Trump’S Buy American And U.S. Steel Industry? . Shuang
1506 WordsMay 22, 20177 Pages
Trump’s Buy American and U.S. Steel industry?
As the backbone of American manufacturing, the steel industry is essential to the world 's water and food supply, energy generation and national security. Steel consumption is highly cyclical and generally follows economic and industrial conditions both worldwide and in regional markets. Steel industry was severely impacted by the global economic crisis in 2008 as demand from its largest markets, construction and automobile manufacturing, dropped sharply along with consumer spending on durable goods and business investment in new spaces. This downturn reversed in 2010. Since demand for steel is highly dependent on the level of activity in the nonresidential construction sector,…show more content…
Therefore, weak domestic demand is further exacerbated by rising global overcapacity, in which has drastically reduced the selling price of steel. Capacity utilization at domestic mills dropped to as low as 60% in early 2016.
Facing intense competition and influx of cheaper steel products, U.S. steel producers have been persuading U.S. government to protect U.S. companies from dumping and other unfair competitive practices via either tariffs or import quotas on the steel products of offending companies in foreign countries.
Starting in 2016, Commerce Department moved to impose tariffs in response to an oversupply in the steel industry, especially from China. Some duties are as high as 266%. Duties on steel products from China, Brazil, India, Japan and other countries contributed to the U.S. benchmark hot-rolled coil index rising more than 60% in 2016 to $615 per ton, after falling 33% in 2015. In Europe, the benchmark index was up by 34%. Steel imports into the U.S. during the first quarter of 2016 fell to eight million metric tons, down 29% from a year earlier, and inventories also declined. Those tariffs come during an election season rife with promises to protect American workers. Donald Trump promises the job will be done with materials made in U.S.,