Tariffs (That Biden Won ’t Remove) Threaten the U.S. Manufacturing Recovery (That Biden Wants)

Scott LincicomeBloombergreports that American steelmakers are imperiling President Biden ’s goal of boosting the U.S. manufacturing sector and might, in fact, causemore industrial offshoring:Producers that shut furnaces in response to falling demand during the early stages of the coronavirus are still operating plants at well below pre ‐​pandemic levels, even as recovering economies and tight supplies drive prices higher. The benchmark price for American steel is at an all‐​time high.Companies including Cleveland ‐​Cliffs Inc. and U.S. Steel Corp. have kept blast furnaces idled on expectations that prices are likely to recede at some point, which would squeeze margins and potentially force expensive shutdowns again at those furnaces. While that tack bodes well for steelmaker profits, customers in industr ies from automobiles to appliances to machinery say they can’t get enough metal, and may need turn to overseas suppliers.“That’s just blowing a giant hole in the idea of reshoring, where if you want to support U.S. manufacturing you need to have competitively priced inputs, ” Josh Spoores, the principal steel analyst at CRU Group, said in a telephone interview. “It’s primarily steel and energy, and if either of those is out of whack and it’s not competitive where it is elsewhere, you’ll see manufacturing move to lower‐​cost areas.”As the article notes, U.S. manufacturers struggling to get enough steel would in normal times turn to...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs