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General Category => Politics => Topic started by: John Hjorth on March 01, 2018, 10:55:05 AM

Title: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: John Hjorth on March 01, 2018, 10:55:05 AM
 New York Times [2018.03.01]: Trump to Impose Stiff Tariffs on Steel and Aluminium (https://www.nytimes.com/2018/03/01/business/trump-tariffs.html?emc=edit_na_20180301&nl=breaking-news&nlid=71367351&ref=headline).

I don't want to discuss US politics here but more the consequenses for the economic environment that we are investing in, each of us our own way.

Personally, I feel like Moses standing at the Red Sea here. I have absolutely no idea about what will happen.

Any shared thoughts about it in this topic from my fellow board members are much appreciated.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Sharad on March 01, 2018, 12:34:34 PM
I think it's very convenient to blame today's drop on Trump's announcement. I personally believe we ran through virtually every possible positive catalyst for the market, and now we're at a point where virtually all news becomes neutral or a little negative. The market can only run white hot for so long before the pendulum swings the other way. With market valuations sky high, consumer confidence hitting decade long highs, and employment above full employment levels (Powell's words, not mine), all it takes is a little spark to blow this market up. Even this morning, all I have seen is complacency by the "experts". When everyone is waiting for the blow-off top phase of the market, maybe, just maybe, we actually just went through that phase, and were setting up for a deep decline.

I can't say whether we go into recession or not, but I personally feel that we should enter a bear market, even if it is only to clear epic risk-taking and bring valuations back from nosebleed levels.

In any case, I'm speaking my book, so clearly there's a lot of bias in my writing here.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: EliG on March 01, 2018, 12:50:29 PM
John, it's hard to tell the impact without knowing the specifics. Will it be a blanket tariff applied equally to all countries? Or a targeted one aimed, say, at China? Not the same impact, obviously. Maybe Mr. Trump will change his mind after seeing today's market reaction.

I'm following this twitter account for updates, colour commentary and comic relief. He is a trade lawyer at Cato Institute.

https://twitter.com/scottlincicome

BTW, Canada is #1 steel exporter to the U.S. China is #11.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Sharad on March 01, 2018, 12:53:44 PM
John, it's hard to tell the impact without knowing the specifics. Will it be a blanket tariff applied equally to all countries? Or a targeted one aimed, say, at China? Not the same impact, obviously. Maybe Mr. Trump will change his mind after seeing today's market reaction.

I'm following this twitter account for updates, colour commentary and comic relief. He is a trade lawyer at Cato Institute.

https://twitter.com/scottlincicome

BTW, Canada is #1 steel exporter to the U.S. China is #11.

Do you know if steel and aluminum are major imports for the U.S.? I believe I read/heard that it isn't a very big import, and it becomes a convenient way to act tough on trade in some ways.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: EliG on March 01, 2018, 01:07:09 PM
Do you know if steel and aluminum are major imports for the U.S.? I believe I read/heard that it isn't a very big import, and it becomes a convenient way to act tough on trade in some ways.

33% of steel is imported.
https://www.trade.gov/steel/countries/pdfs/imports-us.pdf

90% of aluminum is imported.
https://www.reuters.com/article/usa-trade-steel-aluminium-ahome/column-which-sledgehammer-will-trump-use-on-u-s-aluminium-imports-andy-home-idUSL8N1QA3W1

Canada is the #1 exporter of steel and aluminum. Maybe he is trying to use tariffs as a leverage in NAFTA negotiations.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on March 01, 2018, 01:09:23 PM
Seems weird to do this at the same time as you want to do a big infrastructure push.

Market seems scared of potential of a trade war, which typically makes all sides lose, and nobody win.

Benefit to US as a whole of cheaper steel must be bigger than the size of whatever gain US steel production would get from tariffs... Oh well.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: EliG on March 01, 2018, 01:16:26 PM
Seems weird to do this at the same time as you want to do a big infrastructure push.

Rob Porter was the point man on trade in the White House. He recently resigned over domestic violence allegations. Protectionist hard-liners gained influence after Porter's resignation. That might explain the timing.

Peter Navarro is Ottawa’s worst nightmare – and he’s gaining influence
https://www.theglobeandmail.com/opinion/peter-navarro-is-ottawas-worst-nightmare-and-hes-gaining-influence/article38128099/
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: EliG on March 01, 2018, 01:30:33 PM
https://www.nytimes.com/2018/03/01/upshot/trump-tariff-steel-aluminum-explain.html

Quote
The action may create some jobs in metals-producing industries, cost some jobs in fields where steel and aluminum are inputs, and push consumer prices a bit higher. The large and dynamic United States economy can handle it.

The risk comes from the potential ripple effects.

Affected countries may well retaliate by ordering tariffs on American goods, and they could carefully target goods to cause economic or political pain. American exporters — whether they sell passenger airplanes or soybeans — should be nervous about the next shoe to fall. There are few winners in an all-out trade war like one that enveloped the world economy in the 1930s.

In particular, the Trump administration’s invocation of national security concerns could set a precedent in which China and other nations are willing to use national security as grounds for tariffs, hurting the ability of the World Trade Organization to arbitrate disputes.

The real risk isn’t that steel and aluminum are a bit more expensive, though that is likely to be the case. It is that an entire system of global trade that the United States built might be undermined.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: John Hjorth on March 01, 2018, 01:48:05 PM
Awesome posts so far! - And in less than 3 hours since topic opening! - Please keep them coming, all!

- - - o 0 o - - -

To me, CoBF is my classroom ... - a very special classroom, - by that I consider myself being the only pupil! - Thank you!
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: EliG on March 01, 2018, 03:34:35 PM
thread

https://twitter.com/scottlincicome/status/969322665109573632
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on March 01, 2018, 04:24:22 PM
Do you know if steel and aluminum are major imports for the U.S.? I believe I read/heard that it isn't a very big import, and it becomes a convenient way to act tough on trade in some ways.

33% of steel is imported.
https://www.trade.gov/steel/countries/pdfs/imports-us.pdf

90% of aluminum is imported.
https://www.reuters.com/article/usa-trade-steel-aluminium-ahome/column-which-sledgehammer-will-trump-use-on-u-s-aluminium-imports-andy-home-idUSL8N1QA3W1

Canada is the #1 exporter of steel and aluminum. Maybe he is trying to use tariffs as a leverage in NAFTA negotiations.

LOL, if 90% of the Aluminum is imported, it’s too lat to do tariffs,the trade war is already lost and the only thing tariffs so is to make it more expensive for consumers (car industry etc) and cause retaliation.

Dumbest idea ever, IMO. We had steel tariffs against certain producers (EU, China, Japan) on and off since the 1980‘s.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cigarbutt on March 01, 2018, 04:35:56 PM
BTW, Mr. Linciome's landmark paper was referenced to elsewhere before on this Board, in a thread that discussed US-China protectionism.
Here it is again:
https://assets.realclear.com/files/2017/08/662_pa819.pdf
In that paper, the historical effects of the steel industry tariffs are well covered.
For those who want to dig further:
http://www.tradepartnership.com/pdf_files/2002jobstudy.pdf

Anyways, the key aspects of tariffs are not the immediate effects but the second-order effects and the unintended consequences.
If this is part of a very shrewd and focused plan to help restore balance in some specific areas or even if this is simply to "protect" some industries of related party (national?) interests, then OK.
However, the slippery slope involves the possibility of retaliation. After a while, who remembers who started first?

If we are on our way to a retaliation spiral, then the following may be helpful:
https://www.clubforgrowth.org/assets/files/smooth%20hawley%20ny%20times%2005%2005%2030.pdf

I'm not saying that we are in a 1928 style re-play, and who cares about economists. But maybe they had a point. Just wondering if we are much wiser today.

There are imbalances but it seems to me that the downward curve of the ratio of duties collected to dutiable imports that is characteristic of the last 70 years has a strong inverse correlation to our global quality of life even if it may not feel like it.
https://www.marketwatch.com/story/may-not-feel-like-it-but-the-worlds-improving-really-and-heres-the-proof-2018-03-01

Exchange nurtures peace. Handle with care.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on March 01, 2018, 06:29:34 PM
John, as others have said what this means will depend on the details of the actual order. But the basics are these:

The US just increased the price they pay for steel by 25% and the price they pay for aluminium by 10%. This will mean that the price will rise for a whole host of products - steel and aluminium go into lots and lots of things. This is fantastic news for US steel producers which just hit the jackpot and will turn in fantastic profits. There's not much aluminium production in the US so that's not so significant, but hey if you have a smelter then hey, great news.

If I was an American (that wasn't a steel worker) I would hate this. But as a Canadian I'm not so worried about it despite the fact that Canada is the largest exporter of steel and aluminium to the US. This action is likely to give a huge advantage to Canadian auto and machinery manufacturing as well as other heavy industries.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: RadMan24 on March 01, 2018, 07:07:43 PM
I wouldn't be so sure. If US Steel prices for HRC is $800, then non-US sourced steel would have to be sold around $630 including shipping. Chinese steel ex works for export at around around $600 a ton for HRC, and has been in the $500s per ton for some time now. CRC has a similar margin difference compared to US steel prices.

If US Steel prices retain there current price levels, or go up, global producers could easily make a healthy margin in the $600 per ton range, and even lower price to boost share.

China is the top dog, however. All because their imports to US don't show up on a graph, they cause huge global fluctuations in price because of their huge impact on both the demand and supply side of the market. They flood other countries with steel, lowering the price. Look at a steel price chart over past 15 years, its bonkers.

I do not know how it will play out for aluminum, but it will surely be interesting how it affects steel prices on a global scale.

The market clearly thinks that US Steel producers are going to benefit greatly (despite having sub par operations) and auto's are going to suffer (despite having strong sourcing abilities). Further, this could also make investments into lowering the cost to produce carbon fiber and other materials that much more promising.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: EliG on March 01, 2018, 07:45:39 PM
Scott Lincicome again:

https://twitter.com/scottlincicome/status/969381291287306240

Quote
Interesting how many "people" with, like, 200 tweets, no avi, and a bunch of numbers in their @ handle have entered my TL today to defend tariffs & trade wars

If you were Vlad Putin and you wanted to undermine world trade order, what would you differently?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Sharad on March 01, 2018, 08:46:37 PM
Scott Lincicome again:

https://twitter.com/scottlincicome/status/969381291287306240

Quote
Interesting how many "people" with, like, 200 tweets, no avi, and a bunch of numbers in their @ handle have entered my TL today to defend tariffs & trade wars

If you were Vlad Putin and you wanted to undermine world trade order, what would you differently?


Step 1, create handles with no numbers. 😎
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: EliG on March 01, 2018, 08:51:29 PM
Step 1, create handles with no numbers. 😎

That's funny, thanks for the laugh.

My question wasn't about Russian bots attacking Mr. Lincicome. It was in reference to Trump's policy.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on March 01, 2018, 10:21:44 PM
Step 1, create handles with no numbers. 😎

That's funny, thanks for the laugh.

My question wasn't about Russian bots attacking Mr. Lincicome. It was in reference to Trump's policy.
Yep! Pretty funny. Also a testament that the intelligence of the human race has perhaps been exaggerated.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rkbabang on March 02, 2018, 03:18:02 AM
I heard Trump talking about this, he really can be ain ignorant moron sometimes.  He says they are “dumping” cheap steal on us. Damn I hate it when someone gives me a bargain on something I wish to buy. Just “dumping” inexpensive items on me.  It must piss people off when Walmart dumps cheap products on them at a good price which others can’t match.  Oh wait that does bother people, which is why people fight just about every planned Walmart coming into their community.  The difference is that it used to be only the left who didn’t understand economics.  I think he should next put a huge tariff on bananas to encourage US farmers to build huge greenhouses to produce them here.  Think of the US jobs that would create. Coffee too, all that cheap coffee from overseas and Kona being so expensive, it just isn’t fair that Columbia can just dump coffee on us.

Someone mentioned above that it will have a small impact on the economy, but not if you are in the building profession.  I wonder if this will put a damper on the skyscraper boom in NYC?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: John Hjorth on March 02, 2018, 03:52:35 AM
That's hilarious, rkbabang! Thanks to all for comments and links to good stuff about this to read in the weekend.

- - - o 0 o - - -

It's all over the place today here on the Eastern side of the Atlantic Ocean. Just about everybody describes it as an own goal. Well, and the market certainly does not welcome it either.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on March 02, 2018, 04:11:34 AM
https://twitter.com/realDonaldTrump/status/969525362580484098

Can someone please explain trade 101 to the president of the United States?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: EliG on March 02, 2018, 05:40:59 AM
https://twitter.com/realDonaldTrump/status/969525362580484098

Can someone please explain trade 101 to the president of the United States?

Yeah, someone should run an ad on Fox and Friends.

https://twitter.com/alex_panetta/status/969556632886800384
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Value^2 on March 02, 2018, 06:04:01 AM
John, it's hard to tell the impact without knowing the specifics. Will it be a blanket tariff applied equally to all countries? Or a targeted one aimed, say, at China? Not the same impact, obviously. Maybe Mr. Trump will change his mind after seeing today's market reaction.

I'm following this twitter account for updates, colour commentary and comic relief. He is a trade lawyer at Cato Institute.

https://twitter.com/scottlincicome

BTW, Canada is #1 steel exporter to the U.S. China is #11.

Yep, and that's why i think, this is just Mr Trump's way to move stagnated NAFTA negotiations forward. This is what great deal makers do... Everyone else seems to be playing checkers but Mr Trump plays chess.

I also think  EU and many other commentators are just hypocrite...
https://www.reuters.com/article/us-eu-steel-china/eu-raises-import-duties-on-chinese-steel-angering-beijing-idUSKBN1780VU
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on March 02, 2018, 06:13:30 AM
If Canada had a strong leader, he would have realized that the U.S. could become a tougher place to trade with. Maybe less reliable than it used to be and capable to take strong actions. Hence the opportunity to expand exports and be a supplier of choice: LNG, oil, wood, grains, potash, uranium you name it.

Unfortunately, we are led by a group of people who think about pot, peoplekind and only renewing NAFTA. Dependency is what they seem to like.

Cardboard
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: EliG on March 02, 2018, 06:27:10 AM
This is what great deal makers do... Everyone else seems to be playing checkers but Mr Trump plays chess.

Equally likely: he is just an old fool watching too much TV.

(https://pbs.twimg.com/media/DXR6ah4U8AAz9tp.jpg)
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on March 02, 2018, 06:41:35 AM
As usual, it's more about Trump than anything else. He'll try to associate himself with "manly" industries like coal and steel, but he wouldn't do it for blueberry producers.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rkbabang on March 02, 2018, 06:48:11 AM
What we really need protection from is you Canadians dumping maple syrup on us.  Trump save us, your our only hope!
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Sharad on March 02, 2018, 07:13:05 AM
What we really need protection from is you Canadians dumping maple syrup on us.  Trump save us, your our only hope!

Make corn syrup great again!
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Pelagic on March 02, 2018, 07:18:06 AM
As usual, it's more about Trump than anything else. He'll try to associate himself with "manly" industries like coal and steel, but he wouldn't do it for blueberry producers.

This. Trump's a populist to the core, if he thinks his base approves then that's his position. If his base was a bunch of free market capitalists he'd be singing a different tune.

One of the great stories in business is how Dow Chemical defeated the German bromine cartel by buying bromine they were dumping in the US (to drive Dow out of business) and reselling it back on the European market at a profit. Worth reading if you've never heard it before.

https://www.investopedia.com/ask/answers/09/dow-chemical-bromine-monopoly.asp
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on March 02, 2018, 07:20:18 AM
"What we really need protection from is you Canadians dumping maple syrup on us.  Trump save us, your our only hope!"

You should be reassured on that one since Quebec is having a quota on maple syrup production and raising prices!!! By these measures, they basically created a large revival of maple syrup production in Maine and Vermont.

Cardboard
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cigarbutt on March 02, 2018, 07:23:19 AM
"What we really need protection from is you Canadians dumping maple syrup on us."
I guess the comment is, at least partly, ironic.

-----
Side discussion on the "dumping" aspect.
Disclosure:
-have some on the grounds knowledge about this industry.
-think this is investable but don't expect to see public vehicles.

Interesting facts (maybe?):
-The "natural" maple syrup industry dynamics remain incredibly favorable.
-The price per "barrel" is about 30 times that of oil.
-The supply is controlled (with an enormous "strategic reserve") so that prices are kept high (à la OPEC, but much more effective).
-Because of the cartel characteristics, fellow Canadians actually cross the border in order to set up production capacity.
-The dynamic is not unlike the shale oil vs OPEC situation as US producers tend to focus on production efficiencies and technology.
-Last time I checked, Canada was exporting 380 million worth of the "commodity". (CDN dollars)
-I hear that New York and Vermont states have interesting opportunities but maybe you should look in your own backyard.

Think about that the next time you put Canadian maple syrup on your pancakes.
----
End of side discussion.

Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: no_free_lunch on March 02, 2018, 07:39:15 AM
We all do this in different ways. In canada they r putting barriers to property purchases by foreigners. Where was the outrage there?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: jjsto on March 02, 2018, 07:49:25 AM
This article gives some more context to tariff:

https://www.washingtonpost.com/news/monkey-cage/wp/2018/03/01/trump-has-announced-massive-aluminum-and-steel-tariffs-here-are-5-things-you-need-to-know/?utm_term=.43ffc9d43c85
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on March 02, 2018, 08:01:43 AM
Looks like Wilbur Ross is at least partly driving this:

https://www.commerce.gov/news/press-releases/2018/02/secretary-ross-releases-steel-and-aluminum-232-reports-coordination

I saw on Twitter that he was on TV this morning defending the tariffs.

(https://pbs.twimg.com/media/DXS3ipfXUAAAdlJ.jpg)
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on March 02, 2018, 08:15:54 AM
"We all do this in different ways. In canada they r putting barriers to property purchases by foreigners. Where was the outrage there?"

