Trump to Impose Tariffs on Steel, Aluminum Imports
Commerce Dept. recommended tariffs to protect national security.
President Donald Trump campaigned “to protect the U.S. from what he has said are unfair trade practices.” It looks like he has tried to keep that promise since he announced during a meeting with steel executives that the U.S. will impose 25% tariffs on steel imports and 10% on aluminum.
We do not know yet if it will affect all countries or just ones like China, who has sent a lot of cheap metals to the states.
In February, the Commerce Department recommended that he impose these tariffs on China and others “to protect U.S. national security.” The Washington Examiner continued:
Commerce Secretary Wilbur Ross said the surge of foreign metal imports has created a national security risk and left the American manufacturing community struggling.
”Excessive steel imports have adversely impacted the steel industry,” he wrote Friday. “Numerous U.S. steel mill closures, a substantial decline in employment, lost domestic sales and market share, and marginal annual net income for U.S.-based steel companies illustrate the decline of the U.S. steel industry.”
A report put out three options:
One is an across-the-board tariff of 24 percent on imports from all countries to the U.S., and another is a 53 percent tariff on imported steel from China, Brazil, South Korea, Vietnam, and India, among other countries. A third option is to impose a global quota that would limit countries to shipping 63 percent of the steel they shipped to the U.S. in 2017.
Trump hinted this move could come today with this tweet this morning:
Our Steel and Aluminum industries (and many others) have been decimated by decades of unfair trade and bad policy with countries from around the world. We must not let our country, companies and workers be taken advantage of any longer. We want free, fair and SMART TRADE!
— Donald J. Trump (@realDonaldTrump) March 1, 2018
Since the report suggested a tariff of 24% on imports from all countries it looks like he went with the first option.
John Lapides, president of United Aluminum Corp, said at the meeting that the companies as a whole currently have a situation “where competing unfairly has meant capital depletion in our business” and that they “need a level playing field.” Trump said:
“We’ll be signing it next week. And you’ll have protection for a long time in a while,” Trump told U.S. steel and aluminum executives during a meeting at the White House on Thursday. “You’ll have to regrow your industries, that’s all I’m asking.”
Trump has long complained that other countries cheat when it comes to trade, while the U.S. plays by the rules.
“People have no idea how badly our country has been treated by other countries,” Trump said.
He called all of this “disgraceful” and mentioned that “you almost don’t have much of a country” when the “country can’t make aluminum and steel.”
But this could come back and bite us. China and others may retaliate and impose their own tariffs. It could also drive up prices, which could end up hurting our companies that purchase and use those materials.
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Comments
This is not the sort of move we need at this moment.
Just imagine the horrible ways in which China could strike back – first they could stop importing all of those Hollywood movies, and cut off a big flow of cash to LA producers – then they could start restricting Google – then they could start blocking Apple Products from their country (even though most I-Phones are made by Chinese child labor) – then they could start to really hurt the income Silicon Valley rakes in….
ooh wait a minnit….
LOL
Good Good!
BIG FAKE ECONOMIC NEWS:
“Idea of a big downstream effect of tariffs is fake news: Peter Navarro”
https://www.youtube.com/watch?v=HuRgCKPaNVU
Peter Navarro on tariffs: I don’t believe any country will retaliate
https://www.youtube.com/watch?v=7hwVnbygjHw
IF you could be honest, you’d name several ways the Chinese would reciprocate.
But you are NOT honest. Witness your bullshit about “child labor” and Apple products. It’s a lie.
But you’re also (another) economics moron.
The Chinese…or the British…won’t restrict their own imports of U.S. products. They’ll raise a tariff of their own on American goods. And it won’t be just be “Silicon Valley” stuff. It’ll be stuff American entrepreneurs produce.
EVERYBODY gets screwed…!!!
MAGA…!!!
“But this could come back and bite us.”
No “come back” needed, although that WILL happen, too.
It’s already “biting” us, and it will on several levels.
First, it is a tax on every American consumer.
Second, it will make U.S. producers of steel (who enjoyed an INCREASE in production last year) and aluminum LESS competitive. Protectionism ALWAYS does that. See https://www.youtube.com/watch?v=eYqzcqDtL3k
Third, and so on, it will ignite a trade war…involving some of our best allies as well as some of our adversaries.
This is predicated on a LIE, and it is illegal. There is no “national security” interest involved here. It is BIG GOVERNMENT central planning at its worst.
Will this increase prices on American products? Probably. The question is how much and will that increase be offset by increased employment and, thereby, a potential reduction in taxes due to reductions in welfare and unemployment payouts. Also, note the chart. Our major steel import partners are Canada and Mexico. There is no reason why either of those countries can not enter into a trade agreement which would significantly reduce the tariff on steel from those two nations. The same applies to all the other countries on that list. What a tariff does is force foreign sources to raise their prices on imported commodities to allow domestic sources to compete. It allows a nation to be self sufficient and not dependent upon a foreign source. And, all countries do this, even China. Of course, China also uses a selective use of Value Added Tax, restrictive procurement directives, restrictive use of Quarantine Inspection Permits, government restriction of market access, movement of American R&D and patents to China and outright piracy of intellectual materials to harm the US economy, as well.
Now, the position of the US in any trade war is one of advantage. As the US constitutes 27% of the world market for consumer goods and has a horrible balance of trade [we import significantly more than we export], by using domestic sources to meet out consumer needs, we can minimize the negative effects of foreign tariffs. If a foreign source makes a better product, not just a cheaper one, then American consumers will buy that product over a domestic one.
There’s no “probably” about this being a tax on American consumers.
There’s ALSO no question that this will COST net jobs in the U.S.
This is Bernie Sanders’ “economics”. Pure and stupid.
It would only be a “tax” on the consumers who use products made from this material. And, as I mentioned, the impact will depend upon the extent to which other taxes are reduced.
As to it resulting in a net LOSS of jobs in the US, it is a little too soon to project THAT. Again, it will depend upon how the US consumer reacts. Of course, we can see that we have had a steady reduction in US jobs under our previous foreign trade policies. So, we might want to give this a try.
It would only be a “tax” on the consumers who use products made from this material.”
Which is everyone.
