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The Granite City plant reopening is not just about tariffs

Monday, Jul 9, 2018

* From March 26, 2015

The “temporary” closing of United States Steel’s Granite City Works, announced Wednesday, sent a wave of worry through 2,000 soon-to-be-laid-off steelworkers and a city that depends on its mill. […]

The move comes as tumbling oil prices hit the country’s second-largest steelmaker hard. Much of Granite City’s steel is used to make pipe for the oil industry at U.S. Steel’s Lone Star Tubular plant in Texas, and demand for drilling pipe is falling fast.

U.S. Steel, and the United Steelworkers union, also blamed imported steel, which they claim is being “dumped” unfairly on the American market. The steelmaker has been hit by a surge in Chinese imports. [Emphasis added.]

Average crude oil spot price for March, 2015: $52.83/bbl

Crude oil spot price for July 3, 2018: $74.19/bbl

That’s a 40 percent price hike.

* July 6, 2018 Tribune story entitled “The Illinois town where Trump’s tariffs have provided jobs, and a sigh of relief” claims tariffs alone have reopened the steel mill

But the first blast furnace now has been restarted and U.S. Steel is filling 800 jobs at the mill, a result of the steep tariffs that President Donald Trump announced on imported steel and aluminum earlier this year. The Trump administration has in recent months imposed tariffs on goods from Canada, Mexico and China and on Friday imposed tariffs on $34 billion worth of Chinese imports. That country responded by levying tariffs of its own on American-made goods.

Tariffs may very well have played a role. Yet there was not a single mention in the entire Tribune story of the Granite City plant’s direct and crucial connection to the rebounding Texas oil industry.

But, hey, Breitbart played up the story bigly, so the Trib got some mad clicks.

* Related…

* American Manufacturing Business Owner: ‘Thank You Mr. President’ for ‘Enough is Enough’ Attitude on Trade: Zach Mottl, the owner of American manufacturing company Atlas Tool Works in Lyons, Illinois, is thanking President Trump for his recent tariffs on imported steel and aluminum. In an interview with Fox Business, Mottl praised Trump’s tariffs on foreign countries and their imported steel and aluminum, saying the economic nationalist approach to trade should have been implemented years ago to help American businesses and workers.

* Red-state governor sticks with Trump on China trade war but warns US farmers can’t take much more pain: Despite the “devastating” effects of the China trade war on soybean farmers, Ron Moore — a lifelong farmer from Roseville, Illinois, who has 850 acres of soybeans — told CNBC on Friday that he’s not angry with the president. Moore, also chairman of the American Soybean Association, said farmers “admire” Trump for trying get China to be a “better and more fair trading partner.” “We just think there are alternative choices” to achieve that goal, Moore added in last week’s “Squawk Alley” interview. “The WTO resolution process is an alternative that needs to be explored before we keep these tariffs on.”

* Congressman wants to see results from Trump’s tough trade negotiations: U.S. Rep. Rodney Davis, R-Taylorville, said Friday in Springfield, Illinois, that while he has concerns about the impact tariffs have on Illinois farmers, he has been told by his constituents to have patience. “If they feel that this is the best way to negotiate, let’s see what those results are,” Davis said. “And if you talk with many of the farmers that I represent they will tell you they are worried, but they still support this president.”

* Rep. Davis wary of tariffs: U.S. Rep. Rodney Davis, R-Taylorville, said Friday that tariffs being imposed on American products are “devastating to our agricultural sector,” and he hopes the administration of President Donald Trump focuses on countries that are “bad actors,” rather than allies. But in general, Davis said, “I do believe the president is actually working hard to move this country in the right direction.”

* Soy farmers say they’re getting hurt in Trump’s trade war with China

* Farmers the First Casualties in Trump’s Trade War: “The corn market’s a very fickle thing. It doesn’t take much to tip it over when it gets to a certain time of year,” Illinois farmer James McCune told THE WEEKLY STANDARD. “We have no idea what’s going on, and the market’s cratering like mad.” McCune, who describes himself as an ex-Republican—“now I’m just a Trump supporter”—thinks Trump’s policies have helped to revitalize the economy of small-town America. But he’s also seen the impact falling prices have had on his own 5,500 acre farm: He estimates he’s lost $660,000 in revenue due to falling grain prices, enough to wipe out his grain profits entirely. And he sees himself as one of the lucky ones.

