[Balog]

Much as I dislike the Eurotrash Union, I agree that steel tariffs deserve censure.

http://story.news.yahoo.com/news?tmpl=story&u=/ap/20031110/ap_on_bi_ge/wto_us_steel_031110161712

[Bill Hook]

What no cheese, w(h)ine, or overpriced, unreliable cars? Oh, darn. ;)

[Deepdiver]

We should just tell them we will apply it towards their account (what they owe us for the first two world wars). OR, lets pay them (in Iraqi dinars), but then we get to give France back to Germany:D !!

[PeteyPete]

30% tariffs on steel are a horrible idea.....I guess Bush never heard of the term "Diffused Costs, Concentrated Benefit"

He might save the steel industry for a couple more years, but he is increasing the costs of production on every item manufacturered in the US that uses steel. The sad thing is that the steel industry isn't restructuring, they are laying off workers at the same price and they just increased their own prices 30% (to match the imported prices). Tariffs like this save a few thousand jobs in the short run, and cost society millions (maybe billions) in the long run.

[TheBluesMan]

What worries me is that we import so much steel today, if another World War cropped up, we'd be unable to increase weapons production like was done in '42 without serious problems. We *need* American steel. Unfortunately, tarriffs are not the answer to keeping U.S. steel mills in business.

[Iain]

Bastion of 'free trade' that you've got over there guys huh? ;)

(You deserved that due to the comment about unreliable cars - I'll have you know that some very reliable cars are made in Britain; by Toyota.)

[Waitone]

Steel tariffs is just opening salvo being fired into the US. Right behind it will be rounds related to textiles and furniture. Bush uncharacteristically took a solid stand wrt to steel imports and now he is on the horns of a dilemma. Incur the wrath of union steel in key electoral states or stand by while the EU slaps fines against the US.

The US has been worshipping at the altar of "Free Trade" for 15 years now and we are beginning to see the consequences, not projections of the consequences. You don't get something for nothing and there is most decidedly consequences to so-called "Free Trade."

Does it really matter that the US has no native steel industry? Accroding to the "Free Traders" that is not a problem. The FT construct says it is ok to have strategic materiel in the control of foreign (if not hostile) countries. Notta problem. Problem is Joe and Martha Sixpack's BS meter pegs when the argument is made. Joe and Martha had little input into the decisions leading to "Free Trade." Now maybe they will get to enter the debate during the 2004 election.

George Washington warned against "entangling alliances" as a threat to our sovereignty. We are about to begin a public debate (which up 'til now has been quashed) on the merits of "Free Trade." Perhaps the debate will conclude "Free Trade" ain't free and it ain't trade

[Glock Glockler]

TheBluesMan,

1 - We are and have been transitioning from the industrial age to the information age. Fighting giant wars with long assembly lines of production is a thing of the past. Information and technolegy will be the keys to winning future battles.

2 - If you want to keep the industries we have domestically located please write a polite but firm letter to Congress advising them to:

- lower corporate taxes
- not give any extra support and protection to unions
- get out of the school business
- appoint judges that will put an end to the frivilous lawsuits that strangle businesses
- cease the senseless regulation that likewise strangles businesses

- Stop approving these stupid foreign adventures that get us into wars

How's that?

[w4rma]

Glock Glockler, I noticed that you included "not give any extra support and protection to unions" in your list. Does that mean that you support wages for Americans at the same rate as the Chinese give their factory workers? (about $0.40/hour) Or the same wages that programmers, accountants and engineers make in India for Americans? (about $10K/year)

[makarov1]

I theory, free trade works. However, all markets are not created equal. Free trade between the U.S. and a huge country like China sounds appealing, until you find out that China is a desperately poor nation that can't afford U.S. products. China is poor, for sure, but it does have a growing middle class with more disposible income. The company I work for buys fasteners from China (nails and screws) and we all know that U.S. steel is not competitive in the world marketplace. Those are cold, hard facts. What to do about it? Good question.

[Balog]

[Homer voice] In theory, Communism works. In theory. [/Homer voice]

Sorry, added nothing to the thread. But that's a really funny episode of the Simpsons.

[RocketMan]

W4RMA,

First, 73 to you.

Second, union membership is not a guarantee of higher wages.
Hasn't been for some time, what with a relatively small number of people belonging to unions compared to past years.

FWIW, the lowest paid technical job I ever held was also my first, and it was when I was a union member. Union membership in that job only fostered strikes and violence, not higher wages and better benefits.