“And, as I mentioned, the impact will depend upon the extent to which other taxes are reduced.”
What an appalling stupid statement! This is like saying Der DOnald’s proposed hike in gasoline tax would only be a tax to the extent you got an income-tax reduction.
Wholly SHIT…!!!
You are again making comparisons of apples and oranges.
A tariff is a limited tax designed to raise the price of an imported product so as to eliminate unfair competition between foreign producers and domestic producers. It is not for the purposes of generating revenue. Though it will raise prices, somewhat, the nation, as a whole, benefits as it creates jobs, which increase the amount of money available in the country, which is then spent for other goods and services, which provides income and job security for other workers, and so on.
A gasoline tax is just the opposite. It exists to generate revenue for a purpose other than to level the cost of the gasoline between foreign and domestic producers. Also, at the point of sale, the gasoline tax is actually a user tax, as its proceeds are going to maintain the roadways that the gasoline buyer is using. To anticipate your response to this, yes, commercial buyers of gasoline would pass the tax on to consumers. However, even thought these consumers did not purchase the gasoline to transport themselves over the roadways, they are benefiting from the existence of those roadways, as they are used to deliver products to these consumers.
This is pure mercantilism, which Adam Smith demolished 240 years ago.
1. There is no such thing as “unfair” competition.
2. Raising prices, by definition, hurts everyone.
3. Creating jobs benefits only those who get those jobs.
4. Increasing the amount of money available in the country is not a good thing.
“If a foreign source makes a better product, not just a cheaper one, then American consumers will buy that product over a domestic one.”
No. They WON’T you liar.
They WON’T because people like you will not allow them to, with the exception of consumers to whom price is unimportant.
The rest of us are priced out of the market for a superior product, and American producers are sent false signals about their own products and innovation.
I swear…!!!
Wow, time for your meds?
In 1960, a television cost x number of dollars. In 1968, a television cost roughly the same price, but it incorporated more features. It was better. In 1980, a television again, cost roughly the same amount [adjusted for inflation] but now the consumer demanded that it be a color TV. See how this works? The same thing is at play in the auto industry today. As the price of domestic and foreign vehicles are comparable, the manufacturers have to produce a “better” product in order to win the consumer dollar.
If two products cost the same, or nearly the same, consumers will usually buy the one which offers them more, either features or reliability.
…UNLESS, of course (you moron) someone like you uses the power of government to artificially make one car more expensive than its equivalent competitor.
In which case, the favored CRONY will misread the market and sit back on their fat asses, instead of being whipped by the forces of competition to produce a better product.
See how this works…???
Oh, now I understand. You firmly believe that all consumers are stupid.
However, the purpose of the tariff is NOT to make one product MORE expensive than the other. It is designed to make both products EQUALLY expensive.
When in fact they are not equally expensive, and therefore consumers who have to pay the price of the more expensive one are being taxed the difference between the two. The money isn’t going to the government, it’s going to the people who make the more expensive item.
“What a tariff does is force foreign sources to raise their prices on imported commodities to allow domestic sources to compete.”
That is so stupidly bass-akwards I can believe it could only come from a resolute Birther…!!!
What a tariff ACTUALLY does is impose a BIG GOVERNMENT market distortion on goods, paid for ENTIRELY by Americans.
It makes American goods ARTIFICIALLY competitive SOLELY because of the statist action of BIG GOVERNMENT in raising prices for foreign goods via a tariff on them.
It thus RAISES the price of that good or commodity for consumers, while providing false signals to producers in the market respecting their products.
Well, that was certainly obtuse.
Look economics is really pretty simple. Consumers will purchase products mostly based upon the cost of the product. A secondary consideration is the quality and the features incorporated into that product. If all products cost the same, then a consumer will pay greater attention to features.
Now, simply equalizing the price of foreign and domestic products does not guarantee that a domestic producer can gain a greater market share than an import. Consumers may very well decide to purchase the import because it has greater reliability or more features which the consumer finds desirable.
…RAISING the price of ANYTHING will take many consumers out of the market for a given product.
Doing this via BIG GOVERNMENT is swell by you, Progressive.
It will ALSO send signals through the exquisitely subtle means of the market that DOMESTIC producers can now ALSO raise prices for their products if the goods in question are in fact at parity as to quality and features.
Yes, raising the price of an item WILL reduce the existing market. However, if you increase the market by creating NEW members through the creation of jobs then you can end up with a net gain.
As to domestic producers raising their prices, this is entirely possible. However, the reverse is that the domestic manufacturers either have to move out of the country to compete with foreign manufacturing or go broke.
Business is a symbiotic relationship between producers and consumers. Producers can not price their products beyond the reach of their consumers, or they can’t sell their product. Consumers can not demand that a producer sell a product for less than the amount necessary to make a decent profit or the producer will stop producing the product. See how this works?
What I SEE…very plainly…is that you are an idiot who knows nothing about the history of tariffs.
They COST jobs in the net. They CANNOT produce jobs in the net. The ACTUAL figures from ACTUAL experience are 40:1. As in FORTY jobs lost to one saved or created. The DOLLAR amounts LOST are likewise a known quantity.
Look up Smoot-Hawley, you moron. It is DIScredited with being one of the MAJOR factors that made the Great Depression so “great”.
I also see you stating utterly sophomoric bullshit that has NADA to do with the issues, like “business is a symbiotic”…blah, blah, blah.
You, like T-rump, are an economics moron. In company with Bernie Sanders and the AFL-CIO.
These tariffs will cause a price increase of maybe $200 on a new $50,000 pickup truck from Detroit. I can live with that.
First, where the hell did you get that number?
Second, knock yourself out, buckwheat. Seen your $200.00 in to your dealer of choice. Don’t include me or anyone else in your Progresive wet dream.
Uh Rags, this is to be an incentive for other countries to knock it off and once they do then there will be no reason for the tax
There’s no “reason” for it now. Well, except crony crapitalism brought to you by a New York Progressive who LIES and violates the law.
Hey, don’t blame NY for Trump. The borough of Manhattan vote 9-1 against him.
It is amazing how suddenly the majority, here, are sanguine on paying a tax that benefits crony capitalists and their workers (among the highest paid blue collar workers) at the expense of the rest of us.
