President Trump plans to revive the steel industry. He instructed the builders of pipelines of oil and natural gas to use only American -made steel. His Department of Trade has already prepared appropriate measures.
Regardless of its harmonious name, the US President’s plan will have unpleasant consequences - destroying more jobs than creating.
American steel companies do not make parts of the desired size for most pipelines, and their products cost more than steel from abroad. The coercion of pipeline companies to the use of domestic steel will lead to an increase in prices and delaying projects for many years, which will lead to dismissal and loss of employment possibilities for tens of thousands of Americans.
Currently, oil and gas companies import more than three quarters of steel used in pipelines. They do this for the same reason why America buys bananas in Honduras. American companies can technically grow bananas under glass in New York, but they prefer to receive bananas from the most profitable source and enjoy the savings.
The number of imported steel is unlikely to change soon. Only 25 American steel plants produce parts for internal pipelines of oil and natural gas. And some pipelines need pipes so thick -walled that the US steel industry cannot make them.
The mandatory of the use of domestic steel for pipelines will require the manufacturers to convert their plants. The costs of repair and re -equipment can more than double the cost of pipeline parts and slow down production.
It would be a disaster for ordinary Americans. Pipelines create tens of thousands of American jobs. The Keystone XL pipeline project can alone lead to the fact that 40,000 Americans will work and get more than $ 2 billion. Trump recently revived the project of this pipeline, not requiring the builders of the use of American steel.
History shows that the policy of protectionism in the market has become harmful to an American worker. In 2002, the George Bush administration introduced barriers to import steel. As a result, the increase in steel prices caused an economic recession that reduced 200,000 jobs, which is more than the number of employees engaged in the steel industry of all states.
Trade,
