PROPURCHASER INSIGHT: If you’re not happy with today’s Steel prices, you might want to read this article….nothing is simple. Read the full article HERE.
05.22.16 by Boston Globe Columnist Jeff Jacoby
China produces more than 820 million tons of steel per year, of which about 100 million tons are exported and sold at a discount overseas. Only about 3 percent of those exports go to the United States, but American steel producers bristle at the competition. So in keeping with the time-honored practice of the US steel industry — “the backbone of American manufacturing,” as it proudly calls itself — domestic producers are rising to the challenge.
Are they doing so by making their operations more efficient? By improving the quality of the steel they sell? By cutting their prices to maintain market share in the face of a tough competitor?
Not exactly. They’re getting the federal government to punish American consumers.
“The United States on Tuesday said it would impose duties of more than 500 percent on Chinese cold-rolled flat steel, widely used for car body panels, appliances, and in construction,” reported Reuters. “The Commerce Department said the new duties effectively increase more than five-fold the import prices on Chinese-made . . . steel products.”
American steel producers complain that their counterparts in China are dumping cheap steel on the US market, benefiting from Chinese tax subsidies to undercut other companies’ prices. Because of these “unfairly traded imports,” lament Thomas Gibson and Chuck Schmitt of the American Iron and Steel Institute, some US steel mills have had to be shuttered, and 12,000 steel-making jobs were lost during the past year.
It is always painful when workers are laid off and once-thriving facilities have to be closed. But the steel industry is far from unique. The US economy creates and destroys millions of jobs every year. No industry is exempt from the upheaval, retrenchment, or losses caused by changes in technology, trade, and consumer demand. The digital revolution has decimated once-formidable companies and careers in fields as different as journalism, photography, tax accountancy, and recorded music. Would anyone argue that the government should have suppressed the Internet in order to preserve the employment and production patterns of the 1980s? Should the Commerce Department have imposed taxes of 500 percent on e-mail services and word-processing software to preserve the viability of typewriters and stenographers?
….Read the rest of this ProPurchaser sourced article, HERE.
SOURCE: The Boston Globe