U.S. automakers call for end to steel tariffs
The Big Six U.S. automakers (General Motors, Ford Motor, Toyota Motor, DaimlerChrysler, Honda Motor and Nissan Motor) are calling for the U.S. International Trade Commission to put an end to heavy tariffs on imported steel. Current tariffs boost the price of high-grade steel from Australia, Canada, France, Germany, Japan and Korea by about 30 percent, at a time when automakers are struggling with steel prices that have skyrocketed 68 percent in the past two years.On the other side of the fence is the U.S. steel industry, which lobbied hard for the tariffs in the early '90s to prevent its foreign competitors from dumping cheap steel into the U.S. market at prices the domestic producers couldn't match.
Automakers contend that the steel industry no longer needs protective tariffs to compete, while the Steel Manufacturers Association contends that removing the protection would damage the industry while providing insignificant cost benefit to the automakers.
Considering that GM alone buys about 10 million tons of steel annually, we're guessing that the automakers have a pretty strong case, and with the U.S. steel industry employing about 150,000, vs. the auto industry's 2.4 million workers, it's not hard to see which side should be able to muster the greatest political support.
[Source: The Detroit News]
Reader Comments (Page 1 of 2)
Paul 12:43PM (10/06/2006)
why should there be steel tarrifs. the steel industry should either compete or let it die. this is exactly the kind of environmentally unfriendly indusry that should be overseas anyway.
Reply
G 12:52PM (10/06/2006)
But how vocal those 150,000 workers have been! If we do open the flood gates to cheap Japanese steel, we could probably kiss that domestic steel industry goodbye. Can the same be said for GM et al.?
http://www.automobilesdeluxe.blogspot.com
Reply
PuffyC 1:00PM (10/06/2006)
Just remember how GM, Ford, etc threw the US steel industry under the bus the next time they come running for help. It's this whole "gimme mine and screw everybody else" attitude that makes me reluctant to support GM and Ford in their time of need. If GM and Ford can't see the value of helping US manufacturers of steel they shouldn't be surprised when the rest of America doesn't see the value of supporting US manufacturers of automobiles.
Reply
Richard Warren 1:02PM (10/06/2006)
It's issues like this that the President meeting with the automakers that might take some pressure off. Of course that will never happen with this guy, he's too busy feeding us other BS.
Reply
UK-KID 1:23PM (10/06/2006)
Sample from Post no 3
"If GM and Ford can't see the value of helping US manufacturers of steel they shouldn't be surprised when the rest of America doesn't see the value of supporting US manufacturers of automobiles."
Are you being serious ?
So Propping up businesses that cannot survive otherwise is a sensible thing to do ?
You don't think its complete HYPOCRISY that you guys always Shout about the Merits of Capitalism and International Trade, Bully Countries into eliminating Tarrifs on Heavily Subsidized USA made products into their own country thus Stifiling their own industry, But somehow it is okay for USA to put Tarrifs on imports into the USA ??
Said it before and will Say it Agian
CHINA & INDIA WILL CHANGE THE STATUS QUO IN THE NOT TOO DISTANT FUTURE
Good luck with your PROTECTIONISM
Reply
Kansei 2:13PM (10/06/2006)
muster = pay
Reply
John 2:20PM (10/06/2006)
Without tariffs, the world will globalize, and all will fall to the living standards of the Chinese and Indian commoner.
They don't even get toilets in their "houses"!!!!
Do you really want to live like a Chinese or Indian commoner??
Tariffs are there to elevate American living standards above the rest of the world.
It's not fair, I know,
but DO YOU WANT TO POOP IN THE STREET???
Reply
jordan 2:30PM (10/06/2006)
Look at it on the flip side. Say Toyota/Honda/BMW/whoever had to pay a tax to build cars in the US, and now they want it removed. Would the Big 2.5 (would DCX only have to pay half that tax? ;D) go whining to the government?
Of course someone's going to whine when there's a possibility they won't make as much of a profit as they did before. Unfortunately, the only time the economy will give them what they want (keeping the tariffs) is when someone in that industry has deep pockets and/or someone near Capitol Hill that they can call to lobby against the issue.
In closing, remove the tariffs. Either they will compete to survive, or they will be looking for new jobs. In this country, you have the right to life, liberty, and the pursuit of happiness. Unfortunately, we're not going to give you the work and money to live off of...you have to go after that yourself. We're not communists, right? :)
Reply
jordan 2:26PM (10/06/2006)
In Soviet Russia, steel tariffs YOU!
Reply
Poorredman 2:31PM (10/06/2006)
I know most of you guys would like to think the US is the big evil empire, but do a little research and figure out how many other countries have protectionist tarrifs on imports. Most often US companies trying to sell overseas are on the short end of the stick.
Reply
John 2:47PM (10/06/2006)
Everyone is on the "short end of the stick."
All countries use tariffs.
With no tariffs, there will be an absolute cheapest country that makes steel, an absolute cheapest country that makes cloth, etc.
#5 small child from UK,
http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageImport_Home
You have to pay £245 to even get the book that explains the tariffs, UK doesn't disclose its tariff information for free!
