Feb. 19, 2009 – 22:05:30
As I blogged Feb. 17, Nucor and other steelmakers pushed a “Buy America” provision into the stimulus package. Apparently that’s not enough. The Wall Street Journal reported today that Nucor and other steelmakers are preparing numerous complaints against China as part of a planned bid to impose tariffs on imported steel.
Estimates are that the stimulus package will account for 25 percent of domestic steel consumption over the next two years. The fear of Nucor and other steelmakers, apparently, is that China will dump below-cost steel to improve its U.S. market share in the other 75 percent of the market.
The fireworks will not just be with China and the World Trade Organization. Any U.S. manufacturer that buys steel for its finished products will pay more if tariffs are imposed. Caterpillar already has raised concerns. Locally, tariffs would increase costs for General Electric.
An odd result of the “Buy America” provision is that we could see two different pricing schemes for steel. Taxpayer-funded steel purchases would be at a higher rate than private purchases. Indeed, this politically unpalatable result may be a factor in the push for tariffs.