Tariff Question ...

There is a nail maker in Missouri that is shutting down due to tariffs and how they are making steel too expensive to make the nails.

My question is this. The tariffs are on incoming steel and the idea is to buy US steel which doesn't have tariffs on it so why don't they just buy US steel?

Sure, it may be more expensive but it won't be "as expensive", right?

Unless they use the cheap steel for their nails which is severely underpriced due to lack of quality. For nails I guess that may not be a big deal. Then their issue would be that they can only afford to stay in business when they get cheap steel at cut-rate prices.

Color me confused.

USS might not be making the steel needed for nails at a reasonable price. I believe USS is making more specialty steel rather than bulk.

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Originally Posted by ALLD

USS might not be making the steel needed for nails at a reasonable price. I believe USS is making more specialty steel rather than bulk.

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Agreed. I started my career as a financial analyst for specialty (stainless) steel company. We were less affected by foreign imports than the basic (carbon) steel companies.

Labor in China (and in many other countries) is a fraction of what it is here, so even with tariffs it is still still more cost effective to make a lot of products overseas.

In general, the more labor intensive the product is with regard to production, the greater the disparity.

(If cost of domestic "nail grade" steel > (imported "nail grade" steel + tariff charge)) select domestic, else imports

(If cost of production, sales, distribution, etc. > revenue) select shutdown, else stay in business.

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Originally Posted by GBMelBlount

Labor in China (and in many other countries) is a fraction of what it is here, so even with tariffs it is still still more cost effective to make a lot of products overseas.
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Very True.

I think also the import taxes in foreign markets make it more cost effective to make products overseas. I recall that is the issue with Harley Davidson shifting more production to Europe and Austrailia. The tarrifs and retaliatory tarrifs would make a Harley more expensive to produce in the US and then ship to Europe, so its now cheaper to manufacture in Europe to sell to the European market.

Harley was making the move regardless, apparently they decided that earlier this year, like March time frame.

here is where the problem starts ...

scrap yards / crushers are sending scrap steel to china by freighter because China is paying more than its true value

china then refines this scrap metal and ships it back cheaper than we can make it .

that is how they all buy wiped out the steel industry in the US .

the tariffs are intended to make our own companies here in the US more competitive instead of having foreign steel dumped here to further force them out ...

the tariffs are working , but we didn't get to where we are over night and we won't recover from it over night either ..

China Blinks in Trade War, Drops Oil from Retaliatory U.S. Tariff List

https://www.breitbart.com/national-s...s-tariff-list/