Half a billion dollar bet on the Trump steel tariff.
Here's a bit of US courage, or is it?
JSW Steel USA recently announced an investment of half a billion dollars to upgrade a steel plant in the Houston area.
The music to the President's ears will be that it is expected to create 500 new jobs and avoid having to import steel slabs from outside of the US.
JSW is part of the O.P Jindal Group, one of India's largest Family conglomerates, with JSW alone worth a reported USD13 billion. It acquired US Steel's operations in Baytown, Houston.
Remember that name, US Steel? They've been fighting a trade war for 30 years and it shows. US Steel recently announced it would be adding 800 workers after plans to open two furnaces in Illinois.
JSW's US subsidiary will reportedly install a state of the art Plate Mill plus an additional 1 million tonnes of manufacturing capacity (which will allow it to avoid those imports).
Clearly JSW is bullish on the Trump steel tariff and is betting the tariffs will not be rolled back.
CEO John Hritz said: "We are in lockstep with the president and with the administration."
Parth Jindal, a Family member said: "We want to bring steel manufacturing back to the United States".
So, whilst cash from India will be deployed at Baytown, and 500 jobs are expected to be created and some imports will stop, profits from becoming competitive again via the tariffs will flow back to India.
Setting aside that minor point, if there is a roll-back of the tariffs, presumably the Family has a big enough balance sheet to forge ahead with its plans.
Well, that's what factory workers in Houston will be hoping for.
Tariffs and industry-specific subsidies and rebates are blunt and savage instruments when they are enforced - but they can decimate sunrise industries, if and when they are rolled back.
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