Personally I’m not placing much emphasis on seeing Donald Trump and the GOP majority in Congress rushing to “reach across the aisle” to Democrats now that we’re finally in charge of the entire show. The Democrats haven’t exactly been in the habit of working with conservatives in any way which would buy them that sort of political capital. But incoming Senate Minority Leader Chuck Schumer seems to be a bit more pragmatic and in search of some gaps in the GOP alliance where he can find room to work with the new president. One of these areas is found in the question of United States steel production and federal spending on such infrastructure materials.
As the Wall Street Journal reports this week, Schumer is calling on Trump to “put America first” when purchasing steel and revitalize an industry which has been lethargic at best for decades.
Incoming Senate Minority Leader Chuck Schumer (D., N.Y.) urged President-elect Donald Trump on Tuesday to buck House Republicans and defend his pledges to buy U.S. steel in the face of concerns it has generated among top GOP lawmakers on a water infrastructure bill.
“Today we’re challenging the president-elect: follow through on what you campaigned on and tell the congressional Republicans we ought to build our infrastructure with American steel,” Mr. Schumer told reporters Tuesday. “It’s going to be up to the president-elect to stand up to the Republican establishment he campaigned against on economic issues.”
The dispute centers on a provision of a water infrastructure bill released Monday after merging different House and Senate versions. The Senate bill contained a requirement that going forward, federal money could largely only be used to buy U.S.-produced iron and steel and raised the threshold for how much of the steel-manufacturing process had to occur in the U.S. to qualify.
But House GOP leaders, including Speaker Paul Ryan of Wisconsin, worried that could create an advantage for some U.S. manufacturers over others. The final bill included less-strict language that kept in place some requirements — but only through September, rather than on a permanent basis. Mr. Ryan told reporters Tuesday he expected the House would pass the water infrastructure bill this week.
I understand and have dealt with the reflexive reaction by fiscal conservatives to recoil at the idea of showing any type of favoritism to American businesses. Charges of picking winners and losers immediately result, frequently mixed with the endless mantra of, “But… Smoot–Hawley!” While these are always valid concerns, it’s worth at least acknowledging that the United States has been forced to fight on an uneven playing field in a number of areas, including the steel industry.
Also, this is part and parcel of the themes the President Elect stuck to all through the election and arguably what helped put him in office. Trump said repeatedly that we needed to support U.S. manufacturers and the steel industry is a long standing example. The WSJ article reminds us that Trump regularly insisted that we needed to Buy American and hire American.
It’s also worth pointing out that Trump (and to a certain extent Schumer) seem to have the public on their side. Ed noted last night that the American public doesn’t have a big problem with this strain of populist policies. In fact, a clear majority would like to see the United States be more competitive against foreign suppliers. And these figures have been showing up reliably in the polls this autumn on a number of questions, such as the idea of the even more extreme proposal of taxing companies which offshore American jobs.
Trump's GOP now >
APPROVE of "imposing stiff tariffs or other taxes on U.S. companies that relocate jobs"
Republicans: 73% pic.twitter.com/KJpqf4y9f6
— Will Jordan (@williamjordann) December 6, 2016
Keep in mind that while we rail against protectionist tendencies, our trading partners have suffered under no such self-imposed limitations. One of the countries which has effectively crushed us in the steel trade is France and it isn’t because their steel is somehow cheaper because they’re better at making it. It’s because their government subsidizes the industry. Leo Gerard of the United Steelworkers has been sounding the warning bells on this for a while.
In the depth of the recession, some foreign countries made a simple calculation. They’d subsidize their steel industries even though that violates international trade rules. It paid off by keeping their citizens employed, paid and fed.
These countries banked on dumping their excess steel in the United States. That has cost good, family-supporting American jobs. It has wounded the American steel industry. And it has emboldened foreign countries to continue eating America’s lunch by violating international trade laws.
Last week, Mario Longhi, president and chief executive officer of U.S. Steel, and I asked Congress to enforce the law. We’re not seeking special deals or subsidies or handouts. We’re asking Congress to implement American and international trade laws to level the field of competition. If the same rules apply to everyone, U.S. industry can compete and win. And American workers can retain their jobs and afford their daily bread.
We’re not talking about a “trade war” here unless you consider insisting on an even playing field to be “war.” The French are able to set their steel prices below the cost of production thanks to subsidies from their government. If American steel companies tried cutting prices to those levels and operating at a loss they would go bankrupt in short order. And it’s not just the French sticking it to us in this fashion. As the article notes, in 2011 half of the world’s 46 top steel companies were state-owned. They don’t live by the same rules American companies do.
Even if you can’t get behind the idea of taxing foreign steel to create a fair trade balance, it’s well within the power of the federal government to demand that American tax dollars only be spent on American steel for any coming infrastructure projects. Unlike an Obama “stimulus package” of handing out cash to the states, this is the sort of incentive which might cost us a bit more up front in materials but return jobs in the private sector and all the actual stimulation that entails over the long haul.
I’m no fan of Chuck Schumer, but this is one idea where we shouldn’t immediately throw the baby out with the bath water. It’s at least worth a look.