LOL! Canadians are actually crazier than that. They actually impose taxes on Albertans and others who own properties in B.C.!!!

http://www.cbc.ca/news/canada/calgary/alberta-property-owners-bc-tax-1.4548251

Also, cannot buy milk, eggs or chicken produced in the U.S. No no, Canada has to protect its millionaire farmers with quotas while the population pays twice the market price!

Anyway, I am not in favour of tariffs, quotas or anything like that. It appears that Trump want to start a trade war and really push NAFTA negotiations.

My view is that he wants to look serious when he is talking about reciprocal trades and by doing something crazy like that, other countries may blink.

Cardboard
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: no_free_lunch on March 02, 2018, 08:33:30 AM
"We all do this in different ways. In canada they r putting barriers to property purchases by foreigners. Where was the outrage there?"

LOL! Canadians are actually crazier than that. They actually impose taxes on Albertans and others who own properties in B.C.!!!

http://www.cbc.ca/news/canada/calgary/alberta-property-owners-bc-tax-1.4548251

Also, cannot buy milk, eggs or chicken produced in the U.S. No no, Canada has to protect its millionaire farmers with quotas while the population pays twice the market price!

Anyway, I am not in favour of tariffs, quotas or anything like that. It appears that Trump want to start a trade war and really push NAFTA negotiations.

My view is that he wants to look serious when he is talking about reciprocal trades and by doing something crazy like that, other countries may blink.

Cardboard

I agree.  Just wanted to highlight the hypocrisy of the thread.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: CorpRaider on March 02, 2018, 08:56:24 AM
I think Wilbur is smarter than most of these guys who have been in commerce before. 

I'm ok with smacking them around a little.  We have a big, dynamic and potentially self-sufficient economy (more than any others....just look at freaking oil) and its ok to flex.  Stop demanding IP transfers and promoting piracy.  Wilbur is probably right, anywhere we get exports is only because we are so much better that there is no other option.

Probably better to do it now rather than let a really militant alt right or antifa faction take over in 8 - 12 years.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: RichardGibbons on March 02, 2018, 08:57:46 AM
Just curious--so does this mean that you two (Cardboard and no_free_lunch) would be good with, for instance, China buying every oil company in Canada?

I think you're saying that, but I'm not totally sure.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on March 02, 2018, 09:02:45 AM
I think Wilbur is smarter than most of these guys who have been in commerce before. 

I'm ok with smacking them around a little.  We have a big, dynamic and potentially self-sufficient economy (more than any others....just look at freaking oil) and its ok to flex.  Stop demanding IP transfers and promoting piracy.  Wilbur is probably right, anywhere we get exports is only because we are so much better that there is no other option.

Probably better to do it now rather than let a really militant alt right or antifa faction take over in 8 - 12 years.
Who is demanding IP transfers?

Speaking of oil. You want to show you're big boys? Go ahead and tax oil.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rkbabang on March 02, 2018, 09:07:19 AM
"We all do this in different ways. In canada they r putting barriers to property purchases by foreigners. Where was the outrage there?"

LOL! Canadians are actually crazier than that. They actually impose taxes on Albertans and others who own properties in B.C.!!!

http://www.cbc.ca/news/canada/calgary/alberta-property-owners-bc-tax-1.4548251

Also, cannot buy milk, eggs or chicken produced in the U.S. No no, Canada has to protect its millionaire farmers with quotas while the population pays twice the market price!

Anyway, I am not in favour of tariffs, quotas or anything like that. It appears that Trump want to start a trade war and really push NAFTA negotiations.

My view is that he wants to look serious when he is talking about reciprocal trades and by doing something crazy like that, other countries may blink.

Cardboard

I've read about Canadians visiting the US to buy Kerrygold grass-fed Irish butter and smuggle it home.  Something about butter imports not being allowed and no good Canadian source for grass-fed butter.  That alone is enough to stop me from ever considering moving to Canada.  My family goes through 1-2+lbs per week of that stuff.  I don't know how you Canadians cope.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rkbabang on March 02, 2018, 09:10:29 AM
"What we really need protection from is you Canadians dumping maple syrup on us.  Trump save us, your our only hope!"

You should be reassured on that one since Quebec is having a quota on maple syrup production and raising prices!!! By these measures, they basically created a large revival of maple syrup production in Maine and Vermont.

Cardboard

So you are doing it for us.  Come to think of it, there does seem to be a lot more Vermont and even New Hampshire maple syrup on the shelves than there used to be a few decades ago.  It looks like Quebec is trying to make Canada great again.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on March 02, 2018, 09:16:13 AM
"Just curious--so does this mean that you two (Cardboard and no_free_lunch) would be good with, for instance, China buying every oil company in Canada?

I think you're saying that, but I'm not totally sure."

If they were why would I care? We would still have the ability to tax them on royalty and profits. We would still tell them how to develop it with our regulations. We could seize their properties if they did not behave or pay.

Is this so much different from Canadian and U.S. investors owning these companies? They have already bought some and I have seen no impact on oil flows, nor in Canadian ability to obtain oil.

What is the risk Mr. Gibbons and why this discussion now?

Cardboard
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on March 02, 2018, 09:19:38 AM
"So you are doing it for us.  Come to think of it, there does seem to be a lot more Vermont and even New Hampshire maple syrup on the shelves than there used to be a few decades ago.  It looks like Quebec is trying to make Canada great again."

What they are trying to do is to create equality for maple syrup producers: subsidize the underperformers or just like a good old union does.

Eventually this leads to a decline in market share and lower profits for all.

Cardboard
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rkbabang on March 02, 2018, 09:21:25 AM
"What we really need protection from is you Canadians dumping maple syrup on us."
I guess the comment is, at least partly, ironic.

-----
Side discussion on the "dumping" aspect.
Disclosure:
-have some on the grounds knowledge about this industry.
-think this is investable but don't expect to see public vehicles.

Interesting facts (maybe?):
-The "natural" maple syrup industry dynamics remain incredibly favorable.
-The price per "barrel" is about 30 times that of oil.
-The supply is controlled (with an enormous "strategic reserve") so that prices are kept high (à la OPEC, but much more effective).
-Because of the cartel characteristics, fellow Canadians actually cross the border in order to set up production capacity.
-The dynamic is not unlike the shale oil vs OPEC situation as US producers tend to focus on production efficiencies and technology.
-Last time I checked, Canada was exporting 380 million worth of the "commodity". (CDN dollars)
-I hear that New York and Vermont states have interesting opportunities but maybe you should look in your own backyard.

Think about that the next time you put Canadian maple syrup on your pancakes.
----
End of side discussion.


Great post, and I was just picturing a bunch of Canadians in red uniforms on horseback galloping across the border to dump barrels of syrup on unsuspecting Americans.  A sticky situation indeed.

Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rkbabang on March 02, 2018, 09:24:42 AM
"So you are doing it for us.  Come to think of it, there does seem to be a lot more Vermont and even New Hampshire maple syrup on the shelves than there used to be a few decades ago.  It looks like Quebec is trying to make Canada great again."

What they are trying to do is to create equality for maple syrup producers: subsidize the underperformers or just like a good old union does.

Eventually this leads to a decline in market share and lower profits for all.

Cardboard

Has "Harrison Bergeron" ever been translated into French?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on March 02, 2018, 09:41:10 AM
I've read about Canadians visiting the US to buy Kerrygold grass-fed Irish butter and smuggle it home.  Something about butter imports not being allowed and no good Canadian source for grass-fed butter.  That alone is enough to stop me from ever considering moving to Canada.  My family goes through 1-2+lbs per week of that stuff.  I don't know how you Canadians cope.
I don't know man, we somehow seem to muddle through. I've actually never hear of the product till now. Who knows maybe I should try it out. But seriously, 2 lb+ of butter per week? Take it easy man, think of your arteries.

Anyway, that butter imports are not allowed thing is nonsense. Here are the fun facts: In 2017 Canada imported 8,672 tons of butter from the US. Canadian butter exports to the US we 19 tons. The US is running a large trade surplus with Canada in butter.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: RichardGibbons on March 02, 2018, 09:42:23 AM
If they were why would I care? We would still have the ability to tax them on royalty and profits. We would still tell them how to develop it with our regulations. We could seize their properties if they did not behave or pay.

Is this so much different from Canadian and U.S. investors owning these companies? They have already bought some and I have seen no impact on oil flows, nor in Canadian ability to obtain oil.

What is the risk Mr. Gibbons and why this discussion now?

I was mainly just curious if you felt that way.  I personally think there is considerable value the law of property rights and both energy and food security.  I think it's generally a bad idea for the government to seize property, and also bad for the country to rely to a great extent on others for food and energy.  Yet if we sell all our energy to China, but then have a conflict with China, we either have a choice between violating property rights, or not having energy. 

I figured that you care a lot about property ownership and energy security, so I was curious where you fell on that continuum.  I'm not sure where I fall on that spectrum myself, but thanks to your response, I'm leaning more toward your socialist strategy of "sell them the oil companies, then appropriate it for the state if that proves to be a problem." Though that strategy didn't work so well for Venezuela, so maybe not.  (Frankly, I'm kind of surprised that you think Venezuela's strategy is a good model for Canada to follow.)

It's relevant because you say it's outrageous that the government is taxing people who don't pay BC income taxes but who own property in BC, while at the same time saying that China owning all the oil properties is fine because the government can tax all the foreigners who own property in Alberta.  It's not an identical situation, but there are parallels.

It does interest me that you think Albertans deserve a handout from the government rather than paying their own way (i.e. saying that Albertans shouldn't be required to pay a dime toward the infrastructure required by their vacation homes, but rather that the government should pay for it all.)

First VZ, and now this.  You're getting more and more socialist every day. :)
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on March 02, 2018, 10:03:17 AM
What is it Mr. Gibbons? Ah you caught me because I did not mention "special" taxes as I typed my initial post:

http://www.cbc.ca/news/canada/edmonton/speculation-tax-british-columbia-alberta-property-1.4550097

They already pay property taxes. So now, reformulate your last post because it makes little sense.

Cardboard

Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: tengen on March 02, 2018, 10:05:22 AM
We all do this in different ways. In canada they r putting barriers to property purchases by foreigners. Where was the outrage there?

Countries don't trade real estate.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: tengen on March 02, 2018, 10:07:48 AM
Trump doesn't seem to understand trade or economics. He constantly claims the US is running a trade deficit with Canada when it runs a surplus. His own staff at the White House published a report contradicting him.

http://business.financialpost.com/news/economy/president-donald-trump-signs-report-rebuking-own-views-on-trade-canada
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on March 02, 2018, 10:26:40 AM
Well this didn't take long.

Electrolux puts US investment on hold:

https://www.reuters.com/article/us-usa-trade-trump-electrolux/electrolux-puts-250-million-u-s-investment-on-hold-over-trump-tariff-hike-idUSKCN1GE1P0

Europe prepares retaliatory measures:

https://www.reuters.com/article/us-usa-trade-europe-measures-exclusive/exclusive-eu-may-target-3-5-billion-of-u-s-imports-for-trade-retaliation-sources-idUSKCN1GE2FO
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rkbabang on March 02, 2018, 10:38:51 AM
I've read about Canadians visiting the US to buy Kerrygold grass-fed Irish butter and smuggle it home.  Something about butter imports not being allowed and no good Canadian source for grass-fed butter.  That alone is enough to stop me from ever considering moving to Canada.  My family goes through 1-2+lbs per week of that stuff.  I don't know how you Canadians cope.
I don't know man, we somehow seem to muddle through. I've actually never hear of the product till now. Who knows maybe I should try it out. But seriously, 2 lb+ of butter per week? Take it easy man, think of your arteries.

Anyway, that butter imports are not allowed thing is nonsense. Here are the fun facts: In 2017 Canada imported 8,672 tons of butter from the US. Canadian butter exports to the US we 19 tons. The US is running a large trade surplus with Canada in butter.

The only reason you can say those things is that you haven't tried it.  If you had, you would know.  I can't find the original story I remember reading, but I found this:  https://forum.jackkruse.com/index.php?threads/making-a-kerrygold-butter-run-canadian-style.17862/
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: RichardGibbons on March 02, 2018, 11:17:56 AM
What is it Mr. Gibbons? Ah you caught me because I did not mention "special" taxes as I typed my initial post:

http://www.cbc.ca/news/canada/edmonton/speculation-tax-british-columbia-alberta-property-1.4550097

They already pay property taxes. So now, reformulate your last post because it makes little sense.

Curious.  You think that property taxes are the primary source of funds for electricity, roads, tourist offices, and other infrastructure spending?  Do you know that cities, provinces, and the country have different governments who provide different services and get their revenue in different ways?  You might want to read up on that a bit.

It's awesome that I'm the one in this thread arguing personal responsibility, and you're the one arguing that the state should give you a free ride, paying for your wants.

(It does make the conspiracy theorist in me wonder about the pipeline thing, like whether Horgan didn't exclude Albertans from this tax because Alberta got pissy over the pipeline holdup.  Or whether Horgan opened up the pipeline issue so that BCers would be annoyed at Albertans and therefore have no problem with a tax that is targetting foreigners hits Albertans as well. I think there's some chance of either possibility being true.)
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on March 02, 2018, 11:18:54 AM
Ha, Campbell didn't like being used as a prop, apparently:

https://www.cnbc.com/2018/03/02/wilbur-ross-tariffs-are-nbd-but-campbells-says-cans-will-cost-more.html
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cigarbutt on March 02, 2018, 11:29:23 AM
"Just wanted to highlight the hypocrisy of the thread."

Good point.
Late in 2017, China tried to boost exports by reducing export tariffs.
 https://agmetalminer.com/2017/12/21/china-export-tariffs-world-trade-organization-g20-electric-arc-furnace/

International trade is a constant war in a way.
So, maybe this is just business as usual.

In order to try to understand where this is headed and to grasp different perspectives, it may be helpful to hear directly from the horse's mouth:
https://assets.donaldjtrump.com/Trump_Economic_Plan.pdf

My understanding is that the international trade policies are aimed to go much further.
With all due respect to Mr. Navarro, I find that he uses an elitist if everything else is kept equal assumption when he describes that the trade balance will equilibrate by a reduction of imports corresponding to an equal increase of exports.

Another perspective:
http://www.conferenceboard.ca/economics/hot_eco_topics/default/hot-topics-in-economics-blog/2017/04/28/Inadequate_Savings--Not_Trade_Deals--Account_for_Much_of_U_S_Trade_Deficit.aspx

The idea (very good one) is to restore the trade balance.
https://fred.stlouisfed.org/series/BOPGSTB

But then, who will do the saving for us?

The governments?
https://fred.stlouisfed.org/series/M318501A027NBEA

The private sector or households?
https://fred.stlouisfed.org/series/NCBDBIQ027S
https://fred.stlouisfed.org/series/PSAVERT

Maybe everything is relative and equations don't matter anymore.

Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on March 02, 2018, 11:35:35 AM
Some behind the scenes context from the leaky WH:

https://www.nbcnews.com/politics/white-house/trump-was-angry-unglued-when-he-started-trade-war-officials-n852641

Quote
A trifecta of events had set him off in a way that two officials said they had not seen before: Hope Hicks' testimony to lawmakers investigating Russia's interference in the 2016 election, conduct by his embattled attorney general and the treatment of his son-in-law by his chief of staff.

Trump, the two officials said, was angry and gunning for a fight, and he chose a trade war, spurred on by Commerce Secretary Wilbur Ross and Peter Navarro, the White House director for trade.

Ross had already invited steel and aluminum executives to the White House for an 11 a.m. meeting on Thursday. But Ross, according to a person with direct knowledge, hadn't told the White House who the executives were. As a result, White House officials were unable to conduct a background check on the executives to make sure they were appropriate for the president to meet with and they were not able to be cleared for entry by secret service. According to a person with direct knowledge, even White House chief of staff John Kelly was unaware of their names.

By midnight Wednesday, less than 12 hours before the executives were expected to arrive, no one on the president's team had prepared any position paper for an announcement on tariff policy, the official said. In fact, according to the official, the White House counsel's office had advised that they were as much as two weeks away from being able to complete a legal review on steel tariffs.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: John Hjorth on March 02, 2018, 11:40:18 AM
Well this didn't take long.

Electrolux puts US investment on hold:

https://www.reuters.com/article/us-usa-trade-trump-electrolux/electrolux-puts-250-million-u-s-investment-on-hold-over-trump-tariff-hike-idUSKCN1GE1P0 (https://www.reuters.com/article/us-usa-trade-trump-electrolux/electrolux-puts-250-million-u-s-investment-on-hold-over-trump-tariff-hike-idUSKCN1GE1P0)

Europe prepares retaliatory measures:

https://www.reuters.com/article/us-usa-trade-europe-measures-exclusive/exclusive-eu-may-target-3-5-billion-of-u-s-imports-for-trade-retaliation-sources-idUSKCN1GE2FO (https://www.reuters.com/article/us-usa-trade-europe-measures-exclusive/exclusive-eu-may-target-3-5-billion-of-u-s-imports-for-trade-retaliation-sources-idUSKCN1GE2FO)

I expect to see more like this from Swedish industrial companies under the umbrellas of Investor AB and Industrivärden AB. The Wallenberg sphere represented by Investor AB chairman Jacob Wallenberg takes no BS like this. The same goes for Fredrik Lundberg, boss & majority owner at LE Lundbergföretagen AB, who owns a major stake in Industrivärden AB.

Edit:

Tweet: EU exports of finished steel products to the US in metric tons (https://twitter.com/ZSchneeweiss/status/969532808170541057).
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: thowed on March 02, 2018, 12:28:18 PM
What a coincidence - Icahn just sold a whole load of steel-related stock.

https://thinkprogress.org/trump-ichan-steel-imports-cf7deb8beaf0/

(caveat: I have not seen this website before, so have no idea of any political bias it has.  But he sold the stocks as a fact.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on March 02, 2018, 01:04:06 PM

My understanding is that the international trade policies are aimed to go much further.
With all due respect to Mr. Navarro, I find that he uses an elitist if everything else is kept equal assumption when he describes that the trade balance will equilibrate by a reduction of imports corresponding to an equal increase of exports.

