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>> this is scott paul joining us the president of the alliance for american new factoring to talk to us about the initiatives from the trump administration. good morning to you. >> great to be with you. how do you represent who support and represent the people. we have the united steelworkers union which is north america's largest industrial union and domestic manufacturers to have steelworkers and their plants. it is a select group and mostly what i think people would call heavy manufacturing. and wers have been around for about 16 or 17 years now. >> as far as those that you represent how would you describe the state of the steel industry. >> i would say that it is stable not great, not horrible, but stable. in a lot of ways, that is pretty

good because it had been in freefall for several decades. so, there've been some developments in the economy lately, the infrastructure money , there've been tariffs in place on imported steel since 2018. so there is been a fair amount of stability in steel where as in the decades prior to that, it had just been on a pretty downward trajectory. >> how much do they lead to the stability or instability of the markets. >> when it comes to steel or aluminum are kind of commodity materials like that, they can be extraordinary helpful. the reason is this. we are a big steel consumer in the united states. we do not supply all of that market from here at home. our market is generally very open to imports. the challenge has been particular with china, you have these massive firms that are owned by the chinese communist

party, but have dominated the steel industry. they make more than half the world steel now. it cannot possibly consume all of that at home so that ends up somewhere else. again, not necessarily a problem , but the problem is that they will sell it at bargain-basement rights. unfairly traded. it does not reflect the actual price of even making this deal. that drives other firms out of business. we saw that happen in the united states about 15 years ago and it was devastating to the steel industry. so, that is why you have this need y for tariffs so that you have, you know, a sub level of steel in the united states that can satisfydo the rest of our manufacturing needs in that it does not get any lower. we are to the point now where there are only one or two plants that make it. that did not used to be the case at all. what we have said is low, we

cannot go down any further. it would be detrimental to national security. >> when the president says i will putut tariffs on steel and aluminum, exactly what does he mean by that and how does it work. >> first of all, i would characterize this as a real statement of policy. there are couple of layers to it over the last couple of decades, there have been some tariffs put in place on some steel that has been what we would call unfairly traded which is what i just described. very selective, depends on the country, depends on what the problem is. in 2018, president trump utilized one of the aspects of trade law called section 232. we got into all of this trade jargon. basically it means i can impose tariffs if there is a national security rationale and he did

that on steel and aluminum in 2018. 25% for steel. the issue was a there was a process put in place to exempt a whole bunch of different products, thousands of them, as a matter of fact and exempt some countries from that as well. what is happened over the last six or seven years is that you have seen the imports creep back into the u.s. market and so that relief was noo longer as effective asas it once was. u.s. seen some surges in steel come from mexico and vietnam and some other places, not necessarily china, but it is working its way around. this is basically pressing the reset button on those tariffs and saying we will start this over again at the 25% level with all countries and all products and youal will have to work very hard basically if you want to get an exemption and exclusion to that and aluminum which had already been covered at 10%,

that is rising to 25% as well. all of this is scheduled to take effect nextor month in march. >> for those that depend on steel for manufacturing, in the united states, what t happens to the price they pay or charge for the things that they make. >> it depends on what the demand is as well. and what we learn from the last round of steer tariffs, and that effect at the end of it is that because of currency devaluation and some other things like that, there was not a lot passed on to the end user consumer. let's take an automobile is an example here. there's a lot of steel in an automobile, but the actual price component of steel in an automobile is pretty low. it is impacting a very small percentage of that price of an automobile. he does not necessarily need to be passed on to consumers.

what we found with the last round is there was an ability to renegotiate some manufacturing contracts. there was the ability to seek some efficiencies. it really meant that there was not a large price impact. i would say i would go talk to audiences of steel consumers and i would defend the tariffs which is not an easy thing to deal. the principal complaint that i heard is i cannot find enough workerss. i am still hiring, i cannot find enough workers. i can findro a way to deal with the steel tariffs if there is a transparent process and i know what it will be, but i'm still struggling finding workers. >> skull paul scott paul with us asking questions about manufacturing in the united states particularly inn light of tariff policy and other issues 7,488,001 for republicans. 748 for democrats and 202,748,002 for independence.

you can text us. post on the social media sites as well. what about the idea of retribution by these other countries? what does that ultimately do for the price of steel. >> there was some retaliation to the terrorists. let's bear clear. there is a lot of tariffs. with respect to china and other potential tariffs down the road. what we saw the last round is that there was some retaliation, but congress and the administration put into place some mechanisms to compensate the domestic producers for that. i would anticipate that there would be a similar mechanism this time. i would also say this. people talk about trade wars. it is a little bit more complicated than that. there is differing trade tariff rates, trade disagreements that happen all the time.