I’ll bet most heard of the Smoot–Hawley Tariff Act sometime in their schooling. But I doubt they have any understanding how destructive it was.
On the other hand, Trump is fulfilling a campaign pledge and they will blame liberals when the bill comes due.
Perhaps these countries can enact a tax on licensing your name. Boy, those tariffs will go away in a hurry.
“Dow drops 500 points after Trump says steel and aluminum tariffs coming next week”
https://www.msn.com/en-us/money/markets/dow-drops-500-points-after-trump-says-steel-and-aluminum-tariffs-coming-next-week
The stooppid. It hurts. Make it stop, Daddy.
The markets have been on a 10 year climb, at some point they are going to come down at some point. Trump as guaranteed that it will start at a higher point when it drops.
If the market has been going up for ten years (and it has), how can you attribute that to T-rump?
How did “Trump guarantee” anything that wasn’t something essentially going to happen anyhow?
Because the last part that spiked up was due to Trump’s policies. The market was very jittery around the election, and I had a lot of cash ready. I was pissed because I knew that if Hillary got elected I would have some VERY big buying opportunities. Alas and fortunately we got Trump. Hillary’s presidency would have tanked the market just like Obama’s did.
The market doesn’t generally like Democrats and the more anti-capitalist they are the more the market doesn’t like it.
We are going to get a market downturn, thanks to Trump it will be a lot milder than if we had Hillary.
Your link is broke, and so is your reasoning.
You know that the trend-line has been strongly increasing for years (partly due to the Fed screwing with money).
But you attribute the recent gains (without noticing the recent losses) to the wonder of T-rump.
There was a “T-rump bump”. But is was just a continuation, NOT a reversal, of what we had been seeing for years.
Now show me that there would have been no such rise…or a better one…on the election of anyone “NOT-Barracula”.
You have got to be the dumbest most arrogant fucker on the planet. You don’t look at the charts you don’t you even have any money in the market if you even have any money at all. My livelihood depends on my understanding the market and I am doing pretty fucking good so far but hey you are a useless sack of shit with no real argument so please do continue.
And by the way do you just grab words out of the air? The “trendline” w/e the fuck that was is flat before the election. I really think you are an angry alcoholic that has long since lost his own practice and can’t really get any work now because you are drunk and incoherent.
Fuck me you are the stupidest economist on the planet and I guess that and law aren’t your forte. But hey I am all for planned economies because I am market capitalist and shockingly dumb fuck markets adjust even to bad policy. Try this phrase out next time you want to pontificate on how smart you are at economics … Life will find a way, and it’s corollary markets will find a way.
But do keep insulting me you miserable fuck because I know that is all you have.
I keep quoting you and referring to YOUR chart, you lying SOS.
Sorry. I just KNOW you’re a billionaire…on the internet.
Please note when Trump was elected. Before that it was flat and faltering. So yah … that is all Trump.
Whoops broke link right one here.
Your graph shows the opposite of what you pretend.
What does the trend line tell you (if you know what that means)?
You’re like a puppy that needs it’s nose rubbed in the shit so that it will get that shit isn’t ok. The graph is flat before the election and goes up after. Anyone can see that, literally anyone (except of course you).
Do you not have eyes, or are you in another alcoholic stupor and can’t see?
“The markets have been on a 10 year climb…”
Yes. As shown in the trend-line of the graph, you stupid, lying POS.
There’s NOTHING “flat” on that trend, as you noted initially.
What a moron…!!!
I apologize for chiming in on your posts, but this one made me laugh out loud. After Obama got elected and Trump started talking about Obama’s birth certificate, it was inevitable that Trump would be our next president. The stock market, being a leading indicator, started going up right away.
BTW, it was not 10 years. In the last year of Bush the stock market went down significantly. I do not believe that any president has that much effect on the market. But since people are determined to assign credit to Trump, where is the credit to Obama for 8 straight years of growth?
Where is the credit to Obama? Let the real trolling begin!
The point being that tariffs are a tax that the consumers eventually ends up paying. Tariffs also spark retaliation by competing entities – and rattle markets.
Trump does good things, but also bad things. Let’s be honest about it.
Damn and Trump is doing so well in other areas. Whelp you take the good with the bad. 🙁
Fuck off Rags hahahahaahaha
Dumping of steel on the American market, from one part of Asia or another, has been an obvious problem for at least the last forty years. Prior administrations seem to have been content to pay little attention, perhaps on the theory that America has no future as an industrial power no matter what they do. Obviously there’s some room for policy differences there.
Apparently you can’t read a graph.
The U.S. produces steel just fine. And we do it competitively. Or we DID…
We still do, and we still will. Because the other countries will just double down on their stupid and make their prices competitive. Markets aren’t static unless you are a socialist … right Rags?
I have no idea WTF you’re talking about, and neither do you.
Protectionism has proven to DAMAGE the protected.
Markets are not static. But when you screw with them, you get terrible results. Where did you learn economics?
Do you loooooovesssss you some sugar tariffs? Point to a goo one.
I’m for market economics. You apparently support planned economics. Just say it.
No, lying sack of shit. I’m the market economics advocate.
You’re the statist-loving moron.
Market DO NOT “always work around” distortions. Why do you think there is virtually no candy industry in Chicago…which used to be the candy-making capital of the world…you stinking idiot?
See subsidies, sugar.
Markets DO adjust to distortions to some extent, and here that will be HIGHER prices for anything made from steel and aluminum.
What a flucking idiot, pretending to know some damned thing about market economics while being a clear enemy of the whole idea.
You are as stupid as you are arrogant a typical miserable big government type. Markets will always work around bad policy and they are relentless and won’t stop. The only people that think this isn’t true are thieves and communists, so which one are you Rags you sorry excuse for a collection of cancerous cells?
Tom look at it like oil. We have been getting our ass handed to us because the Saudi’s have easy access to oil and their entire economy is pretty vested in it so there is a lot of imbalance. But NOW we are curb stomping the Saudi’s and they are shitting their pants … Why? Because we found a better way. We didn’t need tariffs or any other such nonsense we just needed good ole merican ingenuity.
