US metal manufacturers mobilize against Trump tariffs

The American Institute for International Steel, an industry body representing companies that depend on steel imports, sued the Trump administration last week before the US Court of International Trade in New York, challenging the legality of the steel tariffs. (AFP)
Updated 01 July 2018

US metal manufacturers mobilize against Trump tariffs

  • US President Donald Trump in March slapped duties of 25 on steel imports and 10 percent on aluminum
  • The American Institute for International Steel sued the Trump administration last week before the US Court of International Trade in Yew York

WASHINGTON: Feeling the pinch from President Donald Trump’s protectionist trade policies, the American metal industry has rallied its forces to plead for changes.
Employees from the Texas steel pipe producer Borusan Mannesmann Pipe sent some 4,500 post cards to Trump and members of Congress, on behalf of their employer in the Houston suburb of Baytown — which imports unfinished pipes from Turkey.
Trump in March slapped duties of 25 on steel imports and 10 percent on aluminum, and at the start of June removed temporary exemptions for major producers Canada, Mexico and the European Union.
While Trump says the border taxes protect US national security and have breathed life into time-ravaged American producers, about 21,000 businesses have sought exemptions from the tariffs for foreign-made goods, arguing that the duties threaten their import-dependent bottom lines.
But three months after the first requests, the government has reviewed only 98, Commerce Secretary Wilbur Ross said in recent congressional testimony. Of these, just 42 were approved.
BMP CEO Joel Johnson was among the very first business leaders to seek product exemptions for the Houston pipe company. But when he got no response, he decided to make his case directly, along with thousands of others.
“We made an offer to President Trump and Secretary Ross which was very simple,” he said.
“We did a request for a two-year exemption of the tariffs to allow us to build a new factory in Baytown and at the end of these two years we will stop importing and we will be 100 percent US-made pipe.”
The proposition should appeal to Trump, given his “America first” agenda, said Johnson, adding that it would bring his workforce to 437 people from 267.
In Baytown, unemployment is two and a half times the national average at 10 percent, and Johnson warned the company will be forced to lay workers off if it faces an annual hit of $25 million to $35 million from the tariffs.
Republican Texas lawmaker Brian Babin made the same case to Ross last week.
Others are opting to play hardball.
The American Institute for International Steel, an industry body representing companies that depend on steel imports, sued the Trump administration last week before the US Court of International Trade in New York, challenging the legality of the steel tariffs.
The organization is calling on the courts to strike down the 1962 legal provision Trump used to impose the new duties, claiming it is unconstitutional.
Sometimes called the “national security clause,” Section 232 of the Trade Expansion Act of 1962 gives the US president extraordinary powers over foreign trade, a power the US Constitution generally confers on Congress.
“Section 232 allows the president to consider virtually any effect on the US economy as part of ‘national security,’” AIIS President Richard Chriss said in a statement.
The federation says many American business are suffering under the tariffs while ports and workers have seen a sharp decline in their businesses’ throughput.
So far, the Federal Reserve system’s regional manufacturing indices show general manufacturing activity remains quite healthy by historical standards.
But steel prices have risen sharply and fast. In October, a ton of hot-rolled steel coil went for $577, its lowest level in a year, Johnson said.
As of Friday, it was closing in on twice that at just under $917.
As the metal tariffs battle rages, a second set of Trump tariffs on Chinese goods is due to take effect July 6, while US businesses are being hit with retaliatory tariffs from Canada, Mexico, the EU and China.
The Trump administration also announced in late May it was considering using Section 232 to slap duties on the hundreds of billions in autos imported annually, a prospect economists say would make America’s trade wars far more serious.


Crown prince highlights key ways Saudi budget 2020 will contribute to Vision 2030

Updated 47 min 45 sec ago

Crown prince highlights key ways Saudi budget 2020 will contribute to Vision 2030

  • The budget for the coming year reflects and reinforces the commitment to implement the reforms

RIYADH: After King Salman announced Saudi Arabia’s budget for 2020 on Monday, Crown Prince Mohammed bin Salman highlighted some of its key elements and their implications, along with his thoughts on the ongoing implementation of economic reforms in the Kingdom.