I've not been a union member since, and my pay and benefits have increased significantly over the years as I have improved my employment positions in high tech.

In every place I have worked, whenever union representation was brought to a vote, it was voted down resoundingly. The workers in those places knew it would cause more harm than good.

Not a big union fan here.

[Destructo6]

As mentioned, the US, as well as every other country, does have a national interest in ensuring that it retains certain capabilities. Steel production is one of those. I don't know if tariffs are the proper way to do it, however.
You deserved that due to the comment about unreliable cars - I'll have you know that some very reliable cars are made in Britain; by Toyota
And Ford. I suppose there's Jaguar and Rover...wait, they're Ford, too.

[w4rma]

Unions are simply a group of workers that works together to try to fight for better wages and benefits. You can't fight for those improvements alone.

Note, while *you* aren't unionized, you and I enjoy the benefits of the legal battles that unions have helped win over the past century.

Note, it is illegal for any legal structure (unions/businesses) to engage in illegal acts of violence.

Best regards, RocketMan! :)

[Waitone]

A really informative site chocked full of factoids pertaining to "Free Trade."


http://www.tradealert.org/

Factoid--China has 73 million "surplus workers."

Factoid--If China is so full of poor people, why is the country permitted to maintain high import tariffs on products produced in the US. We drop our tariffs on product poor Chinese manufacture yet our products are held to a higher tariff if we try to sell them in China.

[jimpeel]

If we had another world war, we would be in deep s---. We no longer have control of the Panama Canal. We have a waning steel industry. Manufacturing capability is nil.

When you consider the diverse industries that made weapons during WWII -- GM, Singer, et al -- one is hard pressed to believe that that could happen again.

As an example, there is no way that we could turn out Liberty Ships at one every four days today.

[Matt249SAW]

Lady's and gentalmen,

I believe that the day's old steel production are over. take for instance Steel Dynamics Inc. They have done nothing but grow straight through this recession. They have even sold steel to china!!! Thats right, when other company's like Slater steel are forlding, SDI has grown. Why you ask? well, frist the guy in charge kieth Bussy, is a financial geniuss to be placed on the same pedistal as the Firestones and the Fords of old. Bussy has seen the use of Unions decay and seen that as long as you can provide a better alternative to Union labor, you can retain the right of chooice hire and fire that his compition have not been able to do. Look them up. You'll see!! And I'm even Union!!!!


hmmm

[telewinz]

Do away with the tariffs, we are only buying the steel industry time not changing the end result. US produced steel will still be here only leaner and more able to complete with the rest of the World. The unions and management deserve most of the blame not the competition. Their current situation was a long time in coming and has been feared (and ignored) for over 20 years. "Lets pretend" that everything will be alright while we demand more benefits and higher wages (and less productivity).

You killed off the Golden Goose and ate her, what do you expect? You don't really think I'm going to pay more for my consumer goods so that you can maintain your cabin cruiser and summer home? Most of the "support steel" rallies around here are attended by political office holders and union members, no one else cares. Steel will still be made in this country long after Weirton and Wheeling Pitt steel go by the wayside and are broken-up.

The next guy who brings my pizza might be a "highly trained" 'ex' steelworker. Hows that for a career change? You did it to yourselves:uhoh:

[Bill Hook]

The highly trained steelworker might move on to a better job, too. I believe Youngstown, OH experienced a boom in emplyment in other industries moving in to fill the void left by steel, with wages actually going up. Of course, this didn't happen overnight and many were unemployed for several years.

I think it is in the strategic interest of the US to have a steel industry, but the thing is the industry should specialize so that it can stay afloat by not trying to compete on all fronts.

Another piece of info that I'd like to add, is that when I took the Toyota plant tour in Georgetown, KY, they mentioned they used a lot of US made steel, but that they couldn't get the right kind of steel from US mills for a significant part of their production b/c the US mills either didn't make it or not in the quantity and sizing needed for the stamping presses (each the size of a large house).


I'll have you know that some very reliable cars are made in Britain; by Toyota.

And Honda.

[Don Galt]

Screw theory-- in PRACTICE free trade works, and it works well.

This story is an example of how unfree trade bites you in the buttocks.

These steel tarrifs have cost american companies jobs-- companies that make steel products, not surprisingly.

The tarrif makes it more cost effective to export the manufacturing overseas and import the completed goods, rather than import the steel. :rolleyes:

What part of forcing jobs overseas sounded like a good idea to this president? (I know, it was never about saving american jobs, but about saving jobs in key election states for a few years.)