Another perspective:
http://www.conferenceboard.ca/economics/hot_eco_topics/default/hot-topics-in-economics-blog/2017/04/28/Inadequate_Savings--Not_Trade_Deals--Account_for_Much_of_U_S_Trade_Deficit.aspx

The idea (very good one) is to restore the trade balance.
https://fred.stlouisfed.org/series/BOPGSTB

But then, who will do the saving for us?

The governments?
https://fred.stlouisfed.org/series/M318501A027NBEA

The private sector or households?
https://fred.stlouisfed.org/series/NCBDBIQ027S
https://fred.stlouisfed.org/series/PSAVERT

Maybe everything is relative and equations don't matter anymore.
That is not a different perspective. Trade balances ARE a result of saving rates. So in order to bring trade closer to balance you have to get Americans to save more and consume less.

Tariffs can actually achieve that. Because they are a tax and thus increase the price of products through taxation and thus lowers the demand. So in this manner they act as forced savings. But my guess is that the American people isn't really cool with that approach. Also this assumes that the American government will not do anything stupid with those forced savings and that is a HUGE assumption.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: EliG on March 02, 2018, 02:46:56 PM
Statement by Canada on steel and aluminum

https://www.canada.ca/en/global-affairs/news/2018/03/statement-by-canada-on-steel-and-aluminum.html
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cigarbutt on March 02, 2018, 04:01:59 PM
"So in this manner they (tariffs) act as forced savings."
Cause and effect or correlation? Savings deficiency for some or savings glut for others?

Forced savings is a weird concept as people should choose to save.
Hayek used to say that forced savings really meant forced reduction in consumption.
When the state is involved, forced savings have been dubbed as a "primitive social accumulation".
I never thought repression was a good idea, financial or otherwise.

Why is it not clear that higher savings would lead to higher long term growth rates and productivity?

Disclosure: prefer firms that rely on internally generated funds instead of external financing but don't think that tariffs is the best way to effectively achieve that.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on March 02, 2018, 04:21:21 PM
"So in this manner they (tariffs) act as forced savings."
Cause and effect or correlation? Savings deficiency for some or savings glut for others?

Forced savings is a weird concept as people should choose to save.
Hayek used to say that forced savings really meant forced reduction in consumption.
When the state is involved, forced savings have been dubbed as a "primitive social accumulation".
I never thought repression was a good idea, financial or otherwise.

Why is it not clear that higher savings would lead to higher long term growth rates and productivity?

Disclosure: prefer firms that rely on internally generated funds instead of external financing but don't think that tariffs is the best way to effectively achieve that.
I should start by saying that I don't have a high opinion of Hayek - my disclosure. Now that's out of the way let's move on.

In my post i didn't say that forced savings would be a good idea. I also explicitly said that in my opinion the American people would not like them. But they would do the trick of reducing or eliminating the trade deficit because they also represent forced reduced consumption as you said. Of course this is after the requisite period of pain when your trade partners drop economic bombs all over your country.

Voluntary savings would of course be much preferable. Because in that case the people get to keep their savings instead of the state. The trade result would be the same. However it is obvious that the people prefer to consume. That is because it is what they are doing. So you either live with a trade deficit or the state implements forced reduced consumption against the wishes of the people. This is quite literally a case where the US would like their cake and eat it too. Unfortunately it does not work like that.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Value^2 on March 02, 2018, 11:08:19 PM
 It's only a matter of time before Turdeau capitulates. End of the day it's career politican (hack) vs hard boiled businessman & Marchionne-like deal maker. 
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: scorpioncapital on March 03, 2018, 04:23:36 AM
Regarding tariffs, imagine a country that takes in tax revenue and runs itself like one big hedge fund with the collective capital. It uses this money to subsidize industries, dump commodities, or otherwise do all the things that if a private group did would either be labelled a cartel, rigged pricing, or monopoly. Yet governments do this all the time, some more than others.

For investments maybe you can invest in material processing or automation companies that reduce cost of production which will be needed when there is a new 'tax'. Or...alternative materials like composites. I imagine they are still expensive enough and fewer producers hence less likely to be taxed.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: John Hjorth on March 03, 2018, 04:33:14 AM
Thank you for calling the bluff and European hypocracy, Value^2. - Including documentation. Refreshing read. I learned something.
 
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: mcliu on March 03, 2018, 04:55:23 AM
I wonder why are all these other countries (Europe, Canada, China) so upset though? Don't they have substantially more tariffs and trade protection than the US to begin with? (I'm 100% not sure.. let me know if I'm wrong.. )
I mean Canadian banking and telecom are essentially oligopolies.. China's notorious for protecting local tech companies (Facebook and Google don't work..) forcing IP transfer and local JVs in order to sell in China and major subsidies for exporters and state-owned firms.. I might be wrong but even with these tariffs the US is still likely one of the most open countries for trade no?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cigarbutt on March 03, 2018, 05:45:57 AM
mcliu,
Interesting point and it is also possible that this is just noise: negotiation tactic etc

Don't know the specific answer to your question but I understand that tariffs have gone down ++ across the board in the last decades (not in a perfectly proportional or symmetrical way).

It's just that the recent announcement defines a break with the previous trend and the national interest argument introduces a new environment to the negotiation/retaliation profile. History shows that it's a slippery slope.

Anyways, in my neck of the woods, I see/hear a lot of people involved in the aluminum industry scratching their heads.

Here's some info that may help in quantifying this aspect:
http://internationalecon.com/Trade/Tch20/T20-3.php
https://www.wto.org/english/res_e/statis_e/statis_maps_e.htm

Not a WTO numbers expert but there are various measures and the site is user-friendly.


Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: cwericb on March 03, 2018, 05:55:47 AM
What amazes me is that every time Trump raises or imposes new tariffs he gets cheers from his supporters. Don't they realize that they are the ones who will have to will have pay for those duties, not the other countries?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: EliG on March 03, 2018, 06:43:14 AM
I wonder why are all these other countries (Europe, Canada, China) so upset though? Don't they have substantially more tariffs and trade protection than the US to begin with? (I'm 100% not sure.. let me know if I'm wrong.. )

I'm not 100% sure either but this is my understanding. The US can challenge tariffs and trade barriers under WTO rules. The US has been doing it a lot and winning a lot:

Quote
The efficacy of WTO dispute settlement mechanism remains an area of active debate. Davis (2012) finds that the United States gets better outcomes via formal WTO adjudication than negotiation, increasing the probability that the complaint will be resolved and decreasing the time it takes to remove the barrier in question. Mayeda (2017) finds that the United States has won 85.7 percent of the cases it has initiated before the WTO since 1995, compared with a global average of 84.4 percent. In contrast, China’s success rate is just 66.7 percent. Most U.S. WTO cases target China (21) and the European Communities (19). When the United States is the respondent, it still wins 25 percent of the time, a rate that is better than the global average rate of 16.6 percent (Mayeda 2017). In comparison, the EU and Japan have won 0 percent of the cases brought against them, while China has won only 5.3 percent of the time (Mayeda 2017). Nonetheless, because countries may initiate or decline to initiate cases based on their perceived probability of obtaining a favorable outcome in the WTO dispute process, comparisons of WTO dispute statements between countries should be taken with at least some skepticism.

The quote comes from Economic Report of the President which Trump signed just the other week.

Page 252
http://www.presidency.ucsb.edu/economic_reports/2018.pdf

Furthermore, China doesn't have market economy status in WTO. Because it lacks this status, the US can use special tariffs and duties aimed specifically at China. The US has 160+ special duties in place to prevent steel dumping by China. That's one of the reasons why China is not a major source of steel imports to the US.

So... two questions:

1. WTO conflict resolution mechanism has worked pretty well for the US. Why not keep using it?
2. Targeted duties aimed at China have worked pretty well too. Why not keep using them?

Trump decided to use carpet bombing... a blanket tariff that applies equally to all countries. For no good reason as far as anyone can tell: the US steel industry is doing quite well. In addition to that, he used national security justification that is harder (or maybe impossible?) to challenge under WTO rules. It's an allowed exemption. I think these are the reasons why other countries are so upset. No good justification for the tariff to begin with + carpet bombing + no way to challenge.


Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: EliG on March 03, 2018, 06:49:30 AM
I mean Canadian banking and telecom are essentially oligopolies..

As far as I know, nothing stops US banks and telecoms from coming here and setting up shop.

For example, I have Canadian Amazon Visa card served by Chase. The card is closing in a couple of weeks, presumably because Amazon or/and Chase couldn't make enough money in the small Canadian market. They are not commenting publicly so I'm not sure why they decided to close it.

I had MBNA credit cards in the past. MBNA sold their Canadian business to TD Bank presumably for the same reason... they were not making enough money here.

Telecoms: same story I think. Verizon considered an auction bid for Canadian spectrum a couple of years ago. All Canadian telecoms dropped sharply on the rumour. In the end, Verizon declined to bid. Our government of the day would have welcomed them with both hands. They were actively trying to add another major player to our oligopolistic wireless market.

Remember that our entire population is less than California. Small population is spread thinly over a huge territory. A good chunk of it is French speaking (a natural trade barrier). It's hard to make money in our market when you are starting from scratch. That has nothing to do with tariffs and trade barriers.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: EliG on March 03, 2018, 07:05:45 AM
What amazes me is that every time Trump raises or imposes new tariffs he gets cheers from his supporters. Don't they realize that they are the ones who will have to will have pay for those duties, not the other countries?

Yup.

1 ton of steel in a car.
$700 for a ton of steel.
25% tariff = $175 tax per car.
$175 * 17M cars sold (2017) = $3B in new consumer taxes.

Rinse and repeat across all other industries that use steel. THEN add aluminum taxes.

GOP base responds with a wild orgasm. It's quite amazing to watch.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: no_free_lunch on March 03, 2018, 08:22:58 AM
Eli. He is going after swing voters.  This isnt for his base who tend to be quite capitalist.

Cigarbutt caught it but ill say it again. This is more evidence of a media conspiring agaibst the us president. The fact that canada already has duties on some products , the government subsidies we provide as well ,  none of this is ever an issue worth discussing.  Trump does it and its the start of the 30s? 
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: SharperDingaan on March 03, 2018, 09:00:01 AM
Or we could really screw up the US day.

An American trading house sets up in Canada.
It buys large quantities of steel and aluminium in Canada, changing 'ownership' of the steel from Canadian to US.
The steel and aluminium crosses the border duty free - as it's now just 'US' product 'returning' home.
End of tarrifs

The reality of course is that tarrifs exist to be exploited, and the US customer is expecting to pay more

We sell you the steel at 125% of todays price, subject to a 12.5% price discount for minimum volume.
The steel crosses the border at the 125% expected, but we get an extra 12.5% and trading house keeps 12.5%
US consumers get screwed.

Point is there many ways by which to exploit this,
and it WILL be exploited.

SD
   
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Rod on March 03, 2018, 09:14:01 AM
Under this tariff would US steel production increase to substitute for imported steel? It seems a daring bet by a steel company to build a new plant based on a Trump policy that might be reversed at any time. So if domestic production doesn't increase, imports won't decrease and the only effect of the tariff will be to make steel more expensive for Americans.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: EliG on March 03, 2018, 09:47:18 AM
Eli. He is going after swing voters.  This isnt for his base who tend to be quite capitalist.

Cigarbutt caught it but ill say it again. This is more evidence of a media conspiring agaibst the us president. The fact that canada already has duties on some products , the government subsidies we provide as well ,  none of this is ever an issue worth discussing.  Trump does it and its the start of the 30s?

You can't defend his actions on substance so you claim a media conspiracy. Pretty standard response from a Trump supporter. Happens reliably every time.

EU is planning a swift retaliation... media covers it... should they not cover the EU response?

Canada issues a statement promising retaliation... media covers it... should they not cover Canada's response?

Wilbur Ross goes on TV to sell Trump's tariffs and makes fool of himself with his idiotic props... should media not put him on air?

Orrin Hatch (R) says that Wilbur Ross should be reprimanded for giving poor advice to the President... should media not cover the Chairman of the Senate Finance Committee?

Wisconsin Governor Scott Walker (R) asks Trump to reconsider the tariffs... should media not cover that?

I can continue until the cows come home. You get the idea. Don't blame the mirror if you don't like what you see.

=====

Canada generally plays by the rules. If the US is not happy with certain Canadian duties (do you know which ones??), Trump administration can lodge a WTO complaint. They win 85% of WTO complains they choose to pursue. They can roll out a targeted tariff like they did with softwood lumber or Bombardier. Affected US companies can pursue trade litigation under NAFTA, if the case falls under NAFTA rules (they have done that many times). And so on, so forth. There are tons of tools available that are much less blunt than 25% steel tariff.

Speaking of steel, US/Canada steel trade is almost perfectly balanced. We buy as much from them as they buy from us, per US own numbers. Please explain, what exactly is the problem with Canadian steel? Why does it warrant a 25% tariff?

More generally, US/Canada trade is fairly balanced. Annual surplus/deficit is so small, the two countries can't agree as to who runs the surplus and who runs the deficit. This Bloomberg article goes into the deep weeds:

https://www.bloomberg.com/news/articles/2017-12-12/trump-may-actually-be-right-about-the-trade-deficit-with-canada

The bottom line from the article:

"Whichever data is used, the deficit (or surplus) is still relatively small compared to total trade between the two countries -- between 1 and 2 percent."

The US has a huge trade deficit with China, not Canada. 25% steel tariff will punish Canada, not China. Please explain the logic. Don't tell me that China is shaking in its boots and is ready to fold just because Trump can push Canada around. That's laughable.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on March 03, 2018, 10:23:03 AM
I wonder why are all these other countries (Europe, Canada, China) so upset though? Don't they have substantially more tariffs and trade protection than the US to begin with? (I'm 100% not sure.. let me know if I'm wrong.. )
I mean Canadian banking and telecom are essentially oligopolies.. China's notorious for protecting local tech companies (Facebook and Google don't work..) forcing IP transfer and local JVs in order to sell in China and major subsidies for exporters and state-owned firms.. I might be wrong but even with these tariffs the US is still likely one of the most open countries for trade no?
EliG did a good job explaining a lot stuff. I should also add that if you lump Europe and especially Canada together with China in terms of trade and protectionism then you really need to do a lot more research on this topic.

As to why are countries so upset? It boils down to the fact that someone who we thought of as a friend turned out to actually be an asshole. The US is gonna tax Canadian steel? We're not dumping steel in the US. We're not a massive steel producer. As a country we have a trade deficit in steel. We even have a trade deficit in steel with the US. Guess who is the biggest steel exporter to Canada? Yep, the US.

Furthermore these duties are passed under the reason of national security. Canada is a US ally as well as a member of NATO and NORAD. Members of our military have fought and died along the US in various wars. Moreover Canada has a special designation that basically says we should be treated just like the US in terms of military procurement because we are so safe. And now our steel and aluminium are a threat to your national security?

As a general rule when you say and do insulting and offensive things you should expect the other party to react negatively.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: EliG on March 03, 2018, 10:28:45 AM
He is going after swing voters. This isnt for his base who tend to be quite capitalist.

Okay, let's look at the numbers. Gallup poll from a year ago:

In US, Record-High 72% See Foreign Trade as Opportunity (http://news.gallup.com/poll/204044/record-high-foreign-trade-opportunity.aspx)

All Americans:

(http://content.gallup.com/origin/gallupinc/GallupSpaces/Production/Cms/POLL/2au5tbfr_eiprdzo7itrjw.png)


Drill-down by party ID:

(http://content.gallup.com/origin/gallupinc/GallupSpaces/Production/Cms/POLL/-y9uzey-qkcvnxmo_xeeoa.png)

D-s and I-s have a more positive view of global trade than R-s.

I know, I know, it's just a poll.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: John Hjorth on March 03, 2018, 11:00:31 AM
I have tried to take a half hearted stab at this today, trying to just roughly triangulate the economic consequenses of this, for the US, "Ceteris paribus", ref. a post in this topic by Cigarbutt.

I ended up stuck very quick.

From the stats material linked to in this topic [thank you, all] it's not that hard to calculate the total price increase on steel for the US under some assumptions. Steel here understood as steel, the raw material [generally speaking, because steel is not just steel, there are many kinds, sorts and qualities of steel - but that does not matter for a rough calculation].

The next question is which exporters of steel [read: from which countries] are going to get hit by this.

Next question is what about fabricated parts of steel, where the steel has been added purpose related value before passing the US border and going into the extremely vast and complicated US supply chain.

Here I gave up.

Rinse and repeat with aluminium.

In short, we need to know the specifics, as posted earlier in this topic - I think it was by rb and Eli, at least - nobody else as such forgotten.

- - - o 0 o - - -

The specifics are right now: The video where Mr. Trump is stating he will impose these tariffs, combined with his tweets about it, and this transcript of the the press briefing with Sarah Sanders of March 1, 2018 (https://www.whitehouse.gov/briefings-statements/press-briefing-press-secretary-sarah-sanders-03012018/). [Which is basically nothing, and omg.: she can actually smile, if you find the video of it to support your reading.]

- - - o 0 o - - -

The only thing I feel pretty confident about is, that steel and aluminium is like water, ref. ShaperDingaan. It will always find its way to where it's needed.

- - - o 0 o - - -

Now I'm challenged with:

1. US tariffs on steel and aluminium coming in,
2. The EUR / US currency pair, and
3. The relation between stock prices and bond interest rates globally.

