Free Trade

More Than 300 Manufacturers Just Asked Biden To Repeal Trump's Steel Tariffs as Prices Skyrocket

Trump imposed huge tariffs on imported steel and Biden is keeping them in place even as American businesses beg for relief.

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Steel prices are surging and American manufacturing is paying the price—literally, thanks in part to the ongoing consequences of former President Donald Trump's tariffs, which President Joe Biden has not removed.

On Thursday, more than 300 manufacturing businesses sent a letter to the White House urging Biden to repeal Trump's tariffs, which the signatories say have contributed to supply shortages, long lead times, and artificially high prices for key inputs made of steel and aluminum.

"It is businesses manufacturing in America such as ours who pay the tariffs on imports, and it is our businesses and employees who suffer when our product cannot compete with overseas manufacturers because the U.S. is an island of high steel and aluminum prices," reads the letter, in part. The manufacturers say that they are forced to pay prices as much as 40 percent higher for some steel products than overseas competitors, an "unsustainable situation for any U.S. employer."

According to SteelBenchmarker, an industry publication, one metric tonne of American-made hot-rolled band steel is now priced at over $1,500. That's nearly three times more expensive than it was at this same time last year.

While the economic recovery has caused sharp increases in the price of steel made in China and Europe as well, the real problem for American manufacturers is that prices for American-made steel are running well ahead of the rest of the world. In other words, there is likely more than just surging demand and slow-to-recover supply driving the sudden hike in American steel prices. Tariffs are almost certainly part of the explanation.

American-made steel closely tracked global prices until mid-2018, when Trump imposed 25 percent tariffs on imports of foreign steel into America. Since then, American-made steel has diverged significantly from global prices.

For American manufacturers that require raw steel inputs to make anything from cars to kitchen appliances, that's a problem. Buying foreign steel meaning saving some money, but then owing a 25 percent tax to the federal government—because tariffs are really just taxes.

The goal of Trump's tariffs was to increase the competitiveness of American-made steel relative to the rest of the world, but that does not appear to have happened. Instead, American steelmakers have simply been able to raise prices even faster because they are protected from competition.

And while higher domestic steel prices could, in theory, nudge American steelmakers to invest in expanding plants and hiring more workers, that doesn't seem to have happened either. Even amid surging prices, U.S. Steel announced this week that it was canceling plans for a $1 billion expansion of one of its major steel plants in Pennsylvania—an expansion Trump had touted as evidence that his tariffs were working. Bank of America, meanwhile, is warning that high steel prices are likely a "bubble" that will soon burst, rather than a stable long-term situation that would encourage steelmakers to invest in more capacity.

The manufacturers petitioning the White House for relief say it takes up to 20 weeks for some orders to be filled—three to five times longer than the four-to-six-week wait that was typical before the tariffs.

"We support a strong and thriving steel and aluminum industry," the manufacturers told the White House in their letter, "but producers today simply cannot meet demand and the tariffs create a tax that only manufacturers in the U.S. must pay."

The Biden administration has waffled between defending Trump's tariffs as "effective"—which they are clearly not—and promising to be more discerning about how it uses (or abuses) the executive trade powers Trump stretched to new limits.

Neither approach offers much relief for American manufacturers that have been caught in the middle of misguided federal trade policies for over three years. Biden should set aside politics for a moment and listen to what they have to say.

NEXT: Gavin Newsom's Idiotic Case Against the Recall: It Costs Too Much!

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  1. Everyone’s prices are up. We are just leading.

    1. Yep. Did people think all those covid bailouts were going to come without cost? We are going to see prices rise on everything, with no accompanying rise in wages.

      1. This is good news for bitcoin?

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      2. Hello stagflation!

      3. “with no accompanying rise in wages” Incorrect. But Econ 101 sans Marxism would tell you that.

    2. Reason on Economics: “A 25% tariff *tripled* prices! Tariffs bad, m’kay?”

      Clown Magazine

      1. It’s absolutely pathetic.

  2. That $10 million of the 1.9 trillion for infrastructure plan that will be used for construction is now going to cost the taxpayers about $300 million. Thankfully, “equity” prices have remained stable.

  3. Biden should set aside politics for a moment the first time in his 50-year political career

    Fixed.

  4. … we are here to help.

    Thanks, no. We’re good. Really. Can you leave us alone? No? Of course not, it is a mental health issue. Yours.

  5. My family as been in the Steel Business for 40 years. We’ve grown year to year at a steady rate for that time. Covid never slowed us down. In the last 6 months sales/demand has skyrocketed to unprecedented levels. The major contributor to this has been lumber prices are way up and people have have to flocking to steel structures like never before.

    We’ve had price increases over the years.. it’s always due to one thing and one thing only, Demand is exceeding production. The argument that the Trump’s Tariff’s are causing the prices is false, even if you claim that the Tariff has decreased the available steel. If that were true we would have been here seen this in 2018.