We've probably lost far more manufacturing jobs than steel jobs we've saved.

And as to another world war, we won't have trouble gearing up for one if we needed to in a hury... its not like steel is a strategic capability that we couldnt' ramp up in 5-6 months if needed.... the 40s are over, it no longer takes 1-4 years to build a new plant. Hell, california had an energy crises and had 4 new energy plants the next year!

The government, especially the federal government is completely incompetant at managing an economy, so they shouldn't even try.

Just let the free market do its job, in practice, and you things will go much better-- better than you could even hope to achieve in theory with government manipulation.

But then, the whole economy is based on worthless dollars anyway, so rare indeed is the politician who has the integrity to stand by principles of capitalism and return to the gold standard (or get the government out of the money counterfieting business.)

[Don Galt]

Oh, and american steel did it to themselves. Like auto manufacturing and airlines, once you start doing business with unions, your days are numbered.

Better just keep your employees happy enough that they won't unionize-- its cheaper in the long run. And american steel companies seem to be poorly run.

Let poorly run businesses fail. IF there's a need, someone more competant will come around and fulfill the need.

Why subsidize incompetance?

[Bill Hook]

If a company's infrastructure is any good, it wouldn't be too much to expect that it be bought up and run by another entity. Methinks labor problems are the crux of why this doesn't seem to be the case.

[Glock Glockler]

Glock Glockler, I noticed that you included "not give any extra support and protection to unions" in your list. Does that mean that you support wages for Americans at the same rate as the Chinese give their factory workers? (about $0.40/hour) Or the same wages that programmers, accountants and engineers make in India for Americans? (about $10K/year)

Ever hear of something called comparative advantage? Well, that's the reason why you 1) remove the external constraints that harm American businesses and 2) allow the market to allocate resources to where they're most profitable. A while back many broom makers were put out of business because a factories could churn out better quality brooms at a fraction of the cost.

The function of a market economy is to provide goods and services, not jobs, or would you like to go to a Soviet-style economy with full employment?

[Mil Novecientos Once]

Asian steelmakers take aim at US
http://news.bbc.co.uk/2/hi/business/3259761.stm

The tariffs helped protect the US steel industry
Asian steelmakers have said they will consider retaliation if the US does not remove tariffs on imported steel.
The warning came a day after the World Trade Organisation's highest court ruled that the US tariffs violate global trade rules.

Japan said it would retaliate if the US did not back down while China and Korea indicated they might follow suit.

The EU is set to impose retaliatory sanctions of $2.2bn on imports of some US goods.


Japanese trade and industry minister Shoichi Nakagawa said Japan would notify the WTO of its retaliatory measures if the US did not lift the tariffs.

He did not specify the size of any sanctions but Japanese newspapers said they were likely to be about 10bn yen ($92m; £55m)

Motorbikes and oranges

In China, foreign affairs ministry spokesman Liu Jianchao said: "With respect to the further measures taken by various parties, it will depend on the attitude that the US will take."

A South Korean official said Seoul was studying its options and retaliation was among the possible courses of action.

The EU plans to target US imports worth $2.2bn a year - including Harley Davidson motorcycles, citrus fruits and textiles - in retaliation.

The US measures represent a significant and wholly unwarranted burden on our business and on our US customers

Anglo-Dutch steelmaker Corus
The US measures were introduced in March 2002, imposing tariffs of between 8% and 30% on selected types of imported steel, and hit Chinese exporters particularly hard.

While China saw its steel exports to the US fall 15%, it had to lower its own import tariffs and quotas following its entry to the WTO.

Along with Japan, South Korea and New Zealand, China had supported the EU-led complaint to the WTO last year.

Brazil, Norway and Switzerland also backed the EU's action.

New Zealand's trade negotiations minister Jim Sutton said he now expected the US to back down - eventually.

"They've always exhausted all means of appeal and then complied when they've lost in the past, and we expect them to do that again," he said.

Bad for US consumers?

A spokesman for Anglo-Dutch steel group Corus said it hoped President Bush would now act quickly to lift the restrictions.

He added: "The US measures represent a significant and wholly unwarranted burden on our business and on our US customers."

US officials said President Bush disagreed with the WTO ruling, although he had made no decision on a response.

The tariffs have been controversial in the US as well, with steel consumers such as the automotive industry, complaining that the tariffs have driven up their costs.