Perhaps it's just time to find some jokes about macro economists and post them in the joke topic. Naturally my focus then will be on jokes about such economists actually not knowing what they talk about, - for me just to get even.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Viking on March 03, 2018, 11:12:40 AM
The challenge I have with this issue (like many with Trump) is he appears to be playing by his own rules. That is ok for a private business. Nations and governments need some predictability and continuity with their actions. Russia is now the good guy? Our friend is now our enemy (you pick the country)?

I am all for looking out for number 1. However, when you completely disregard 60 years (sometimes longer) of alliances and trade negotiations and bully ‘friends’ and allies this makes no sense to me.

The sooner the mid term elections come the better. If the House swings to the Democrats then hopefully Trump will finally be held accountable for his actions.

I tell my kids they can do pretty much anything they want. However, there will be consequences for their actions. Given time I firmly believe this will also apply to Trump.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: boilermaker75 on March 03, 2018, 11:21:10 AM
I posted a joke for you John.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on March 03, 2018, 11:48:43 AM
Now I'm challenged with:

1. US tariffs on steel and aluminium coming in,
2. The EUR / US currency pair, and
3. The relation between stock prices and bond interest rates globally.

John, this action alone is unlikely to affect EUR/USD or bond rates. Simply put, the amounts involved are just too small to move the needle.

Furthermore, while the US is the EU's largest trading partner that trade relationship isn't that large in the context of their economies. To give you some context the EU-US trade relationship is about the size of Canada-US trade, 30% larger than Mexico-US trade and somewhat more than double the trade the EU does with Switzerland. So while further trade actions may/will affect exchange rates EUR/USD should be less sensitive to that than USD/CAD or USD/MXN which will whip around a lot.

Stock prices can be a lot more finicky.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rkbabang on March 03, 2018, 12:02:41 PM
What amazes me is that every time Trump raises or imposes new tariffs he gets cheers from his supporters. Don't they realize that they are the ones who will have to will have pay for those duties, not the other countries?

Yup.

1 ton of steel in a car.
$700 for a ton of steel.
25% tariff = $175 tax per car.
$175 * 17M cars sold (2017) = $3B in new consumer taxes.

Rinse and repeat across all other industries that use steel. THEN add aluminum taxes.

GOP base responds with a wild orgasm. It's quite amazing to watch.

It really is amazing. I wonder if they even realize that those taxes in the end aren’t being paid by the hated foreigners, but by Americans when we buy these products?  The thing I hate most about politics (and there’s a lot of things I hate) is the tribalism. “My team proposed this so it must be good”. Or “My guy is dropping the bombs, so there must be a good reason.” (Even after calling the previous guy a war criminal).
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: EliG on March 03, 2018, 12:11:23 PM
Trump's actions stem from the two reports issued by the Department of Commerce:

https://www.commerce.gov/news/press-releases/2018/02/secretary-ross-releases-steel-and-aluminum-232-reports-coordination

Trump is required to make a decision on steel and aluminum by April 11 and 19. His options:

Quote
Recommendations of the Steel Report:

Secretary Ross has recommended to the President that he consider the following alternative remedies to address the problem of steel imports:

  • A global tariff of at least 24% on all steel imports from all countries, or
  • A tariff of at least 53% on all steel imports from 12 countries (Brazil, China, Costa Rica, Egypt, India, Malaysia, Republic of Korea, Russia, South Africa, Thailand, Turkey and Vietnam) with a quota by product on steel imports from all other countries equal to 100% of their 2017 exports to the United States, or
  • A quota on all steel products from all countries equal to 63% of each country’s 2017 exports to the United States.

Each of these remedies is intended to increase domestic steel production from its present 73% of capacity to approximately an 80% operating rate, the minimum rate needed for the long-term viability of the industry. Each remedy applies measures to all countries and all steel products to prevent circumvention.

Quote
Recommendations of the Aluminum Report:

Secretary Ross has recommended to President Trump three alternative remedies for dealing with the excessive imports of aluminum. These would cover both aluminum ingots and a wide variety of aluminum products.

  • A tariff of at least 7.7% on all aluminum exports from all countries, or
  • A tariff of 23.6% on all products from China, Hong Kong, Russia, Venezuela and Vietnam. All the other countries would be subject to quotas equal to 100% of their 2017 exports to the United States, or
  • A quota on all imports from all countries equal to a maximum of 86.7% of their 2017 exports to the United States.

Each of the three proposals is intended to raise production of aluminum from the present 48% average capacity to 80%, a level that would provide the industry with long-term viability. Each remedy applies measures to all countries and all steel products to prevent circumvention.

In both cases, Trump is going for the first, blanket remedy.

Compare and contrast the first and the second remedies in terms of:

- treatment of Canada and other US allies.
- treatment of China and Russia.

Trump's choice of remedies is perfectly consistent with Russian conspiracy theories. Just saying.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on March 03, 2018, 12:37:28 PM
Trump is now threatening tariffs on cars. The Europeans will surely not retaliate on that one.  ::)

https://www.reuters.com/article/us-usa-trade-autos/trump-threatens-to-tax-european-auto-imports-idUSKCN1GF0QJ?il=0
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: no_free_lunch on March 03, 2018, 01:06:58 PM
Elig

You bring up many good arguments. My point is not that this is good policy but that it is routine policy globally. Taxes on foreign buyers in vancouver is one example if u would like. Generally well received in canada too in my experience.  Free health care is a subsidy given to canadian companies.  Very popular in canada too.  I dont view what trump is doing as so different.

But yes it isnt good policy. Lets just apply the same standard universally.

Lets also consider that this has minimal impact on us gdp growth given the economies size.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: John Hjorth on March 03, 2018, 02:53:19 PM
The challenge I have with this issue (like many with Trump) is he appears to be playing by his own rules. That is ok for a private business. Nations and governments need some predictability and continuity with their actions. Russia is now the good guy? Our friend is now our enemy (you pick the country)?

I am all for looking out for number 1. However, when you completely disregard 60 years (sometimes longer) of alliances and trade negotiations and bully ‘friends’ and allies this makes no sense to me.

The sooner the mid term elections come the better. If the House swings to the Democrats then hopefully Trump will finally be held accountable for his actions.

I tell my kids they can do pretty much anything they want. However, there will be consequences for their actions. Given time I firmly believe this will also apply to Trump.

Viking,

This is to me so true. Here, there is no way the Danish Prime Minister could have done this - on his own -, without involving chamber. [We - as Danes - have only one chamber.]

Furthermore, despite these subtle, - but important - differencies in perception of democracy - I simply don't get the point of this action, from the perspective of friends and foes [like already posted by rb in this topic]. Especially in conflicts and politics in general friends matters a lot. They  [friends] constitutes a part of your power.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: EliG on March 03, 2018, 02:53:55 PM
Elig

You bring up many good arguments. My point is not that this is good policy but that it is routine policy globally. Taxes on foreign buyers in vancouver is one example if u would like. Generally well received in canada too in my experience.  Free health care is a subsidy given to canadian companies.  Very popular in canada too.

Your real estate example is not relevant. Countries do not trade real estate. International trade treaties do not govern local real estate transactions. Countries are free to pursue any policy they want.

Singapore has two segregated housing markets: a regulated one is just for locals; an unregulated one is open to anyone. New Zealand banned foreign real estate buyers altogether. No other country gives a damn. It's a local policy.

Similar deal with healthcare. Generous social policy is not an unfair subsidy under international trade treaties.


I dont view what trump is doing as so different.

He is blowing up normal WTO process by invoking bogus "national security" justification. It can't be challenged under WTO rules. He leaves trading partners without a good choice. It's either swallow their pride and accept the tariff, or retaliate. A chain of retaliations can spiral into a trade war. No other country has used "national security" justification until now. It's explosive.


Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: John Hjorth on March 03, 2018, 03:11:20 PM
I posted a joke for you John.

Thanks, boilermaker, - I posted one further there, to keep CoBF going on ridiculing macro economists ... - are there any such [macro economists] here? <desperate voice>[and now I'm totally cracking up ... [ ; - D  ]]
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on March 03, 2018, 03:15:15 PM
" are there any such [macro economists] here? "

Yes, there is RB.

And in his spare time, he sips fine scotch with executives from TCPL.  ;D

Cardboard
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: John Hjorth on March 03, 2018, 04:40:34 PM
Cardboard,

As OP by questions, and by exposing my own shortcomings about what's going on right now in this field, I will appreciate that you do not use my posts [more or less qualified and relevant], to question the macro capabities of any of my fellow board members here on CoBF.

Personally, I think we can all judge on that, based on what's posted on here on CoBF of facts. Here, we just just need to share the facts with eachother.

- - - o 0 o - - -

With that said, yes, my post #88 in this topic really sucks, for a certain part. So be it. One always have to perceive the actual - here and now - context. Not always easy here on CoBF, over time.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: mcliu on March 03, 2018, 06:24:28 PM
I mean Canadian banking and telecom are essentially oligopolies..

As far as I know, nothing stops US banks and telecoms from coming here and setting up shop.

For example, I have Canadian Amazon Visa card served by Chase. The card is closing in a couple of weeks, presumably because Amazon or/and Chase couldn't make enough money in the small Canadian market. They are not commenting publicly so I'm not sure why they decided to close it.

I had MBNA credit cards in the past. MBNA sold their Canadian business to TD Bank presumably for the same reason... they were not making enough money here.

Telecoms: same story I think. Verizon considered an auction bid for Canadian spectrum a couple of years ago. All Canadian telecoms dropped sharply on the rumour. In the end, Verizon declined to bid. Our government of the day would have welcomed them with both hands. They were actively trying to add another major player to our oligopolistic wireless market.

Remember that our entire population is less than California. Small population is spread thinly over a huge territory. A good chunk of it is French speaking (a natural trade barrier). It's hard to make money in our market when you are starting from scratch. That has nothing to do with tariffs and trade barriers.

@EliG Thanks for the reply. From my understanding (which may be wrong or incomplete), foreign ownership of banks in Canada is restricted through the provision that no single shareholder can own more than 25% of a bank? Doesn't that makes it impossible for foreign banks to have a Canadian subsidiary..? On the other hand, Canadian banks had no issues acquiring US subsidiaries like BMO/Harris Bank and TD/Commerce Bank, etc..

On telecom, I thought foreign ownership was restricted to below 50%? "Under provisions of Canada's Telecommunications Act, foreign ownership of transmission facilities is limited to 20 percent direct ownership and 33 percent through a holding company, for an effective limit of 46.7 percent total foreign ownership. Canada amended the Telecommunications Act in June 2012 to rescind foreign ownership restrictions on carriers with less than 10 percent share of the total Canadian telecommunications market." https://www.export.gov/article?id=Canada-Openness-to-Foreign-Investment
So my understanding is that, even with the amendment, majority-owned foreign telecoms can only gain a 10% market-share before they need to divest..?

EliG did a good job explaining a lot stuff. I should also add that if you lump Europe and especially Canada together with China in terms of trade and protectionism then you really need to do a lot more research on this topic.

@rb, I didn't mean to lump Canada, EU and China together in terms of their openness to trade. I was just pointing out that every country has trade barriers. Some more restrictive than others. China probably has much stricter trade barriers than the EU and Canada. It's a fair comment that I am nowhere near qualified to comment on this subject.. I also haven't really formed any opinions.. Just trying to understand the facts at this point..

When you look at the big picture, the US still has some of the least barriers to trade compared to these other countries.. While this tariff seems wrongly targeted, it's nowhere near the subsidies that countries like China provide to their exporters.. Isn't that the bigger issue here? Or at least what these trade tariffs are supposed to be aimed at? Obviously, it sucks for Canada to be caught in the cross-fire/friendly-fire since this particular tariff is poorly aimed.. Nonetheless, I find it ironic that China is suggesting that these tariffs are damaging global trade while they continue to massively subsidize their exporters..

https://hbr.org/2013/04/how-chinese-subsidies-changed "Since 2001, when China joined the World Trade Organization, subsidies have annually financed over 20% of the expansion of the country’s manufacturing capacity. The state has willingly paid the price of economic inefficiency to accomplish political, social, economic, and diplomatic goals. Huge Chinese subsidies have led to massive excess global capacity, increased exports, and depressed worldwide prices, and have hollowed out other countries’ industrial bases."
http://cep.lse.ac.uk/pubs/download/cp396.pdf "Our research finds that as a direct consequence of these subsidies, over a third of Chinese manufacturing exporters sell more than 90% of their produce abroad. To put this in perspective, fewer than 2% of French exporters and 0.7% of US exporters display such high export intensity (Bernard et al, 2003). Our analysis suggests that China’s total spending on these subsidies could be as much as 1.5% of GDP to support such a large number of pure exporters."

EliG has a good point that there's already a global mechanism or process for doing this, maybe the US should be pursuing this route instead of initiating a trade war. On the other hand, the large and persistent trade deficits of countries like the US, Canada and UK and the surpluses of China, Korea, Japan, Germany seems to suggest that the WTO system isn't working, or at least some countries are deliberately skirting trade rules..? (For example, Chinese subsidies continue to be large and unfair..)

I mean, if the US ran a balanced trade or a persistent trade surplus, trade protection wouldn't be an issue right?
I guess if this steel tariff was aimed more appropriately, such heavily subsidized Chinese steel, (like what the EU did back in early 2017) would that be better? or is the whole concept of having any tariff terrible?

http://money.cnn.com/2017/05/12/news/economy/china-steel-europe-dumping/index.html
"The European Commission has announced new anti-dumping duties on pipes and tubes made from steel and iron in China, its latest attempt to stop the flow of cheap metal from the country. The duties of 29% to 55% were imposed after an investigation found that Chinese firms were dumping steel into Europe at unusually low prices that hurt local competitors."
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Sharad on March 03, 2018, 06:41:22 PM
Eli. He is going after swing voters.  This isnt for his base who tend to be quite capitalist.

Cigarbutt caught it but ill say it again. This is more evidence of a media conspiring agaibst the us president. The fact that canada already has duties on some products , the government subsidies we provide as well ,  none of this is ever an issue worth discussing.  Trump does it and its the start of the 30s?


https://en.m.wikipedia.org/wiki/Pennsylvania's_18th_congressional_district_special_election,_2018

Hmmmm.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Sharad on March 03, 2018, 06:49:13 PM
How do we make money from this turmoil, should this become a permanent feature in the global economy?

I have no influence on politics anywhere anyways, so I try not waste my time getting hot and bothered too much. I'm short Canadian stocks, except Cathedral Energy, CCL Industries and Premium Brands Holdings, and a few tiny positions.  I am long tobacco companies, Novo Nordisk, and Texas Pacific Land Trust.

I honestly don't know what industries could do well in a trade war. Any ideas?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: no_free_lunch on March 03, 2018, 08:33:48 PM
Elig

You bring up many good arguments. My point is not that this is good policy but that it is routine policy globally. Taxes on foreign buyers in vancouver is one example if u would like. Generally well received in canada too in my experience.  Free health care is a subsidy given to canadian companies.  Very popular in canada too.

Your real estate example is not relevant. Countries do not trade real estate. International trade treaties do not govern local real estate transactions. Countries are free to pursue any policy they want.

Singapore has two segregated housing markets: a regulated one is just for locals; an unregulated one is open to anyone. New Zealand banned foreign real estate buyers altogether. No other country gives a damn. It's a local policy.

Similar deal with healthcare. Generous social policy is not an unfair subsidy under international trade treaties.


I dont view what trump is doing as so different.

He is blowing up normal WTO process by invoking bogus "national security" justification. It can't be challenged under WTO rules. He leaves trading partners without a good choice. It's either swallow their pride and accept the tariff, or retaliate. A chain of retaliations can spiral into a trade war. No other country has used "national security" justification until now. It's explosive.

Real estate investment isnt relevant?  Okay. I say it is. Flow of funds.  Flow of goods.  They are distinct yes but the true liberal thinkers back both from what i have seen.  If we are going to talk about trump screwing us car buyers why not mention vancouver screwing their home owners?  If i own property in van i want max dollars without the government filtering foreign bids. That policy applied to americans too from what i understand.

Healthcare subsidies are still subsidies.  It puts american firms at a disadvantage.  They have an extra cost to bear.

My point with it is lets keep in mind all that US puts up with. 600b trade surplus right?  I recall berkshire hathaway devoting significant text in an annual report to that deficit. If the US feels needto flex a bit they r still the most open country in the world or near to in my books.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on March 03, 2018, 09:02:08 PM
" are there any such [macro economists] here? "

Yes, there is RB.

And in his spare time, he sips fine scotch with executives from TCPL.  ;D

Cardboard
Hey man, there's nothing wrong with fine scotch or TCPL executives. In fact they are absolutely delightful in combination :)
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Value^2 on March 03, 2018, 09:11:32 PM
Trump is now threatening tariffs on cars. The Europeans will surely not retaliate on that one.  ::)

https://www.reuters.com/article/us-usa-trade-autos/trump-threatens-to-tax-european-auto-imports-idUSKCN1GF0QJ?il=0

EU and other exporters may threaten they will retaliate.... but eventually they can't afford that. It's their protectionist policies which are unfair.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on March 03, 2018, 09:28:10 PM
Elig

You bring up many good arguments. My point is not that this is good policy but that it is routine policy globally. Taxes on foreign buyers in vancouver is one example if u would like. Generally well received in canada too in my experience.  Free health care is a subsidy given to canadian companies.  Very popular in canada too.

Your real estate example is not relevant. Countries do not trade real estate. International trade treaties do not govern local real estate transactions. Countries are free to pursue any policy they want.

Singapore has two segregated housing markets: a regulated one is just for locals; an unregulated one is open to anyone. New Zealand banned foreign real estate buyers altogether. No other country gives a damn. It's a local policy.

Similar deal with healthcare. Generous social policy is not an unfair subsidy under international trade treaties.


I dont view what trump is doing as so different.

He is blowing up normal WTO process by invoking bogus "national security" justification. It can't be challenged under WTO rules. He leaves trading partners without a good choice. It's either swallow their pride and accept the tariff, or retaliate. A chain of retaliations can spiral into a trade war. No other country has used "national security" justification until now. It's explosive.

