Tax Funded Head-Start for Low Cost Country Tool & Die Makers

Joe Brown, in his blog, wrote an excellent, fictionalized (I presume) account of what it’s like to be laid off, followed by an excellent analysis of why we’re losing tooling money offshore and how the car companies are encouraging this.

What if we added that not only were taxpayer funds being funneled to China, the very recipients of these taxpayer funds, (GM, Chrysler and hundred’s of Tier 1 parts manufacturers) gave the Chinese competitors to North American manufacturers a 5-9% cost advantage by paying these Chinese suppliers on far better terms than they would pay say a company in Grand rapids, Detroit or Windsor.

Steel firms deny price fixing

The implications of such a suit, if it was to proceed, and especially if it were certified as a class-action law suit (which seems to be what the article is implying) would be vast.

journalgazette.net

A steel company customer has accused eight major steel manufacturers, including Fort Wayne-based Steel Dynamics Inc., of colluding to scale back production to force up prices.
A spokesman for Steel Dynamics on Friday denied the allegation made in a lawsuit filed last week. Also named in the suit is Nucor Corp., which operates plants in St. Joe and Waterloo. ArcelorMittal USA Inc. and its parent company, Luxembourg-based ArcelorMittal, are listed separately, making eight companies and nine defendants.
The suit was filed in U.S. District Court in Chicago by Standard Iron Works of Scranton, Pa.

EU threatens to impose tariffs on steel from China

Once again, no one is dealing with the problem that small and medium manufacturers have, that is, if you tarif the raw materials but not the finished goods, they get around the tarifs by supplying the finished product, a flashlight, whatever, at below our costs for the raw materials.

International Herald Tribune
The EU began an inquiry into whether Chinese exporters, including Baoshan Iron & Steel and Wuhan Iron & Steel, sell flat-rolled steel in the EU below cost, a practice known as dumping. The inquiry covers €1.2 billion, or $1.7 billion, of imports of hot-dipped metallic-coated steel.

The investigation will determine whether the steel “is being dumped and whether this dumping has caused injury,” the European Commission, the executive arm of the EU, said in the Official Journal.

The commission has nine months to decide whether to impose provisional anti-dumping duties for half a year and EU governments have 15 months to decide whether to apply “definitive” levies for five years.

Here’s another, similar article, from the Toronto Star, a local (to Toronto) newspaper.

EU officials have warned of a protectionist backlash if China doesn’t do more to open up to European exports. They’ve also asked that Beijing address the valuation of the yuan, which they say gives Chinese exporters an unfair price advantage.

Area lawmakers testify to keep tariffs on Chinese steel; Nucor called a victim

I don’t understand why anyone thinks it makes sense to impose tarifs on the raw materials coming from China and not the finished goods made from the same raw materials coming from China. All this does is cut the entire food chain out of North America and shift it all to China. Why don’t the steelmakers see it as shortsighted to cut off the legs of their customers? Why don’t the lawmakers see it either?

Nucor Corp. and other U.S. steelmakers are the victims of China’s illegal subsidization of exported steel, lawmakers testified Tuesday.

In the first day of a two-day hearing, dozens of lawmakers argued that the U.S. International Trade Commission should renew five-year punitive tariffs on hot-rolled flat carbon steel imported from China and 10 other countries. China was the main target.

China Currency Coalition

Every once in a while, I like to give a plug to the China Currency Coalition. They sure seem to be fighting an uphill battle (although I’m baffled as to why their point of view isn’t making itself in the eyes of the public and legislators).

Their basic premise is that Chinese currency manipulation is unfair. Well, of course it is. It’s also illegal under various statutes and international obligations. I’m no lawyer, so I’ll leave that one to the lawyers.

I can tell you this. Currency manipulation was rampant during the second world war war, and it was used as a weapon of war. That’s pretty serious. So why don’t we take these things seriously now?