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Here’s another example of how Trump’s tariffs are backfiring and putting American producers at great risk. Thanks to double-digit increases in domestic steel prices over the last year, U.S. steel costs are the highest in the world and putting our manufacturers like Ford, GM, and Caterpillar at a significant competitive disadvantage compared to their global rivals.
The chart above shows the annual, double-digit increases through September for the six major Producer Price Index series for US steel prices based on data from the Bureau of Labor Statistics available here. Interestingly, the BLS tracks more than 100 different price indexes for various steel products, and the six categories above are the major 4, 5 or 6 digit steel price series. As can be seen, the major categories of steel purchased by US producers and manufacturers have all increased in price over the last year by between 18.2% and 25.8%, with an average increase of 22.4%. For those double-digit steel price increases, we can thank the Protectionist-in-Chief’s 25% tariffs on steel imports that started in March of this year.
And it’s those double-digit price increases in a major commodity product used by thousands of US producers that is putting America’s manufacturing sector at great risk. For example Ford Motor Co. is blaming Donald Trump’s tariffs for elevating U.S. steel prices higher than any other market on the planet, and which are slamming the automaker with $1 billion annually in increased costs for materials. “U.S. steel costs are more than anywhere else in the world,” Joe Hinrichs, Ford’s president of global operations, said during Monday’s launch of the Ford Ranger. Separately, GM has also estimated the negative impact of Trump’s tariffs on steel and aluminum at $1 billion per year in higher costs.
The Wall Street Journal reported today that “U.S. Manufacturers Are Seeing Signs of New Risks,” in large part because of Trump’s trade war and rising costs for key inputs. For example, “Caterpillar said tariff-related costs for this year would likely come in at the low end of the previous range of $100 million to $200 million it forecast. 3M expects the tariffs to push up costs by about $20 million this year and $100 million next year.”
Back in March, when Trump signed the order for steel tariffs, he proclaimed “Steel is steel. You don’t have steel, you don’t have a country.” Maybe we’re finding out now that “Tariffs are taxes. Tariffs are taxes on American businesses and consumers. You don’t have a globally competitive market for steel with competitive prices, you don’t have steel-using industries in the country.”
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