The same will happen some day with steel and aluminum, but if the idiots elsewhere want to tax the hell out of their citizens so that I can get ridiculously cheap metals … well then why on earth would I stop them?
“Dumping” is just another word for giving gifts. Which would be wonderful if only it ever actually happened. If China were really offering Americans steel at below cost, we would be fools not to jump on it. Condemning it as some sort of attack on us, and preventing our people from taking advantage of it, is just as perverse as forcing people, at gunpoint, to boycott sales at the supermarket.
Except that dumping doesn’t really happen on any large scale, because nobody is so stupid as to give us gifts for nothing. Sometimes someone is stuck with inventory that won’t move, so they dump it because the loss they take by selling below cost is less than the cost of carrying it in inventory. But that only lasts until the stock is gone; they don’t keep making or buying more in order to keep selling it at a loss. And of course the thing to do when this happens is to be grateful and buy.
they don’t keep making or buying more in order to keep selling it at a loss
You are spectacularly wrong. That’s exactly what “dumping” is. If a manufacturer has the financial strength to take the losses—and foreign industries which are essentially branches of their governments certainly do, since they’re backed not by some pitiful corporate bank account but by entire national economies—dumping is how he drives competitors out of business. After they’re out of business, obviously, he can set prices to whatever demand will tolerate, and quickly make up his earlier losses.
There is not the slightest doubt that his has been happening for decades, and is happening now. We even know which governments and which companies are involved. (We probably don’t know all of the offenders, but enough to know that it’s a problem and estimate just how big a financial problem it is.)
The Japanese were major offenders. They would target specific markets—semiconductor circuit testers, say—and pour government money into the R&D. That’s not dumping. But then they would subsidize production and sales of the manufactured products, which is dumping. This was all in accord with official government policy. They had an entire government department, the Ministry of International Trade and Industry, to handle this.
The Chinese are much bigger now, but they do a much better job than the Japanese of obscuring exactly which factories are producing the goods.
No, he can’t, because as soon as he does someone else will move in and undercut him. There is not a single case in history of any businessman even trying this, let alone succeeding. This myth originates with a scurrilous accusation against John Rockefeller during the “progressive” jihad against him which resulted in the antitrust laws; it wasn’t true of him and it’s never been true of anyone since then.
Now governments might be that stupid, in which case we should take advantage and buy all the under-cost goods they’ll sell us.
Environmental, regulatory, and labor disparity (e.g. monopolies and practices) undermine the function of capitalism to reconcile supply, demand, and pricing.
The idea is to have a continuing infrastructure of strategic manufacturing.
That has its price. But the price is far greater in not having it.
Kind of like life insurance.
We built the monster of communist china, and continue to feed it.
“The idea is to have a continuing infrastructure of strategic manufacturing.”
That’s a lie, and you’re a liar, mindlessly repeating lies.
Apparently China has refused the carrot, Trump had no choice but to bring out the stick.
The Art of the Deal… and
Hip, hip, HOORAY!!!!!!!!!!
About time!
Now to break up the media/MSM monopolies……
“Oligopolies are just shared monopolies by another name…”
Ummm….moron…
Count the nations shown in the graph above. Where does China come in? I’d day 11th. How ’bout you, pugsly?
Did Mr. New York Progressive specify he was aiming his ILLEGAL tariffs at China? Let me hep ya. NO!
Yeepeeeee, hip-horerrrry, you’re a moron and should have to pay more for everything you buy.
The rest of us, not so much.
Also, of the hundreds of thousands of jobs this statim will cost, I hope yours is time of the list.
this is going to hurt for some time. if its worth it or not…I don’t know.
w/o lessening rules on mining/transport/smelting/etc it may be useless.
A strong and competitive domestic market helps.
Unfortunately, I believe that is better done by removing all the unneeded regulatory costs that we cripple our economy with and let our businesses innovate their way to greater productivity.
As a gambit to force better trade agreements it can work but only after a period of some damage and likely retaliation.
As an actual long-term policy it is a tax on the American consumer and any benefit the steel workers receive is offset by the impact on steel-consuming industries e.g. Steel frame construction, autos, etc
As an example, our sugar protection laws have cost us as many jobs just in candy manufacturing as we kept in sugar growing and refining. That doesn’t include the spillover that is less visible from higher prices etc
Frederic Bastiat, The seen and the unseen, is the definitive concept for me, and his essay on protecting candlemakers from unfair competition is an important essay for everyone to understand.
But, I don’t think there is a need for so much name calling. I am a Trump supporter and am concerned about the impact to the economy not only for all Americans but also what it means for Trump’s success.
You don’t have to agree with me – or I with you – to both be supporters of Trump and anti-progressive policy. I am open to debates and different viewpoints. I don’t harbor bitterness toward those who disagree. These are important issues to understand one another on, and think those who disagree with me do so with the same good intentions I have.
Except for the Marxists trolls. That’s different. Screw them.
I am also open to certain kinds of anti-free trade policies in certain narrow areas, would never trust a Chinese firewall vendor, and believe wars have been fought over access to strategic resources for a reason. I absolutely don’t believe in absolute positions with careful consideration.
Have at it, this one is gonna be debated for a while.
All, you are getting mixed up here.
First, protecting the domestic sugar industry may have led to reduced employment in the candy industry. However, as there are a number of other sweeteners that can, and are, used in candy making, that we have seen more and more automation in almost all industries AND, health trends may well have led to a down turn in employment.
In order to work, effectively, free trade requires one of two things; either relatively equal costs of production in different locations or product specialization. However, in the current world market, we have a tremendous inequity in the cost of production. In the past, transportation costs leveled the field, providing protection for domestic production of common items. This no longer exists. Transportation costs are now so low as to be negligible. Also, specialization is now longer applicable, except in agriculture. One can manufacture a passenger car virtually anywhere. And, with transportation costs being so low, if a manufacturer can reduce his production costs significantly, then he can price his product significantly lower in a given market than a manufacturer in that market can. This results in the manufacturer in that market either moving to an area which affords lower production costs or goes out of business.
MORE amazing glabber-blast by an economics ignoramus!
The U.S. leads the world in SEVERAL specialized areas having NOTHING to do with “agriculture”. See oil tools, ya moron.