Real estate investment isnt relevant?  Okay. I say it is. Flow of funds.  Flow of goods.  They are distinct yes but the true liberal thinkers back both from what i have seen.  If we are going to talk about trump screwing us car buyers why not mention vancouver screwing their home owners?  If i own property in van i want max dollars without the government filtering foreign bids. That policy applied to americans too from what i understand.

Healthcare subsidies are still subsidies.  It puts american firms at a disadvantage.  They have an extra cost to bear.

My point with it is lets keep in mind all that US puts up with. 600b trade surplus right?  I recall berkshire hathaway devoting significant text in an annual report to that deficit. If the US feels needto flex a bit they r still the most open country in the world or near to in my books.
Man it must be hard to keep twisting yourself into that pretzel.

No, real estate is not a tradeable good. Flow of funds, flow of good is real but nobody says you have to buy Vancouver real estate. You don't like the deal on real estate you can buy bond, or you can do FDI or whatever you deem a good deal.

Also the government does not subsidize health care. People pay for their health care through their taxes. It's not other countries' fault that you've made an expensive mess of your health care system. Furthermore taxation is a local matter for each country to decide. It is not a matter of trade. But for theoretical purposes if you want to do that let's explore. Canada is running a budget deficit of about 0.8% of GDP the US is running a budged deficit of about 4% of GDP. You hike your taxes to lower your deficit to 0.8% to match ours and let's compete.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: no_free_lunch on March 03, 2018, 09:50:59 PM
Rb,

You didnt address or add anything to my comments on RE. Please review.

From US perspective their companies pay workers health insurance generally from what i understand.  In canada they do not.  Advantage canada right?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on March 03, 2018, 10:23:25 PM
Mcliu, you had a long post so I didn't want to quote everything to clog up the board. I will beg your forgiveness if I miss some of the points you've made in it.

In terms of banking. No there is nothing preventing a foreign bank to have as big of a subsidiary as they wish to have. Our 7th largest bank is HSBC. That is their subsidiary here. Completely foreign owned. There are no laws preventing that bank to get bigger.

You are correct that there are some boneheaded restrictions in telecom. But as EliG pointed out not long ago the government here offered everything short of sexual favours for foreign companies. They rolled out the red carpet and threw the parade. They even offered to subsidize them. Guess what..  no takers. So while I disagree with the telecom issues, I don't believe they represent any barrier.

Also while you are correct that China is quite protective. You are incorrect in your assessment that the US is some paragon of trade openness. The US is actually one of the most protective countries. They just do it through a lot of rules and regulation to obfuscate their protectionism.

Your information about persistent trade surpluses and deficits is also wrong. Canada is not a persistent trade deficit country. We used to run persistent trade surpluses but for the past decade we have been running somewhat negligible trade deficits. Japan used to run persistent trade surpluses but lately they're actually running trade deficits. China also is somewhat of a weird beast. They run large trade surpluses with countries like US and Canada but their trade surplus with the world is not that large. Mexico as well has a trade surplus with the US but a trade deficit with the world. I'm sorry but these things can get complicated in a hurry.

Furthermore when you talk about trade surpluses and deficits you should be aware that they arise from differentials in savings rates. See discussion above. Those savings rates can be incredibly stubborn. China's surpluses and savings rates are nothing compared to Germany and Netherlands. In economics we actually didn't think it was possible for a country to run the kind of trade surpluses that Germany is running right now. But it turns out that those Germans are really, really stubborn savers. Things are made more complicated by things like the eurozone but I hope you get the point.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Value^2 on March 04, 2018, 05:06:28 AM
Wilbur Ross @ CNBC (Full interview)
https://www.cnbc.com/2018/03/02/wilbur-ross-deflects-the-top-market-question-about-trump-tariffs.html
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on March 04, 2018, 06:22:04 AM
Mcliu, you had a long post so I didn't want to quote everything to clog up the board. I will beg your forgiveness if I miss some of the points you've made in it.

In terms of banking. No there is nothing preventing a foreign bank to have as big of a subsidiary as they wish to have. Our 7th largest bank is HSBC. That is their subsidiary here. Completely foreign owned. There are no laws preventing that bank to get bigger.

You are correct that there are some boneheaded restrictions in telecom. But as EliG pointed out not long ago the government here offered everything short of sexual favours for foreign companies. They rolled out the red carpet and threw the parade. They even offered to subsidize them. Guess what..  no takers. So while I disagree with the telecom issues, I don't believe they represent any barrier.

Also while you are correct that China is quite protective. You are incorrect in your assessment that the US is some paragon of trade openness. The US is actually one of the most protective countries. They just do it through a lot of rules and regulation to obfuscate their protectionism.

Your information about persistent trade surpluses and deficits is also wrong. Canada is not a persistent trade deficit country. We used to run persistent trade surpluses but for the past decade we have been running somewhat negligible trade deficits. Japan used to run persistent trade surpluses but lately they're actually running trade deficits. China also is somewhat of a weird beast. They run large trade surpluses with countries like US and Canada but their trade surplus with the world is not that large. Mexico as well has a trade surplus with the US but a trade deficit with the world. I'm sorry but these things can get complicated in a hurry.

Furthermore when you talk about trade surpluses and deficits you should be aware that they arise from differentials in savings rates. See discussion above. Those savings rates can be incredibly stubborn. China's surpluses and savings rates are nothing compared to Germany and Netherlands. In economics we actually didn't think it was possible for a country to run the kind of trade surpluses that Germany is running right now. But it turns out that those Germans are really, really stubborn savers. Things are made more complicated by things like the eurozone but I hope you get the point.

Germany, Korea, Japan and China are running trade surpluses with the US, because they have a higher diving rats than the US. In one sense, those countries are not exporting good,s they are really exporting savings in a macroeconomic sense.

While there is more to it, the US can never run a balanced trade unless the savings rate goes up. I am not a macroeconomist, but that is even clear to me. Setting up specific trade barriers won’t do anything to fix the trade deficit, it will just flow into other goods, or the US consumer will just pay more (most likely). What would need to happen is that the US consumer stops spending and actually save funds for the trade to become balanced. It’s as simple as that, or at least I think it is  :o
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cigarbutt on March 04, 2018, 06:44:16 AM
"What would need to happen is that the US consumer stops spending and actually save funds for the trade to become balanced."
Agree. Then I wonder what incentives would need to be in place to usher in a new era of thrift. :o

Short term pain vs long term gain?
It may be hard to think long term when you live paycheque to paycheque.
And this is nothing new.
www.nytimes.com/books/first/s/schor-overspent.html
But it's getting harder and harder to keep up with the top quintile.
The wealth effect.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: mcliu on March 04, 2018, 07:05:28 AM
Mcliu, you had a long post so I didn't want to quote everything to clog up the board. I will beg your forgiveness if I miss some of the points you've made in it.

Appreciate the reply rb, that was helpful. You seem well-versed in these topics.
What would you suggest to balance out the trade deficits of the US and surplus of China? Also, do you think the savings rate is the primary cause of the trade differentials, or could it also be a reflection of the trade imbalance?

Also, assuming if savings rate is the main culprit, what's the solution here? Increasing the price of goods? Limiting the amount of credit that the US can access? Increasing interest rates on borrowing?

Side note: Just wanted to clarify, say if HSBC wanted to get bigger, can they acquire a competitor like CIBC/CWB/National/Laurentian or would they be restricted to building out their branches? On telecom, did they scrap all restrictions, or does the 10% market share limit still apply?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: John Hjorth on March 04, 2018, 07:08:13 AM
I think the answer to the question from Cigarbutt in the last post is education. Mandatory education in basic personal finance in elementary school could be one way to make a change long term.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: EliG on March 04, 2018, 08:59:51 AM
Hi mcliu,

@EliG Thanks for the reply. From my understanding (which may be wrong or incomplete), foreign ownership of banks in Canada is restricted through the provision that no single shareholder can own more than 25% of a bank? Doesn't that makes it impossible for foreign banks to have a Canadian subsidiary..? On the other hand, Canadian banks had no issues acquiring US subsidiaries like BMO/Harris Bank and TD/Commerce Bank, etc..

Foreign ownership of Canadian banks *used* to be restricted. Canada lifted restrictions in two steps. First under NAFTA, for US and Mexico. Then under WTO agreement, for WTO members. There are still restrictions in place for non-WTO members (Irans and Sudans of the world).


On telecom, I thought foreign ownership was restricted to below 50%? "Under provisions of Canada's Telecommunications Act, foreign ownership of transmission facilities is limited to 20 percent direct ownership and 33 percent through a holding company, for an effective limit of 46.7 percent total foreign ownership. Canada amended the Telecommunications Act in June 2012 to rescind foreign ownership restrictions on carriers with less than 10 percent share of the total Canadian telecommunications market." https://www.export.gov/article?id=Canada-Openness-to-Foreign-Investment
So my understanding is that, even with the amendment, majority-owned foreign telecoms can only gain a 10% market-share before they need to divest..?

I think you are right here. 10% market share restriction on foreign telecoms is still in place. I found an article that discusses this restriction in the context of NAFTA renegotiation:

http://nationalpost.com/pmn/news-pmn/canada-news-pmn/use-nafta-talks-to-lift-canadian-telecom-protections-prof-argues

The article mentions that American NAFTA negotiators are unlikely to make telecom a priority. Apparently it's not a big irritant for your side. That's too bad. As a consumer, I would love to see more competition in wireless. Our oligopolistic providers have us over a barrel.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: SharperDingaan on March 04, 2018, 09:08:52 AM
We would suggest to you that this entire thing is renally intended to divert attention from the other big event of last week.
http://www.bbc.com/news/world-europe-43239331

"Giving his annual state of the nation speech, Mr Putin used video presentations to showcase the development of two new nuclear delivery systems that he said could evade detection. One video graphic appeared to show missiles raining down on the US state of Florida.

POTUS gets a direct threat from his Russian bud, we rapidly return to the cold war, and the best he can do is try and start a trade war? The more cynical might suggest that his masters told him to. We would also suggest that picking a trade fight with the EU, is really to divert attention from the former Russian satellites.

Mr Putin clearly wants them back.

SD
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: SharperDingaan on March 04, 2018, 09:15:56 AM
Seem familiar ?
http://www.inatoday.com/philbyspygod20101221.htm

SD
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: EliG on March 04, 2018, 09:18:14 AM
Also while you are correct that China is quite protective. You are incorrect in your assessment that the US is some paragon of trade openness. The US is actually one of the most protective countries. They just do it through a lot of rules and regulation to obfuscate their protectionism.

The most famous and hilarious example of US protectionism is US market for pickup trucks. Why is it that Japanese, Germans, Koreans were able to take great market share in cars and SUVs but not trucks?

Well, there is this little thing called the CHICKEN TAX...

https://www.npr.org/sections/money/2018/02/28/589239438/planet-money-shorts-the-chicken-tax
https://fee.org/articles/chicken-tax-makes-trucks-expensive-and-unavailable/
https://carbuzz.com/news/5-amazing-trucks-the-us-can-t-have-because-of-the-chicken-tax
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: EliG on March 04, 2018, 09:31:49 AM
POTUS gets a direct threat from his Russian bud, we rapidly return to the cold war, and the best he can do is try and start a trade war? The more cynical might suggest that his masters told him to. We would also suggest that picking a trade fight with the EU, is really to divert attention from the former Russian satellites.

Yeah, Russians are getting a great return on their investment. We are facing a US/European trade war for no good reason.

I doubt that Trump is following the orders or is pursuing a trade war to please Russians. More likely, it's just a natural state of chaos that Trump cultivates for his own viewing pleasure. There is one thing I am sure about: Putin loves the end result.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: no_free_lunch on March 04, 2018, 09:49:18 AM
From what i just read the US charges 2.5 % on vehicles and 25% on light trucks. The EU charges 10 % on all vehicles.  So overall they are both charging tarriffs as you well know.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: no_free_lunch on March 04, 2018, 09:55:28 AM
We would suggest to you that this entire thing is renally intended to divert attention from the other big event of last week.
http://www.bbc.com/news/world-europe-43239331

"Giving his annual state of the nation speech, Mr Putin used video presentations to showcase the development of two new nuclear delivery systems that he said could evade detection. One video graphic appeared to show missiles raining down on the US state of Florida.

POTUS gets a direct threat from his Russian bud, we rapidly return to the cold war, and the best he can do is try and start a trade war? The more cynical might suggest that his masters told him to. We would also suggest that picking a trade fight with the EU, is really to divert attention from the former Russian satellites.

Mr Putin clearly wants them back.

SD

Now you getting into cooky conspiracy land.  Where were u when the thread floated of us troops killing 100 plus russian mercenaries in syria. The US is now appearing to be permanently stationed in syria , under trump, in what i assume is an effort to push back on russian influence.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: no_free_lunch on March 04, 2018, 10:20:45 AM
Heres another one for you sd.  Why is this alledged russian agent selling antitank weapons that obama refused to provide?

https://www.washingtonpost.com/amphtml/news/josh-rogin/wp/2017/12/20/trump-administration-approves-lethal-arms-sales-to-ukraine/
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Viking on March 04, 2018, 10:34:24 AM
Wilbur Ross @ CNBC (Full interview)
https://www.cnbc.com/2018/03/02/wilbur-ross-deflects-the-top-market-question-about-trump-tariffs.html

Thanks for posting the interview. Very informative.

If I was a US multinational I would be very nervous. Especially if I was  doing business in China.

Nationalism is a very strong emotion. Global consumers have choices. Trump had better be careful he does not do permanent damage to the US brand globally. If we get a trade war the losers will likely be US multinationals; foreign governments and global consumers (non-US) will need to vent their frustration somewhere and US brands sold in their country will be a very visible and easy target.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on March 04, 2018, 12:20:31 PM
Mcliu, you had a long post so I didn't want to quote everything to clog up the board. I will beg your forgiveness if I miss some of the points you've made in it.

Appreciate the reply rb, that was helpful. You seem well-versed in these topics.
What would you suggest to balance out the trade deficits of the US and surplus of China? Also, do you think the savings rate is the primary cause of the trade differentials, or could it also be a reflection of the trade imbalance?

Also, assuming if savings rate is the main culprit, what's the solution here? Increasing the price of goods? Limiting the amount of credit that the US can access? Increasing interest rates on borrowing?

Side note: Just wanted to clarify, say if HSBC wanted to get bigger, can they acquire a competitor like CIBC/CWB/National/Laurentian or would they be restricted to building out their branches? On telecom, did they scrap all restrictions, or does the 10% market share limit still apply?
Well when it comes to banks in Canada they have to grow organically. EliG touched on this. But essentially bank mergers are banned in Canada for banks the size of National and larger. If the moment was to come I'd say that CWB and Laurentian are probably off limits as well. This doesn't have anything to do with protectionism. It has to do with the fact that about 2 decades ago the government decided that the banks are too large already and decided there will be no more large bank mergers.

Well the savings rates are the cause trade surpluses and deficits. What people miss here is that the US market wants the current trade deficit. The people want to consume not save. It's not clear that trade can even be brought into balance. Just as the Germans are very stubborn savers, the Americans could be very stubborn spenders. Yes, you could probably narrow the trade deficit by using taxes or hiking interest rates. But that will inflict a large amount of pain of the economy. So is it worth it? Moreover doing that is akin to Soviet style central planning. Trying to force the market to do something because the leader decided it should be so. History has shown us that that doesn't usually end well.

Finally a quick note on China since you've brought that up. China has run large trade surpluses in the 2000s. Since the 2000s their trade surpluses declined quite dramatically and for the past couple of years they've been around 2% of GDP. That's not particularly large. However China does run some very high trade surpluses with countries like the US and Canada. This means that even if the US somehow gets to balanced trade it will still potentially have large trade deficits with China. It's just the way the economies seem to be wired.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: mcliu on March 04, 2018, 01:51:49 PM
Ok, it doesn't sound like mergers are off limits as long as there's no ownership above 25% by a single shareholder.. but I think you're probably right.. it sounds like the protectionism is not really the main intent but a byproduct of the government's stance on banking competition..

Well the savings rates are the cause trade surpluses and deficits. What people miss here is that the US market wants the current trade deficit. The people want to consume not save. It's not clear that trade can even be brought into balance. Just as the Germans are very stubborn savers, the Americans could be very stubborn spenders. Yes, you could probably narrow the trade deficit by using taxes or hiking interest rates. But that will inflict a large amount of pain of the economy. So is it worth it? Moreover doing that is akin to Soviet style central planning. Trying to force the market to do something because the leader decided it should be so. History has shown us that that doesn't usually end well.

Finally a quick note on China since you've brought that up. China has run large trade surpluses in the 2000s. Since the 2000s their trade surpluses declined quite dramatically and for the past couple of years they've been around 2% of GDP. That's not particularly large. However China does run some very high trade surpluses with countries like the US and Canada. This means that even if the US somehow gets to balanced trade it will still potentially have large trade deficits with China. It's just the way the economies seem to be wired.

No, I don't think central planning will work. But shouldn't there be some market mechanism that adjust to balance out trade over time? I mean, one country can't keep consuming more than it produces indefinitely right? On a micro basis, if an individual keeps borrowing money and spending it, at some point, the creditors will increase rates or stop lending, right? Also, from my limited understanding, a few decades ago when countries were on the gold standard (Bretton Woods) and when a country starts running short of gold (as a result of the deficits), then their currency adjusts which affects the purchasing power and brings the trade back in balance. Should there be some sort of adjustment mechanism in the current fiat system?

My other question is whether the current situation (large trade deficits between China & Canada/US) a natural result due to free trade/comparative advantage (aka how the economy is wired) or could it be possible that this is the outcome that the central planners in Beijing are trying to achieve?

