Protectionism

This Steelmaker Looked Like a Winner in the Trade War. Now It's Suing the Commerce Department Over Tariffs.

Protectionism fails, even for those who were supposed to benefit.

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In March 2018, just weeks after President Donald Trump announced plans to place tariffs on imported steel, the India-based company JSW Steel announced plans to spend $500 million to expand its steelmaking plants in America.

A huge victory for "America First" economic nationalism, right?

Wrong. Less than 18 months later, the same company is now suing the U.S. Department of Commerce over the trade barriers that it once celebrated. In a complaint filed last week, JSW Steel claims it has been harmed by the steel tariffs because, as it turns out, even steel manufacturers with U.S.-based operations still sometimes have to import steel from abroad. When JSW Steel sought an exemption from the steel tariffs, the Commerce Department denied it and told them to pay up. In the lawsuit, the company argues that those exemptions should have been granted.

As I've written before, the tariff exemption process set-up by the Commerce Department is opaque and unaccountable. Even such rudimentary details as which Commerce Department officials are responsible for making final determinations, or the metrics by which those decisions are made, remain a secret. With little transparency or due process, the entire waiver procedure is open to abuse and political favoritism—something that businesses trying to navigate the exemption process have been complaining about for more than a year.

In its lawsuit, JSW Steel claims it applied for a tariff exemption so it could import steel slab—a type of bulk unfinished steel product—from Mexico and elsewhere. Steel slab is not produced in the United States in sufficient quantity to satisfy the company's demand, the lawsuit says.

But the Commerce Department apparently did not care about that. The lawsuit argues that the department "yielded to the objections of three competitive domestic steel producers" (U.S. Steel, AK Steel, and Nucor Corp.) despite making "no effort to verify their claims" and failing "even to offer any reasoned basis for its decisions."

Which, yeah, is pretty much exactly what everyone who's looked at the Commerce Department's tariff exemption process has concluded. It's the sort of dense bureaucratic operation where cronyism flourishes.

In testimony to the House Ways and Means Committee last year, the executive of a Texas-based pipeline builder said the process did not allow adequate time for businesses to respond to objections raised by U.S. Steel and other manufacturers. Once an application is submitted, there is little interaction between the government and the applicant, and there is no opportunity for businesses to "state their case," said Willie Chiang, vice president of Plains All American GP.

Those are "due process flaws that do not exist with respect to most other government procedures," Chiang complained.

Sens. Orrin Hatch (R–Utah) and Ron Wyden (D–Ore.) sent a letter to the Commerce Department last year outlining their worries about a lack of "basic due process and procedural fairness" in the tariff exemption system. The senators held some hearings about the problems with the process, but Congress has not acted to meaningfully restrict Trump's tariffs or instruct the Commerce Department to alter the process.

The fact that a steelmaker that once praised Trump's tariffs is now learning a painful lesson about the realities of "economic nationalism" might seem like karma—with maybe a touch of schadenfreude too. There's been plenty of that to go around. Aluminum manufacturers have sought protection from the tariffs that were supposed to help them. Appliance-maker Whirlpool initially cheered tariffs on washing machines before getting walloped by tariffs on steel and aluminum. And the American steel industry in general has suffered over the past year, largely because tariffs have increased prices and triggered a decline in demand—which has led to layoffs rather than the promised resurrection of American steelmaking.

But JSW Steel's suit is a welcome development. It's a chance for the courts to review the obvious problems with how the Commerce Department has handed Trump's trade policies.

The lawsuit demonstrates the extent to which Trump's trade policies are failing even for the industries that were supposed to be "winning." More government control over trade doesn't produce prosperity. It produces the special kind of misery that JSW Steel is now experiencing.

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  1. STEEL IMPLODING!!!

    1. Two in one day! Boehm is really flaming.

      Did I say that right?

  2. File under: Ask and you shall receive.

    Don’t ask for more government if your not prepared for what the government is about to give you (hint: stock up on lube).

    1. But, does oil have tariffs?

  3. India-based company JSW Steel announced plans to spend $500 million to expand its steelmaking plants in America.. Less than 18 months later, the same company is now suing the U.S. Department of Commerce over the trade barriers that it once celebrated
    It’s like those cab drivers that become Uber drivers and sue to turn Uber into a cab company.

  4. Waiting for the pro tariffs crowd to start posting
    das übliche schtick on the positive effects of tariffs.

    1. Waiting for actual signal data saying it is bad. One data point isnt a signal. But if you were intelligent youd know that.

      1. What kind of signal data are you waiting for?

        1. JesseAz isn’t going to answer your question.

          The pro tariffs crowd hate when factual data works against their narrative.
          They get triggered if the data is contrary to their adherence to arbitrary authoritarian trade policies enacted by Trump.