The whole REASON for free trade is that there are producers who DON’T compete on a “level playing field” and CANNOT. But they DO produce products for which there is a demand. Left free to chose, people all over the world will happily trade with them. This was the genius of Ricardo’s insight.
Thank you fro making my point.
The US Can and Does export such things as oil tools. But, the world demand for oil tools, a few chemicals and specialized electrical items does not make up for the amount of consumer goods IMPORTED into the US. That is why the US has a negative balance of trade of $566 BILLION in 2017. Fr those of you in Houston, that means that over a half a TRILLION dollars more is going OUT of the US than is coming in. And, in the case of China, the trade deficit was $375 BILLION dollars for that same year.
Now it is doubtful that the US can increase its export of “specialty” goods to eliminate that deficit. So, how do you eliminate it? That’s right, star manufacturing the items that you import in-house, domestically. That keeps some of the money which is going out of the country in the country and significantly reduces your trade deficit.
Free trade usually benefits those who manufacture goods in a region where production costs are low.
ANOTHER TRANSCENDINGLY stupid, false set of bullshit.
As I’ve pointed out MANY times (and derived from Milton Friedman), you run a terrible trade deficit with the grocery store you visit.
Norway enjoys an awful, terrible, really BAD “trade deficit” (a term for demagogues without integrity). They make Volvos. Americans buy Volvos. Norwegians don’t BEGIN to buy anything like the dollar value FROM the U.S. There will NEVER be a “balance of trade between us. And it will NEVER matter one jot.
Keeping the money in the country…
North Korea
Gahndi’s socialist India
Do you see the common threadSSSSSSSS…???
Compulsion is one. Try to think of the others.
Rags:
”
ANOTHER TRANSCENDINGLY stupid, false set of bullshit.
As I’ve pointed out MANY times (and derived from Milton Friedman), you run a terrible trade deficit with the grocery store you visit.
Norway enjoys an awful, terrible, really BAD “trade deficit” (a term for demagogues without integrity). They make Volvos. Americans buy Volvos. Norwegians don’t BEGIN to buy anything like the dollar value FROM the U.S. There will NEVER be a “balance of trade between us. And it will NEVER matter one jot.”
Wow, Sesame Street Economics.
First of all, your grocery store analogy is horribly flawed. Why, you ask? Because you neglect the rest of the economic equation. Where does your money come from? That’s right, it come from either goods or service which you produce and sell to others. So, if you get $20,000 a years for your the goods and services which you produce, but you spend $30,000 a years for other goods and services, what happens? That’s right, you go broke and, unless you find a charitable donor, you starve.
Now, a fun fact about Norway. Norway actually enjoys a trade SURPLUS. Though it runs a trade deficit with the US. The US, on the other hand, runs a general trade deficit. So, the Norwegians make money, overall, while the US loses money overall.
1. Worrying about the current account deficit is the first sign of economic ignorance. Running a current account deficit is a good thing; it means money is going out and goods are coming in, which is wonderful. The whole point of The Wealth of Nations is that having a lot of money does not make a person or nation rich. The only purpose of money is to spend it, and free trade gives you more and better things to spend it on.
2. Free trade benefits both parties to every exchange. The producer and the consumer. It hurts the parasite whose products are either inferior or too expensive, but who expects the consumer to buy them anyway just because he’s closer.
“Now, a fun fact about Norway. Norway actually enjoys a trade SURPLUS. Though it runs a trade deficit with the US. The US, on the other hand, runs a general trade deficit. So, the Norwegians make money, overall, while the US loses money overall.”
You REALLY should just STFU, since you’re exposing your idiocy here with each passing “attempt”.
Norway has a “trade surplus” relative to the U.S., as I SAID, you moron. They do NOT have a “trade deficit” with the U.S.
The U.S. DOES NOT “lose money” in trade with Norway. Americans VOLUNTARILY give value (in money) for what they consider GREATER value (in goods from Norway).
Who is packing this shit in your skull?
Now, Rags, if Norway is running a trade surplus with the US, then by definition the US is sending more money to Norway than Norway is sending to the US, and therefore the US is losing money. What it’s not losing but gaining is wealth.
Last week I saw a quite nice brand of chocolate, which I often buy at $3 a bar, on sale for 50 cents. I bought 40. I am now poorer by $20, but richer by 40 bars of chocolate (or I would be if I hadn’t given 30 of them away as Purim gifts). I have less money than I did, but more wealth. (And more money, if you consider that I’d have had to buy something else for Purim gifts instead.) The key insight is that money is not wealth; the only reason to want money is in order to buy goods, so if we have the goods we want then we don’t need the money.
Now, Milhouse, that’s only KINDA true.
“Trade imbalances” are ALWAYS stated in money terms. As noted, it’s an entirely BOGUS concept.
Why? Well, what do Norwegians do with American currency? They can’t use it domestically. So, just like the Chinese and Japanese…and all those foreign devils like the Brits…they either spend it on American goods or invest it in American interests.
There is no “exporting of wealth” by U.S. consumers being free to spend their money as they deem wise, as you note. In fact, we’re MORE wealthy when we are left to spend our money as we wish. But the fact is that money is a stupid measure, and what money DOES is cycle back into our own economy.
BTW, it’s apparent that Der Donald is doubling-down on STOOOOoooooopid WRT a trade war. It’s simply astounding…
Oh, and one more thing that’s essentially important…
No only are Americans more wealthy by virtue of trading with…say…Norwegians, but NORWEGIANS are ALSO more wealthy by virtue of trading with us.
THAT was the genius of Ricardo’s insight. Trade is NOT a “win-lose” proposition. It HAS to be beneficial to all concerned, or they would not enter into the trade.
They could use the money we send them to buy goods from here, or to build things here, in which case the money comes back and we don’t run a trade deficit. But if we do run a trade deficit with them it means they’re not sending the money back. That’s what a trade deficit means.
So what are they doing with the money? One thing they may do is trade it with someone else, who then sends it back here. So if we’re running a trade deficit with one country but are in balance or surplus with the whole world, then we assume that’s what they’re doing with the money we send them. But we’re running a trade deficit with the whole world, i.e. we’re exporting more money than we’re importing. That money isn’t coming back, it’s staying over there.