At least one report has said that more jobs have been lost in steel consuming industries than have been saved among steelmakers.

[Don Galt]

I'm in direct competition with Indian programmers. Companies can outsource work to india for less than I'm willing to work for.

Such are the breaks. You don't see me crying for sanctions against companies that do.

The free market, in the end, means that those cheaper Indian employees help grow the industry, and HELP CREATE JOBS FOR ME.

And government intereference to try and "protect" my job would simply destroy jobs here.

This is what gets me about people ranting about "illegal aliens" taking their jobs... I don't know any of those people who rant who want to go pick apples for 10 hours a day. Yet they want to stop the apple growers from being allowed to hire people who are willing to do the work?

This is all part of the same principle-- you ban something, and you distort the market. You ban guns, to decrease crime and you end up increasing it. Teh idea that you can just ban guns and decrease crime is the exact same error as the idea that you can just ban worker and protect local jobs.

It usually works the opposite of what you want.

[Sean Smith]

Free trade would be great if we practiced anything close to it. But we don't. We didn't before, and we don't now, so free trade hasn't caused all these supposed evils that all the demagogues who failed economics think it does. Tarrifs and subsidies are just a mechanism from buying votes from dumb constituencies.

[Stealth101]

Alot of your points are good however there is one point that you should ponder....we are in trouble not because of of poor manufacturing or unions but because of poor economic leadership and greed.......Henry Ford and others like him started a partnership with the common man and the middle-class was born.....providing jobs and getting the money back in the end by the sale of products produced....a circle of economic harmony.....
as it were....
For the last 30 years we have had greedy economic policies that have eroded this circle of economic harmony and the very foundation of our society.....
As far as I am concerned the rich no longer want to share with us.....we are given Nafta and Gatt and a flood of US companies flee leaving us with a broken circle....... lost jobs and and tax base....Foreign companies also exploit the back door of Mexico....dont forget coorporate raiding or the corupting of various Savings and Loans around the country......Savings and Loans that by the way belonged to.....the people!The flood of Chinese product sans Clinton further destroying American manufacturing and businesses....his cronies get rich! at our expense
We are now flooded with Illegal aliens(the ultimate union buster)there are tens of thousands in my state and they work for cheaper and devalue the little guy....me....they pay no taxes and send most of the money home to mother Mexico
The reason I state some of this is not to try and cry conspiracy see this for what it is......the reason is at no other time in our nations history is there a greater need than now, for all of us to band together to fight tyrrany and protect our freedoms to be a team again! You see the tyrranny is here manifest first as economic...... its ruthless and I believe it will manefest against our freedoms there is little regard for the American people by the big coorporations......as for the steel tarrifs....why not?....such moves have saved Harley Davidson, Chrysler and a host of others.......anything to restore our economy.......

[telewinz]

....we are in trouble not because of of poor manufacturing or unions but because of poor economic leadership and greed.......Henry Ford and others like him started a partnership with the common man and the middle-class was born.....providing jobs and getting the money back in the end by the sale of products produced....a circle of economic harmony.....

Our current state of affairs is very mild when compared to how business was done in this country and the World just 100 years ago. Capitalism and greed (profit) is our motivation and is what makes our system work. What is happening to the steel industry is no different than what happened to the American electronics, textiles, and shoe industries to name a few. Sometimes it becomes quite funny, do you have any idea how much imported steel our American Steel Industry has purchased over the years? Who's playing who for a fool? When was there ever harmony?

[Don Galt]

Stealth, your economic education is missing a bit-- the rich get richer by making everyone else richer. The idea that its a zero sum game and some have to loose for others to win is false... total wealth grows over time, growing it faster makes everyone involved in the enterprise richer, not just "the rich".

What's changed in the last 70 years (not 30) is the federal income tax. The federal income tax is the greatest cause of poverty this country has ever known.

IF we didn't have that, we would have a much better society (and the government would only have to reduce itself to the size it was a decade ago, or so.)

ITs a slippery slope-- an exponential feedback loop-- the tax undermines the economy and requires more taxes, which further undermine the economy, etc....

Eventually its going to fail, and we're going to be in a world of hurt when it does.

[telewinz]

What's changed in the last 70 years (not 30) is the federal income tax. The federal income tax is the greatest cause of poverty this country has ever known.

