I think there are sound fundamental arguments for tariffs on steel. However politicians have to consider the consequences of the dry bumming the Chinese are going to give them in other areas as a result of doing it.

Tariffs will hurt just about all British industries as suddenly their unit costs all go up and so manufacturing which is already struggling will suffer massively. It may be the stupidest policy argument ever.

If you want to argue we should also artificially lower British steel unit prices then I can see the merits but no one who is even slightly intelligent will say an import tariff is a good idea for the British economy.

Bollock tonnes of tax breaks seem wise

Its more nuanced than Phill is making out, which is why lots and lots of intelligent people are arguing that there should be a tariff.

Its worth pointing out that USA has a ~267% tariff and Europe (including UK) has one of about 20%. Most of Europe has been trying to raise this but the UK has been blocking it.

Its worth pointing out how much support the Chinese have given there Steel industry, the whole reason the price of steel has halved in about 4 years.

China has added billions of tons of extra capacity, due to slump in China, this is all being dumped on the world market, at the current price the Steel industry in China is losing hundreds of billions a year, but no worries, Chinese state is supporting its industry and bailing out bankrupt firms for billions on the regular. Obviously if the bankrupt firms were allowed to bust, the price of steel would rise. As it is there is a massive structural deformation of the market.

The State policy is to reduce capacity but there is to much vested interest in Steel for this to policy to proceed in any meaningful way.

The long terms problem is that the Chinese state policy can actively destroy the installed base of Steel production in Europe if there is not some counter policy by political institutions in Europe. This base and the skilled labour to replace are very hard to re install once lost.

Uk industry might be benefiting from cheap steel now, but will it benefit from having one country absolutely dominate Steel production?

Said the bad guy in Live and Let Die.

Tariffs might not be the best way to do that, but no cost has been offered up on how much a direct subsidy would cost.

Lets try and have a civliised discussion about this without all the lol bad internet hyperboles of lolzors no intelligent person would argue for that lolz lolz.

Will the steel mills be demolished? Why not just shutter them so they can be reactivated if the price goes back up. In the meantime it sounds like China is giving billions of dollars in equity to UK manufacturers who use steel. Why not grab it?

I feel like 'flood the market then drive the price up' is a really dumb plan. Especially in a global market. If things get bad the government can inject a few million to kick-start the industry which would be profitable again.

Its really difficult to shut and reopen something

Great plan, we'll just put all the workers into a cryogenic freeze until we need them.

They're planning on killing them? Or is steelmaking something you forget how to do with lack of practice?

Insightful post, thanks

Not sure if the up the price again is actually formerly a plan, but the flood the market certainly is.

Ultra free market types always bang on about how bad it is that CBs artificially make the price of money too low, and hence cause horrible structural distortions that lead to booms and busts and that money should find its own level/price etc.

If its a net negative for money, it will be for steel too. There will be exposure to the price of steel at current levels, and when prices finally find their own level due to cant buck the market for ever, the over capacity in steel consuming activities caused by the cheap steel will have to liquidate causing an industrial shock.

I am just calling out free market thinkers for not being consistent when it comes to tariffs, they should be happy if they return prices nearer to natural level, instead they just seem religiously opposed to any state interference on any level.

Even Adam Smith said you had to protect yourself against Mercantilism.

You have to keep the furnaces going or they are very hard (expensive) to restart.

I get that it's a net negative but I imagine most of that negative will be felt by the people doing the subsidising. The countries getting below market price steel should still benefit even though it's a negative sum overall. Like if the central bank is giving out super cheap money to banks it's good to be a bank even if it screws things up for everyone long term.

More expensive than £1,000,000 a day for as many years as the chinese take to decide to enact their fiendish flood the market then raise the price scam?

Eh?

Tons of banks would have gone bust in 2008 without further intervention, some famously did. So in your example, it was bad for the banks not good, the correction clearly hurt the banks A LOT. The industry which depended on the artificially cheap input was the most hurt.

Which makes sense, the whole point with an artificially cheap input is that it leads to over capacity in any industry using that input.

It was good for them while the going was good, and it wasn't that bad overall because they got bailed out. It's probably just a dumb analogy though, those have been known to happen. My point is why not bank the free steel money now (ty china) and then use some of it to pay to reboot the steel industry later if it turns out to be needed. If the market just returns to equilibrium levels after a while we won't even need to do that and we can use the free money to write big checks to the displaced workers or at least pay for them to be trained in something else, possibly both.

Its not dumb at all.

The banks were the industry most damaged by the correction when it happened, that the damage was ultimately mitigated by State intervention (in some cases, some banks still went bust) is irrelevant, it just shows how bad the damage was. It posed an existential threat to many firms in that sector.

As previously stated those industries most reliant on the artificially cheap input are the ones most damaged when correction happens. In this case that means industries reliant on cheap steel, or more specifically the over capacity created by the cheap steel.

Also how exactly do we bank the free steel money?

Its also worth pointing out that the actual measures the UK gov can implement are limited severely via being a member of the EU, including further tariffs.

The only way a tariff on steel imports works is if we also put it in everything with steel in it like cars and machinery. If our industry is paying 50% more for raw materials they will be under massive pressure from imports.

Like I said a steel tariff is only good for British steel (maybe) which has been on the outs longer than I have been alive. This isn't some new trend.

if there's any free steel money to bank, it will be banked by filthy tory dog cock touching bastards.

Any other place making cars and machinery is likely to have a tariff higher or equal to the one we do, and we cant raise ours without all of Europe following suite, which all the other major players want to do.

If the UK Steel was simply being out competed on a level playing field then fine, but its not, the current price of steel is an absolute aberration.

is that a coded message?

the eu wanted to increase tariffs, the uk opposed it

Yea, I have mentioned that several times itt.

How the **** does Cameron not own any shares? Even I own some shares and I'm poor as hell.

I don't believe him either. I'd guess his are all owned by companies etc controlled by his relatives.