* China’s Taste for Soybeans Is a Weak Spot in Trade War With Trump: Still, soy-producing states like Iowa and Illinois might not feel the tariffs’ impact right away. China buys so much soy from the United States — $14 billion last year — that it can hardly switch to new suppliers overnight. Foreign-grown soybeans are a key source both of low-cost protein for feeding livestock and of cooking oil for Chinese kitchens.

- Posted by Rich Miller        

37 Comments
  1. - 47th Ward - Monday, Jul 9, 18 @ 12:16 pm:

    I’m happy for the 2000 steelworkers who are back on the job.

    I feel bad for the soy bean and hog farmers who will be paying for those 2000 jobs and then some.

    I remember when Republicans used to complain about government picking winners and losers in the economy. Those were the good ole days.


  2. - Practical Politics - Monday, Jul 9, 18 @ 12:22 pm:

    Atlas Tool Works used to be based in Chicago’s north side. Another family owned factory lost to the suburbs.


  3. - wondering - Monday, Jul 9, 18 @ 12:29 pm:

    I wonder if farm subsidies equate to the free trade bean farmers are asking for? Generation after generation of dependence on government handouts. Why should taxpayers pay for Chinese food requirements?


  4. - Try-4-Truth - Monday, Jul 9, 18 @ 12:45 pm:

    ==== I wonder if farm subsidies equate to the free trade bean farmers are asking for? Generation after generation of dependence on government handouts. Why should taxpayers pay for Chinese food requirements? ====

    Not that simple. 1.) There are no longer “farm subsidies… 2.) All Ag policy is designed for 1 thing, to artificially manipulate the cost of food for export.


  5. - Roman - Monday, Jul 9, 18 @ 12:57 pm:

    Few have benefited from economic globalization more than Illinois farmers. Yet, they voted overwhelmingly for an anti-globalization candidate for president — and that president is keeping his promises.

    Suggested slogan for this year’s farm bureau convention: “Thank you, sir. May I have another?”


  6. - Lester Holt’s Mustache - Monday, Jul 9, 18 @ 1:05 pm:

    ==Not that simple. 1.) There are no longer “farm subsidies…==

    Hahaha. Yeah sure there aren’t, just ask US Reps. Devin Nunes, Vicky Hartzler, Doug LaMalfa, Kristi Noem, Lamar Smith, Stephen Fincher and Bill Flores. Or, you could ask the recipient of the largest farm subsidy in all of Washington - Sen. Chuck Grassley (almost $400K).

    2017 was a good year for congressional republicans who owned stake in large farming operations.


  7. - Precinct Captain - Monday, Jul 9, 18 @ 1:18 pm:

    What a rag


  8. - wondering - Monday, Jul 9, 18 @ 1:26 pm:

    try 4 truth….you should…try google, go to the ewg site, what ever would give you an idea that it is not ongoing? The only thing cut is food stamp eligibility. figures


  9. - Try-4-Truth - Monday, Jul 9, 18 @ 1:52 pm:

    Ok, Mr. wondering….

    “In 2014 Congress passed another huge farm bill. The bill changed the structure of subsidies, but it did not cut the overall level of benefits. The law ended the direct payment program, the countercyclical program, and a couple of other smaller programs. But it expanded the largest farm subsidy program — crop insurance — and it added two new subsidy programs, the Agriculture Risk Coverage (ARC) program and the Price Loss Coverage (PLC) program.”

    Source: https://www.downsizinggovernment.org/agriculture/subsidies


  10. - Deadbeat Conservative - Monday, Jul 9, 18 @ 1:54 pm:

    ===Few have benefited from economic globalization more than Illinois farmers. Yet, they voted overwhelmingly for an anti-globalization candidate for president — and that president is keeping his promises.

    Suggested slogan for this year’s farm bureau convention: “Thank you, sir. May I have another?” ===

    Agreed. Another slogan ” Careful what you ask for, you might get it.”
    Trump got elected by cynical voters who thought they had nothing to lose - we’ll see about that.


  11. - JS Mill - Monday, Jul 9, 18 @ 1:57 pm:

    =Not that simple.=

    Yeah, it really is.

    Ag is very important to the economy but I love these market economy farmers who want handouts for everyone else but them to end.

    Everyone in the world knows that US Ag is heavily subsidized. From special deals on fuel, tax breaks, equipment, insurance, and direct subsidies for crops there is a little help found just about everywhere if you farm.