I mean free trade is good, but when you're trading with a large & powerful planned economy, can't they can put overwhelming resources into production that can easily overwhelm free market competitors? For example, the solar industry.. "https://www.scientificamerican.com/article/why-china-is-dominating-the-solar-industry/ But has this been the case for the other industries (steel, electronics, etc..) over the past 2 decades?

Excerpt from link:

Expanding renewable energy became one of seven categories of business that receive special attention including loans and tax incentives under China’s five-year plans.

The result was that in building up the world’s largest solar manufacturing industry, one that became the price leader in most aspects of the world’s market—beginning with cheaper solar panels—China had helped create a worldwide glut. There were roughly two panels being made for every one being ordered by an overseas customer.

...

Some think it’s a matter of government policies that ran out of control. After spending 30 years in the U.S. solar industry and in DOE watching solar markets, Ken Zweibel has recently retired, but he worries that there may be more to it than that. He calls it “black box economics.”

“If there was ever a situation where the Chinese have put their whole governmental system behind manufacturing, it’s got to be solar modules,” Zweibel said. “I think they think they can wipe out all the competition in the world. It makes all kinds of sense if you have the staying power.”

Wyatt Metzger, a principal scientist at NREL, takes a more benign view. “They have a centralized government and terrible pollution problems. They understand the need to get away from coal and to invest in clean energy,” he said.

Whatever the reasoning was behind China’s massive investment in solar module manufacturing, the impact on its U.S. competitors has not been benign. SunEdison of Belmont, Calif., filed for bankruptcy in April. The stocks of two other leading companies, First Solar and SunPower, were in the triple digits a decade ago. Now they are treading water, floating between 13 and 6 percent of their former values.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: EliG on March 04, 2018, 03:34:21 PM
Also while you are correct that China is quite protective. You are incorrect in your assessment that the US is some paragon of trade openness. The US is actually one of the most protective countries. They just do it through a lot of rules and regulation to obfuscate their protectionism.

I came across a blog post by Scott Lincicome that confirms rb's statement quoted above.

“Unfettered” Free Trade? If Only… (https://www.cato.org/blog/unfettered-free-trade-only?utm_content=buffer4e8d9&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer)

Quote
First, although the United States maintains a relatively low average import tariff of around 3 percent, it also applies high tariffs on a wide array of “politically-sensitive” (read: highly lobbied) products: 131.8% on peanuts; 35% on tuna; 20% on various dairy products; 25% on light trucks; 16% on wool sweaters, just to name a few.  (Agriculture is particularly bad in this regard.)  We also maintain a long list of restrictive quotas on products like sugar, cheese, canned tuna, brooms, cotton, and baby formula.  And although the U.S. has 14 free trade agreements (FTAs) with 20 different countries and is a longstanding member of the World Trade Organization (WTO), many of these same “sensitive” products have been exempted from the agreements’ trade liberalization commitments.  Free trade for thee, but not for me.

Quote
Second, while America’s tariffs and other “formal” trade barriers have indeed been declining for decades, they are only a small part of the overall story.  U.S. non-tariff barriers – export subsidies, discriminatory regulations, “buy local” rules, “fair trade” duties, etc. – have exploded in recent years.  In fact, according to a recent analysis by Credit Suisse, when you add up all forms of trade barriers imposed between 1990 and 2013, the biggest protectionist in the world isn’t China or Mexico but none other than… the United States:

(https://i.imgur.com/CC1QGiO.png)
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on March 04, 2018, 03:43:07 PM
Ok, first thing in macro is that countries are not people. One of the biggest mistakes is to think of problem from the point of view of how it applies to an individual and then apply it to a country. Politicians do that a lot because it sells well. But it is completely wrong.

Now, can countries run trade deficits forever or do they have to eventually stop? The answer is yes and no. Countries can in fact run fairly small trade deficits for ever. In the case of the US. It should be able to safely run a 2% forever. It gets trickier with larger trade deficits but even the larger ones can be carried on for a really really long time.

Is there a mechanism to bring things into balance. Yes it is and you actually know it. It's through FX. If you recall the US dollar wasn't doing very well in the 2000s when the US started running large trade deficits. The Yuan is also a significantly higher now compared to the 2000s which is likely the cause of the shrinking Chinese trade surplus.

Quote
My other question is whether the current situation (large trade deficits between China & Canada/US) a natural result due to free trade/comparative advantage (aka how the economy is wired) or could it be possible that this is the outcome that the central planners in Beijing are trying to achieve?

In my opinion this is a natural result of the free market. The Chinese government isn't forcing us to buy stuff made in China like in the case of the soviet centrally planned economies. They are producing good that we like to consume. So they are providing what the market demands.

Now, onto dumping and centrally planned actions. Here's where I depart from traditional economics because I can't really figure whether it's good or bad. I mean in everyday life say if Amazon decided to forgo making a profit to sell you cheap shit are you not going to buy it? What do you care if their shareholders are good with it?

Let's move on to countries. A few years ago Saudi Arabia increased oil production to crash the price of oil and take out weaker suppliers. We all know that a lot of said weaker suppliers were in the US and Canada. The Saudis were essentially dumping oil and it did hurt domestic companies. But did the US retaliate? No. Why? Because people really like cheap oil. People would have reacted very negatively should the government have taken steps to increase the price of oil. So nobody said a peep. See? Maybe dumping's not that bad, at least if we really like what's being dumped.

In the context of solar panels that you've brought up. Yes, China did crash the price of solar panels. It really sucked if you were a solar company shareholder. But also utilities got to buy cheap solar panels. So rates are lower for consumers. Also panels became cheap enough to make sense for individuals to put them and paid a lot of people to put them up. There are now 130,000 solar installer jobs in the US. That's more people than the ones that make steel. So it gets very tricky when you look at it in aggregate.

The main idea of why dumping is bad is that some foreign country will take losses to eviscerate an industry. Then when it's done it will hike prices and you're screwed. This actually applies more to smaller undeveloped countries rather than a place like the US. To use the example of solar panels, if China were to hike panel prices does anyone seriously believe that the US will have any difficulty building solar panel factories?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cigarbutt on March 04, 2018, 05:01:03 PM
With Bretton Woods, the USD became as good as gold and, in 1971, there came the "temporary" suspension of conversion and the dollar itself became THE reserve currency whose status has been maintained and if anything has gotten stronger.
This development gave rise to an exorbitant privilege that facilitated the development of structural trade deficits. This reserve currency status tends to mitigate the pressures that would tend to depreciate the value of the USD thereby pushing the limit of the consumption/saving excess.
Current trend is unfavorable in the long term.
Mr. Buffett had written a nice conceptual article about this in 2003.
http://archive.fortune.com/magazines/fortune/fortune_archive/2003/11/10/352872/index.htm
He suggested that currency exchange adjustments were likely not enough.

Investment implications:
Ingredients for competitive devaluations and protectionist policies are in place, especially if the economy loses steam.
Hoping for a new equilibrium.
I understand that individuals and family units are not countries because countries are, in theory, perpetual but I wish that countries would think like a responsible citizen sometimes. We need "to test all of our abilities to find a solution".
I am long the USD but the conclusion is based on relative valuations. :)
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Value^2 on March 05, 2018, 01:00:03 AM
It's only a matter of time before Turdeau capitulates. End of the day it's career politican (hack) vs hard boiled businessman & Marchionne-like deal maker.

https://www.themaven.net/mishtalk/politics/canada-s-prime-minister-embarasses-himself-with-pathetic-trade-speech-fD8XWBQTAU-vmQxca9yIcQ   

No need for further explanations.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: John Hjorth on March 05, 2018, 04:41:56 AM
Mr. Trump is backing out (https://twitter.com/realDonaldTrump/status/970626966004162560).

Now we just need somebody to send an express letter to Kim Jung Il, that now is the time to lauch a rocket or two, and then we'll likely be back to the old new normal.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: EliG on March 05, 2018, 05:33:01 AM
Mr. Trump is backing out (https://twitter.com/realDonaldTrump/status/970626966004162560).

Now we just need somebody to send an express letter to Kim Jung Il, that now is the time to lauch a rocket or two, and then we'll likely be back to the old new normal.

John, he is saying that Canada and Mexico won't get a tariff exemption unless they make concessions in NAFTA negotiations. It's not a sign that he is backing off. I'd say it's the opposite.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: EliG on March 05, 2018, 05:34:50 AM
It's only a matter of time before Turdeau capitulates. End of the day it's career politican (hack) vs hard boiled businessman & Marchionne-like deal maker.

https://www.themaven.net/mishtalk/politics/canada-s-prime-minister-embarasses-himself-with-pathetic-trade-speech-fD8XWBQTAU-vmQxca9yIcQ   

No need for further explanations.

Trudeau is a fool. Tariffs are dumb. Both things can be true at the same time.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: John Hjorth on March 05, 2018, 05:53:43 AM
Eli,

I have now reread the tweet. I now think it can be read and understood two different ways, based on your input, thanks. Interesting phenomen [to say the least], that detailed text analysis of tweets is right now the only way to get an understanding of what's actually going on.[lol]
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: KJP on March 05, 2018, 05:55:12 AM
With Bretton Woods, the USD became as good as gold and, in 1971, there came the "temporary" suspension of conversion and the dollar itself became THE reserve currency whose status has been maintained and if anything has gotten stronger.
This development gave rise to an exorbitant privilege that facilitated the development of structural trade deficits. This reserve currency status tends to mitigate the pressures that would tend to depreciate the value of the USD thereby pushing the limit of the consumption/saving excess.
Current trend is unfavorable in the long term.
Mr. Buffett had written a nice conceptual article about this in 2003.
http://archive.fortune.com/magazines/fortune/fortune_archive/2003/11/10/352872/index.htm
He suggested that currency exchange adjustments were likely not enough.

Investment implications:
Ingredients for competitive devaluations and protectionist policies are in place, especially if the economy loses steam.
Hoping for a new equilibrium.
I understand that individuals and family units are not countries because countries are, in theory, perpetual but I wish that countries would think like a responsible citizen sometimes. We need "to test all of our abilities to find a solution".
I am long the USD but the conclusion is based on relative valuations. :)

What is the current academic view of Triffin's Paradox?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: John Hjorth on March 05, 2018, 06:18:18 AM
Eli,

Just to elaborate a bit, here (http://borsen.dk/nyheder/politik/artikel/1/359377/kovending_fra_trump_dropper_globalt_staalangreb_hvis_canada_og_mexico_makker_ret_i_handelsaftale.html?utm_source=forside&utm_campaign=nyhed_01) is how that particular tweet is interpreted by the Danish Press, translates to : "U-turn from Trump: Drops global steel attack, if Canada and Mexico behave in the trade agreement."

So yes, in a sense, everybody outside US except Mexico and Canada have gone from DEFCON X to DEFCON X minus 1, looking at what then will happen. I understand your perception based on that you are a Canadian citizen.

Battle tactics switched to including hostage taking.

And yes, that's not backing out. That's more like taking a break towards some of the many opponents, and focusing on two.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Joe689 on March 05, 2018, 06:59:33 AM
Classic brinkmanship.  Trump knows strategy well and in the end he will not roll over.  He wants fairs deals from other countries and, if not, they will not like the alternatives.   Since the deals are not fair, the alternatives will hurt the other countries more than the USA.   He sent the tariff threat in, and will let it resonate.

Risky play but that is what is all about.   Worth the risk in his opinion.  Most countries will likely come around.  This should help the NAFTA deal get made
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Sharad on March 05, 2018, 07:48:13 AM
Classic brinkmanship.  Trump knows strategy well and in the end he will not roll over.  He wants fairs deals from other countries and, if not, they will not like the alternatives.   Since the deals are not fair, the alternatives will hurt the other countries more than the USA.   He sent the tariff threat in, and will let it resonate.

Risky play but that is what is all about.   Worth the risk in his opinion.  Most countries will likely come around.  This should help the NAFTA deal get made

What would happen if Canada or Mexico decide to exit NAFTA? Has anyone seen any consideration for that sort of action?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Viking on March 05, 2018, 09:18:35 AM
It will be VERY interesting to see how Canada and Mexico handle NAFTA and now the steel/aluminum tariffs. It looks to me like Trump wants nothing to do with China right now (they can fight back). Instead he is going after the much smaller and much easier prey; Canada and Mexico. The US has all the leverage and the Canadian dollar is finally waking up to that reality (and starting to weaken versus the US$).
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on March 05, 2018, 10:13:03 AM
Classic brinkmanship.  Trump knows strategy well and in the end he will not roll over.  He wants fairs deals from other countries and, if not, they will not like the alternatives.   Since the deals are not fair, the alternatives will hurt the other countries more than the USA.   He sent the tariff threat in, and will let it resonate.

Risky play but that is what is all about.   Worth the risk in his opinion.  Most countries will likely come around.  This should help the NAFTA deal get made
Can you please point out specifically what was unfair about steel and aluminium trade between Canada and the US?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Joe689 on March 05, 2018, 11:10:44 AM
I cannot.  But I do not think that is the point. Just like the milk, lumber, Trump will keep adding tariffs until fair agreements are signed.   He is being a bully, knowing that he has the most leverage.  The countries that sign the agreements first will be benefactors. 
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on March 05, 2018, 11:30:51 AM
http://scottgrannis.blogspot.ca/2018/03/trumps-tariffs-are-cause-for-concern.html
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on March 05, 2018, 11:59:17 AM
I cannot.  But I do not think that is the point. Just like the milk, lumber, Trump will keep adding tariffs until fair agreements are signed.   He is being a bully, knowing that he has the most leverage.  The countries that sign the agreements first will be benefactors.
So you don't know anything about it but you are convinced it's unfair. I guess that's about par for the course.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on March 05, 2018, 12:10:24 PM
It will be VERY interesting to see how Canada and Mexico handle NAFTA and now the steel/aluminum tariffs. It looks to me like Trump wants nothing to do with China right now (they can fight back). Instead he is going after the much smaller and much easier prey; Canada and Mexico. The US has all the leverage and the Canadian dollar is finally waking up to that reality (and starting to weaken versus the US$).
I don't know how you figure that China can fight back and Canada is defenseless on this issue. Canada buys more than twice from the US than China. In fact Canada buys more from the US than China, Japan, UK, Germany, and South Korea combined. We may not be able to take out an aircraft carrier. But we can create the mother of all problems on trade for the US.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: John Hjorth on March 05, 2018, 12:12:50 PM
Where do you look for those stats, rb? I want to learn. Thanks in advance.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on March 05, 2018, 12:27:12 PM
The numbers on trade are put together by the department of commerce but their site sucks. The US Census Bureau also keeps detailed stats on trade and it's much easier to work with. The drawback is that the Census Bureau only keeps numbers on trade in goods but not services.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: no_free_lunch on March 05, 2018, 12:31:18 PM
Where do you look for those stats, rb? I want to learn.

I should let rb answer but this is straight forward.

https://en.m.wikipedia.org/wiki/List_of_the_largest_trading_partners_of_the_United_States

He is correct. More than twice as much exported to canada than china.  However even with trade balanced between Can / US the US has advantage due to their economic size being over 10x canadas.  Doesnt make it right but thats how i see it.

The US should really focus on mexico and china if they actually care about trade deficits.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: John Hjorth on March 05, 2018, 12:36:01 PM
Thanks rb & no_free_lunch.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Viking on March 05, 2018, 12:53:04 PM
It will be VERY interesting to see how Canada and Mexico handle NAFTA and now the steel/aluminum tariffs. It looks to me like Trump wants nothing to do with China right now (they can fight back). Instead he is going after the much smaller and much easier prey; Canada and Mexico. The US has all the leverage and the Canadian dollar is finally waking up to that reality (and starting to weaken versus the US$).
I don't know how you figure that China can fight back and Canada is defenseless on this issue. Canada buys more than twice from the US than China. In fact Canada buys more from the US than China, Japan, UK, Germany, and South Korea combined. We may not be able to take out an aircraft carrier. But we can create the mother of all problems on trade for the US.

rb, China is a growing world power and will continue to be a growth engine for the global economy for decades to come. In comparison, Canada is a small country with little real leverage over the Trump US; we are not the tail that wags the dog (when it comes to Trump’s evolving trade policy).
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on March 05, 2018, 01:13:38 PM
It will be VERY interesting to see how Canada and Mexico handle NAFTA and now the steel/aluminum tariffs. It looks to me like Trump wants nothing to do with China right now (they can fight back). Instead he is going after the much smaller and much easier prey; Canada and Mexico. The US has all the leverage and the Canadian dollar is finally waking up to that reality (and starting to weaken versus the US$).
I don't know how you figure that China can fight back and Canada is defenseless on this issue. Canada buys more than twice from the US than China. In fact Canada buys more from the US than China, Japan, UK, Germany, and South Korea combined. We may not be able to take out an aircraft carrier. But we can create the mother of all problems on trade for the US.

rb, China is a growing world power and will continue to be a growth engine for the global economy for decades to come. In comparison, Canada is a small country with little real leverage over the Trump US; we are not the tail that wags the dog (when it comes to Trump’s evolving trade policy).
And what does that have to do with the two respective countries' abilities to inflict economic pain on the US today?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on March 05, 2018, 01:19:30 PM
He is correct. More than twice as much exported to canada than china.  However even with trade balanced between Can / US the US has advantage due to their economic size being over 10x canadas.  Doesnt make it right but thats how i see it.

The US should really focus on mexico and china if they actually care about trade deficits.
Theoretically you are correct that the size of the United States should give it an advantage. But it actually doesn't matter that much because these things don't get to the point where that advantage should matter. Think about it. How many job losses in the Mid West would it take before people there realize that maybe they should leave Canada well enough alone? My guess is not that many.

Trade wars are a lot like nuclear wars. Just like in a nuclear war it doesn't much matter if you get hit with 1,000 nukes or 10,000 nukes. The end result is the same.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: EliG on March 05, 2018, 06:26:21 PM
He is correct. More than twice as much exported to canada than china.  However even with trade balanced between Can / US the US has advantage due to their economic size being over 10x canadas.  Doesnt make it right but thats how i see it.

