Examples of wise or foolish use of steel and aluminum tariffs.

Free traders diligently have one focus only, cheap prices in the hasty short span of time.

However, cheap is not in the best value or interest for the USA. The best value for the commodity of steel and aluminum for the long term is to allow USA steel makers time to modernized the energy and efficiency of USA plants.

When steelmakers have to compete with imported prices, they never have enough profit to invest to upgrade their facilities in a free market system. There should be no reason why USA steel and aluminum should cost more than imported steel that has to be transported thousands of miles.

Somehow or some way, the USA free markets have to meet import countries methods of government subsidizing or providing incentives for USA producers to modernize steel making efficiencies of energy use or steelmaking technology, dumping practices, or currency manipulation.

The real problem with tariffs is when the profits are not reinvested in steel making efficiencies and are instead distributed to shareholders and speculators who will jump in knowing the tariffs will increase the stock value when the steelmakers have guaranteed prices.

What’s my Point?

The USA free market can never compete on price alone unless long term diligent strategies to improve steelmaking efficiencies are on the same level as import steel making processes.

The USA has more than enough steel scrap, ore, energy available locally to compete and produce steel at the same low costs as importers.

In My Opinion

What is lacking is the difference in long term government economic strategies to compete with export nations.

In other words, the USA government economic strategies are not as wise as other nations

The cheapest price is not always the best value for USA in the long term for the steel and aluminum industries.

Free market economics makes sense only up to a point. When the point hurts USA workers wages in the rear end and poverty, government needs to do something to make USA steel and aluminum industries become as efficient or more efficient to compete on prices with other nations.

You Decide

Will the tariffs provide and incentive for USA steelmakers to reinvest wisely to improve USA steelmaking efficiencies?

Or will the profits be used to up executive salaries and stock market speculators foolishly, in my opinion?.

King Solomon

The plans of the diligent lead to profit as surely as haste leads to poverty. (Proverbs 21:5)

Source Links

Click to access lbnl-47205-steel-co2may-2001.pdf