    So Sonny Perdue looking for more money to help these guys because they are big Trump supporters (and getting pretty whiney about the whole thing) is the absolute height of hypocrisy. They will get the money because that is how politicians work.

    The other Tariff losers won’t get a dime.

    I know a lot of good people in the farming business, but on this topic I have no sympathy.


  12. - Try-4-Truth - Monday, Jul 9, 18 @ 1:57 pm:

    ******The law ended the direct payment program********


  13. - wondering - Monday, Jul 9, 18 @ 2:13 pm:

    Kick it around, paint it red, call it an elephant if you like, a subsidy is a subsidy, direct or not. Crop insurance is a subsidy, price manipulation is a subsidy. 18 billion a year goes out to farmers from the treasury.


  14. - Boone's is Back - Monday, Jul 9, 18 @ 2:31 pm:

    ===Ron Moore — a lifelong farmer from Roseville, Illinois, who has 850 acres of soybeans — told CNBC on Friday that he’s not angry with the president===

    You just can’t make this stuff up. Where do you find these dopes? Next headline will be “Man shot in the middle of 5th Avenue not mad at Trump, applauds his tough stance on crime.”


  15. - JS Mill - Monday, Jul 9, 18 @ 2:45 pm:

    =Kick it around, paint it red, call it an elephant if you like, a subsidy is a subsidy, direct or not. Crop insurance is a subsidy, price manipulation is a subsidy. 18 billion a year goes out to farmers from the treasury.=

    Yep.

    @Try-4-truth needs to try harder. Parsing words is parsing words and not being honest. Ag gets a ton of money and the Trump admin wants to give more “farm welfare”.


  16. - Lester Holt’s Mustache - Monday, Jul 9, 18 @ 3:08 pm:

    ==I know a lot of good people in the farming business==

    All of the ones I know spend half their day complaining about poor people getting money from the government. “Hypocrisy” is not in the central Illinois farming lexicon.


  17. - BlueDogDem - Monday, Jul 9, 18 @ 3:19 pm:

    I agree that tariffs alone did not cause Granite to fire back up. But it was a significant reason. I agree that the govt shouldnt pick winners and losers but Chinas dumping and theft of intellectual content needed to be dealt with. I am not happy that Canada has been made a scapegoat. Europe needs a lesson.


  18. - Try-4-Truth - Monday, Jul 9, 18 @ 3:34 pm:

    ==== subsidy is a subsidy, direct or not =====

    I really don’t agree with this statement. Neither do Big AG producers, and I’m not even on their side.

    Also, SNAP (Food Stamps) is not about feeding poor people. Never has been. It’s about price manipulation (control?) and, in modern times, a give away to large retailers. It’s about creating aggregate demand and to move money around the economy. That’s why it’s so hard to “cut”. Too many stakeholders who have lots of $$$$$ at stake.


  19. - wordslinger - Monday, Jul 9, 18 @ 3:38 pm:

    –Not that simple. 1.) There are no longer “farm subsidies… 2.) All Ag policy is designed for 1 thing, to artificially manipulate the cost of food for export.–

    Does your cult have a name?


  20. - Archpundit - Monday, Jul 9, 18 @ 4:12 pm:

    —Europe needs a lesson.

    What lesson is it that you think is being taught?


  21. - Pyrman - Monday, Jul 9, 18 @ 4:18 pm:

    According to several Steelworkers I know at the plant, US Steel had a blast furnace unexpectedly go down at a mill in back east, that is why they reopened the GC furnace


  22. - illini97 - Monday, Jul 9, 18 @ 4:19 pm:

    “BlueDogDem — I am not happy that Canada has been made a scapegoat. Europe needs a lesson.”

    As someone responsible for sales into Canada on a product that’s now under tarriffs going into the Great White North, I’m not happy either. We manurfacture product in Illinois and now it’s harder to sell into Canada, how is that a win?

    And what lesson is it that we are teaching anyone?


  23. - lost in the weeds - Monday, Jul 9, 18 @ 4:45 pm:

    In 1987 after meeting Russians in Moscow Trump took out ad in NYT that foreign US allies were taking advantage of US.

    https://www.nytimes.com/1987/09/02/nyregion/trump-gives-a-vague-hint-of-candidacy.html


  24. - JS Mill - Monday, Jul 9, 18 @ 4:46 pm:

    =I really don’t agree with this statement. Neither do Big AG producers=

    There aren’t many corporations or large companies that think they get enough corporate welfare. Not that you have been elected spokesperson for “Big Ag” but no surprise there.

