Latest news with #US14
Sydney Morning Herald
3 days ago
- Business
- Sydney Morning Herald
Why did Trump double his steel tariffs? Because he could
Apart from trying to show that he still has some, albeit more limited, authority to act on tariffs, Trump's announcement, to a rally of US steelworks, had a secondary purpose. Loading During last year's election campaign, Trump was vehemently opposed to a proposed $US15 billion ($23.3 billion) acquisition of US Steel by Japan's Nippon Steel - as was Joe Biden, who blocked the deal only days before he left office. Both were chasing the votes of steelworkers and their powerful union in the critical swing state of Pennsylvania, where US Steel is headquartered and has its major plants. Having won the election, however, Trump has had a change of mind. While the US will impose some significant conditions on the deal -- including, perhaps, a 'golden share' that would give the government a veto over major decisions along with a commitment from Nippon Steel to appoint a US chief executive and a majority of Americans to the board – it now appears that he will approve the deal, even though he says he hasn't seen its final details. Nippon Steel, one of the world's most sophisticated steel producers, has promised to invest about $US14 billion in US Steel's operations, which have been struggling, shrinking and suffering from under-investment for decades. Trump's doubling of the tariff rate for steel and aluminium is a way of justifying the decision to approve the deal, as well as enhancing the economics of US Steel and other US steelmakers and helping to underwrite Nippon Steel's massive investments, most of which will occur over the next four years. Trump's original tariffs on steel and aluminium infuriated America's trade partners, including Australia, even though Australia's exports of those metals to the US are quite modest. Canada, whose steel exports represent about a quarter of US steel imports and half its aluminium imports, has far more at stake. Mexico, Brazil, South Korea, Vietnam, Japan and European nations will also be impacted, with Canada and the European Union already threatening retaliation, as they did in response to Trump's initial 25 per cent tariffs. Australia is still, probably fruitlessly, seeking an exemption. Loading The decision to allow the Nippon Streel deal to proceed, if that is the final outcome, is good policy. The US steel industry is small – about half the size it was half a century ago -- and has been shrinking. It has poor profitability and ageing technology. Nippon Steel's investment and its technologies can arrest that decline. The decision to double the tariffs on steel – indeed the original decision to impose the 25 per cent tariff – is, however, poor policy. It will increase investment in the sector, and will probably improve its profitability, plant utilisation rates and employment numbers. But that will come at a significant cost. In 2018, when Trump first imposed tariffs on imported steel, steel prices rose almost 10 per cent, the sector's profits rose by about $US2.5 billion, capacity utilisation jumped from 74 per cent to about 80 per cent and nearly 10,000 jobs were added within the sector. The impact was quite short-lived, with those numbers subsequently reversing as the industry resumed its long-term decline. The initial impact was predictable. Tariffs are protectionist. They protect domestic industries and companies from more efficient producers elsewhere by boosting their sales, margins and profits. That's what happened after the 2018 tariffs. Loading They come, however, at a cost to the customers of the protected industries, which is also what happened after Trump's 2018 tariffs were imposed. A Peterson Institute for International Economics study concluded that the 2018 tariffs cost US downstream steel-using industries about $US5.6 billion, or about $US650,000 for each new job they added in the steel sector. The US Federal Reserve Board concluded that they cost about 75,000 jobs in those downstream industries, or more than eight times the number of jobs added by the steelmakers. Steel is a key input to the manufacturing industries, whose protection Trump has trumpeted as the rationale for his trade wars. It's also extensively used in the construction sector. With the 25 per cent version of the tariffs on steel and aluminium not only set at twice the 2018 rate, but also applying more broadly – they now also extend to downstream products containing the metals – their impact on steel and aluminium users and US companies and consumers will be far more significant and damaging. Trump might regain a little of the authority and ego he lost when the court knocked out, perhaps temporarily, his broader weaponisation of tariffs against the rest of the world. He might also have ingratiated himself with the steelworkers whose jobs he will protect, but the economic benefits of his metals tariffs will be far outweighed by their costs to the rest of the US economy. The probable impact on the steel and aluminium industries and their customers provide, in fact, a glimpse of the broader damage that Trump's trade wars on everyone – if the courts allow him to continue them, or he can find other means to implement them – will inflict on the world's largest economy.