The US should really focus on mexico and china if they actually care about trade deficits.
Theoretically you are correct that the size of the United States should give it an advantage. But it actually doesn't matter that much because these things don't get to the point where that advantage should matter. Think about it. How many job losses in the Mid West would it take before people there realize that maybe they should leave Canada well enough alone? My guess is not that many.

Trade wars are a lot like nuclear wars. Just like in a nuclear war it doesn't much matter if you get hit with 1,000 nukes or 10,000 nukes. The end result is the same.

I agree with rb.

Here's a map showing the top export destination for each US state:
http://i.imgur.com/gNsuhbT.png

By my quick count, Canada is the top export destination for 35 out of 50 states. It's safe to say that GOP runs quite a few of those states. Many of them are safe red states. But not all of them.

Canada can hand-craft its retaliation to target a few vulnerable counties in a few toss-up states. How many job losses would it take to flip a couple of states from R to D? Probably not that many, as rb pointed out.

2020 Census is coming. Whichever party controls a state after the Census gets to gerrymander it for the next decade. This includes Congressional elections. This is a big juicy prize. Why would GOP risk it over a dumb tariff?

I wonder how many vulnerable GOP governors were working the phones this past weekend.

===

Bonus link for nerds:

Trump’s Steel and Aluminum Tariffs: How WTO Retaliation Typically Works
https://piie.com/blogs/trade-investment-policy-watch/trumps-steel-and-aluminum-tariffs-how-wto-retaliation-typically

Quote from the article:

Quote
Countries frequently implement WTO retaliation by imposing 100 percent tariffs on a list of imported goods from the defendant that add up to less than the authorized limit. The logic is that the 100 percent tariff may be prohibitive; this would thus eliminate no more than that WTO-authorized limit.

The next decision for the retaliating country is to identify which products to put on its list. In the case against Trump, the European Union has reportedly indicated its product list will include blue jeans, bourbon from Kentucky, cranberries and dairy products from Wisconsin, Harley-Davidson motorcycles, US steel products, and agricultural products like rice, maize, and orange juice.

The complaining country typically has discretion to determine which products to target. It may select products based on political motives—e.g., inflicting economic costs on key Congressional leaders in the hope that they will effectively persuade Trump to implement policies that conform with international rules.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on March 05, 2018, 08:44:46 PM
Classic brinkmanship.  Trump knows strategy well and in the end he will not roll over.  He wants fairs deals from other countries and, if not, they will not like the alternatives.   Since the deals are not fair, the alternatives will hurt the other countries more than the USA.   He sent the tariff threat in, and will let it resonate.

Risky play but that is what is all about.   Worth the risk in his opinion.  Most countries will likely come around.  This should help the NAFTA deal get made

What exactly is not fair about NAFTA? Trade is almost balanced with Canada and last I checked, Mexico was not a large steel exporter into the US? There is a significant  trade deficit with Mexico - about $60B, but hat is still comparatively small fries compared to China ($350B). Of course China (or Japan and EU) have nothing to do with NAFTA.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: RichardGibbons on March 05, 2018, 11:24:58 PM
So you don't know anything about it but you are convinced it's unfair. I guess that's about par for the course.

I think this is actually the key for Trump.  Americans are treating politics like a sports, with Republicans cheering for their team.  So, as long as Trump's doing something and talking big, it doesn't actually matter what the facts are when it comes to NAFTA. 

After the deal is negotiated, it won't matter what the deal is. What matters is that Trump will proclaim victory.  He could trade California, Oregon, and Washington to Canada for a bag of hockey pucks, and his fans would cheer him on.

On this one I'm actually with Value^2--I think it's actually quite a savvy political strategy you're the type of guy who doesn't actually care about the good of the country, but only your own popularity.  Basically, it's irrelevant what's in NAFTA before or after negotiation. Simply by going through the motions, Trump gets exactly what he wants.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on March 06, 2018, 03:47:13 AM
So you don't know anything about it but you are convinced it's unfair. I guess that's about par for the course.

I think this is actually the key for Trump.  Americans are treating politics like a sports, with Republicans cheering for their team.  So, as long as Trump's doing something and talking big, it doesn't actually matter what the facts are when it comes to NAFTA. 

After the deal is negotiated, it won't matter what the deal is. What matters is that Trump will proclaim victory.  He could trade California, Oregon, and Washington to Canada for a bag of hockey pucks, and his fans would cheer him on.

On this one I'm actually with Value^2--I think it's actually quite a savvy political strategy you're the type of guy who doesn't actually care about the good of the country, but only your own popularity.  Basically, it's irrelevant what's in NAFTA before or after negotiation. Simply by going through the motions, Trump gets exactly what he wants.

Couldn’t have been said any better..

Now the EU does tit for tat and threatens to put tariffs on US whiskey, motorcycles, t-Shirts, agricultural gods. I think they chose the target products well, because raising the tariffs on them will not hurt the Eu industry (unlike the Trump tariffs), are easy to explain to the consumer (iconic Us products) and home in an industries in Republican states.

My guess is that the Trump “deal” will be to return everything more or less to where it was, befiore he started the whole thing
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: cwericb on March 06, 2018, 04:28:10 AM
The problem with trying to understand the justification for these tariffs is that the motivation has nothing to do with trade. It is simply a knee jerk attempt to divert attention from all of the other problems Trump has created for himself.

He does this time after time and it actually works for him to a certain extent - temporarily. But in the long run it snowballs and he just creates more problems for himself.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on March 06, 2018, 05:54:31 AM
Trump generally leaves it to others to create a reason or narrative to his actions, even though there likely is non other populism and sudden impulses. It seemed to be work for him his entire life and he is 74 years old now, so why not?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: CorpRaider on March 06, 2018, 06:33:28 AM
I don't agree with him on a lot but I think they have a point about some of these trade arrangements.  Apparently the EU imposes a 10% tariff on US autos and we impose 2.5% back?  What are they doing to Tesla?  Japan and Germany really are the worst offenders of systemic current account surpluses.  At least china can say they are still developing and will open up as they mature.

Maybe the NAFTA members should be required to impose the same agreements with non-members, so auto manufacturers and steel manufacturers can't dump on Canada or run stuff through nominees in Mexico and basically circumvent strictures on the US market.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: EliG on March 06, 2018, 06:37:46 AM
I don't agree with him on a lot but I think they have a point about some of these trade arrangements.  Apparently the EU imposes a 10% tariff on US autos and we impose 2.5% back?

You impose 25% back on trucks, including light trucks. F-150, RAM and Silverado are dominant for a reason, and that reason is not their technical superiority.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: CorpRaider on March 06, 2018, 06:40:47 AM
What light trucks does Europe manufacture?  I've never even heard of one.  Jeep?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: no_free_lunch on March 06, 2018, 08:54:56 AM
Light trucks are only 15 pct of the market. If u imported everything into the US , cars and trucks, the tariffs would be about 4 pct by my math.

Isnt there an option for foreign companiesto setup shop in the usa and bypass the tariffs?   Does a locally produced toyota hit a tariff?  Then to invert it how easy is it for US auto to setup in eu or japan?  I actually really dont know w eu. With japan i dont think its allowed.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: EliG on March 06, 2018, 09:44:41 AM
What light trucks does Europe manufacture?  I've never even heard of one.  Jeep?

A couple of examples:

VW Amarok
https://en.wikipedia.org/wiki/Volkswagen_Amarok

Mercedes-Benz X-Class
https://www.mercedes-benz.com/en/mercedes-benz/vehicles/passenger-cars/x-class/x-class/

Keep in mind, product availability is a chicken and egg thing. 25% tariff has been in place since circa-1960. It's a prohibitive tariff that completely blocked foreign competition for decades (until Toyota and Honda started to assemble trucks in NA). European domestic market for light trucks is much smaller than American market. Without access to American market, Europeans focused on cars rather than trucks.

That's not the main point though. You cherry-picked car tariffs (10% vs 2.5%). I cherry-picked truck tariffs (25%). We can trade cherry-picked data points forth and back. That's not going to prove anything.

Look at the bigger picture:

1. The US and its main trading partners operate under WTO regime. WTO has a robust mechanism to challenge unfair trade. The US has been using WTO mechanism for years. President's Economic Report that Trump signed a week ago cites this number: the US won 85% of WTO cases it launched against other countries. Why not keep doing that?

2. Tariffs don't tell the whole story. Countries have plenty of non-tariff protectionist measures at their disposal. If you count *all* protectionist measures (tariff and non-tariff), the US is one of the biggest protectionists in the world. See this blog post by Scott Lincicome, a trade lawyer at CATO Institute:

https://www.cato.org/blog/unfettered-free-trade-only
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: EliG on March 06, 2018, 09:47:30 AM
Light trucks are only 15 pct of the market. If u imported everything into the US , cars and trucks, the tariffs would be about 4 pct by my math.

Where did you get that 15% number?

WSJ chart:

(http://online.wsj.com/media/48KIKPMP.gif)

http://www.wsj.com/mdc/public/page/2_3022-autosales.html
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: no_free_lunch on March 06, 2018, 09:56:17 AM
https://www.trucks.com/2018/01/04/2017-pickup-trucks-auto-sales

I am no expert here. That was the first link i found. It kind of jives with what i see on the road.  Most people have cars , vans, suvs.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on March 06, 2018, 10:31:05 AM
The US car makers set up shop in Europe, but don’t do too well . Opel ( GM) was sold for a song and Ford is losing market share.
Trucks are where the US carmakers generate their profits, so I guess they are ok with the current Tarif structure.

Japan’s and Germany’s trade surplus is a byproduct of their high savings rate, nothing else. Tariffs don’t fix saving rates, so they unlikely will fix a Trade imbalance.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: CorpRaider on March 06, 2018, 10:36:19 AM
The high savings rates via impact on their currencies?  Or you mean the high German savings rate which allows them to subsidize southern Europe enough to keep the Euro intact and cloak the D-mark in the Drachma and the Lira?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on March 06, 2018, 11:11:18 AM
The high savings rates via impact on their currencies?  Or you mean the high German savings rate which allows them to subsidize southern Europe enough to keep the Euro intact and cloak the D-mark in the Drachma and the Lira?
What you say is technically true. But it's actually very hard to say what the currency effect is. For example Japan had stubbornly high savings rates (and trade surpluses) when the Yen was much stronger and these days they have much lower savings rates and are running trade deficits under a significantly weaker yen. Japan is interesting because they've had zero rates for a long time so that provides some kind of control for the study.

Germany has always had high saving rates but in recent years they kinda kicked into overdrive. The fact that the Euro is probably cheaper than what the D-mark would have been should theoretically help. But the lower rates of recent years should have been a big drag in savings.

Here's an alternative explanation. It could be that national savings rates have much less to do with currency levels and interest rates than we though and are instead driven more by demographics. For example as Japan was aging it was saving a lot to accumulate assets for retirement. Now that they're old enough they are actually selling assets to fund retirement and in turn crashing their trade surpluses. In turn as Germany has started to age they've cranked up their savings in spite of a low interest rate environment.

In contrast to Germany and Japan countries like Canada and the US with more favorable demographics are running trade deficits because they're still in their happy go lucky phase.

Edit: or Germany and Japan could just be weird.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: mcliu on March 06, 2018, 02:22:06 PM
Japan’s and Germany’s trade surplus is a byproduct of their high savings rate, nothing else. Tariffs don’t fix saving rates, so they unlikely will fix a Trade imbalance.

Or is the high savings rate a byproduct of their trade surplus?

Wouldn't it be hard to save if you don't have income? According to this, the top 60% of the US actually saves quite a bit, but the bottom 40% barely save anything..

http://www.businessinsider.com/chart-savings-rate-by-income-level-2013-3
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on March 06, 2018, 02:59:08 PM
Japan’s and Germany’s trade surplus is a byproduct of their high savings rate, nothing else. Tariffs don’t fix saving rates, so they unlikely will fix a Trade imbalance.

Or is the high savings rate a byproduct of their trade surplus?

Wouldn't it be hard to save if you don't have income? According to this, the top 60% of the US actually saves quite a bit, but the bottom 40% barely save anything..

http://www.businessinsider.com/chart-savings-rate-by-income-level-2013-3
No, trade surplus is an outcome of high savings, not the other way around. Also personal savings is just one part of the equation.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: TorontoRaptorsFan on March 06, 2018, 03:04:37 PM
Gary Cohn resigns!

https://www.cnbc.com/2018/03/06/gary-cohn-plans-to-resign-as-trumps-top-economic-advisor-new-york-times.html
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Sharad on March 06, 2018, 03:05:54 PM
Gary Cohn resigns!

Well, we can all expect NAFTA negotiations are going to be crushed now...the only chance that they don't fall apart is if Congress finds 60% (?) votes to veto the President. Am I right on this?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cigarbutt on March 06, 2018, 03:12:01 PM
Consume or save?
In terms of disaggregation of savings rate, the story can get even more fascinating:
https://www.progressinpolitics.com/images/uploads/misc/The_Distribution_of_U.S._Wealth,_Capital_Income_and_Returns_since_1913.pdf

See pages 43-44.
The whole presentation is actually interesting but touches on some controversial topics (inequality etc)
But the savings data is basic evidence.
And I would bet that the trend since 2012 shows more disconnect.
Basically, the bottom 90% do not save anymore. This suggests at least some kind of cause and effect between absence of savings and the trade deficit.
Why is there such a growing disconnect in savings?

So, people need to save more and to consume more. Something has to give?
In 1914, Henry Ford offered a significant pay increase for his factory workers (5$ per day!).
I understand that his offer was not out of charity; he simply wanted people to have enough money to buy his cars.
The saving/consuming question is indeed circular.
I wonder what Mr. Cohn thinks about this.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on March 06, 2018, 03:57:52 PM
Consume or save?
In terms of disaggregation of savings rate, the story can get even more fascinating:
https://www.progressinpolitics.com/images/uploads/misc/The_Distribution_of_U.S._Wealth,_Capital_Income_and_Returns_since_1913.pdf

See pages 43-44.
The whole presentation is actually interesting but touches on some controversial topics (inequality etc)
But the savings data is basic evidence.
And I would bet that the trend since 2012 shows more disconnect.
Basically, the bottom 90% do not save anymore. This suggests at least some kind of cause and effect between absence of savings and the trade deficit.
Why is there such a growing disconnect in savings?

So, people need to save more and to consume more. Something has to give?
In 1914, Henry Ford offered a significant pay increase for his factory workers (5$ per day!).
I understand that his offer was not out of charity; he simply wanted people to have enough money to buy his cars.
The saving/consuming question is indeed circular.
I wonder what Mr. Cohn thinks about this.

A large part of US population lives paycheck to paycheck and cannot save. One example - with the company my wife works for, employees could put 100% of their paycheck into anESPP (employee stock purchase plan ) and buy shares at a 15% discount with pretty much a guaranteed profit, if you sell after they hit your account after 6 month.  None of her coworker put anything in this ESPP because they are broke and/or don’t understand the concept (she did the 100% LOL)

I believe the income equality and the decade long stagnation in wages for the vast majority of the US population has a lot to do with the low savings rate.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: CorpRaider on March 06, 2018, 04:08:12 PM
Yeah, I dunno.  It is a complex system but if the current account flows and currencies were examined in isolation it seems that the DM, Yuan and Yen should be at premia, maybe multiples of the USD.  I think Cat, and Deere and Chevy could compete pretty ok if they were 1/2 price Geely, and Kioti, Komatsu, etc...Not to mention FANG & Co.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on March 06, 2018, 04:08:34 PM
Gary Cohn resigns!

https://www.cnbc.com/2018/03/06/gary-cohn-plans-to-resign-as-trumps-top-economic-advisor-new-york-times.html

I have to say that much - since Trump got  elected, politics was never that amusing. It’s like “House of Cards” on steroids.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: EliG on March 06, 2018, 04:13:53 PM
Ok, let me posit a solution.  German and Japan pay a fee for their outsourced national defense that over time is equivalent to the accumulated current account surpluses.

Let me posit the next logical step: GOP cuts taxes for the top 1% by the amount of fee received from Germany and Japan. Nothing changes for the bottom 40% that cannot save.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: EliG on March 06, 2018, 04:17:42 PM
DowDuPont Says Trump Steel Tariffs Hurt Case for New U.S. Plants
https://www.bloomberg.com/news/articles/2018-03-06/dowdupont-says-steel-tariff-hurts-case-for-more-u-s-factories

"DowDuPont Inc., the world’s largest chemical company, is considering Canada or Argentina instead of the U.S. Gulf Coast for its next major investment as President Donald Trump’s proposed steel tariffs make domestic construction pricier."
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: CorpRaider on March 06, 2018, 04:18:57 PM
Hey I'm no trumper or even a partisan, but if he does go to the mattresses on trade and it doesn't tank the economy (maybe even if it just offsets the stimulus from the tax cuts) he's going to win the midterms in a landslide...unless he's in jail.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on March 06, 2018, 04:22:40 PM
Hey I'm no trumper or even a partisan, but if he does go to the mattresses on trade and it doesn't tank the economy (maybe even if it just offsets the stimulus from the tax cuts) he's going to win the midterms in a landslide...unless he's in jail.
And what if he tanks the economy?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: CorpRaider on March 06, 2018, 04:25:26 PM
comrade bernie and 70s style stag flation, but dont worry....no savings so will be externalized.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on March 06, 2018, 06:19:15 PM
See, I know that maybe you're kidding about this fee for protection thing. But there seem to be a lot of Americans who think that it's a good idea to turn the US military into a protection racket. What's next? Hey Japan, nice country you've got there, shame if something were to happen to it.?

It's just not going to happen and it would result in the rearming of such countries. History has proved that it's not such a good idea to have a Germany and Japan armed to the teeth which today would also include nuclear arsenals. Think, how would the US feel if the AfD somehow came to power in Germany and into the possession of a nuclear arsenal?

