Quote:
Originally Posted by cjseliga
The problem is they should have done a tariff, immediately, back when China started producing and selling their "cheap" steel, not now, when people have been so accustomed to it. It seems a little too late and now a tariff will effect way more jobs negatively in the US then it does positively.
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I tend to agree.
I recall when 1) Nixon visited China, then decidedly a 'third world' country, and hence opened diplomatic relations with them; and then 2) our opening trade with China, I believe in 1976.
Now, the expectations were that China, with its huge (but still poor) population, would eagerly import our products. The first US company to enter into a deal with China was the Coca Cola Bottling Company, which (from memory) starting shipping cola to China in 1980*. Of course, other companies followed suit.
Then Coca Cola began opening plants in China itself (again, *), and they now have 43 plants in China. We no longer export Coca Cola to China. Other companies followed suit.
China was not the first country to sell 'cheap' steel to the United States. I believe it was Japan.
During WWII, we bombed the beejeebers out Japan's steel industry. Sorry for what we had done, we helped Japan rebuild, using state-of-the-art equipment (at least, for the 1950s).
I had noted elsewhere that in 1975 I worked in the family iron/steel plant (actually, I think it was all iron, like iron pipes and manhole covers and such), and I was surprised to see that all of the machinery dated from or prior to WWI (not II, but I). Each machine had the year of manufacture stamped on it (if you could see it through the grime; it was a nasty place to work).
My uncle (whom ran the plant and was co-owner with my mother) explained that it was simply too expensive for such a small factory (here in Fort Worth) to purchase new equipment. It was he (whom had fought in the Pacific theater) that first, bitterly, informed me that the cheap Japanese steel that was then flooding the US market was courtesy of our government, by rebuilding the Japanese steel companies. Our factory closed in the 1980s, after his death.
Of course, when China began building their huge steel factories in the 1980s and 90s (they obviously had some prior to then, probably on par with my family's plant, equipment wise), they also built state-of-the-art complexes, while the steel plants in the Rust Belt were, like our small factory, using very old equipment. Since the China steel industry was much more modern than Japans, and able to produce steel at a much lower cost, US companies found it profitable to start importing steel from China.
Now, of course, China is no longer considered a 'third world' country. I visited China in 2008, just a few months after their hosting the Olympics. In Beijing, I met a USA businessman with a long history of visiting China. Indeed, he told me that his first visit was in 1980 or 81, and how, at dusk, the city of Beijing virtually closed up due to most areas not having electricity. There was but one western hotel at the time, which he had stayed in (and which was still operating when we stayed there), and he noted that there were very few cars in the streets, day or night.
How things had changed by 2008! Our guide informed us that 1,000 new drivers hit the road, in Beijing alone, each and every day of the year. The cars that jammed the streets were all newer models. When we visited Shanghai, not only did we see ultra-modern office buildings, but the skyline was a literal forest of building cranes. China had become a Power, even though some 900 million of its population (out of 1.3 billion) are still considered 'peasants'.
Yet, here in the US, our steel plants continued to close up shop. Even if the steel tariffs succeed in producing more demand for locally produced steel, I can't see (as I read the other day) US Steel or Bethlehem Steel investing the billions of dollars that would be needed to build new, state-of-the-art, factories. Even if they did, such plants have apparently become so automated that they would require only 10 percent of the work force formerly required.
Such is life.
*I read with some surprise that Coca Cola actually had bottling plants in China prior to the Revolution, with China nationalizing (i.e., taking over) the plants in 1949. Also, when Coke was again being sold in China in the early 1980s, the produce was limited to oversea tourists.
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