Free Trade

Steel Company CEO Says Everyone Else Should Have To Pay for Trump's Tariffs, but Not Him

Robert Wetherbee says steel tariffs might force his business to shutter. But instead of asking for the tariffs to be lifted, he wants special treatment.

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As the head of a Pittsburgh-based metal fabrication and manufacturing firm, Robert Wetherbee has firsthand experience with the consequences of President Donald Trump's trade policies.

They've worked so well, Wetherbee wrote in an op-ed for The Wall Street Journal, that he might have to close his doors.

"Tariffs are blunt instruments and have also harmed many American companies, including my own Allegheny Technologies Inc," writes Wetherbee. "Our Midland [Pennsylvania] plant is hemorrhaging money."

Allegheny Technologies, which employs about 100 people, is the type of company that is especially vulnerable to Trump's tariffs. It imports stainless steel slab from Indonesia and turns it into sheet metal, which it then sells to other manufacturers who incorporate it into car parts, kitchen appliances, and more.

Being in the middle of the supply chain is rough when you're also in the middle of a trade war. Companies like Allegheny Technologies have to pay for Trump's 25 percent tariffs on imported steel, and then have little choice but to pass on that cost increase to their customers. But, as Wetherbee laments, that makes it difficult for a company like his to compete against foreign manufacturers who can make and sell sheet metal without having to account for an extra 25 percent import tax.

Buying American doesn't work, either, since U.S. steel is more expensive. One domestic supplier, Wetherbee writes, "quoted us a price for 60-inch slabs that was so high, the raw materials would have cost us more than we charge for the finished product."

Wetherbee's story is a perfect illustration of why tariffs fail in principle as well as why these specific ones have failed in practice.

Given all that, you'd probably expect Wetherbee to be a critic of Trump's trade policies.

Not so fast. Wetherbee's purpose in penning an op-ed for The Wall Street Journal is to ask for special treatment. He wants everyone else to continue paying Trump's tariffs, as long as his company gets a break—an exemption from having to pay the tariffs that Wetherbee says he still supports.

Give me a break.

It's true that the Commerce Department has set up a process for awarding tariff exemptions—technically, they are called "exclusions"—but the process is, unsurprisingly, a bureaucratic mess. It is opaque and unaccountable, with little recourse for companies whose requests are denied. 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.

At best, the combination of tariffs and tariff exemptions gives the Commerce Department the power to pick winners and losers. At worst, the process allows for serious cronyism. As CNN reported last year, large companies such as U.S. Steel are actively trying to block many exemption requests made by smaller business—because U.S. Steel is better able to absorb the added cost of tariffs than, say, a small metal fabrication business with 100 employees.

All of this, of course, is the entirely predictable result of giving the federal government greater control over trade and expecting federal officials to fairly and correctly decide which economic levers to yank.

Seeking special treatment from the government is a time-honored tradition, of course. However, it is surprising to see the editorial board of the usually pro-market Wall Street Journal give a megaphone to such a blatant call for cronyism.

At least there's one good thing to come from this: There is no better snapshot of the current state of Trump's trade policies than a CEO proclaiming that the president's tariffs are great while simultaneously begging to be saved from them.

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  1. Give me a break.

    Did you get permission from Stossel to say that?

    1. Stossel openly support coercive monopoly government claiming that free ones are not possible and that therefore means it is ok to support coercion.

      1. I’d ask for a cite but you’re run on sentence makes me think it wouldn’t be related to your post.

  2. “But instead of asking for the tariffs to be lifted, he wants special treatment.”

    Reason believes that free market governments are not possible , they want special treatment to actively support (limited) coercive monopoly ones on that basis while claiming they totally support free markets.

    Total

    1. Am I going all Hihnsanity arguing with a bot? I swear hpearce was a real poster?

  3. //It imports stainless steel slab from Indonesia and turns it into sheet metal, which it then sells to other manufacturers who incorporate it into car parts, kitchen appliances, and more.//

    Why is stainless steel from Indonesia so cheap?

    1. I think with steel there are different kinds and specifications. So one manufacturer may not find it profitable while another might depending on demand and production capability.

      He buys slaps and turns them into rolls.

      The middleman has customers for the rolls to certain specifications. In the supply chain this was working out for this company but now he will lose customers who will go elsewhere.

      My guess.

      All of this is just another reason to oppose tariffs and government interference and control of our liberty.

      1. It is also the case that a lot of these asian steel manufacturers are newer, and have more efficient plants. Additionally, it is often cheaper for them to source raw materials.

        This is the whole point of comparative advantage. There are infinite variables that go into the value a company can sell you, and they may be able to do it cheaper than someone else.

        1. No no no. Comparative advantage is a myth. Autarky is the way to go. /sarc

        2. Large scale steel making, even with modern tech, is still massive and dirty–exactly the kind of thing that most Americans do not want to live near. And the kind of thing that some Americans do not want to exist.