i know that it is a catchy headline. it does not really capture the truth. the largest consumer market in the world. we consume 20% of the world's products even though we are 5% of the people. our market is generally very open. we are not nearly as trade exposes a lot of other countries are that depend on their imports coming into the united states to generate national wealth. we hold far more cards and any trading partner we are dealing with. we should not be afraid to utilize that. we have more ability to escalate most if not all of what our trade partners do. we saw this with the china tariffs as well. but china decided when trump applied thehe latest round justo do basically a nominal amount.

investigating google which does not dond a bunch of business in china to reopen the case and to dodo some very, very narrow tariffs that were much more of a symbolic. >> policy initiatives. >> yes. absolutely. >> these tariffs, if they do impact steel ultimately or other things, is at picking winners or losers? >> not. necessarily. fundamentally, trade policy has been picking winners and losers over the years. the bargain we made is we will give up market access. we will expose our manufacturers in return we will have allies in the cold war and then hopefully, you know, with respect to china 25 years ago, that did not work out. and we will also make gains in services andt what have you. what we have learned from all of

this is that it has been very one-sidedad. we have a trillion dollar trade deficit in goods annually. $1 trillion that we are bringing in more than we are taking out. we are very entrepreneurial innovative country. that is called a trade policy out of whack. this is resetting it. a little bit. and, traditionally, with w respt to trade policy, there is been some compensation of people that have been impacted by trade. it has not been generous enough but there is been a long history of that since the early 1960s in the united states. that ispo not an unusual circumstance for our economic or trade policies. >> the president of the alliance for american manufacturing. the firsthe call in new jersey. you are on with our guest. good morning. go ahead. >> good morning, pedro.

>> good morning. you are on. >> good morning. i have a question for you, mr. paul. just a few. that is the 29th teen they said we have the lowest unemployment rate in 50 years. meanwhile,le democrats say if we have tariffs we have wasted every middle-class or most americansl will feel the pain d feel the impact. my first two questions are, why are democrats saying the first administration in 20172018, 2019 , the unemployment rate was low. and second of all, during the first trump administration, some

alleged comedians said that trumpor making things worse for some people like farmers. saying that they are having things worse because of tariffs. is that true or is that fabrication or satellite? >> thank you. >> veryy good question. i would say this. the question about passing along costs to consumers is an unsettled one. there are couple of ways that it could go. if a tariff is charged there will be revenue collected. it will be up to the company whether it passes along the cost to consumers, whether it absorbs it renegotiate contracts with the manufacturing out of china another country not impacted by tariffs. all sorts of things that could

have happened there. it is true that the evidence based on that round of tariffs would be a negative contribution to inflation compared to other things like energy costs or housing costs. i will say that that does not necessarily mean that is always the case. every product everywhere everywht these companies will do there might be costs passed on to consumers. i do not want to pretend like there is not a cost associated with this. there certainly is. there is a cost of inaction. we saw decades of erosion of our manufacturing base in this country. that impacted millions of lives, hundreds of thousands of communities across the country. and it put us in a national security position that is dangerously exposed. and so, again, there is a trade-off. thanks about it like the cold war.

we built up the military in part two make sure that the soviet union could not challenge us. and there is a cost of that because there was a

with all of this especially when we have all of these relationships and we have been bringing tariffs down over a number of decades. that is a really important question. with china in particular and i will answer it because it is very broad. if you look at the goods that china supplies to us and we buy a lot of it includes christmas

and party decorations that also smart and laptops. and you can kind of laughed at the first one because we can source that from anywhere else. truthfully it is not the easiest thing in the world to shift laptop and smartphone production to other locations much less the united states. that is underway in some host: good morning gentlemen and good morning to you all. caller: i am not a democrat or republican. they can put on those tariffs are left that -- let those tariffs. my question is what is the long-term impact for tariffs? and which sector of the economy and our country will get a direct hit that they will see that? and then will we stay independent first to manufacture in the future. and i thank you very much. host: thank you. guest: great question and i would say that indiana is the largest steel producing state and it is relevant to that state. again, what happens with nt%ra% ithat could be where we see an adjustment issue. with respect to steel, we need a base capacity of steel in the united states to preserve our economic security and the tariffs are part of that guarantee. we also need a healthy economy and we need to be making investments in our economy. and that is an important aspect that we cannot lose sight of. host: how much comes from china compared to canada and mexico. we see --'s we see less steel coming in from china. the challenge is that it ends up

going to vietnam or to malaysia and then coming to the united states indirectly, not necessarily subject to a full tariff. and we have seen steel exports surged through mexico. there was a lot of trade in north american steel. our challenge is not with canada. there was generally fair trade relationships and there were some issues. they were generally fair trade relationships. they were a little bit with mexico and we had seen a surge of steel coming in and the biden administration recognize that too and was prepared to take actions on it. and that is where you see a lot of the challenges. host: the former deputy prime minister of canada wrote a recent opinion piece and wrote this about canada's perspective saying "in 2018 imposed dollar for dollar retaliation in -- on