Australia is nicer, all tariff information is online:
http://www.customs.gov.au/site/page.cfm?u=4273
Reply
Whydrive 2:53PM (10/06/2006)
For a lot of you folks that make fun of American manufacturing workers, you're next. I know most of you are engineers or other type of professional working in the hi-tech industry (obviously getting paid to spend way too much time reading sites like Autoblog or Engadget). When YOUR company tells you to train an Indian or Chinese to DO your job for a third of your wages, don't bitch and moan and don't complain when everyone else MAKES FUN of you and tell you you're an overpaid lazy a$$.
Reply
loikll 12:11AM (10/07/2006)
How nice to be reminded that the government has been screwing consumers to protect special interests. Tariffs are nice for the very few people involved in the steel industry, and nothing but bad for the remaining 99.9% of us.
For those of you who find it difficult to understand economics: When we are able to pay less for products containing steel, those needs are satisfied with less money. Money is freed up for us to spend in other ways. We get more product and service for the same amount of money. This is called an increase in economic productivity.
Productivity makes us better off, not worse off. We spend the money that has been freed up on other products and services. That is why we have so many more industries, jobs, job types, and goods & services than existed 30 years ago. That explains Starbucks, Whole Foods, Internet access, Cell Phones, Video games, ESPN, and a thousand other things we take for granted that our parents did not have and could not afford.
John, the globalization you fear makes us richer, and also makes our trading partners richer. It's the original win-win, which is why free people choose to trade in the first place (a tariff being nothing but a restriction on a person's freedom to choose what he knows is best for himself).
There is no possiblity that it will "lower our living standards" to those of China. That has never happened in all of history as a result of economic trade; and there is not even any theory or mechanism to suggest that that could happen. I know you can't understand it, but just trust me when I tell you that this has been well understood since David Ricardo explained it about 200 years ago.
And, it doesn't matter if other countries have tariffs, that just makes them poorer and is a sign of their stupidity. Free trade makes us better off *regardless* of what foolish policy our trading parters have in their own lands.
Reply
anahit 3:26PM (10/06/2006)
Since US car manufacturers are now decrying steel tariffs, which act in large part as a domestic steel subsidy, I can only assume these same car manufacturers will stop requesting and accepting federal government subsidies.
Oh, wait...
Reply
FordMania 3:29PM (10/06/2006)
I say remove US steel tarrifs to Chinese steel companies when China removes all of the junk tarrifs on imported cars, components and the bogus "You must work in conjunction with an established Chinese manufacturer if you want to sell here" rule.
Remove the tarrif to Japanese steel manufacturers when they do away with thier protectionist taxes.
What's good for the Chinese should be good for the US. How Toyota, Honda, Hyundai would complain if they were forced to share technology and build cars in a Ford factory if they wanted to sell cars in the USA? I think many are not aware of what US companies are up against when they head for foreign shores.
Reply
Taylor Alexander 3:31PM (10/06/2006)
You guys need to take some Econ classes...
The short story is: protectionism and tariffs are barriers to trade, and barriers to trade are inefficient and bad for the economies of both sides involved. That's why we had NAFTA, and that's why it's really important that we keep working to remove barriers to trade. If you people want to protect one industry that can't survive on its own, you're basically saying that you don't care (as much, anyway), about the global economy.
Globalization sucks and all, but it's the way things are going to be and we should accept that.
As a more local example:
would you want Costco (a cheap wholesale store, for those that don't have it) to be artifically forced to charge higher prices than Safeway, just to protect safeway? No, that's rediculous. The rest of the economy works the same way.
-Taylor
Reply
Whydrive 3:38PM (10/06/2006)
Thanks to Taylor for the Econ101 lesson. Unfortunately, that only works if both markets operate under the same conditions. If the other market/trade partner imposes rules and tariffs of their own, you can only respond in kind.
Reply
Taylor Alexander 3:48PM (10/06/2006)
Yes, that's true, but that's not the point. We didn't do this because they were imposing tariffs on us, we did this because they were selling steel to us more cheaply than we could sell it to ourselves. That's not some artificial barrier they're producing, that's competition and we were trying to stifle that. I understand imposing tariffs as punishment, but this wasn't that kind of a situation, so why bring it up?
-Taylor
Reply
UK-KID 4:04PM (10/06/2006)
John
I hope you have read the other poster's comments about Business and the effects of Tarrifs.
Think that should teach you not to Mis-Underestimate others.
Hipocrisy is Hipocrisy, no matter how you try to dress it up, my comments was directed at Bullying Developing Countries to delete Tarrifs on NA exported products to the Detriment of Said Countries' Productivity yet USA implementing Tarrifs on Imports for the sole purpose of Propping Up Uncompetitive Businesses.
Wonder who the Small Child is Now ??
Thats always the problem with Supercilious People, they assume they know better than everyone else.
Reply
UK-KID 4:08PM (10/06/2006)
BTW
Mis-Underestimate was discovered by your President, not Me.
Reply