          1. Poor trolls, like Mauser.

            1. lol, actually saying libertarian things on a libertarian website isn’t trolling. You’re the troll here, sack of shit.

              1. marshaul
                August.6.2019 at 10:12 pm
                “lol, actually saying libertarian things on a libertarian website isn’t trolling. You’re the troll here, sack of shit.”

                OH! OH!
                New fucking lefty ignoramus learned “lol”! I’ll bet it took a looooong time; lefty ignoramuses are NOT bright.
                Fuck off and die.

  5. Boehm, China just devalued their currency today.

    Of course, trade with China would be free trade if it weren’t for Trump.

    1. Yeah. Why do you think they did that?

      1. The End is Nigh?

    2. It’s too bad we had no tariffs at all before January 2017. Then Trump unilaterally imposed them, forever ending all that free trade we had.

      1. That’s called tu quoque, and you remain literally retarded.

        1. marshaul
          August.6.2019 at 10:13 pm
          “That’s called tu quoque, and you remain literally retarded.”

          Your post is called one from a fucking lefty ignoramus. Fuck off and die.

  6. And suspended buying US agricultural products.

    Stock markets tanking everywhere.

    This is not going well.

    1. This isnt tanking.. for fucks sake.

      1. I did not call it tanking. Tanking would be a recession.

        It is not good.

        1. It’s a blip in a small sample time period.

        2. By the way…

          “Stock markets tanking everywhere”

          From your post.

          1. Oh that. Pretty big drop ain’t it? Yeah to me that is tanking and all I want is a simple basic comfortable retirement.

            I lost in value today…don’t put this stuff on the internet.

            These things, the cost to business affected, the price shifts, the money paid to farmers who lost business, all of that is crap. We were doing fine before Trump and his minions decided to play poker with our labor.

            Screw all of them. You call it a ‘blip’ it means so much more. That is such a denigrating comment, like you own other people’s property and labor.

            I am no Trump supporter but the one thing I hoped for was that he would not screw around with trade and what we produce and sell yet that seems to be his favorite playground.

            How any libertarian can support that is beyond me.

            1. “Oh that. Pretty big drop ain’t it? Yeah to me that is tanking and all I want is a simple basic comfortable retirement. ”
              No, it isn’t.
              I explained this to you yesterday; you must have a short memory.
              Tariffs are bad, but griping about a 3% drop on the same day as a 4% gain makes it look like addition is a difficult subject for you.

              1. You are also literally retarded.

                https://money.cnn.com/data/markets/dow/

                Take a look at the 1 month timescale, drooling cretin.

                1. OH! OH! OH! OH!!!!!!!!!!!!!!!!!!!!!!!!!!!
                  A *4% drop* from a record high over the last month!!!!!!!!!!
                  How…………….

                  Fuck off, you pathetic piece of shit. Your handle is now on the list, in case you (as some lefty scumbag using a new sock) ever uses it again.
                  Try adding 1+1. Take your time; we know it’s tough for someone of your limited abilities.
                  Oh, and did I tell you to fuck off and die? I did now.

          2. I remember when goofball Boehm spit out some uninformed articles about the DOW Jones dropping hundreds of points over a week period. Then the next month it reached the highest level EVER.

            You wont here out of these non-experts how the US Stock market is so strong that market corrections are now thousand point swings where they used to be hundred point swings.

    2. Imagine if we suddenly cancelled all the pre-Trump tariffs. The DJIA would probably hit eleventy trillion.

  7. This is hilarious. This is literally what OBL does in every reason roundup. Find a company losing some money and blame trump.

    1. To be fair, OBL gets paid good money to do that. Boehm doesnt get paid good money.

  8. This Steelmaker Looked Like a Winner in the Trade War. Now It’s Suing the Commerce Department Over Tariffs.

    Only Boehm thinks that this steelmaker looked like a winner.

    1. Steel makers make their own slabs. Steel processors buy slabs.

  9. India-based? Does that mean Indian owned, or is it foreign owned, taking advantage of being india-based?

    Either way, who cares if they’re butt hurt. The purpose of the tariffs was to help American companies in America, right?

    1. I thought it was to help Americans who want the dream job of working in factories. Like many companies, this one is internationally-owned, but their concern here is there US operation, which means US plants, which means, yes, US jobs.

      Try not to be an imbecile.

      1. their*

        Fucking Windows 98.

      2. Oh, look! A new fucking lefty ignoramus!

        marshaul
        August.6.2019 at 10:17 pm
        “I thought it was to help Americans who want the dream job of working in factories. Like many companies, this one is internationally-owned, but their concern here is there US operation, which means US plants, which means, yes, US jobs.
        Try not to be an imbecile.”

        Gee, I’ll bet you thought there was a point buried in that pile of bullshit.
        Fuck off and die. Far off where you won’t stink up the place.

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