60 point 6 billion canadian dollars in u.s. steel aluminum another engine -- imports deliberatelyargeting products from red states. mr. trump might not care about the objections of people in canada, but he does care about american workers and businesses. effects court -- if exporters feeling the squeeze for to for tat tariffs the pressure on the administration will -- will reverse course." guest: from her perspective that is probably the right argument. i articulated this before. the impact of any trade major -- measures that we would apply to canada would have a massive impact on their gross domestic product because of the size of the economy. the impact of any trade measure that canada could apply to the united states, yes there might be some targeted impact, that it would not be felt economy wide in any way shape or form because the economy is too large because

this would be a small and select subset. if there were a escalation -- caller: i one about -- i want to talk about the machine tool industry. our worthy congress allowed people from not only asia and

europe to butcher the machine tool industry. it was run by family organizations now we have nothing left. all of the large companies that made steel meal -- steel mills and they made them right here in pittsburgh, they are gone. they are never coming back. talk to nucor and they would tell you that all of the things that they are buying for their new plans is coming out of europe and japan. we have lost it. and i do not know how mr. trump expects as far as to build in industry, any industry and manufacturing without a reliable machine tool industry. i appreciate your time. host: thank you. guest: i agree completely. machine tools are something that people do not see when you are in manufacturing you know how

important they are because they are the things in the factories that are helping to produce and convert raw materials into something that is useful up the value chain. we did lose a lot of that industry to europe and asia. and -- but i will say that i think a couple of things show that if we have a policy, we can do it. and this is an ode to industrial policy, which gets a bad name sometimes that it is highly effective. we have had an industrial at -- policy for agriculture and that is why we produce a lot of agricultural products. the same for fossil fuels whether you agree or not, it has been an effective policy. we are producing more fossil fuel output than we ever have even before trump took office. now, the last administration,

the biden administration took that notion and applied it to semi conductors with bipartisan support and as a result we have -- as a result we have seen a rebirth of high end semiconductor manufacturing. there are a dozen or more factories under construction that are going to put us back into the semi conductor game. and so, i will say that tariffs alone, not going to bring machine tools back. that if you have tariffs combined with that sort of muscular industrial policy, it is quite possible. host: democrat line from south carolina. jermaine, hello. caller: how are you doing, good morning. i had my original question answered. i have another question. as far as getting the steel from china, and producing it domestically, speaking as a consumer, how is that going to

help the consumer? will the price of goods be cheaper or with the prices remain the same? guest: that is a good question. it is important to understand that no one buys bank a ton of steel -- buys a ton of steel directly. but steel is part of other products. we use the automobile example before. and even though there is a lot of steel in the automobile in terms of the purchase price it is a small part. and already, most of the steel that these auto manufacturers are utilizing is coming from the united states or north america where it might not even be subject to a tariff. so, there is very little that is passed on to the consumer. i will say this. if you believe that the overriding responsibility of the government's is consumer

efficiency, that gets you to a different policy point than if you believe that it is the national security of our people. and, that is fundamentally what the government is supposed to do, guarantee and safeguard our national security. and so, again, i will not let shy will not pretend that there is no cost. there could be some cost. the question is is it a cost worth bearing and how will it be distributed? how much will these very innovative companies that can figure out different ways to get more efficient, how much will they absorb and pass along? but, it is worth it at the end because we are getting to the point if god forbid we had to mobilize for something, we do not have the capacity to turn out the military equipment or armaments in a way that we did

say 50 or 60 years ago. that makes us extremely vulnerable. host: does your organization represent u.s. steel? guest: we do. host: we pushed -- we saw japan -- president biden president trump pushing back against the idea of japan buying u.s. steel. guest: we have not taken a position on that because we have stakeholders on every side. i will say this, we are at a point in time where it makes sense no matter who it is to invest in the steel industry rather than offload the assets like they were doing for the last 30 years. and so, the fact that there is investment that might be coming into steel from some source, i think that is a good sign for the industry without stating an opinion on the purchase. host: what investments the