What are they doing with it? They could just stick in under a mattress, and some of them are, as a hedge against future problems they may see coming. Or they could use it for international trade with people who will accept it as money. If so, good. As long as the world is willing to take money and send us goods, we should celebrate, because we get wealthier.
Money is not wealth.
And yes, that is why trade deficits are stupid things to worry about, and trade wars are stupid things to engage in. Because they’re measured in money, not in wealth.
As I said.
Which is why stating that U.S. wages are stagnant is also bogus.
The measure to use is the standard of living. Unfortunately, this actually declined in some measure over the last few years, but that had nothing to do with trading. It was the result of the contraction following the housing bubble collapse, which I think (hope) any thinking person recognizes was the result of the BIG GOVERNMENT distortions which Gary (The Liar) Britt so loves.
At this point, we’ve recovered. We enjoy an ascending standard of living.
“And, with transportation costs being so low, if a manufacturer can reduce his production costs significantly, then he can price his product significantly lower in a given market than a manufacturer in that market can.”
This so neatly explains why so many foreign name-plates produce cars in the U.S.
Oh… Wait. You delivered another mother-lode of bullshit. You imply that labor costs equal production costs, and that “anyplace” in the world presents the same costs of production.
Um…no. We manufacture goods in the U.S….often in facilities owned by “foreign devils” because we produce them here at least cost. American workers are wonderfully productive…and LEAST COST. We don’t need no steeeeekin Big Brother.
Obviously you have litle knowledge of the automobile manufacturing industry.
The reason why foreign cars are manufactured in the US is because of quotas. The quota system was put in place because foreign imports were being sold for about 65-70% of the sale price of similar vehicles being manufactured in the US, at the time.There have been quotas on the number of foreign made automobiles which can be imported into the US since 1981. That is why automakers like Toyota and Nissan built manufacturing and assembly plants in the US. This makes vehicles assembled and parts built in the US, US parts and vehicles and they are not counted against the company’s import quota. That is also the reason why these companies established luxury car companies, such as Lexus and Infinity. Vehicles made by these “companies” are not counted against the import quota of their parent companies. This is why NAFTA was such a boondoggle. Under NAFTA, foreign automobile companies could assemble vehicles in Mexico, at considerably less than it would cost to assemble them in the US and then move them to the US for sale, on the US market, bypassing the import quotas.
Maybe you should take a little time to actually learn how the economy works.
Obviously you know shit about shit.
How’s that “deadly assault allegation” with Porter working for you, nutter?
https://en.wikipedia.org/wiki/BMW_in_the_United_States
Which has as much to do with “quotas” as you have to do with anything truthful.
Since I know you are not bright enough to have come up with this utter bullshit yourself, tell us where you found it.
C’mon. Be a mensch…
Sorry Chuckles, but my post was accurate. Warm up your Google Fu and search for US automobile import quotas. DUUUHHH.
You really should study something other than the free traders. In today’s world, free trade only ends up benefiting those in the financial world who manufacture in poor regions and sell in rich ones. What is so interesting is the number of free trade advocates who demand that the US [with its 27% share of the consumer goods market] should essentially provide completely free trade, yet say little or nothing about the rest of the manufacturing nations of the world, all of whom use various means to restrict imports which compete with their domestic manufacturing. I wonder why that is?
No, it benefits the consumers, which is to say everyone, what Smith called “the general interest”.
For the same reason Smith did; because the main benefit of free trade is for us, not them. If other countries are ignorant enough to eschew the benefits of free trade, so much the worse for them. Even completely unilateral free trade is better than protectionism.
Since I know you are not bright enough to have come up with this utter bullshit yourself, tell us where you found it.
C’mon. Be a mensch…
Step up. Oh, and your “quota” bullshit is only true HISTORICALLY. It isn’t true at all now. You’re an idiot.
Why does Stihl make power tools in the U.S., if not for the very reasons I cited, moron? Americans can produce at least cost, you flaming Progressive.
On the contrary, free trade thrives on different costs of production, precisely by sending production to where it’s cheapest, which is where it should be.
“As an example, our sugar protection laws have cost us as many jobs just in candy manufacturing as we kept in sugar growing and refining. That doesn’t include the spillover that is less visible from higher prices etc.”
SO true. But it goes much, much farther than that. Why do American food producers use so much corn sweetener?
The economic law of substitution. When pure cane sugar was priced out of our market, food processors simply substituted corn sweeteners.
This is why the idiocy stated above about “markets just adapting” is bullshit. Markets accommodate, but at what cost to other, ancillary interests, like our health?
Actually the substitution of corn syrup for sugar is not an unintended consequence; the reason we keep the insane sugar tariffs in place is probably more to protect the corn farmers than the sugar farmers. There are more of them.
As so often in the past, any thread touching on market economic exposes the awful, grinding ignorance of basic economics even among “conservatives”.
I commend Dr. Thomas Sowell’s “Basic Economics” as a primer.
Also watch the really outstanding “Brexit: The Movie”, which demonstrates that the whole Brexit impulse was a free-market, pro-liberty driven issue.
We are competing against economy’s that pay 1-2 dollars a day. Obviously Americans will not, and should not, work for that.
For Rags, who thinks our steel Business is alive and well, maybe he should go visit Allentown, and hundreds of cities like it. I believe there is a song or two about it, and one or two movies…
I’ve been to Allentown and others like it. Do you get your economics from Bruce Springstein…!?!?! Figures
I’ve also been to Jewett, Texas, with its thriving mini-mill owned by NuCorp Steel.
Did you know that U.S. steel production was up 5% last year, you racist idiot?
Why should Americans not work for that, if it’s all they’re worth? Why are Americans better than Indonesians? But this is all irrelevant; whether Americans can or can’t, will or won’t, should or shouldn’t, so long as there is someone willing to do the job for that amount it’s wasteful to have someone else do it for more. And waste is a sin.
If we as a society decide to indulge in the luxury of labor laws, welfare laws, environmental laws, and other laws that collectively mean it’s impossible to make steel in the US competitive with that made in countries without such laws, that’s fine, that’s our decision; but we should accept that by doing so we are deciding that we don’t want steel made here. Protectionism is pretending to have our cake and eat it too; to have all those laws and still have steel made here, by forcing everyone to buy it, thus lowering everyone’s standard of living.
