Earlier this year, the president imposed
tariffs of 25 percent on steel imports and 10 percent on aluminum imports. The
U.S. has temporarily exempted Canada, Mexico and the European Union as it tries
to reach separate terms with those entities.
The US imported 34.6
million metric tons of steel in 2017. The US imported its steel from Canada
17%, Brazil 14%, South Korea 10%, Mexico 9%, Russia 8%, Turkey 6%, Japan 5%,
Germany 4%, Taiwan 3% and China 2%.
China makes most of
the steel and they sell it to the countries we import steel from. China
developed an overcapacity and has been dumping steel on the global market. This steel is cheaper than the steel made in
the US. China has had problems outrunning their own headlights and they did
this with steel.
US imports totaled
$2.35 trillion in 2017. The $50 billion of imports being proposed for import
tariffs account for 2% of imports.
US Steel produced 14.4
tons of steel in 2017, down from 21.1 tons in 21.5 tons in 2007. Nucor Steel produced 24.4 tons in 2017 up
from 20 tons in 2007.
Below are the 15
countries from which the United States purchases the highest dollar value worth
of aluminum. These suppliers accounted for 86.3% of all US aluminum imports
during 2017.
1.
Canada: US$8.5 billion
(36.3% of total aluminum exports)
2.
China: $3.5 billion
(15.1%)
3.
Russia: $1.6 billion
(7%)
4.
United Arab Emirates:
$1.5 billion (6.5%)
5.
Mexico: $1 billion
(4.3%)
6.
Bahrain: $621.1 million
(2.7%)
7.
Argentina: $570.8
million (2.4%)
8.
Germany: $561.7 million
(2.4%)
9.
India: $484.1 million
(2.1%)
10.
South Africa: $354.1
million (1.5%)
11.
Qatar: $307.4 million
(1.3%)
12.
Japan: $295.6 million
(1.3%)
13.
France: $294.1 million
(1.3%)
14.
Thailand: $265.3 million
(1.1%)
15.
Italy: $241.2 million
(1%)
Exempted from Donald
Trump’s 10% tariff imposed on other aluminum providers, Canada and Mexico
represent 40.6% of US aluminum imports.
The other 13 aluminum suppliers are subject to the US aluminum duty. Perhaps ominously, five among these countries are also among the top 15 customers for America’s exports namely China, Japan, Germany, France and India.
The other 13 aluminum suppliers are subject to the US aluminum duty. Perhaps ominously, five among these countries are also among the top 15 customers for America’s exports namely China, Japan, Germany, France and India.
Alcoa produced 2.6
million tons of aluminum in 2016.
The steel and aluminum
tariffs might be needed until the DOD has reliable US suppliers. The current struggling US steel and aluminum
vendors should be able to ramp up over the next 12 months. After that, when
China stops dumping steel, the tariffs could go away. This is a DOD problem the DOD could solve by
giving these US suppliers some purchase orders.
A tariff is a tax
collected by the government as revenue. A 25% tariff on $50 billion in imports
generates $12.5 billion in tax revenue. Because these taxes are passed on,
consumers pay the $12.5 billion in higher prices of goods made from steel and
aluminum.
When the US
established tariffs in 1789, these were tariffs levied on already expensive
imported English and French furniture purchased by rich Americans. It did spur the creation of the American
furniture industry and everybody wanted that.
The rich didn’t care, because the imported furniture they already owned
became more valuable overnight.
The tariffs we are
currently imposing will be small and unpopular, but necessary. Food and
beverage packagers could stop using metal cans and go to plastic jars and
bottles. Auto manufacturers continue to use more composite materials and should
be able to adjust their use of aluminum to keep material costs in line. They
have already reduced the use of steel, because it rusts and weight a lot.
Norb Leahy, Dunwoody
GA Tea Party Leader
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