The "Great Depression" wasn't caused by our federal Income tax or any other tax. Our longest running economic boom occured WITH our federal income tax in place. Our standard of living increased at a higher rate after the federal income tax was in place than before. Your comment seems more like a political opinion rather than an established fact. Unregulated business has caused a great deal more hardship than any federal tax. Study your history and count the number of economic recessions that have occured (and their causes) during the last 200 years. Are you aware that we in the the United States enjoy one of the lowest tax rates in the World?

[Waitone]

The entire federal leviathin in the issue. Minimum wage is a red herring. It is designed to distract the malcontent from true problems. Federal taxes? Another problem but not the problem.

State taxes
Federal taxes
Social Security tax--both employee paid and employered paid
Medicare tax
medicaid tax
gas tax
property tax
car rax
road use tax
gas tax
occupancy tax
sales tax
. . . .and far more taxes than I can list this early in the morning.
all costs associated with health laws--USDA and FDA ferinstance
all costs associated with environmental laws--EPA ferinstance
all costs associated with safety laws--OSHA ferinstance
all costs associated with litigation related to civil laws
all costs assoicated with litigation associated with trial lawyers mining corporate america--tobacco, Microsoft, gun manufacturers, big fat, etc
all costs associated with litigation associated with prosecution assoicated with health, environmental, and safety laws.

All the aforementioned taxes and others I can't remember, all the aforementioned regulator burden, and all the aforementioned actual and threatened legal costs are apportioned and loaded on the back of the US worker. These costs are a fixed, non-reduceable costs of employment the US worker must carry into a "global" work place. The US worker must now compete with other workers who have none of the fixed costs added to his wage rate.

We focus on differences in wages yet the real costs of employing an American is hidden and discussed.

I wholeheartedly endorse the concept of free trade and the free flow of capital to where iit produces the most beneficial effect. I do not endorse the statist market manipulation we now call "free trade."

I will however make one clarion admission as to the benefit of the statist manipulation we call free trade. It has conclusively demonstrated the US worker can no longer afford a burdensome, overbearing, oppressive, and arrogant federal goverment riding on our shoulders. The cost of government is too high and the loss of jobs is proof.

[PeteyPete]

The "Great Depression" wasn't caused by our federal Income tax

The federal income tax was a contributing factor in the great depression b/c Herbert Hoover had this insane idea to increase taxes during a recession b/c he had an aversion towards deficits. This along w/ lack of insurance in the case of bank failures, and the Federal Reserve doing little to reverse the economic downward trend by utilizing interest rates were all contributing factors in the Great Depression. There was a lot of blame to go around, but Hoover's taxation policy was certainly part of the equation. Even though it took place nearly 80 years ago, and economics has changed and evolved...I still cant understand what in the hell these jackasses were thinking.

[w4rma]

It is my understanding that the income tax was expanded by Hoover in response to the Great Depression that started, earlier, during his term of office.

http://graphics7.nytimes.com/images/2003/07/02/business/03JOBSch450.gif

Wealth Inequality Charts (http://www.ufenet.org/research/wealth_charts.html)

U.S. Constitution: Sixteenth Amendment

The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.
http://caselaw.lp.findlaw.com/data/constitution/amendment16/

1862 Federal Income Tax Return
http://taxhistory.tax.org/Articles/1862_return.htm

…
The Great Depression brought an end to GOP tax cuts. Faced with a ballooning deficit, President Herbert Hoover proposed a major tax increase, including new excise taxes and a broader, somewhat steeper income tax. In a striking display of bipartisanship, Democratic leaders embraced the plan. They even went Hoover one better, trying to replace the regressive excise taxes with an even more regressive national sales tax. It was a major reversal for the party, which had long opposed any sort of sales tax. It was also a huge blunder, prompting a revolt among rank-and-file Democrats. When the dust finally settled, lawmakers agreed to a host of new excises, as well as steeper, somewhat broader income taxes. Widely considered both prudent and distasteful, these changes constituted the largest peacetime tax increase in the nation's history. For Republicans, the law brought an unhappy end to Mellon's long campaign for tax reduction. For Democrats, it established the regressive starting point for New Deal tax reform.
…
http://taxhistory.tax.org/Articles/1920s.htm

[Iain]

This is an interesting one. As a euro and something of a cynic I will add that the WTO will have ruled on this one because of the political power of Europe within the WTO. Let us not forget Brazil and West Africa heavily hit by cotton subsidies paid to US farmers and I bet some could reel off a huge list of those hit by subsidies paid by our powerful western governments that destroy competition and hit some poor countries pretty hard.

[Coronach]

Closed, OT