Donald Trump Has Placed a Tariff on Imported Steel

Donald Trump Has Placed a Tariff on Imported Steel

Well look at that: President Trump has signed orders for tariffs on steel and aluminum imports.

Trump, whose views on trade policy have been remarkably consistent for decades, has been consistently speaking about the problems facing the domestic steel industry since his 2016 campaign

He has been right to do so. Here's what you need to know about why a tariff is necessary, what it will mean for the economy, and what it means for American steelworkers.

There's a real problem facing American steelmakers: Overcapacity

The international market is swamped with steel. The sector has grown to over 2,300 million metric tons (MT), but only needs approximately 1,500 MT to meet global demand. That's 800 MT worth of annual steel production online that the market isn't asking for. Most of this overcapacity has come from China, home to the world's largest (and largely state-owned) steel industry, which alone created 552 MT of overcapacity between 2007 and 2015. 

The results have been predictable: Layoffs in the United States, steelworker marches across Europe. Trading partners with domestic steel industries have pressed the Chinese government to reduce its capacity and eliminate the massive subsidies with which it props up its steelmakers. China's response has been to acknowledge the problem, agree to reductions – and has repeatedly failed to follow through on its commitments.

The Trump administration's tariff will allow industry in the United States – currently the most open steel market on the planet – a respite from this warped market, hire back workers, and regain market share, which has increasingly gone to import competition. Total steel imports were up more than 15 percent in 2017.

What will happen to the sector larger economy? Look to the 2002 George W. Bush steel tariffs.

In response to significant import competition and a wave of bankruptcies, President Bush put up tariffs of similar scope and size in 2002. Just like the howls coming from some in Congressnow, there were dire warnings of an economic apocalypse from free-trade acolytes then, too.

Yet nothing of the sort happened. 

The International Trade Commission (ITC) found that President Bush's trade action had no discernible economy-wide effects – and may have even resulted in an overall welfare gain of .0006 percent of GDP.

Overall sales and profits from steel consumers increased the year following the action compared to the year before. The ITC even noted that, within the broad definition of "steel-consuming industries," employment even increased in the following year, and productivity and wages in those industries increased over a three-year period. 

And how did the domestic steel industry react? With room to stabilize, restructure, and consolidate – it reduced production costs and increased productivity.

What will this mean for steelworkers?

It will mean a lot. If you ask Onika Rivera of Lorain, Ohio, it means a chance for workers to retain their healthcare benefits.

For Jim Johnston of North Braddock, Pennsylvania, it will mean being able to financially plan past the next two or three years, and make his mortgage payments.

And for the workers Dan Simmons represents in Granite City, Illinois, it will mean going back to work.

 

***

This has been reposted from the Alliance for American Manufacturing.

Posted In: From Alliance for American Manufacturing, Allied Approaches

Union Matters

Get to Know AFL-CIO's Affiliates: National Association of Letter Carriers

From the AFL-CIO

Next up in our series that takes a deeper look at each of our affiliates is the National Association of Letter Carriers.

Name of Union: National Association of Letter Carriers (NALC)

Mission: To unite fraternally all city letter carriers employed by the U.S. Postal Service for their mutual benefit; to obtain and secure rights as employees of the USPS and to strive at all times to promote the safety and the welfare of every member; to strive for the constant improvement of the Postal Service; and for other purposes. NALC is a single-craft union and is the sole collective-bargaining agent for city letter carriers.

Current Leadership of Union: Fredric V. Rolando serves as president of NALC, after being sworn in as the union's 18th president in 2009. Rolando began his career as a letter carrier in 1978 in South Miami before moving to Sarasota in 1984. He was elected president of Branch 2148 in 1988 and served in that role until 1999. In the ensuing years, he worked in various roles for NALC before winning his election as a national officer in 2002, when he was elected director of city delivery. In 2006, he won election as executive vice president. Rolando was re-elected as NALC president in 2010, 2014 and 2018.

Brian Renfroe serves as executive vice president, Lew Drass as vice president, Nicole Rhine as secretary-treasurer, Paul Barner as assistant secretary-treasurer, Christopher Jackson as director of city delivery, Manuel L. Peralta Jr. as director of safety and health, Dan Toth as director of retired members, Stephanie Stewart as director of the Health Benefit Plan and James W. “Jim” Yates as director of life insurance.

Number of Members: 291,000 active and retired letter carriers.

Members Work As: City letter carriers.

Industries Represented: The United States Postal Service.

History: In 1794, the first letter carriers were appointed by Congress as the implementation of the new U.S. Constitution was being put into effect. By the time of the Civil War, free delivery of city mail was established and letter carriers successfully concluded a campaign for the eight-hour workday in 1888. The next year, letter carriers came together in Milwaukee and the National Association of Letter Carriers was formed.

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There is Dignity in All Work

There is Dignity in All Work