Foolish Nature of Picking Winners: Trump's Tariffs Cost Ford $1 Billion
According to Ford's CEO, Trump's Tariffs on Metals Costs Ford $1 Billion.
> “From Ford’s perspective the metals tariffs took about $1 billion in profit from us,” CEO James Hackett said at a Bloomberg conference in New York, “The irony of which is we source most of that in the U.S. today anyway. If it goes on any longer, it will do more damage.” He did not specify what period the $1 billion covered.
It's reasonable to assume GM is in a similar boat.
Steelworkers Demand Higher Pay as Tariffs Lift Profits
The Wall Street Journal reports Steelworkers Demand Higher Pay as Tariffs Lift Profits.
The steel workers did not benefit. They have authorized a strike demanding higher wages as the price of steel rose 30%.
> Leaders for some 30,000 members of the United Steelworkers union say United States Steel Corp. and ArcelorMittal SA aren’t passing those benefits to their workers, who have gone without raises in recent years even as wages have started to climb more broadly.
Trump Picking Winners
Given there are vastly more users of steel than producers of steel, Trump's ploy was a piss-poor tradeoff. Any gain to the steel industry is a loss by Ford, GM, and all the other users of steel and aluminum.
Ford ate the cost as did GM, but any ability of the steel producers to hike wages is more than offset by lost profits and less opportunity for manufacturers who use steel to hike wages.
Some small- and medium-sized manufacturers who use steel as an input will undoubtedly go out of business. Consumers will pay more for products.
It is idiotic to see any "win" in this other than for a small number of producers at a huge cost everywhere else.
Mike "Mish" Shedlock