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Tariffs On China Alone Won’t Protect U.S. Steel

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In early March, President Trump announced forthcoming import tariffs on both steel and aluminum, leaving key trade allies scrambling for possible exemptions and prompting wild speculation of artificial price inflation.

European Union trade commissioner Cecilia Malmstrom abruptly flew to Washington to push back against the proposed measure. Ultimately, the commission proved successful, as the EU, Argentina, Australia, Brazil, Canada, Mexico, and South Korea received exemptions, protecting two-thirds of world steel production from the proposed tariffs.

While smoothing over relations with allies, these exemptions quickly undermined the initial leverage the proposed tariffs granted, representing a serious threat to the sustainability of the U.S. steel industry.

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Immediately following the announcement of tariff exemptions on March 22, shares of U.S. Steel Corp dropped 11 percent, while the S&P steel index fell 7.4 percent, the largest single-day drop since 2011. These economic downturns could easily jeopardize the creation and sustainment of domestic steel jobs, including the 500 new jobs announced by U.S. Steel in March.

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Fortunately, the tariff exemptions are temporary, bearing a May 1 expiration date. When these measures have lapsed, the president should continue to use tariffs to hold bad actors accountable.

These economic measures have already given the Trump administration an effective bargaining chip to combat steel market overcapacity, and to give American companies access to foreign markets they were previously barred from.

South Korea agreed to reduce its steel exports to the U.S. by 30 percent in March, all to avoid Trump’s proposed 25 percent tariff.  Additionally, the agreement allows U.S. car companies to sell 50,000 cars per year in South Korea, forgoing additional testing. This exercise in South Korea proves that tariffs, or the mere threat of tariffs, work.

“In lieu of tariffs on steel, we have a quota which is equal to only 70 percent of their shipments from the last few years, and this will be as effective as the tariffs, and preserve the integrity of the steel industry. So let’s not talk about exemptions letting anybody out,” Trump trade adviser Peter Navarro told NPR, and his judgement rings true.

Trump recently placed $60 billion in tariffs on China, an actor that depresses U.S. steel production and prices by illegally subsidizing domestic production of steel to sell in the global marketplace, also known as “dumping.”

While this is an excellent move, China isn’t the extent of the issue, as 85 percent of U.S. steel trade cases have involved countries other than China in the last four years.

In 2015, six major steelmakers filed anti-dumping and countervailing duties charges against China, India, Italy, South Korea, and Taiwan, alleging a violation of international trade law by importing government-subsidized steel.

“These unfairly traded imports have seriously impacted pricing in the U.S. market, which has resulted in a significant negative effect on our production, sales and earnings,” AK Steel President James Wainscott wrote in a statement.

Clearly, in order to protect the U.S. steel industry, the president should not consider further exemptions, as even trade “allies” are actively engaging in predatory business practices. By extending tariffs to all countries that break the rules, Trump could shore up our economy and national security, keeping a vital domestic industry alive.

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Big League Economics

OUT OUT OUT: Study Shows That Each Illegal Alien is Up to a $6,500-Per-Year Burden for the U.S. Taxpayer

The cost of illegal immigration is massive.

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A ground-breaking new study has shown that illegal immigrants cost the U.S. taxpayer approximately $6,500 per year by soaking up welfare cash and other government benefits after they break the law to enter the country.

The study, commissioned by the Federation for American Immigration Reform (FAIR), showed that that small states are particularly burdened by the illegals, and the money and services are going to aliens instead of veterans, children, and the disabled.

FAIR surveyed ten small states and determined that illegal immigration cost them an average of $454 million per year.

“To put that figure into context, that $454 million expenditure is more than 200 times what the state of Montana budgets for its entire Veterans Affairs program, and it is 2.5 times the total sum that West Virginia invests in its state university,” the report states.

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Dan Stein, president of FAIR, notes that the native populations of these small states are getting squeezed the most by the burden caused by illegal immigrants. These individuals are essentially being replaced as a once-great nation transforms into a globalist economic zone.

“In many ways, the influx of immigrants into less populous areas of the country has an even greater impact on long-time residents than it does in larger and more urban areas,” Stein said.

“These areas have neither the tax base, nor the economic and social infrastructure to accommodate the needs of the growing numbers of immigrants taking up residence,” he added.

The FAIR study, Small Migrant Populations, Huge Impacts, analyzed Alaska, West Virginia, South Dakota, Vermont, Wyoming, New Hampshire, Montana, Mississippi, North Dakota and Maine to discover their startling conclusions regarding the costs of illegal immigration.

“Many local officials tout immigration, including illegal immigration, as a remedy to economic stagnation. However, as this report reveals, the reality is precisely the opposite,” Stein said.

“Illegal immigration, in particular, drives down wages and inhibits job opportunities for legal residents, while bringing more low-skilled, low-wage workers to these states. In turn, this increases costs to state and local governments, and discourages investment by businesses seeking a skilled labor force and lower overhead,” he added.

FAIR released the following video to accompany their newly released study:

“This report highlights the fact that the adverse effects of unchecked mass immigration, combined with an immigration selection process that does not choose people based on individual merit, job skills and education, are now being felt in all parts of the country,” Stein explained.

“Americans, in every part of the nation, are being affected by antiquated and unenforced immigration policies, which is why it is at the top of the list of voter concerns heading into the 2020 elections,” he added.

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