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Make America Safe Again: A Steel of a Deal
President Trump knows more about structural steel than any president since the great civil engineer Herbert Hoover. Media of every flavor took the President’s comments, about requiring the use of US steel in petroleum pipeline construction, at face value, as only a jobs program. While “free” trade advocates got the vapors about protectionism and warned of harm to the US economy from artificially high prices, no one bothered digging into the critical assumption.
A year later, President Trump threatened to impose steel tariffs. There was much back-slapping and hand-wringing, all having to do with the price of steel and supposed resulting gains and losses in jobs. In the midst of this noise, Mark Davis, a Texas radio talk show host, took a call from a welder. (Starts at 23:50.)
This welder is in the high end of the trade, working with pipe that must pass X-ray inspection after welding. The welder said that any skilled welder knows, the moment he sets torch to pipe, whether the material is domestic or from supposedly lower cost countries. The foreign pipe, supposedly identical in specification, is actually contaminated with impurities which cause a high rate of X-ray failure and re-welding. Now think about what such impurities imply for the long-term safety of critical infrastructure. Care to drive over bridges, live or work in skyscrapers, with hidden defects in the structural supports? We build pipelines both for efficiency and safety relative to rail tanker shipment, so why would we allow avoidable risk to be built in?
But, hey, that’s just an anecdote, isn’t it? Well here is another anecdote. My parents have used the same elegantly simple Dansk stainless steel flatware pattern for more than 50 years of marriage. They are getting full value out of the lifetime warranty. Of all the original pieces, run through dishwashers well over 10,000 times, one has developed pitting. Then there are the replacement and extra setting they bought more recently, made in China. Most of these are now pitted, even though they are made of supposedly the same kind of steel, with the same warranty. See for yourself.
So now you have two anecdotes. Perhaps prudent public servants should inquire closely into the actual state of steel coming onto our shores. And maybe you really do get what you pay for, even if you are not fully informed of the risks baked into the bargain.
Published in Economics
Ha! Someone should sue the ferc, claim it’s a violation of ‘just and reasonable’ prices.
Hmm, I certainly don’t hate anyone based on their position on trade, nor do I think those who disagree with my own positions hate me. I understand those who want to artificially support this industry or that, even if the only justification is political. I think that’s a much stronger argument for tariffs than the broad claims about transaction costs and assumptions usually made here. I think Quake sort of took this angle right?
Tell me OP what should the American Government do now that your parent’s silverware is pitting? Where should we, or should I say those private individuals and firms, buy the steel from to replace that 3% of our total steel consumption that comes from China?
Or should we continue with the tariffs and affect our trade with numerous neighbors and allies whose steel quality has not been diminished by your test of your parent’s silverware and one welder’s interview?
Just to be clear, I was riffing on to your post, not responding to/arguing with you.
Ha my bad, limits of txt I suppose