Tin-Foil Logic for Tin-Mill Tariffs

Will Commerce Secretary Gina Raimondo punish all Americans to help Ohio Sen. Sherrod Brown? 

WSJ editorial. Excerpts:

"Cleveland-Cliffs and the USW in January petitioned the Commerce Department and the U.S. International Trade Commission (ITC) to impose duties between 13.5% and 294.3% on imported tin-mill steel from eight countries. They claim foreign manufacturers are “dumping” steel used in canned goods on the U.S. market at less than the “fair value” price.

This is nonsense, and they know it. U.S. can manufacturers rely on imported tin-mill for 62% of their supply owing to a lack of domestic alternatives. Cleveland-Cliffs and U.S. Steel are the only two significant domestic manufacturers, but they can’t produce the high-grade tin-mill that can and food manufacturers require these days.

Rather than invest in specialized tin-mill, U.S. steel manufacturers such as Cleveland-Cliffs have prioritized making steel with higher margins. As a result, domestic tin-mill production capacity is expected to be about 45% lower by the end of this year than in 2017, the year before the Trump Administration’s steel tariffs took effect.

Tin-mill accounts for 2% of Cleveland-Cliffs’s steel sales volume. Were the Administration to slap steep tariffs on imports, domestic production wouldn’t come close to meeting demand. Prices would invariably rise, which would increase Cleveland-Cliffs’s margins. But higher prices would make U.S. can and food manufacturers less competitive."

"new duties would cost up to 39,780 downstream jobs while potentially creating a mere 66 new ones in tin-mill production."

"canned-food prices would increase by 19% to 30%. Canned vegetable prices in the U.S. have risen by nearly 30% since the start of the pandemic owing to higher energy and tin-mill steel prices."