    As far as you not agreeing, who cares. The facts are the facts.


  25. - BlueDogDem - Monday, Jul 9, 18 @ 4:59 pm:

    Illini. Just one example. EU tariff on us imported autos 10%. Us tariff on EU imports here 2.5%.


  26. - wordslinger - Monday, Jul 9, 18 @ 5:29 pm:

    –Europe needs a lesson.–

    What’s that, comrade? You can’t count on the United States as an ally?


  27. - wordslinger - Monday, Jul 9, 18 @ 5:35 pm:

    – Just one example. EU tariff on us imported autos 10%. Us tariff on EU imports here 2.5%.–

    Oh, these tariffs are good for the domestic auto industry? Funny, they don’t see it that way. Maybe you can straighten them out with your cable TV talking points.

    https://www.forbes.com/sites/greggardner/2018/06/27/trump-auto-tariff-amounts-to-a-45-billion-tax-says-alliance-of-automobile-manufacturers/#711d4eea4fd1

    https://www.cbsnews.com/news/trump-auto-tariffs-may-cost-hundreds-of-thousands-of-u-s-jobs/


  28. - Rich Miller - Monday, Jul 9, 18 @ 6:52 pm:

    ===not about feeding poor people. Never has been===

    Don’t be a complete moron your entire life, please.

    Food assistance is a win-win-win-win, which is why it has had so much bipartisan support in the past. Poor people eat, farmers, processors, and the distribution chain members sell products.


  29. - btowntruth from forgottonia - Monday, Jul 9, 18 @ 7:27 pm:

    “now I’m just a Trump supporter”…………….But he’s also seen the impact falling prices have had on his own 5,500 acre farm: He estimates he’s lost $660,000 in revenue due to falling grain prices”

    Welcome to the the Twilight Zone.


  30. - BlueDogDem - Monday, Jul 9, 18 @ 8:06 pm:

    Word. Thanks for the links. Really eye opening. Lets just simplify. Why doesn’t the EU just lower it’s tariffs to 2.5%. Same as ours. Then The playing field is the same.


  31. - wordslinger - Monday, Jul 9, 18 @ 8:21 pm:

    – Why doesn’t the EU just lower it’s tariffs to 2.5%. Same as ours. Then The playing field is the same.–

    Here’s an even better idea: How’s about Trump not unilaterally institute tariffs that the domestic auto industry says will cost them hundreds of thousands of jobs?

    What problem are you trying to solve? Do you even know? The auto industry says your “solution” to their European “problem” will hurt them gravely.


  32. - BlueDogDem - Monday, Jul 9, 18 @ 9:17 pm:

    Tariffs are bad. Free trade. Fair trade are good. Let the EU drop theirs to 0%. The US to 0 %. American consumers benefit. US manufacturing benefits. Win. Win. Can’t take all that winning.


  33. - Pundent - Monday, Jul 9, 18 @ 10:10 pm:

    Instead of posting based on how you “feel” you might want to try using Google to educate yourself. Tarrifs are used for a variety of reasons and one of the main purposes is revenue generation (tax). To suggest that two dissimilar countries set their tarrifs to 0% to match your sense of “fairness” ignores the economic and tax differences that exist in a global economy. Or are you simultaneously suggesting we should all align our country taxation philosophies as well? You might want to stay out of the deep end if the pool.


  34. - Lynn S. - Tuesday, Jul 10, 18 @ 12:48 am:

    @Lester Holt 3:08

    True dat


  35. - BlueDogDem - Tuesday, Jul 10, 18 @ 6:18 am:

    Pundent? Huh?


  36. - wordslinger - Tuesday, Jul 10, 18 @ 9:05 am:

    –Can’t take all that winning.–

    And like that guy, you can’t make a coherent economic argument for the tariffs, so you resort to nonsensical babbling.

    The domestic auto industry says tariffs on European autos and parts will hurt them badly, costing hundreds of thousands of U.S. jobs.

    For the record, the U.S. auto industry has been on a record-breaking bull run since 2010. Your “help” is not wanted.

    https://www.usatoday.com/story/money/cars/2018/01/03/u-s-auto-sales-record-streak-likely-snapped-2017/999182001/


  37. - SteelGuy - Wednesday, Jul 11, 18 @ 9:28 pm:

    Granite city makes a variety of products off the HSM, not just tubular. Look at the Hot Band Price and then report on why it opened. It has nothing to do with tubular.


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