I work in the metals industry, and buy globally. Here are my $.02.

When Bush 43 enacted steel tariffs, the domestic industry was reeling. We had a number of older mills, all producing different products and we were not able to compete with China, India, or Brazil for lower quality grades, and were no better than on par with European, Korean, and Japanese mills for precision grades. The tariffs produced chaos for the consumer, leading to shortages and pricing that literally was good for only hours at a time. However, the short-term shortages made mills profitable enough to consolidate, re-invest, and become efficient. Today we have 3 large steel producers (Nucor, Mittal, US Steel)making a net ~90% of our domestic production, instead of a dozen unprofitable mills. Almost all of our cold rolled low and high carbon steel is made domestically. This is a high value-add product for the mills. Our hot roll production drifts in and out with the energy sector. We do get import pressure here, some of which is foreign government subsidized (such as China) but the industry is generally healthy. Any subsidy of hot rolled steel is basically a gift from the Chinese government to the American consumer.

Aluminum is a completely different story. Our aluminum industry today looks like the steel industry of ~2003 described above. It is not a profitable sector, and our domestic production capacity is becoming more and more foreign owned, or outright closed. Tariffs are never a good long term solution to any industry, but if it buys time for re-organization and re-structuring, it may be a long-term benefit.

The reason the original plans were not nation-of-export specific (Trump has slid a bit on this) is that was easy for a country under sanctions to send a semi-finished product to an unsanctioned country for export to the US. EG, Instead of a Chinese mill sending a coil of aluminum to a US manufacturer, they would melt an ingot and send that to a Brazilian mill. That mill would perform a basic conversion to a coil (a fairly inexpensive process), enjoy the reduced Chinese price, and still avoid the tariff. To avoid these games, the government originally intended to apply to everyone.

So my opinion is that the aluminum tariff might be justified in the short term, if and only if the time allows the US mills to modernize and become profitable. If it's intended to be longer term it is a trade war no one will win. However, the steel tariff is absolutely ridiculous, and is probably only in place because Wilber Ross and Dan DeMicco (both former steel execs) are on Trump's staff. The US steel industry is healthy, and any areas where help is needed or on very specific products probably totaling less than 5% of domestic consumption.

Does anyone nhave hard numbers on us steel production vs what is imported. I doubt we are as bad off as people think.

This morning in the WSJ

A little boost here and a little boost there all adds up.

That's probably better than a steady decline.

I was hoping for tonnages. Mattis states that the military needs only 3% of US steel production

I wonder if that is for current needs, in a pseudo-war, or for a major conflict where we would need to build new ships and replace ships that sank? I suppose, for a major conflict the needs of the military could consume 100%

Remember the steel pennies, few new cars, washing machines, canned food, etc during WW2 ?? I think a situation like that could consume all we produce.

The numbers I am seeing is 82 million metric tons produced to 26 million metric tons imported.

I would imagine the 3% is for current status though what would be needed for WW3...I don't know if anyone knows how that war will be fought.

Remember the steel pennies, few new cars, washing machines, canned food, etc during WW2 ?? I think a situation like that could consume all we produce.

Jeeze White!...you really are old!

i think he is literally older than "Dirt."

Not only to re-negotiate trade deals, but i believe this pushed China hard enough that they put pressure on NOKO to the table on Nukes.

I don't think the tariffs area good idea. It certainly raises the possibility of a trade war which would be counterproductive for everyone.

But the biggest risk I see is that it drove Gary Cohn out of his position. Cohn is a free trader. Ross and Navarro are both protectionists. They offset each other in terms of influence on Trump. That balance is now gone.

Can't say i agree totally White, but i'm no expert by any means.

I just look at China eating our lunch, and know something is off. Free trade would be great, IF all our major trading market countries returned the favor.

Here's what i see China doing in the Steel market.

Their gov't is subsidizing their steel industry to produce steel at a loss if done on the open market.
These subsidies keep people working and gives them control of the market with below normal production costs. These subsidies do two things in reality. Produces the steel in lieu of unemployment entitlement programs like we have.
Here's one write-up about it.
http://www.nwitimes.com/business/steel/r...5200e5d0de.html

Looks like this one added 300 jobs to the area. Nothing like the old giant mills of past, but 300 jobs nonetheless... Plus there are the jobs supported by the place too...

Durant, OK is one of those places no one has ever heard of but would probably be a good place for someone to live. Several places to work, a university, Lake Texoma is nearby, the Kiamichi and Ouachita mountains are nearby.

http://m.newsok.com/article/5436368

And I said rebar only. Looks like round stock and T-posts are being made there too.

Mike

One more report on China steel.

https://hbr.org/2008/06/subsidies-and-the-china-price

Can you free trade with countries like this?

Sounds like he might've met Bessemer and Carnegie when he was a young man in knee pants!

Mike

Stabilizing our own,bodes well in future endeavors,...within reason of course!

Yes Mike, me thinks he kicked them in the shins!

Eventually the Chinese will have to stop their subsidies one day. We are getting the benefit moreso than they are.

Possible i guess SniperBBB, BUT AT THE PRESENT THEY ARE BUYING OUR DEBT, NOT WE BUYING THEIRS.