The Age
3 days ago
- Business
- The Age
Why did Trump double his steel tariffs? Because he could
Apart from trying to show that he still has some, albeit more limited, authority to act on tariffs, Trump's announcement, to a rally of US steelworks, had a secondary purpose. Loading During last year's election campaign, Trump was vehemently opposed to a proposed $US15 billion ($23.3 billion) acquisition of US Steel by Japan's Nippon Steel - as was Joe Biden, who blocked the deal only days before he left office. Both were chasing the votes of steelworkers and their powerful union in the critical swing state of Pennsylvania, where US Steel is headquartered and has its major plants. Having won the election, however, Trump has had a change of mind. While the US will impose some significant conditions on the deal -- including, perhaps, a 'golden share' that would give the government a veto over major decisions along with a commitment from Nippon Steel to appoint a US chief executive and a majority of Americans to the board – it now appears that he will approve the deal, even though he says he hasn't seen its final details. Nippon Steel, one of the world's most sophisticated steel producers, has promised to invest about $US14 billion in US Steel's operations, which have been struggling, shrinking and suffering from under-investment for decades. Trump's doubling of the tariff rate for steel and aluminium is a way of justifying the decision to approve the deal, as well as enhancing the economics of US Steel and other US steelmakers and helping to underwrite Nippon Steel's massive investments, most of which will occur over the next four years. Trump's original tariffs on steel and aluminium infuriated America's trade partners, including Australia, even though Australia's exports of those metals to the US are quite modest. Canada, whose steel exports represent about a quarter of US steel imports and half its aluminium imports, has far more at stake. Mexico, Brazil, South Korea, Vietnam, Japan and European nations will also be impacted, with Canada and the European Union already threatening retaliation, as they did in response to Trump's initial 25 per cent tariffs. Australia is still, probably fruitlessly, seeking an exemption. Loading The decision to allow the Nippon Streel deal to proceed, if that is the final outcome, is good policy. The US steel industry is small – about half the size it was half a century ago -- and has been shrinking. It has poor profitability and ageing technology. Nippon Steel's investment and its technologies can arrest that decline. The decision to double the tariffs on steel – indeed the original decision to impose the 25 per cent tariff – is, however, poor policy. It will increase investment in the sector, and will probably improve its profitability, plant utilisation rates and employment numbers. But that will come at a significant cost. In 2018, when Trump first imposed tariffs on imported steel, steel prices rose almost 10 per cent, the sector's profits rose by about $US2.5 billion, capacity utilisation jumped from 74 per cent to about 80 per cent and nearly 10,000 jobs were added within the sector. The impact was quite short-lived, with those numbers subsequently reversing as the industry resumed its long-term decline. The initial impact was predictable. Tariffs are protectionist. They protect domestic industries and companies from more efficient producers elsewhere by boosting their sales, margins and profits. That's what happened after the 2018 tariffs. Loading They come, however, at a cost to the customers of the protected industries, which is also what happened after Trump's 2018 tariffs were imposed. A Peterson Institute for International Economics study concluded that the 2018 tariffs cost US downstream steel-using industries about $US5.6 billion, or about $US650,000 for each new job they added in the steel sector. The US Federal Reserve Board concluded that they cost about 75,000 jobs in those downstream industries, or more than eight times the number of jobs added by the steelmakers. Steel is a key input to the manufacturing industries, whose protection Trump has trumpeted as the rationale for his trade wars. It's also extensively used in the construction sector. With the 25 per cent version of the tariffs on steel and aluminium not only set at twice the 2018 rate, but also applying more broadly – they now also extend to downstream products containing the metals – their impact on steel and aluminium users and US companies and consumers will be far more significant and damaging. Trump might regain a little of the authority and ego he lost when the court knocked out, perhaps temporarily, his broader weaponisation of tariffs against the rest of the world. He might also have ingratiated himself with the steelworkers whose jobs he will protect, but the economic benefits of his metals tariffs will be far outweighed by their costs to the rest of the US economy. The probable impact on the steel and aluminium industries and their customers provide, in fact, a glimpse of the broader damage that Trump's trade wars on everyone – if the courts allow him to continue them, or he can find other means to implement them – will inflict on the world's largest economy.