countries interested in making specifically? guest: say again? host: how would japan buy u.s. steel and change the company? guest: they proposed making $3 billion in investments as part of that. there are other companies that have expressed interest in purchasing u.s. steel. and in the past you have seen a lot more interest in investing in the steel industry in general in the united states because they say -- they see the united states market as a good and healthy one moving forward as opposed to the past where it was shrinking because of the import penetration. host: is u.s. steel an outlier in form of investment or are other countries are the same shape or condition? guest: again the difference is investment versus rescue or having a vulture come in. in the past it was a lot of mergers and acquisitions in

steel and a lot of downsizing. there was a wave of bankruptcies at the end of the 90's and the beginning of the oughts, where you saw bethlehem and others that went out of business and just disappeared. they had been part of the american landscape generations. and that is not the situation we are in. we also cannot afford to take the tariffs off because that is where we would end up again and we do not want to see that. host: scott paul joining us for this discussion. kathy is up next from georgia, hello. go ahead. caller: good morning. i enjoy watching your show and this one just sort of hit home. i am not going to really ask a question and i just want to make a comment. i was born and raised in a small town in the appalachian mountains in north carolina. even in high school and i graduated in 1975, i worked all

through high school, a job. i did not have a choice. i could go from one plant to another to get a job. this is a small 2000 population town. poser emails, --hosiery mills, furniture builder, blue gene factory, ethan allen. i mean there was always someplace to work. i was very fortunate and i was able to go to college on a scholarship. and so i got out of there and got a better job. and i have five brothers and sisters who lived up there. and over the course of 20 years, this is in 1975, when everything was sort of rosy, every manufacturing plant is gone. right now they are ravaged by helene. we lost every major furniture builder. the hosiery mills, blue jean

factories and everything. the largerest -- the largest employer is walmart. i am just perplexed because i saw my family suffer from it, and many families in this little town in the mountains. so, if you could shed some light on that and if there is a chance that any of these jobs whatever come back to these old towns across america. i guess i am looking for hope. is there any? guest: i would say there is hope. it is not going to look like it did in the 1970's. but, there is the possibility to attract new factories to communities. it takes some policy to do that and it takes a reversal of the free-trade policy is that we saw over the last -- policies over the last couple of generations

that led to the demise and manufacturing in a small and mid side towns in a wide variety of industries and it takes some investment in the skills of the workers and innovation. we have seen some points where it is possible but the ideas not to reimagine manufacturing as it was 50 or 60 years ago. that will not happen. that does not mean it will not have good jobs. in a walmart comes to town you will not get other economic development. when a factory comes to town you are going to get other things. you get folks to supply the factory, more activity at the hardware in the grocery store and you might even get a walmart if you are able to attract a factory. it is possible to do that and we have seen new factories come online over the last 15 years because reshoring has become of a practice. so you see more companies

looking at bringing work back to the united states. we just need to scale it up. host: richard from baltimore, american. -- maryland. "what percentage of american manufacturing employee legal workers?" and where does immigration policy fall into how you represent? guest: from a manufacturing perspective it is not a problem. at all. in fact, it is part of the solution. the immigrant workforce has been a massive part of a solution particularly in a lot of these communities that have been hollowed out where the kids left seeking opportunity elsewhere and these family-owned factories are seeking workers. and, refugees, immigrants have helped to fill the void. and they are not taking jobs from anyone. there are 400,000 open jobs in manufacturing now.

it is not like folks are getting squeezed out. if you talk to any manufacturer, and i am sure that a lot of them voted for president trump, they will say that there workforce, and having some refugees or sap -- or having some immigrants as a part of that will be key to keeping them running at full strength. host: what are your employers doing to make sure that those that do not belong, the undocumented, are not working in factories? guest: our employers who were all steelworker represented there is a deliberate process that workers go through for all of that, for trading and all of the checks. again, it is not an issue and seasonal employment. this is the other thing, it is not casual seasonal employment. this is shift work where you are there.

it is a completely different circumstance and immigration again is part of what it will take to see more employment in manufacturing. host: russell in winchester virginia, works in manufacturing, go ahead. caller: good morning. i have recently retired from an industry and it was really steel intensive. i would like to go back and revisit the tariffs from the first time. i think it was like a 20% tariff on the chinese steel put down, and i am thinking while i am working that this is a good thing because now will i go back and start buying steel from ohio again as we had before they made the switch to chinese? but then, it was with -- it was within a month end close to

three weeks after the tariffs were instated that u.s. steel announced that they would up their prices 20%. and all of a sudden, the manufacturing expanding the customer base and all of that was out the window because no matter where you bought it you were paying more. all we did was put a surtax and send it on to our customers. and that is just money coming out of people's pockets. u.s. steel had a chance to expand its manufacturing base, but they chose that we will board -- reward shareholders. all it does is cost consumers more money. that is pretty much what i've got to say. oh, and, you were talking about us being a consuming nation. we should import more because we consume a lot more than anyone else. but, whatever and good luck.

