May 6, 2021

cafeonjohnston

fashion is organic

Steel tariffs are bringing job losses to the Midwest

2 min read

Tariffs don’t help the economy.

That’s the big takeaway from this long Reuters analysis — which includes some prominent voices in Ohio — of the impact the Trump administration’s steel tariffs have had on Michigan.

Here’s the setup:

(President Donald) Trump’s strategy centered on shielding U.S. steel mills from foreign competition with a 25% tariff imposed in March 2018. He also promised to boost steel demand through major investments in roads, bridges and other infrastructure.

But higher steel prices resulting from the tariffs dented demand from the Michigan-based U.S. auto industry and other steel consumers. And the Trump administration has never followed through on an infrastructure plan. …

While the tariffs failed to boost overall steel employment, economists say they created higher costs for major steel consumers — killing jobs at companies including Detroit-based automakers General Motors Co and Ford Motor Co. Nationally, steel and aluminum tariffs resulted in at least 75,000 job losses in metal-using industries by the end of last year.

Reuters notes that when U.S. Steel idled its Great Lakes Works in Michigan, which primarily serves the automotive industry, “it cited weak demand, lower steel prices and a new corporate strategy to invest in more cost-efficient technology.” In May, Cleveland-Cliffs Inc. said it was closing its hot strip steel mill and some other operations in the Detroit area and laying off 343 workers. It cited “rapidly deteriorating business conditions.” (The piece notes that a Cleveland-Cliffs spokeswoman did not answer questions about the impact of Trump’s trade policy on its business.)

The news service says U.S. Steel defends the tariffs but notes the company’s shares “have plunged about 82% since the beginning of March 2018 — the month Trump announced steel tariffs — compared with a 28% increase in the S&P 500 during the same period. U.S. steel prices are now 33% below their peak in May 2018 but remain 21% higher than the global market price because of tariffs — a gap that hurts the competitiveness of U.S. companies who fashion products from domestic steel.”

That prompts Ned Hill, a professor of economic development at Ohio State University, and formerly at Cleveland State University, to tell Reuters, “No matter what the tariff is, you cannot sell something if there is limited demand.”

Nationally, Reuters notes, the steel industry “has been shedding jobs for the past year — since before the wider economic downturn caused by the COVID-19 pandemic — and now employs 1,900 fewer workers than it did when Trump took office, according to U.S. Labor Department data.”

Source Article

Copyright © All rights reserved. | Newsphere by AF themes.