s you and I that pay the bills, and suffer in our own lives and our own industries. It’s massive redistribution in order to pander to a special interest. They’ll just never get it.