Point one: unless you want to be mistaken for a leftist keep it clean. If you must use insults then be clever. “Your father would be surprised by the arrangement of your chromosomes” and “you f**king bastard” are much the same. Use your wit.
Point two: it’s my understanding that we are already in a trade war; we just haven’t been fighting back. Most every other government subsidizes their products; certainly China, Vietnam, Canada, and Mexico do.
Point three: this is the stick that would not have been used had China reigned in North Korea. Economic pressure will be ratcheted up until “Big Panda” decides to calm down their proxy state. Sundance as been all over this aspect for the last year.
As if on cue: https://theconservativetreehouse.com/2018/03/01/prepare-maganomics-is-the-battle-the-restoration-of-a-balanced-economy-is-the-goal/
I usually come here first for news; should have gone there first today.
Let them. If they’re stupid enough to give us gifts, let us take advantage.
Free trade is not a gift we offer other countries, at our expense, as a reward for something they give us. Free trade is inherently good, and it’s something we should do primarily for ourselves, regardless of what other countries do.
CTH often gets things wrong. A better site is hillaryis44 which is now a pro Trump site
That’s an understatement. There is no reason ever to look there. If something is true, it will be reported somewhere else. If it isn’t reported anywhere else then it isn’t true, and you wasted your time reading it.
The last time the USA ran an annual trade surplus was 1975. We have been in a trade war with most of the world for the past 43 years. During that time unilateral surrender has been the policy of the USA. The result has been trillions of dollars in wealth and jobs transferred from the USA people to our friends and mortal enemies alike.
Trump wants to end the policies of unilateral surrender and actually fight for free trade that is also fair trade and reciprocal on both sides. Rags and those like him, who are many when it comes to globalism and free trade, want to continue the old policies of unilateral surrender which have been so harmful to our country.
Gary (The Liar) Britt wants to keep telling the same old lies in the same corrupt cause.
Trading with others is NOT “globalism”. If it were, since the world’s been trading together for centuries, we’d be “globalized” by now. Of course, Gary (The Liar) Britt never hints at what “globalism” means, the better to smear with.
As noted and demonstrated above, “the balance of trade” and “trade deficit” is a demamogue’s piece of bullshit. Americans will ALWAYS import more from almost anywhere we trade with while others will import a lower dollar amount from us, simply because of the relative size of our market and the wealth of our consumers. We will have an AWFUL balance of trade with Norway every year. The ONLY way you COULD “balance” that would be to take away the freedom of Americans to buy what they want. Which would be fine with an authoritarian puke like Gary.
This is EXACTLY what a tariff does via a tax on American consumers. Consider a supply and demand curve (a new and startling concept to many here); as you move price up, demand for a given thing drops. Ordinary Americans cease being able to afford goods they’d like to buy. Oligarchs like T-rump will never be touched.
BIG GOVERNMENT ruins. Planned economics suck. Tariffs are simply taxes on our own people. And trade wars are what you get out of tariffs, not leaving people free to choose and letting markets work their magic. It’s tyranny by degrees, and in this case it’s both illegal and based on a lie.
https://www.youtube.com/watch?v=eYqzcqDtL3k
Watch that, and as you do, ask yourself…
1. are Brexit’s leading lights “one-worlders” or are they patriotic Britons?
2. what is their position on trade with the world?
3. how do they feel about individual liberty?
4. do tariffs help or hurt domestic “protectees” in the end?
5. what interests in a country lobby for protection from markets?
This epitomizes the economic ignorance of protectionists like Trump and garybritt, which the liberal (now known as conservative) political movement was founded in the first place to combat. There is nothing good about a trade surplus. We should not wish ever to run one. Calling a trade deficit “surrender” shows that you’re looking at it backwards. And claiming that a trade deficit transfers wealth from the net importer to the countries it imports from shows that you have no idea what wealth is. You think wealth is money. And that means you’ve never read The Wealth of Nations, whose point is that wealth is not money.
As Smith pointed out, Spain in his day was a country awash with money, and yet desperately poor, because its policies encouraged the hoarding of money rather than trade or production. Poland was a country without much money and yet it was prosperous, because it didn’t worry about money and produced all it needed, plus enough to pay for all its imports.
Electronics really is not a good example, as there’s been more improvement in electronics technology than in just about any other technology, so much so that the improvements in non-electronic products (e.g., automobiles) are mostly due to improvements in the electronics used in them.
If the price/performance ratio of cars had improved as much as electronics a new car would cost less than a Big Mac, and you’d be able to drive it across the country in less time than it would take to eat that Big Mac.
If space travel had improved this much, Elon Musk’s dreams of Mars colonization would be considered as hopelessly conservative as a prediction that someday there might be a world market for perhaps a dozen digital computers.
And steel? Well, the USA has fewer than ten integrated steel mills left. We used to have a whole lot more, but labor costs and environmental regulations made it difficult to justify the huge investments that would have been needed to upgrade them if they were to remain competitive. Although some U.S. firms do remain competitive high quality specialty alloy steels.
And as always, the cost of virgin aluminum has a great deal to do with the cost of the electricity used to smelt it.
I’m mostly on-board with Trump’s push for a more fair trading environment, as political considerations in the past have resulted in all too many cases of unequal trade relationships of the “we’ll take unlimited amounts of your stuff and ignore that you’ll find ways to take none of ours” type. But, steel? Aluminum?? these are areas where the USA mostly lacks comparative advantage to begin with.
Not to pick, but American firms produce more broad lines than “specialty alloy” steel.
Also, we’d be unable to produce much aluminum at all without net imports of Bauxite.
Trade is good. Competition is good.
This is a genuine question: can you give examples of “we’ll take unlimited amounts of your stuff and ignore that you’ll find ways to take none of ours” relationships?
More to the point, if they makes stuff we want in unlimited quantities, and at a better price than we make it here, why shouldn’t we buy it, and why should it matter whether they buy anything of ours?