and i think that all of this will do is just make the inflation worse and feed it good. host: thank you. guest: i mean, again, the evidence with respect to the steel tariffs is that overwhelmingly what happened is that these comfort -- these companies were able to make investments in their factories that had been deferred for decades because they did not have the resources. a modernized and became more efficient. when steel prices go up it is because demand is increasing. it is a very demand sensitive industry. and so, it goes up and believe me, it comes down and to a level where it cost more to make than they could sell it. and that is how all the dumping for china and other countries did. and i do think that on net, it

is well worth having steel and aluminum tariffs in place to have -- to protect a basic level of production in the united states and to provide that stability and that choice. and i would say, i would much rather have u.s. companies in competition with each other dealing with prices and having the estate owned chinese for -- chinese firms set the prices and being hostage to them. host: the caller made the point towards the end but there is a viewer who sent a text saying " what if we had a consumption tax? wouldn't that be a better way of reducing consumption and thus reducing the price of imports?" guest: i do not know. we do not have a tax system based on a consumption tax. i think that is highly unlikely to have. that is the european model. and something that this administration is concerned

about because they believe it serves as a nontariff tax on our employers going into europe -- imports going into europe. i am not sure if that is the answer. i think more balance in the trade policy would be a good starting point. host: senator mcconnell talked about trade and tariffs towards his state saying "kentucky cannot afford tariffs in the trade wars." he said "trade wars with our partners hurt working people most. in the president has better toils to protect american workers without forcing our families and businesses to absorb higher costs." he does not elaborate but are there things i can make up for ultimately higher prices on people? guest: again, trade theory is complicated. it is very unsettled. one of the things that we saw when these steel and aluminum tariffs were imposed before was that the value of the u.s.

dollar went down a little bit. and that actually on net makes the imports less expensive than a day otherwise would be. does it negate the effect? not necessarily. they can still be impactful. but the idea behind the tariffs is that you will either generate the revenue or get the jobs back, one or the other. i would like to see the jobs come back and the firm start to reshore rather than to pay the tariffs because that is an option for some of them as well. again, with respect to senator mcconnell, for his entire career he has been a free-trader. it is not surprising, this. but i think he would agree that china has not played by the rules. and so far, what we have seen in place from the trump administration right now is a 10% tariff on chinese products across the board.

we have seen some steel and aluminum tariff announcements. they will take effect next month and we will see what happens between now and then. we know that things can change very dramatically. that is what we have seen so far. host: al from washington. democrat line. hello. caller: hello. good morning. i went to georgetown in the late 70's. and i watched the demographics of the nation change overnight during that election of 1980 when carter was drummed out and reagan came in. i am seeing something happen similar in the most recent election cycle where overnight everybody is now in favor of the current administration. i grew up in west virginia.

i mean, my family was from down in coal mining country. and i saw the u.s. steel divest in the coal mining regions of the country. so when that lady was talking about north carolina and manufacturing jobs, the whole state of west virginia literally dried up. and i am here -- i am hearing drill baby drill and all of this stuff, right? but what i am really curious about is what are we going to do to bring america back, even with these dynamic election changes we have seen. i will stand aside now. guest: simple question. how do we get america back? part of it is that there has been a realization. i think this was true from the biden administration and the trump administration that says we have to reorient our trade

policy. instead of just negotiating free-trade deals and giving away market access, we need to demand a level playing field and to be able to utilize tariffs as one of the tools. keep in mind, biden signed a tariff proclamation to put 100% tariffs on chinese electric vehicles. ok? that is -- so when progressives are saying trump is doing this i was like look, biden was doing some of this. it is a similar thread to trade policy and a welcome one. that is not alone the answer. we need to invest in workers, community colleges, career and technical education programs. we need to be massively innovative and continue to build out our infrastructure. and to explore all energy sources so that we have an energy advantage for generations.

there is a lot that we need to do and we can do and we are well-positioned to do it. in this washington can we get it done? i am not sure. it is a vote one way or another so i am not holding my breath. there is a pathway to kind of get back that economic strength. host: americanmanufacturing.org