Remember those demonstrations on nuclear fission where they set up a few hundred mousetraps, each with a ping-pong ball atop it. Toss one ball into the middle and it triggers a trap that tosses another ping-pong ball into another trap and then another until you hear a din of snaps and it is raining ping-pong balls.
It sort of feels like that's where we are regarding our steel industry. President Trump has a ping-pong ball in his hand, and it is labeled "tariff."
Trump's announcement that he intended to place a 25 percent tariff on steel imports brought immediate good news to Granite City. U.S. Steel is reigniting one of two furnaces at the Granite City Works and putting up to 500 steelworkers back on the job starting this month. It idled 2,000 local steelworkers a few years ago because foreign steel was being dumped in the U.S. and they couldn't compete with prices subsidized or manipulated by those foreign companies' governments.
But there are plenty of questions about which traps will be triggered by the steel tariffs and accompanying 10 percent tariff on aluminum. It's that uncertainty that has Wall Street throwing a minor tizzy.
The U.S. has 140,000 steelworkers. About 16 times as many folks work in industries that use steel and will be impacted by a rise in prices. Those price hikes get passed on to all of us at the store and in the showroom.
Our nation is on the verge of a major infrastructure overhaul. Lots of steel goes into those roads and bridges. Prices go up, so does the need for your taxes.
Then there are the soybean farmers. Pork is the top protein source in China. Their pigs eat $12.4 billion worth of U.S. soybeans a year. We get into a trade war, and China can shift to the expected bumper crop of Brazilian soybeans.
But on the other side, steel is a small player in the overall economy here and among those rogue steel exporters. Some economists think we'll do just fine with tariffs because the U.S. economy is just shy of $20 trillion, and both steel and aluminum are only 1.6 percent of our imports and 0.2 percent of our output.
We've been in favor of the tariffs because we saw the devastation in our community. We saw what happened when we did nothing to fight foreign dumping.
We also see the need to have domestic steel and aluminum production for our national defense. Granite City's mill produces the steel for petroleum production pipe, and we all understand you cannot ride into battle or feed refugees without gas.
But, boy, do we hope we were right. War is hell, on the pocketbook.