It's equivalent to the US implementing a VAT, except superior as it directly encourages replacement domestic manufacturing rather than merely acting as a tax on goods (as in the case of steel and aluminum, which are seeing US steel companies boom again with vast profit growth).
It doesn't merely redistribute wealth from one company to another. It reclaims critical domestic industrial investment and blue collar jobs as well.
Nucor's profit for all of 2016 was $796m, and $679m for 2014 (2015 was a bad year). For just the second quarter it was $683m and they've yet to see the full benefit of the tariffs. Alcoa, which has been a disaster the last several years, produced a billion dollars in operating income in the first two quarters, equal to a full year's operating income previously. US Steel which has been bleeding to death for years, looks capable of producing a billion dollars in annual profit again in the near future ($214m in profit in the second quarter on a large bump in sales).
Yes, we'll pay slightly higher steel & aluminum prices than we would have otherwise if we were getting artificially low dumping-level prices set by the Chinese impact on the global markets. It's worth it to regenerate major US industry back to health and the blue collar jobs that go with that. We can afford the slightly higher prices, we can't afford a hollowed-out industrial base.
It’s not at all like a VAT as it doesn’t impact everyone equally. It’s redistributing wealth to specific market participants from others.
In this case almost all profits that come to the domestic producers of steel come from the domestic consumers (and those impacted by tit for tat tariffs).
There might be very good reasons to prefer some industries to others but as a revenue source tariffs are not at all like a neutral VAT.
It doesn't merely redistribute wealth from one company to another. It reclaims critical domestic industrial investment and blue collar jobs as well.
Nucor's profit for all of 2016 was $796m, and $679m for 2014 (2015 was a bad year). For just the second quarter it was $683m and they've yet to see the full benefit of the tariffs. Alcoa, which has been a disaster the last several years, produced a billion dollars in operating income in the first two quarters, equal to a full year's operating income previously. US Steel which has been bleeding to death for years, looks capable of producing a billion dollars in annual profit again in the near future ($214m in profit in the second quarter on a large bump in sales).
Yes, we'll pay slightly higher steel & aluminum prices than we would have otherwise if we were getting artificially low dumping-level prices set by the Chinese impact on the global markets. It's worth it to regenerate major US industry back to health and the blue collar jobs that go with that. We can afford the slightly higher prices, we can't afford a hollowed-out industrial base.