If you don’t have steel you don’t have a country - so says the President of the United States Donald Trump. And, based on an investigation conducted by the American government, their country had drawn the short straw when it came to steel imports and exports. To ensure it did not impact the elusive ‘American Dream’l import tariffs were back on the table.
President Donald Trump has announced a 25 percent tariff on steel articles exported to the United States. In an official proclamation, he said:
“This relief will help our domestic steel industry to revive idled facilities, open closed mills, preserve necessary skills by hiring new steel workers, and maintain or increase production, which will reduce our Nation’s need to rely on foreign producers for steel and ensure that domestic producers can continue to supply all the steel necessary for critical industries and national defense.”
And yet American steelworkers have been wondering where they fit in into the future of the metalworking industries - the increasing automation of steel factories will inevitably hollow out traditional roles. Barack Obama, before the end of his presidency, was quizzed on the return of jobs to the steel sector. He was less optimistic than his successor.
President Donald Trump is making a concerted effort to refocus attention on metalworking factories; the new tariffs will add 25% to steel imports and 10% to aluminum. Tariffs on foreign washing machines and solar panels were also recently imposed by his government.
Trump, on March 7th, tweeted:
“From Bush 1 to present, our Country has lost more than 55,000 factories, 6,000, manufacturing jobs and accumulated Trade Deficits of more than 12 Trillion Dollars. Last year we had a Trade Deficit of almost 800 Billion Dollars. Bad Policies & Leadership. Must WIN again! #MAGA”
Car manufacturing and beyond
Whilst most people would decry the tweets as Trump’s notorious ‘alternative facts’, a CEO of multiple engineering companies on the cutting edge of modern day engineering agrees that American business has not been getting a fair deal.
CEO of Tesla Motors, Elon Musk, also took a seemingly pro-tariffs stance. Responding to Trump on Twitter, Musk tweeted:
“Do you think the US & China should have equal & fair rules for cars? Meaning, same import duties, ownership constraints & other factors. For example, an American car going to China pays 25% import duty, but a Chinese car coming to the US only pays 2.5%, a tenfold difference. We raised this with the prior administration and nothing happened. Just want a fair outcome, ideally where tariffs/rules are equally moderate. Nothing more. Hope this does not seem unreasonable.”
Trump read Musk’s tweets from a printed piece of paper as he announced the Presidential Proclamation on Adjusting Imports of Steel into the United States.
Chief Equity Strategist for Goldman Sachs David Kostin said
“Steel is the primary material used by Automobile manufacturers Ford and General Motors. Based on 2017 production mix, if the proposed tariff of 25% on imported steel translates into a similar magnitude of increase in steel prices, it would impact each firm by roughly US$1 billion, representing 12% and 7% of their 2017 adjusted operating income, respectively.”
Furthermore, there are of course fears that the suggested tariffs could start a trade war with other superpowers, something China has all but confirmed. BHP Billiton CEO Andrew Mackenzie too is disheartened by the talk of tariffs. At a business summit on Tuesday, the 6th of March 2018, the CEO hit out against Trump’s attacks on free trade, calling the announcements a ‘black day for the world’. He said:
“I am worried about this sentiment shift that people all around the world might suddenly say that free trade isn’t good for the world and that would be particularly bad for a trading company like BHP. We have to speak up loudly against these measures as being bad for America and bad for the world.”
Cheng, Evelyn. “Goldman: GM and Ford Could Take $1 Billion Hit Each from the Steel Tariffs.” CNBC, CNBC, 5 Mar. 2018, www.cnbc.com/2018/03/05/goldman-tariffs-to-knock-gm-terex.html.
Williams, Perry. “Trump Tariffs Are a Black Day for the World, Says BHP CEO.” Bloomberg.com, Bloomberg, 5 Mar. 2018, www.bloomberg.com/news/articles/2018-03-06/trump-tariffs-are-black-day-for-world-business-bhp-ceo-says.