Why steel and aluminium tariffs signal failure of American business

Adam E. Badenhorst
3 min readMar 12, 2018

We have recently seen that the US has implemented tariffs on steel and aluminium despite political pundits cautioning this move. Now let’s dive into a little bit more on why this signals failure. I am not going to dive into politics or about Donald Trump’s policies. That can be saved for the folks some place else.

Reasons why failure shows:

#1 Total loss of competitiveness

There has been no competitiveness for a long time. American business has outsourced a lot of its business to cheaper locations like Mexico or China. This two countries are prime examples of manufacturing that’s been outsourced — Ford in Mexico and Nike in China. Both of have had their own share of human rights queries.

#2 Lack of reform for employees

There has been single reform targeted towards improving the baseline for employees. That does not mean increasing the minimum wage, it means increasing the benefits for employees to benefit from. That benefit also includes increases in public transportation, public infrastructure reform, and healthcare — let’s not talk about Obamacare or the recent attempts to repeal it.

#3 Lack of culture reform

Capitalism inherently leads to selfishness and the potential for oligarchic societies. The current culture is very much everyone looks for themselves. The political climate has not improved and made the cultural shift to a more balanced way of life. Again, this doesn’t mean increase minimum wage. It means reorganise the benefits and enact legislation that improves worker’s conditions.

#4 No business incentive

There is no incentive to keep jobs in the US. Nor is there an incentive to create a more competitive environment. The large corporations and others can easily outsource their businesses and retain the profits. The small business can operate locally, but there again gets roadblocks. There has to be more incentive for the lower down to increase their potential and buying power.

#5 Protectionism never works

In a globally evolved world, we are more and more interconnected. We need to promote globalisation and not hinder it. I don’t believe American business has necessarily embraced this change or made it happen. The example of that is the steel and aluminium.

American manufacturing is dead

Bottom line, the US has long outsourced manufacturing to cheaper locations. There may be some manufacturing taking place, but this doesn’t reflect the global thrust of players like China, Indonesia, South Korea, and other SE Asian nations who are manufacturing. Of course, you have some European manufacturers too that are manufacturing locally.

What has to change

Mainly there has to be cultural and political shift to change the way things are done.

A cultural shift that includes looking after the fellow citizen followed by the need shift away from a ‘hire and fire culture’ to a more engaged and less profits focused culture.

There is obviously a political shift that’s needed too, but I am not going to open that topic here. It’s closely aligned to the cultural shift that needs to take place, because we need to empower the lower levels of society to keep going and bring back manufacturing.

Final Thoughts

The current trajectory does not favour business. In my view, American business is not managing well the change. The current market is not helpful or engaging to lower levels of society.

A fundamental cultural and political shift are needed to re-surge American business and improve its competitiveness in the global market place.

Bottom line, a movement to change what is being done has to start or continue so that the next generation has the opportunities that the older generation could not easily access or access at all.



Adam E. Badenhorst

Enterpreneur. IT & Heritage Consultant disrupting industries. AI, blockchain, SaaS, ERP.