I almost added “in return” to the end of that last sentence, but that’s precisely the wrong phrase; we don’t want them to buy our stuff in return for our buying theirs, we want them to buy our stuff because it’s what they want and it’s cheaper and better than they can get elsewhere. If it isn’t then we shouldn’t want them to buy it, and if it finds no customers we shouldn’t be making it in the first place. But whether they buy our stuff or not shouldn’t affect whether we buy their stuff.
The arguments for unilateral surrender in the trade wars made by Rags and the globalist crowd are exactly the same as they have been for the last 43 years. There is nothing new or changed in them. What is new is the observation that after 43 years of unilateral surrender much of the livelihood, jobs, and wealth of the middle class has been shipped overseas, and this destruction is directly tied to these insane, unequal, unfair and non-reciprocal trade policies of the globalist free traders.
It is far past time to try something different when it is obvious that the 43 year results of the globalist free traders do not work well over the long term. The “tariffs are a tax” argument fails to consider how tariffs can be used as a short term tool to achieve free trade that is also fair trade and completely ignores the long term detrimental effects of unilateral surrender in the trade wars by myopically focusing solely on only one small part of the total equation. After observing the results of 43 years of unilateral surrender it is quite clear that there is far more to determining what is best for the nation and its people than the simple minded and sophomoric refrain “tariffs are a tax”.
There’s been no “unilateral surrender”, you lying sack of shit.
What you want is a repeat of statist BIG GOVERNMENT that has been tried and proven to do the opposite of what you lying Progressives claim.
It’s Bernie Sanders trade policy. You LOVES it…!!! I hate it and will always fight you enemies of liberty.
Simple truths are exquisite. Tariffs are taxes on Americans. See the period, lying T-rump sucker?
You love market distortions. I hate them, and I’ll fight you to the death to prevent your attack on liberty. You love and make lies. I hate them, and will fight you to the death every time you tell them.
Ignoring 43 years of poor results and huge outflows of USA wealth and jobs with simple minded and sophomoric “tariffs are a tax”.
Combined, in your case, with large doses of childish vulgarity and your usual irrationality.
Chanting a lie or several about the last 43 years is just lying.
Tariffs are taxes. Nobody with the least integrity denies this.
Tariffs have been used…with disastrous results…as recently as the W presidency. The net job loss is calculated at 200,000. Billions of lost revenue.
Smoot-Hawley was a MAJOR factor in deepening and prolonging the Great Depression.
The case can be made that, not only are tariffs a tax, but a redistributive tax with EXTREMELY poor transfer efficiencies. Vast sums of money are extracted from consumer and corruptly provided to a chosen few in protected jobs.
And, of course, they are BIG GOVERNMENT economic planning of the worst sort, and a denial of the liberty of Americans to use their property as they see fit. Just you’re cup of tea.
You’re just a Progressive piece of filth, Britt. Always were.
Despite the whole terrible history of BIG GOVERNMENT attempts to dick with people’s rights as market players, Der Donald will likely find himself cock-blocked in this idiocy.
He lied as a predicate. And what he’s trying to do is actually illegal. He’s actually quite stupid AND quite corrupt.
Wrong. They’re exactly the same arguments we’ve been making for the last 242 years. And they’re just as true today as they were in 1776. (I honestly have no idea what 1975 event you’re referring to as the start of these arguments.) Calling sanity “surrender” is a sign of your ignorance.
A trade war is like two people fighting by repeatedly stabbing themselves in order to splash blood on their opponent’s clothes. Each would be better off stopping, even if their opponent continues.
I haven’t read “The Art of the Deal”, but isn’t Trump just proposing a tough negotiating starting position that he can later back away from to get what he wants?
There are other explanations for the big drop in the Dow yesterday (March 1st). A lot of stocks went way up the day before (February 28th), because ownership that day determined who got paid the company’s stock dividends. Since the dividend payment was announced in advance, most dividend paying stocks rose in value in the days leading up to the 28th because investors knew they would get the announced dividend if they owned the stock on the the 28th. Then on the 1st, the who were just chasing dividends, started selling the stocks and their price went down.
One stock I own, dropped exactly the amount of the dividend. Not surprise at all. In fact, I would have been more surprised if there was not a “correction” or “profit taking sell off” on March 1st. It happens every 3 months for those stocks that pay quarterly dividends and once a year for those that pay annual dividends. My favorite stock is one that pays monthly dividends, and I see the fluctuations every month. When you get a bunch of monthly, quarterly, and annual dividend paying stocks setting their effective date the same, then the Dow notices it.
The scale will probably be different but you can see the same thing almost every month, with some months more pronounced than others.
By the way, I also predict that the dividend paying stocks will go up in value just before the payments are made in the middle of March. That is because a lot of us investors have automatic reinvestment of our dividends rather than getting paid in cash and paying another brokerage fee to buy more stocks with the dividend. So, the company has to buy stocks before they can pay us with the stocks.
This will make the globalists very unhappy. To them, the world market means more money. They do not care a wit about the US’s ability to produce anything on its own. All they care about is the immediate impact on certain industries that use primarily imported materials. What is going to happen in the future when we need a new atomic sub? What is going to happen when we need an advanced fighter to combat the Russians or Chinese? Where has the textile industry in America gone? Eventually, we will be at the mercy of the countries that actually manufacture the goods and materials that we must have.
It is almost that way now. We are using Chinese/Japanese electronics in our first line defensive weapons NOW! Shipbuilding? It’s down to two major facilities. We have become a nation of service providers and movies!
You’re delusional.
In a full-tilt, balls to the walls war, America would need about 3% of our current steel production. Not 3% of what we import from Canada or Mexico and our production; just our production.
T=rump lies. There is no “strategic national security interest” involved.
That’s right. I don’t care a whit (note the spelling) for that, because it’s of no value. Even if we stopped making any steel at all (and that’s unlikely to happen), it will never be a problem to find someone to sell us all we need, of whatever quality we like, at a decent price. There is no reason for us to make anything that can be made better and more cheaply elsewhere. There will always be things at which we have a comparative advantage, and those are the things we should be doing.
Good news! “Democrats” from the Workers Party support this tariff. Nothing says free market capitalism like the stamp of approval from commies.
https://youtu.be/SXEkkJdQU5Q