Some things are worth protecting they say, and one could argue that the steel industry in the US is one of them, and the history to back up that argument is far and wide - trust me. Still, there is a difference between protecting something and protectionism. Okay so, let's talk about this because the politics here in the US when it comes to such things are also quite complex and serious.
It seems we are our own worst enemy 75% of the time, especially when it comes to steel. We've destroyed our mining industry and made it jump through almost impossible environmental hoops, many are way over the top and out of line when it comes to iron ore. But it also takes a special kind of coal to make steel, and that coal comes from many places where over regulation has made mining that coal completely unmanageable.
Now we are worried about foreign nations dumping steel on our markets, often steel which isn't even close to our real needs, mostly because our iron ore in the US is much more pure, but also our standards in manufacturing are higher as well. Nothing new, we went through this before with Japan also. Reuters had a piece recently justifying the tariffs we've put on Chinese steel pipes imported to the US; " U.S. Steel warns imports threatening pipe market," by Matt Daily posted on June 19, 2012. The article stated;
"Steel imports have jumped nearly 28% this year. U.S. Steel has been among the most vocal in the industry in pointing to potential trade violations, and DC has increased pressure on both China and India. It had determined that Indian companies were selling circular welded carbon-quality steel pipe in the US nearly 50% percent below fair market value. Cheap Chinese steel imports have also attracted punitive duties in the US. China made those US duties the subject of a trade complaint at the WTO."
We ought to also talk about the quality of that steel, and its long-term survival rate from corrosion and rust in this debate. Still, cheap pipe is a good thing. Maybe we need fewer regulations here at home so we can compete head to head - and insist that other nations also implement similar restrictions on coking coal soot and CO2 and if they won't maybe we need to add that cost in tariff and give that money to the oil and gas industry. That would solve the problem.
And a big problem it is too, in fact, as I was almost completed with this article another ominous piece appeared in the same business newspaper "Steelmakers Gird for a Downturn" by John W. Miller and Mathew Day on June 20, 2012 which cited a perfect storm - increased US regulations, increased employee costs (ObamaCare), slaughtering of the coking coal industry, vanishing of European steel demand, and a slow growth US economy with very little construction going on plus the Chinese and Indian dumping of below cost steel.
Maybe we need to invest in some innovation for our old industries to keep them clean, and at a low cost, not just new high-tech (perceived eco-friendly) sectors - next maybe, just maybe we need to consider the unintended consequences of attacking our major supply chains from raw materials forward with insane over regulation. And lastly, let's keep investing in pure research for carbon nano-tube construction to eventually replace steel - once it can compete efficiently on its own, and let the free-market entrepreneurs and their Wall Street Investors decide when that is, not some Washington DC crony that wants to score points with left-winger constituents.
Oh, and further more on this topic let's invest in clean coal fired electrical plants and capturing that CO2 for its carbon value to make the carbon nano-tubes. Let's allow these technologies to come together in a Singularity sort of way, with industrial capitalists seeing the value and re-designing that supply chain to compete rather than protectionism of older industries. We seem to be doing everything wrong, and we've completely taken our eye off the ball of free-market capitalism. Please consider all this and think on it.
Lance Winslow has launched a new provocative series of eBooks on Politics and Economics. Lance Winslow is a retired Founder of a Nationwide Franchise Chain, and now runs the Online Think Tank; http://www.worldthinktank.net/
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