TL;DR

A U.S. steel giant bought a Canadian company, now facing tariffs on its own product. The resulting chaos echoes 2008, reminding us that short-term greed often leads to long-term pain.

Story

Remember 2008? Subprime mortgages, bundled and sold as safe investments? It all came crashing down. Well, here we go again, but with steel.

Cleveland-Cliffs, a major U.S. steel producer, bought Stelco, a Canadian company. Now, with talks of new U.S. tariffs, Stelco is refusing U.S. orders. Why? Because they’d be paying tariffs on their own product. It’s like setting your pants on fire to stay warm.

This isn’t just about Cliffs. Other Canadian and Mexican steelmakers are halting U.S. sales. Imagine a restaurant refusing to serve its biggest customer. That’s the U.S. steel market right now.

‣ Tariff: A tax on imported goods. It’s meant to protect domestic industries, but it can backfire, like now. Prices will rise, businesses will scramble, and who loses? You, the consumer. Like always.

This reminds me of Enron, cooking the books while everyone looked the other way. Here, we’re seeing a different kind of cooking – the kind that leaves everyone with burnt dinner.

‣ Subprime Mortgages: Loans given to people with poor credit. They were a key factor in the 2008 financial crisis.

So, what’s the lesson? Don’t trust the hype. When politicians promise to protect you, they usually protect their buddies first. And when companies prioritize short-term gains, it’s the long-term consumer who gets shafted.

Advice

Diversify your investments. Don’t put all your eggs in one basket, especially when that basket is made of volatile commodities like steel. And always question the motives of those in power.

Source

https://www.reddit.com/r/wallstreetbets/comments/1iq1e66/steelmakers_refuse_new_us_orders/