RE: "Bush is fighting for the working men and women in the US steel industry"...
Yeah, sure he is... His action was based on politics, not sound economics. The relief is tailored to benefit Ohio, West Virginia, and Penn. Battleground states the Republicans need to win in the next election cycle.
Over-all, the higher cost of steel will cost far more jobs (in the steel consuming industries such as autos, appliances, construction, etc.) than it will 'save'.
Consumers will pay this 'tax' in higher product costs, to the tune of a couple of hundred thousand dollars per year for every steel job that is 'saved'.
It would have been cheaper to the taxpayers and the economy to just pay the salary of every laid off steel worker.
The problems of the steel industry in the US stem from a failure to invest in capital upgrades over the past few decades, and from approximately 20% over-capacity globally.
The US is going to lose the WTO complaints... and in the meantime we are going to have to eat retaliatory tariffs levied against other US industries... perhaps agriculture, perhaps computers, whatever Europe / Japan / Korea / Australia / Russia / China thinks will cause us the most pain.
US steel is over-priced by about $100 a ton right now, compared to the cheapest world producers. Since steel costs so much to ship ('cause of weight) if we were efficient producers we wouldn't have this severe of a problem.
Cheapest steel (in order of lowest price) comes from: Russia, Germany and Asia, UK, then us.
Wages in the industry are quite higher in Germany than here... and yet they don't have any problems under-pricing us. |