He said that the government’s economic transformation of the country is progressing steadily in accordance with Vision 2030. The budget for the coming year reflects and reinforces the commitment to implement the reforms, plans and programs designed to help achieve this, he noted, and sets specific goals in a number of areas to help create a vibrant society, a prosperous economy and an ambitious homeland.

The crown prince added that the government is working to improve the quality of life in the Kingdom by developing and diversifying the economy, improving job opportunities and enhancing government services in terms of financial and economic stability, which is the main pillar of sustainable economic growth.

He also pointed out that the economic and structural reforms implemented during the past three years are having positive effects on the country’s financial and economic performance. The Kingdom has recently achieved remarkable increases in real GDP growth rates in the non-oil sector, and the government has encouraged the private sector play an important role in the economy, the positive results of which include significant growth in the business sector, the crown prince added. The government has also implemented a number major projects in vital sectors and launched activities that will help to achieve economic growth goals and create job opportunities, he said.

Crown Prince Mohammed stressed the importance of engaging with the private sector as a major and vital partner for the development of the Kingdom. He also noted the continuing program of reforms by the government designed to develop the business sector and create an attractive environment for investors to contribute to economic growth. This has helped to greatly boost the Kingdom’s ranking on international indexes that measure competitiveness and ease of doing business, he added.

“We aim to create an attractive investment environment that contributes to directing the national economy toward broad prospects of diversification, growth and prosperity,” the crown prince said. “The government will continue to move forward with implementing the stages of economic transformation and will progress with diversifying the economy’s productive base while maintaining financial sustainability and providing wider opportunities for a better future for the current and future generations.”

He stated that the government has a clear vision, fixed goals and explicit plans, and is working on implementing them while maintaining financial and economic stability as an essential pillar of sustainable economic growth.

“Financial and economic results and indicators confirm that we are progressing positively,” he said. “We constantly review and update the policies, procedures and programs implemented to ensure their effectiveness and to rectify their course whenever the need arises, in order to achieve the goals of the Kingdom’s Vision 2030, taking into account the global financial and economic conditions and what is in the interest of our homeland and citizens.”

The 2020 Saudi budget has been prepared in light of a global economic atmosphere characterized by challenges, risks and protectionist policies, said Crown Prince Mohammed, which require flexibility in the management of public finances and strengthening the ability of the economy to face the challenges and risks.

“We aim, through this budget, to benefit from the programs that were achieved and rely on them to maintain a balance between economic growth and the sustainable financial stability that guarantees this growth,” he said.

The crown prince noted that financial-control policies and the development of public financial management and its efficiency have contributed to the continued reduction of the budget deficit. This is expected to fall to about 4.7 percent of GDP in 2019, compared with 5.9 percent in 2018 and 9.3 percent in 2017. This confirms the success of ongoing efforts to ensure financial sustainability, and progress in implementing projects to improve the private sector, he added.

He also confirmed that the 2020 budget continues to support programs that contribute to achieving Vision 2030. This includes the financing of major projects, helping to develop medium, small and micro enterprises, and supporting entrepreneurs. These are some of the most important engines for economic growth, which will help to diversify the economy and open up new fields for investment and employment, he added

The budget includes reviews of some of these programs and schedules to ensure they reach their goals, Crown Prince Mohammed said, and the continued development and modernization of government infrastructure and services. He also stressed the government’s focus on improving the efficiency and quality of spending, to make the best use of state resources to achieve the highest possible social and economic income.

He highlighted the recent launch of oil company Saudi Aramco as a major step forward for the Kingdom, and his support for enhancing the role and participation of the private sector in the nation’s economy. He noted that opportunities for the private sector will continue to increase, enhancing its role in the growth and diversification of the economy and in creating job opportunities in the medium and long terms.

The crown prince also pointed out the part played by the Public Investment Fund and the National Development Fund in achieving Vision 2030, as the local and external investment mechanisms and the growth arm of the local economy, which are also contributing to the diversification of the economy and income sources. These are among the most important strategic goals of Vision 2030, he said.