    To put demand into perspective we had a record year in 2020 by a few percent like normal, we passed our 2020 sales in March of 2021. The only thing that is going to make steel prices go down is demand needs to go back to somewhat normal levels.

    1. I’m sure your anecdotal story will surely be right instead of mountains of actual evidence across the industry as a whole.

      It was the same story when Bush Jr. did it in the early 2000s. Why anyone would be surprised that the EXACT same thing is happening is beyond me.

      And here we have “libertarians” in this comment section arguing for tariffs against the free market. What an absolute joke.

      1. I wouldn’t use the word “libertarian” to describe the tariff proponents on these comments. They’re Trumpsters who come here to insult libertarians.

        1. They are right-wingers who treat Reason like it’s a part of their social media feed.

          1. Hey Jeff, did sarc invite you to his weekend at a half-million dollar lake house?

            1. He tried inviting me, but I already had plans at a three quarter million dollar lake house.

        2. Even with the mute function sarc can’t stop crying.

    2. While I’m sure lack of steel inventory is partially due to construction as you mentioned, it is also due to the tariffs. Tariffs have reduced steel imports and placed additional pressure on domestic production. Domestically, we don’t have the capacity. Elimination of the tariffs would alleviate that pressure, increase inventory, and reduce prices. Free market at work.

  6. Guess Biden has a steel resolve on this issue.

  7. Nope not tariffs and anyway you pimped Biden and he didn’t end them so I guess that plan didn’t work out so well.

    1. Trump used tariffs as a means to an end. With Biden, they’re a key structural element in what passes for economic policy.

      1. I prefer not being someone else’s means. But that’s just me.

  8. Sorry Boehm, you have zippo credibility after ‘presstituting’ yourself for Basement Bunker Biden.

    1. Oh man, boo hoo. He says one nice thing about Biden and all you snowflakes just melt.

      1. Biden is continuing with Trump policy. How is that good?

        1. How is it bad? Trumpistas should be trumpeting or something.

          1. It bad because it’s just a bad idea. No matter who it is .

            1. Um…. Are we allowed to say that now without being shouted down by a wall of spam??

              1. Poor sarc.

          2. Sarc, I’ll be civil with you and explain the difference. Trump used tariffs as a tool to get China to knock off their crap. Biden just likes tariffs. So they will now be a permanent feature.

            Does that clear it up for you?

  9. Meet the new boss, same as the old boss.

  10. How many idled steel mills are there in the United States? Looks like quite a few were closed over the past 2 years.

  11. “Trump imposed huge tariffs on imported steel and Biden is keeping them in place even as American businesses beg for relief.

    You know who else begged for relief from Drumpf’s economic policies? Charles Koch, the billionaire who funds Reason.com.

    Don’t worry though. Biden knows he’s in office to serve billionaires. He’ll ultimately do whatever the richest Americans want.

    #InDefenseOfBillionaires

  12. Executive Order Taxation is unconstitutional and should be seen as a treasonous action deserving of hanging. No Taxation without Representation!

  13. This must be a mistake. I’m pretty sure Biden repealed the steel tariff on day one.

    1. Maybe he did it on an etch a sketch and couldn’t tell the difference.

  14. 80 million people voted for Biden including Boehm so whatever Biden does will be exactly what they want.

  15. According to the chart in the article, manufacturers can still purchase Chinese steel and pay less than any other source of steel even factoring in the tariff. What’s the relief these manufacturers are seeking?

    1. They’re looking for relief from foreign competition.
      In other words they know they can’t compete and should go broke.

  16. We are in a war with China folks. That’s what nobody understands. Why are they building military islands, military naval ports in So. Africa? What we do t give them … they are going to take. Hellloooi!!!! Please wake up.

  17. Funny. I seem to remember when the steel manufacturers were begging Obama for a tariff.

    1. They beg every POTUS for a tariff. It’s the steel consumers who want them removed…

      1. Right.
        These guys just cannot compete.
        So they want tariffs.

  18. What about all the companies that benefit from the tariffs? It’s complicated, isn’t it Reason? Just another Trump hit piece with misleading “facts”.

    1. So you are cheering cronyism, the plundering of the masses to support the P&Ls of the politically connected, but non-competitive US suppliers?

      Zero-sum economics is a fancy name for theft…

      1. And it’s actually negative-sum. Pay more for something, not able to pay for something else. A loss.

  19. “The goal of Trump’s tariffs was to increase the competitiveness of American-made steel relative to the rest of the world, but that does not appear to have happened. Instead, American steelmakers have simply been able to raise prices even faster because they are protected from competition.”

    What??? Domestic suppliers benefiting from a government kneecapping of consumer choice?

    Say it ain’t so!

    1. Lolbertarian soyboys are always looking to sell the US out to the lowest bidder, which is, ironically, a communist country.

  20. Only in the Bizarro -World of ‘Reason’ is staunch support for Chinese mercantilism the same thing as ‘free trade’.

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