Steel Tariffs

China is flooding the world with low priced steel. They have abandoned inland steel factories and built new ones on the coasts in order to massively export steel. Of all the exported steel in the world, China exports 50% of that steel. China is not a free market country. Their State Owned Enterprises can operate outside of free market economic constraints.

Canada is the largest exporter of steel to the U.S. Mexico is 4th. To date, both are now exempt from these tariffs. No one knows what the administration’s final tariff list will look like. What needs to happen is for steel trading countries of the world to jointly oppose China’s overproduction. Another measure would be for the government to give tax credits to steel producers to modernize their plants to be more efficient (though, I understand the U.S. has some of the most efficient factories in the world).

If The U.S. becomes an island of higher priced steel relative to the rest of the world, that will only incentivize U.S. manufacturers to move production off shore to compete on world markets and even then import products into the U.S. That is a direction we must not go.