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Tariffs become double-edged sword for industry

There was a time not so long ago that the word about steel tariffs being enacted by the president would have brought a whoop of joy up and down the Ohio River valley.

That was a decade or more ago, when there were still furnaces cranking out molten steel, casting them into slabs and rolling the slabs into coils. The news would have been welcomed precisely because the tariffs enacted by President Trump are against dumping of slabs and coils and other pieces of raw steel that were the mainstay of the domestic steel industry, which once employed hundreds of thousands.

Now, while the tariffs are welcomed as preserving what was a vital national defense industry when the area was 100 percent in favor of tariffs, there are issues.

The glut of Chinese steel and capacity remains a problem, as it had been in 2003 when President Bush enacted a tariff.

The result that time could well be the result again: Higher prices for domestic steel and a Chinese dump of cheap steel in markets around the globe.

Without tariffs on finished steel goods, the result could be a loss of American jobs in the kinds of small factories that take raw steel and make it into various items, such as handtools or nails.

Locally, a company that won recognition as an all-American industry, Bully Tools, provides a prime example. Bully sources all of its steel domestically and produces a line of long-handled tools such as rakes, shovels and more, at its factory outside Wintersville. The company was touted by the Trump administration as an all-American firm. Its owner even was invited to a small business roundtable at the White House last summer.

But, the Trump tariff ignored a basic economic issue that was voiced at the roundtable. The tariff needed to be structured in a way that not only protected big, basic steel mills but also the countless machine shops and small factories around the nation that employ nearly a million workers in producing useful parts, tools and devices from steel.

The feared results have begun already, with small companies reporting steel distributors holding up orders to wait for the tariffs and jacking up prices after the tariffs.

If competitors to some of the smaller American firms start producing their finished goods overseas, their prices at retail will be lower, and the jobs held by Americans in the ranks of the finishing plants and end users will dwindle as market forces drive buyers to the cheaper, overseas produced, goods.

The tariffs are thus a double whammy, protecting what’s left of an industry that once thrived in the Upper Ohio Valley, while perhaps diminishing the ranks of other workers, some of whom also still work in the Upper Ohio Valley.

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