Score one for the free market: US dumps most of its steel tariffs
Yesterday the U.S. International Trade Commission lifted tariffs on imported steel from Australia, Canada, France and Japan, and there was much rejoicing in the boardrooms of many automakers that build cars and trucks in the U.S. The tariffs were originally put in place on cheap steel imported into the U.S. from a total of six countries that threatened to collapse the U.S. steel industry back in 1993. Some 13 years later, the U.S. steel industry is healthy, and the tariffs that once were helpful, are now creating artificially high steel prices in the U.S.
Six automakers including General Motors, Ford, DaimlerChrysler, Honda, Nissan and Toyota lobbied hard for this outcome and were extremely pleased yesterday, despite not getting tariffs lifted against steel imported from Germany and Korea, tariffs on both of which will remain in place until reviewed again in 2011.
The rising cost of raw materials, steel in particular, has been a constant thorn in the side of our own domestic auto industry, the members of which are busy trying to orchestrate complex turnarounds at the moment. Hopefully market prices for steel will begin to drop as competition to sell this all-important ingredient in modern day cars heats up again.
[Source: Just-Auto]
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Reader Comments (Page 1 of 1)
Jason 11:45AM (12/15/2006)
Anyone have any numbers about how this will effect the cost of vehicles?
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mike 11:51AM (12/15/2006)
This means cheaper cars for us consumers right? :-)
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TheOne442 12:27PM (12/15/2006)
I would hope that the automakers pass this savings on to us, but no suprises if they don't.
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epp_b 11:56AM (12/15/2006)
["Anyone have any numbers about how this will effect the cost of vehicles?"]
["This means cheaper cars for us consumers right? :-)"]
You people trust corporations far too much...
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Richard Warren 12:51PM (12/15/2006)
Price reductions? No, most will go to the bottom line.
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Accordsforall 12:12PM (12/15/2006)
Man.. have you ever actually figured otu what the word CONSUMERS MEANS?? It means.. consume. It means.. all ya basically do.. is eat what people produce and that be it.
Cheaper cars...? I got news for ya.. cars will get more expensive, and companies like GM MO FO CO and DCX will continue to have their rebate sales.. cause the damn company is in the crapper.
Cheaper sales.. they can eat that money up from steel charges.. and put it into crap ya didnt know ya needed.. like more alphabet soup for ya 5500lb suvs.
Trusting automakers again.. especially the domestics.. is a bad thing.
But if you dont know any better.. Im sure there is a Kia or a Daewoo / Hyundai with your name on it.
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SilverAero 12:41PM (12/15/2006)
Accordsforall, how dare you wish a kia or daewoo on any one that is like the unforgiveable sin of all car fans. And you don't know any better, i believe that the extra money will go into making a better product. Put the money into development of RWD platforms or in the interiors and then youve got something. What bugs me about these forums are the self righteous Japanese car owners who think your companies can do nothing wrong and that they love you guys, every forum has them.
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Infinihertz 1:06PM (12/15/2006)
I think the only manufacturer that can really afford to pass the savings to consumers will be Toyota, and I'm not convinced they will. As Richard Warren says, they need to go to the bottom line, and not because they're greedy; otherwise they won't stay in business.
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Shawn 1:20PM (12/15/2006)
does that mean other countries will now lift their tariffs on American goods?
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Rodion 1:16PM (12/15/2006)
I'm in favor of free trade without any barriers. Having studied economics, it is the best thing. Free trade does not cause job loss, it merely reshuffles them.
Anyways, it is good that steel prices will be lower now. This will allow companies to improve products elsewhere, namely quality of interior plastics, R&D in new technology. That sort of thing. So yes the consumer benefits.
I will always love economics because only this field accurately represents the overall picture.
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The other Bob 4:46PM (12/15/2006)
"10. does that mean other countries will now lift their tariffs on American goods?"
Of course not Shawn, but the people who support "free-trade" don't like to discuss the fact that it's mostly a one way street. Free trade in the American market and no access to other markets for our goods.
That's one of the reasons why the Japanese autos are doing so well. They have a protected home market. The Chinese demand that cars sold there, be built there or they face huge tariffs.
That said, the tariffs on raw materials hits U.S. manufacturers hard, especially smaller auto parts makers. Finished goods on the other hand are another story, we need to level the playing field and demand access to other markets, especially the Jaopnese market which is the third largest auto market in the world.
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broadlyspoken 2:30PM (12/15/2006)
@Jason
Steel prices were around USD425 a ton back in 2001 the last time these tariffs were reviewed. Steel prices are now around USD750 a ton.
@Shawn
No, it doesn't mean that other countries will reduce tariffs on US goods. Tariffs like those imposed by the ITC are unilateral by the US only. Only the Congress can impose tariffs as a customs tax. Though, if the President negotiates a free-trade treaty either bilaterally like NAFTA or multilaterally like GATT, the Senate must review and approve the treaty on behalf of the US.
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Gary Blomquist 2:34PM (12/15/2006)
God have mercy on our few steel companies that are barely thriving, and especially, God have mercy, on the U.S. steel worker.
I'm a union man, and I know we need to be competitive. I do know that Japan and many other foreign countries that ship steel here, have plants that were built up after WW2 because their infrastructure was bombed to smithereens by in the war. They got new tech steel plants after the war, and our steel industry didn't get any government help to upgrade our pre-WW2 plants to compete.
Japan and many other bombed to the ground nations actually got much $$$ help from us to rebuild their industrial base. Our domestic manufacturers that helped us win the war, got ////////Nada! Tariffs were the only way to protect our antequated mills, unless we got help from Uncle Sam the way Uncle Sam helped Japan and Germany and others.
It's a sad scenario.......up in the old "Rust Belt". We must build up our heavy industrial sector again....with modern cost effective plants. Maybe our domestic auto manufactures could scratch the back of the few domestic steel manufacturers that are left and help them financially?
I know, it's probably a "pipe dream".
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David 4:16PM (12/15/2006)
Finally! Now US automakers (including foreign owned who produce within the states) can get steel at actual market prices. If this reduces the costs for all automakers significantly, consumer's will probably benefit (see: competition).
Protecting the steel industry at the expense of other US industries doesn't make sense. (For the same reason that protecting sugar growers at the expense of candy manufacturers, many of whom have had to move to Canada, only harms our overall economy more).
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David 5:14PM (12/15/2006)
Gary, your explanation for how we helped foreign industry post ww2 is absolutely absurd. We gave them some assistance, yes, but in the meantime, US industries profited IMMENSELY from having no large industrial competition in the world. Japan, Europe, and Russia's industrial economy was in ruins, and US factories shipped goods all over the world. WE had the advantage. They certainly don't deserve financial assistance, now.
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Phillip 6:16PM (12/15/2006)
Grrreaat. Lower cost mean more profit and bigger CEO pay check!!!!
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Greg 10:17AM (12/16/2006)
When US Steel companies completely collapse in the next few years, all of those US workers will be out of work.
Their families will wind up on public assistance, welfare, etc.
Their communities will face cuts across the board, fire deptarment, police department, education and healthcare.
Why? Because our gov't officials were too busy listening to lobbyists.
In 30 years the USA will be fighting a civil war, and all of these precious automobiles we all love to read about, drive around in, will be nothing more than targets, along with the homes of the wealthy, waged by the masses of the poor.
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