Yahoo
7 days ago
- General
- Yahoo
Change reroutes US14 in Pierre to avoid an oft-hit bridge
PIERRE, S.D. (KELO) — US14 is being officially rerouted through Pierre to shift traffic away from a railroad bridge that's often been struck by taller vehicles such as trucks and RVs passing beneath it. Buffalo Chip announces rally lineup The South Dakota Transportation Commission approved the rule change during a teleconference on Thursday. The intention is that US 14 traffic would no longer travel through the heart of Pierre and no longer need to go under the Dakota, Minnesota & Eastern bridge that crosses over Pierre Street. Instead, US 14 traffic would take what currently is known as the US 14B bypass on Garfield Avenue at the eastern edge of Pierre. The new route will be labeled as US 14. The hope is that automated mapping services will reflect the change. Standard traffic signs warn motorists of the bridge's clearance of 11 feet, 3 inches and a nearby Pierre law firm also has an electronic sign advising that the bridge is low. Nonetheless semi trucks still get stuck under the bridge month after month and RVs sometimes lose cooling units or other items from their roofs. The change also affects traffic using US 83 through Pierre. US 83 and US 14 follow the same route through South Dakota's capital city. There were no comments from the public at the hearing Thursday. The re-designation corresponds to the Legislature's passage of Senate Bill 39 earlier this year at the request of the South Dakota Department of Transportation. The goal is to have the re-designation take effect on July 1 at the same time as the legislation does. This comes as portions of Pierre Street and Euclid Avenue are in the first year of a two-year reconstruction project. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
West Australian
06-05-2025
- Business
- West Australian
OpenAI scraps plans to change into for-profit company
ChatGPT inventor OpenAI has reversed course on plans to transform into a for-profit company, announcing that it will remain under the control of its original US non-profit entity. The decision follows consultations with state attorneys-general in California and Delaware, who could have moved to block the restructuring. "OpenAI was founded as a non-profit, and is today overseen and controlled by that non-profit. Going forward, it will continue to be overseen and controlled by that non-profit," the company said in a statement. The reversal raises questions about the future of OpenAI's funding structure. Major investors, including Japan's SoftBank, had backed the company on the condition it would transition to a profit-driven model by the end of the year. Chief executive and co-founder Sam Altman told reporters on a call on Monday that SoftBank had no plans to reduce its funding. Microsoft, which has invested almost $US14 billion ($A22 billion) in the company, has not commented on the new plan. The profit-oriented restructuring was originally intended to attract more investors as competition in the artificial intelligence sector intensified. It came after a period of turmoil in late 2023, when OpenAI's board abruptly fired Altman, only to reinstate him weeks later following pressure from investors and staff. OpenAI's co-founders, including Altman and Tesla CEO Elon Musk, originally started it as a non-profit research laboratory on a mission to safely build artificial general intelligence for humanity's benefit. Nearly a decade later, OpenAI has reported its market value as $US300 billion and counts 400 million weekly users of ChatGPT, its flagship product. The non-profit decision marks a victory for Musk, who now runs rival AI firm xAI. Musk has been a vocal critic of the profit shift and has taken legal action to block the transformation. with AP
Perth Now
01-05-2025
- Business
- Perth Now
Buffett to mark 60 years leading Berkshire Hathaway
Berkshire Hathaway has held up well in a rocky year for stocks, and shareholders this weekend will be seeking reassurance from Warren Buffett that they remain in good hands as tariff turmoil disrupts corporate America. At Saturday's annual meeting in Omaha, Nebraska, the 94-year-old billionaire will mark 60 years in charge of what he built into a $US1.15 trillion conglomerate. Buffett will spend four-and-a-half hours fielding shareholder questions, which typically focus on Berkshire's operating businesses, markets, the economy, life lessons, and the company's future after the Oracle of Omaha departs. Berkshire's businesses are disparate, and include Geico insurance, the BNSF railroad, Berkshire Hathaway Energy, Dairy Queen, Fruit of the Loom, and retro brands such as Ginsu knives and the World Book Encyclopedia. For many, they serve as a proxy for the American economy. Yet through April 30, Berkshire shares have trounced the Standard & Poor's 500, rising 18 per cent while the index was down five per cent. That gulf, however, is more likely reflective of whipsaw from US President Donald Trump's policies than new attitudes about Berkshire itself. Some observers view Berkshire's $US334.2 billion year-end cash stake, which at current yields could generate more than $US14 billion of income, as a buffer. "People have so much conviction in Warren Buffett and his ability to deploy capital well in market downturns," said Brett Gardner, author of Buffett's Early Investments. "Berkshire also has a lot of stable cash flowing businesses that may not be as impacted as other companies," he added. The early outperformance fuelled much of Berkshire's stock price gain of more than 6,400,000 per cent since 1965. Over multi year periods, Berkshire now performs more like the S&P, but with better downside protection. Buffett readily acknowledges the folly of expecting stellar outperformance over the long haul. "We cannot do as well as we did in the past," Buffett said at Berkshire's 2013 annual shareholder meeting. "It's tougher as we get bigger." At the 2021 meeting, Buffett said a person who knows nothing about stocks and had no "special feelings" for Berkshire should buy the index. And in his February 2024 shareholder letter, Buffett said Berkshire "should do a bit better" than average American companies, with materially less risk of losing capital, but that anything beyond "slightly better" was "wishful thinking." A large driver of Berkshire's profit is insurance, which accounted for 48 per cent of its $US47.4 billion of operating profit last year. Still, earnings in 53 per cent of Berkshire's 189 operating businesses fell last year, and Trump's tariffs could pressure some of the businesses. Berkshire's value also derives from its huge cache of stocks, including Apple and American Express, though that portfolio suffered during April's market selloff. Buffett took over Berkshire in a fit of anger in 1965, when management of the then-flailing textile company short-changed him when he offered to sell back his shares. He later called Berkshire "the dumbest stock I ever bought," saying he missed out on $US200 billion over 45 years by making it his vehicle to invest in insurance instead of starting a new entity. But by adopting the mantra of the company's late vice chairman, Charlie Munger, to buy wonderful businesses at fair prices, rather than fair businesses at wonderful prices, Buffett made Berkshire what it is today. Gardner called Berkshire's size its "biggest handicap, being unable to move the needle," but said Buffett's record as perhaps the greatest investor ever outweighed it for many.