    2. “Why is stainless steel from Indonesia so cheap?” — THAT IS THE QUESTION..

      Because… Previous Trade Policy has been SUBSIDIZING foreign trade while simultaneously punishing (by over-regulating) our own.

      I don’t feel a millimeter of sympathy for going-under businesses that are supported by government policy/subsidizing. If you cannot compete in a ‘fair’ market; you don’t deserve to exist.

  4. The secret of steel has always carried with it a mystery. My hopes that he finds Crom and is able to save his little steel company.

    1. What is steel compared to the hand that wields it?

    2. Conchfritters, WHAT IS GOOD IN LIFE?

      1. The open steppe, fleet horse, falcons at your wrist, and the wind in your hair.

  5. At least there’s one good thing to come from this: There is no better snapshot of the current state of Trump’s trade policies than a CEO proclaiming that the president’s tariffs are great while simultaneously begging to be saved from them.

    Maybe if the lowly subject praises the Emperor with sufficient vigor, the Emperor will offer the serf a favorable Imperial Decree.

    1. That was my reaction as well. If you are going to ask the Big Cheese for a favor, you don’t start by telling him that one of his pet projects is a disaster.

    2. accidentally flagged.

  6. “At best, the combination of tariffs and tariff exemptions gives the Commerce Department the power to pick winners and losers. At worst, the process allows for serious cronyism.”

    Otherwise recognized by government agencies across the land as a win-win.

    1. accidentally flagged.

  7. “It’s true that the Commerce Department has set up a process for awarding tariff exemptions”

    This can’t be. lc1789, the butt plug, Jesse, John, all the Trumpistas assure us that tariffs are not taxes, and/or that they are paid by the dastardly foreigners who export their shit to America. Why would anyone wan to let the foreigners off the hook?

    No, no. Cannot be.

  8. “Robert Wetherbee says steel tariffs might force his business to shutter.”

    That sucks.

    You know who else has been severely hurt by Drumpf’s disastrous economic policies? Reason.com’s benefactor Charles Koch, that’s who. His hard-earned fortune has been stagnating in the $58,000,000,000 to $62,000,000,000 range throughout the #DrumpfRecession.

    This. Is. Not. Normal.

  9. Allegheny Technologies, which employs about 100 people, is the type of company that is especially vulnerable to Trump’s tariffs. It imports stainless steel slab from Indonesia and turns it into sheet metal, which it then sells to other manufacturers who incorporate it into car parts, kitchen appliances, and more.

    Why would imports from Indonesia suffer from US tariffs on Chinese steel imports?

    1. Why would imports from Indonesia suffer from US tariffs on Chinese steel imports?

      Because, contrary to what you may have been led to believe, Trump didn’t just single out China for tariffs on imported steel.

      1. Hell at one point he was slapping tariffs on Canadian steel. Which is beyond ridiculous.

        1. I dunno. They speak French there. By law!

        2. Canadian tariffs In the name of #NationalSecurity

          1. More likely the Canadian tariffs were about Melanie not shutting up about Justin T

        3. Was it really ridiculous? It seems to me we have a new trade agreement (USMCA) with terms more favorable to the US.

          Now, if only the Congress could ratify the damned thing….

  10. Leopards Eating Faces party.

  11. Begging Trump for an exclusion? How about a big campaign contribution? Money talks, bullshit walks.

  12. Where are the Trumpistas saying that tariffs only hurt the bad guys, or they are so small that they can’t be felt and are just revenue, that they don’t change customer behavior but at the same time fuck Evil China, which pays for all of it because tariffs on China are taxes on China no Americans…. I can’t keep up.

    1. Past their bedtime?

    2. “I can’t keep up.” — It’s not as complicated as you want it to be.

      “bad guys” – are those who “cheat” domestic policy (law) by importing from a foreign (law) base as well as expecting domestic law to subsidize it.

      Its exactly those saying, “I cannot be held accountable for following the law or fairness; and I have a Constitutional Right to insist people pay me to thwart the law.”

      The “Free-Trade” initiative of the 90s was just like EVERY-OTHER “Free” government sales pitch…. It was subsidized by debt and taxes.

    3. Nice strawman you have there. This has been explained to you, over and over. You are a waste of time,

      Now stay out of the way while the adults get things done.

  13. 3 years and the trade deficit is still higher than Obama’s

  14. The problem is that the larger steel manufacturers are in direct competition with his company. They are his only source of US made steel and they price it so high so that he cannot compete with them.

    I’m surprised that nobody has mentioned that before there was a Federal Income Tax, tariffs were the main source of revenue for the Federal Government.

  15. Great post!
    Still most of steel imports are from Indonesia.
    home and kitchen appliances are generally made of steel and they will be impacted due to these traffic.

  16. Great information,

    Steel sbobet88 good komoditi for us

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