Interested in another positive that resulted from Donald Trump Presidency?
The Chicago Tribune article titled, US Steel investing 750 million in the plant, reports a major revitalization to their flagship Gary plant. This undoubtedly is the result of both the corporation tax reduction and steel tariffs on foreign steel. The long-range benefits that will result over time will benefit trade imbalance, benefit worker, US Steel, and reduce the cost and competitiveness of USA steel producers.
The purpose of this post is to give you an insight of how foreign steel manufacturers were able to make and export steel across oceans and sell at lower costs than USA Steelmakers. It was not labor cost differences which usually are the main factor in imported products sent into the USA.
Do you see someone skilled in their work? They will serve before kings; they will not serve before officials of low rank. (Proverb 22:29)
“he shall stand before kings; he shall not stand before mean men, or “obscure persons” (o); he shall not continue in the service of ignoble persons, or keep company with them; but he shall be taken into the service of princes and noble men, and be admitted into their presence,
What’s My Point?
One major factor why US steel cost more than foreign steel is foreign steel mills are more modern and productive than USA steel mills. Why that came about was two reasons. The first was after WWII, new modern more productive and new steel making technology steel mills were built in foreign countries while USA mills were not.
The second reason why is because US steel mills being had to produce profits for shareholders and were never subsidized by the USA government whereas many foreign steel mills received government financing. When the USA had to face the foreign competition of lower prices, they had to reduce prices which made less money available for major investments such as the reported 750 million dollars announced by US Steel.
My point is over time, if all US Steel mills do the same type investments, the USA steel manufactures will become more productive and price completion will come into play between USA steel producers.
In other words, manufacturing steel requires long-range government planning and tax incentives to allow steel manufactures to make investments. The USA politicians do not think long term about anything other than getting re-elected.
In My Opinion
Most people who are complaining about tariffs do not understand manufacturing. They still believe in the failed economic policies that were taught to them which result in the decimation of US manufacturing and loss of millions of livable wage jobs for middle-class Americans.
President Trump is no politician and frequently complains about USA trade agreements made by politicians were unfair to American workers.
American workers know this and that is why they voted for President Trump.
Thank You, President Trump, for fulfilling your campaign promises to renegotiate unfair trade agreements and to return manufacturing jobs to the USA.
Read previous posts in the Source Links below that pertain to steel manufacturing.
Regards and good will blogging.
Wise Use of Steel Tariff Profits
King Solomon Proverb Excerpt
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