Anyway back to the trade thing cause German with nukes depress me. The thing about this whole trade thing is that it's actually all bullshit. Americans are not concerned because their savings are too low and think that they should save more to lower the trade deficit. No, they just think that a trade surplus sounds cool and if Germany has one they want one too nevermind the implications of that.

Remember when they were trying to pass the tax cut and the were bragging about how the tax cut will get foreign companies to invest in the US and how awesome that would be? That foreign investment would increase the trade deficit by an equal amount. So I guess trade deficit is good when passing tax cuts. Trade deficit not good when trying to feel like big boys?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on March 06, 2018, 06:21:16 PM
Cohn Gone. Anyone left?

The still have this guy.

(https://s3.amazonaws.com/assets.forward.com/images/cropped/stephen-miller-2-0210-1485816954.jpg)
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: EliG on March 06, 2018, 08:17:18 PM
An old campaign poster from California:

Peter Navarro. The Democrat Newt Gingrich fears most! (https://pbs.twimg.com/media/DXpPF8OX0AALwtM.jpg)

Peter Navarro is, of course, an economic adviser to Trump. He is gaining influence and is rumored to be a candidate to replace Cohn. Like Trump, Navarro is a staunch protectionist. Not a surprise coming from a Democrat, right? According to recent articles, he is pushing hard for the blanket tariffs. No compromises, no exemptions, not even for Canada.

What's the reaction from the Republican base? They love it! GOP base is lining up behind a long-standing Democratic plank, promoted by a card-carrying Democrat.

I think I'm taking crazy pills.

(https://pbs.twimg.com/media/DXorFh7U0AAS5Cr.jpg:small)
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Investor20 on March 06, 2018, 09:19:29 PM
Consume or save?


This is actually Buffett position too.  He wrote this article

http://archive.fortune.com/magazines/fortune/fortune_archive/2003/11/10/352872/index.htm
America's Growing Trade Deficit Is Selling The Nation Out From Under Us. Here's A Way To Fix The Problem--And We Need To Do It Now.

"Above all, the pain of higher prices on goods imported today dims beside the pain we will eventually suffer if we drift along and trade away ever larger portions of our country’s net worth."

It is republished in 2016:
https://finance.yahoo.com/news/warren-buffett-solve-trade-problem-224428083.html

He even made a cartoon Thriftville vs Squanderville (Of course Squanderville is US)
https://www.youtube.com/watch?v=5DvuyvuHmJI

The whole point IMO is you cannot consume more than you produce for ever.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Value^2 on March 07, 2018, 05:53:04 AM
If crooked H had won the elections. Next year they would have been celebrating NAFTA's 25year anniversary.

Deal that  has cost the U.S. more than 55,000 factories, 6 million manufacturing jobs and trade deficits totaling more than $12 trillion since President George H.W. Bush was in office.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: CorpRaider on March 07, 2018, 06:44:54 AM
Yeah I like Buffett's plan.  Someone send it to Trump and Navarro.  I do think he's making a pretty big assumption that they can convert those IOUs to real assets without huge market impacts that in essence vaporize a bunch of that accumulated debt.  Like I don't see how Japan or China "dump treasuries" without spiking their currencies at which point the flows would reverse hard if not further distorted by the command and control economies.

If Trump does something on guns, does he have to run as an independent next cycle?  Maybe he can add Bernie as his VP.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on March 07, 2018, 08:25:19 AM
What you have mostly on this thread is the same regurgitation from the usual losers of the 2016 election.

Actually, a lot of these losers should be thankful that Trump won and allowed their funds to show + in 2016 and 2017 because they don't seem too good at delivering Alpha. They are more the type of parasites as described by Buffett sucking on OPM.

What is simply happening is that the guy won and is following on his promises. Kind of refreshing in terms of politics. Now, I am really looking forward for him to follow-up and really put the screw on Iran.

Cardboard
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: RichardGibbons on March 07, 2018, 10:13:55 AM
What you have mostly on this thread is the same regurgitation from the usual losers of the 2016 election.
...
What is simply happening is that the guy won and is following on his promises. Kind of refreshing in terms of politics.

So I take this to mean that you wouldn't have any problem with the winners of the 2017 BC election blocking pipelines through British Columbia, or the federal Liberals adhering to their promises to updating the environmental review process for pipelines and potentially stopping new pipelines that don't meet the new criteria from being built?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on March 07, 2018, 10:40:58 AM
Funny Richard that you did not paste the "parasites" part of my post. I take this to mean that it truly applies to the whining Liberals of this thread.

I have also always wondered what you meant when you mentioned to another poster previously that you would not have made it in the U.S.? Care to explain?

Cardboard
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: John Hjorth on March 07, 2018, 11:08:06 AM
From the starting post:

... I don't want to discuss US politics here but more the consequenses for the economic environment that we are investing in, each of us our own way. ...

... Any shared thoughts about it in this topic from my fellow board members are much appreciated.

Thank you a bunch for a lot of educational stuff posted in this topic so far. It has helped me a lot - so far - in understanding the underlying economics from the proposal from Mr. Trump of March 1st 2018.

This actually can't be discussed without touching politics from an investing angle.

So far, and right now, this isen't over yet. So, I hope we can have this topic going without anyone getting [too] personal. Please just remember and try to respect, that each and every CoBF member has his/her own roots, with a solid grip in the soil, both political and with regard to location & nationality.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Viking on March 07, 2018, 11:15:22 AM
From the starting post:

... I don't want to discuss US politics here but more the consequenses for the economic environment that we are investing in, each of us our own way. ...

... Any shared thoughts about it in this topic from my fellow board members are much appreciated.

Thank you a bunch for a lot of educational stuff posted in this topic so far. It has helped me a lot - so far - in understanding the underlying economics from the proposal from Mr. Trump of March 1st 2018.

This actually can't be discussed without touching politics from an investing angle.

So far, and right now, this isen't over yet. So, I hope we can have this topic going without anyone getting [too] personal. Please just remember and try to respect, that each and every CoBF member has his/her own roots, with a solid grip in the soil, both political and with regard location & nationality.

John, well said.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: RichardGibbons on March 07, 2018, 12:04:39 PM
Funny Richard that you did not paste the "parasites" part of my post. I take this to mean that it truly applies to the whining Liberals of this thread.

I didn't see much value in including ad hominem attacks. It weakens your argument, and isn't interesting to discuss.

I have also always wondered what you meant when you mentioned to another poster previously that you would not have made it in the U.S.? Care to explain?

Sure.  I'm an entrepreneur.  I co-founded a company in Canada that grew to about 30 people, and sold it when it made sense.

The issue is that I'm also a father.  I wouldn't have been able to found the company in the USA because the risk of going without health insurance would be too high.  It's not that anyone in my family has health problems, but rather that in having kids, I've made a commitment to look after my family. It would be the height of irresponsibility to leave my family without health insurance for an extended period of time in order to start a company.

Thus, in the US I would've been required to continue working for someone else simply to maintain health insurance rather than risking starting my own business.  So, in my case, the fact that I was able to leech off of Canada's health insurance coverage for a couple of years resulted in me being able to create jobs for piles of people, and pay back that leeching by submitting huge piles of direct and indirect taxes.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: augustabound on March 07, 2018, 12:25:47 PM
whining Liberals

Oh ffs, you need to stop this. There are whiners on both side (all 3 here in Canada). Every time you call out the whining Liberals or idiot left wing you in fact are whining. It adds nothing to your argument or rant in your case and it actually takes away from any facts you present.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: CorpRaider on March 07, 2018, 05:52:47 PM
Does Canada produce Aluminum or Aluminium?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on March 07, 2018, 06:18:14 PM
Does Canada produce Aluminum or Aluminium?
Well, the world produces Aluminium. The US has trouble spelling the word. Canada is in a grey area. Officially we produce Aluminium but we also watch a lot of American TV.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: John Hjorth on March 07, 2018, 10:24:09 PM
... The US has trouble spelling the word. ...

Great start on my day reading this! lol
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on March 08, 2018, 04:18:37 AM
https://overcast.fm/+LHydPZXdA

and

https://twitter.com/EdBorgato/status/971830053611999234

Quote
It would be interesting (and useful) to see gross trade data adjusted for profit margin i.e. the trade deficit/surplus in margin terms, not total value. I once visited an American friend's lamp factory in Zhongshan. His exports were Chinese; his profits were red, white, and blue.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on March 08, 2018, 12:04:13 PM
Sounds like your hero Liberty supports Trump somewhat:

https://www.cnbc.com/2018/03/08/elon-musk-sides-with-trump-on-trade-with-china-citing-25-percent-import-duty-on-american-cars.html

Cardboard
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on March 08, 2018, 12:30:00 PM
http://www.bbc.com/news/world-asia-china-38060980
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on March 08, 2018, 12:31:22 PM
Sounds like your hero Liberty supports Trump somewhat:

https://www.cnbc.com/2018/03/08/elon-musk-sides-with-trump-on-trade-with-china-citing-25-percent-import-duty-on-american-cars.html

Cardboard

He says he's generally against tariffs, and he points out tariffs that he's specifically against for being unfair. I agree with that.

But I'm sure that's too complex for the media and most people, so it'll be simplified into "Musk supports Trump"...
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on March 08, 2018, 01:20:28 PM
"He says he's generally against tariffs, and he points out tariffs that he's specifically against for being unfair. I agree with that."

So tariffs that he perceives as unfair and that hurts his pocketbook are ok to attack but, those perceived by others as unfair are not ok to attack.

I get it now.

Cardboard
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: flesh on March 08, 2018, 01:21:47 PM
https://overcast.fm/+LHydPZXdA

and

https://twitter.com/EdBorgato/status/971830053611999234

Quote
It would be interesting (and useful) to see gross trade data adjusted for profit margin i.e. the trade deficit/surplus in margin terms, not total value. I once visited an American friend's lamp factory in Zhongshan. His exports were Chinese; his profits were red, white, and blue.

I've often thought our margins are larger, just look at our massive tech industry.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on March 08, 2018, 01:58:53 PM
"He says he's generally against tariffs, and he points out tariffs that he's specifically against for being unfair. I agree with that."

So tariffs that he perceives as unfair and that hurts his pocketbook are ok to attack but, those perceived by others as unfair are not ok to attack.

I get it now.

Cardboard

No you don't, as usual.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on March 08, 2018, 02:47:52 PM
LOL! Ad hominem attacks now.

I guess a little bit of latine is needed since I am dealing with such smart people that they cannot even figure out that all Trump is doing is masterful negotiation!

You announce something that appears totally crazy and then they finally take you seriously. Once you have shown how far you are willing to go, then the other side comes with various proposals. Musk is just another one of them whining for his own good.

Canadians should salute this move by Trump as NAFTA will be modified and should result in lower prices at the grocery store which will be good especially for the less fortunate among us.

Cardboard
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: CorpRaider on March 08, 2018, 03:00:33 PM
https://overcast.fm/+LHydPZXdA

and

https://twitter.com/EdBorgato/status/971830053611999234

Quote
It would be interesting (and useful) to see gross trade data adjusted for profit margin i.e. the trade deficit/surplus in margin terms, not total value. I once visited an American friend's lamp factory in Zhongshan. His exports were Chinese; his profits were red, white, and blue.

Don't you have to partner via a minority stake in a JV with a Chinese national or someone else who is under state control?  Are the  theoretical profits effectively stranded there because of capital/people controls?  I mean assuming they don't want to buy bitcoin and exceed $500 per day or $15,000 per annum or whatever the current cap is.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on March 08, 2018, 05:08:33 PM
LOL! Ad hominem attacks now.

I guess a little bit of latine is needed since I am dealing with such smart people that they cannot even figure out that all Trump is doing is masterful negotiation!

You announce something that appears totally crazy and then they finally take you seriously. Once you have shown how far you are willing to go, then the other side comes with various proposals. Musk is just another one of them whining for his own good.

Canadians should salute this move by Trump as NAFTA will be modified and should result in lower prices at the grocery store which will be good especially for the less fortunate among us.

Cardboard

That's not ad hominem, that a purely objective description based on what you wrote. You didn't get it, in good part because you just assumed a bunch of thing and never asked me for my actual position.

Here we go:

Personally, I don't like tariffs. I want to live in a world with a lot fewer tariffs trending to zero. That seems to be Elon Musk's position too. So the Chinese car tariffs should go, in my opinion. How do you get there? First you show leadership on free trade and convince others that it's a good idea, and you use existing rules to get tariffs thrown out and you create multilateral deals that are so good that those who don't join them would be penalized enough that they'll have no choice but to join and lower their trade barriers. That's the best way to do it as shown be practice. It's not perfect, but it's better than the rest, like democracy.

Trump wants more tariffs. He bad mouths trade any chance he gets, gets out of free trade treaties and generally feels like the US economy should be more closed on itself rather than trading with the rest of the world. This is likely because he doesn't understand the difference between a zero-sum game and a non-zero sum game, or that it's not because something is called a "deficit" that it's necessarily bad (if it was phrased as "the US is the biggest purchaser in the world because it's wealthiest and so it buys more from it's much smaller trading partners than they buy from it" I bet he'd feel less like everybody was taking advantage of the country -- it would also make sense to look at where the economic value flows rather than just look at gross revenues from trade with various countries). He also feels like any other country strengthening is somehow taking something away from the US (zero sum game mentality again), so he has to put down others constantly, even allies, rather than help them.

His steel and alumimium tariffs had nothing to do with China's car tariffs, in fact, they'd have hurt US allies and all of the US economy except for steelmakers way more than China (2% steel exports, iirc), so they'd have been relatively strengthening for China. These tariffs are about Trump associating himself with manly things (steelworkers, like coal miners). He wouldn't do it for the association of blueberry exporters, even if they created more jobs than steel (in fact, he seems to have little thoughts for all the jobs affected by higher steel prices). He wants photos ops in politically sensitive states for re-election purposes and to be able to say that he did what he'd say he'd do, regardless of how stupid everybody with a brain thinks tariffs are. He's not a free trader, he's surrounded by protectionist advisers, and all his life has been used to zero-sum deals where giving something to the other automatically means less for you, and it's clearly his way of thinking.

So me and Elon seem to want fewer tariffs, and Trump seems to want more of them (esp. on closely allied countries, and especially not on Russia).

You thinking that this is some masterful 3D chess by Trump is still the old Scott Adams thinking from pre-election days when people thought it was all an act to achieve his goals. Well, the past year has shown that it's really a big SNAFU and that there's no plan and he's just whining it and changing his mind based on the last adviser or lobbyist that he spoke to and who controls access to him or what's on some partisan TV show that evening (literally without fact-checking any of it). So who's naive?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on March 08, 2018, 05:44:11 PM
"Personally, I don't like tariffs. I want to live in a world with a lot fewer tariffs trending to zero. That seems to be Elon Musk's position too. So the Chinese car tariffs should go, in my opinion. How do you get there? First you show leadership on free trade and convince others that it's a good idea, and you use existing rules to get tariffs thrown out and you create multilateral deals that are so good that those who don't join them would be penalized enough that they'll have no choice but to join and lower their trade barriers. That's the best way to do it as shown be practice. It's not perfect, but it's better than the rest, like democracy."

Are you naive? Since you are asking, I think that you are to a degree and deeply influenced by CNN and other Left wing media.

Truth of the matter is that what you have described above has been tried by politicians for decades and is not resulting in reciprocal trade. What is the definition of insanity? Trying the same thing over and over again and expecting different results?

And some of these deals when not followed end up in front of the WTO were a panel takes months if not years to debate, then impose solutions. If you have followed at all Fortress Paper it is one big case of China screwing its partners around. There are dozens and dozens of these.

Cardboard
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: RichardGibbons on March 08, 2018, 08:06:45 PM
Truth of the matter is that what you have described above has been tried by politicians for decades and is not resulting in reciprocal trade. What is the definition of insanity? Trying the same thing over and over again and expecting different results?

Since this is what has actually happened, I guess the different result you want is for worldwide tariffs to go up dramatically?

(http://2.bp.blogspot.com/-ffPu4lW0kVI/TvpFSGWthKI/AAAAAAAAAhc/4UyUBL3cZw4/s1600/baldwin+3.JPG)

That said, I do find it fascinating that given the choice between supporting your team or supporting free markets, you chose the team.  I really thought that you believed in free markets and low taxes.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: no_free_lunch on March 08, 2018, 08:27:42 PM
Richard liberty,

You always embed debate in your posts and that is what i read the site for. Maybe we could back down a bit on the other portion, the us them filler as it really adds nothing.

Richard what you are missing in your chart is the US trade deficit.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: RichardGibbons on March 08, 2018, 08:44:46 PM
You always embed debate in your posts and that is what i read the site for. Maybe we could back down a bit on the other portion, the us them filler as it really adds nothing.

Fair point--my response to this comment is basically the same as this response that someone thoughtful posted in this thread, so I'll just copy and paste it here.

I agree.  Just wanted to highlight the hypocrisy of the thread.

Your trade deficiet argument is reasonable too.  Mathematically, at the limit, escalating trade wars between the US and everyone else should certainly result in the US trade deficit falling to zero.

The interesting thing is that I think global trade does even out wealth worldwide, at least below the 95th percentile incomes.  Trade's not a zero-sum game, but the cost of labor disparities between the first world and everyone else will almost certainly lower first-world incomes and raise others' incomes.  It's not at all clear to me how the first world can combat that (because trade isn't zero-sum, just throwing up tariffs and turning into fortress America doesn't seem like it will solve the problem.)
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on March 08, 2018, 09:56:05 PM
"Personally, I don't like tariffs. I want to live in a world with a lot fewer tariffs trending to zero. That seems to be Elon Musk's position too. So the Chinese car tariffs should go, in my opinion. How do you get there? First you show leadership on free trade and convince others that it's a good idea, and you use existing rules to get tariffs thrown out and you create multilateral deals that are so good that those who don't join them would be penalized enough that they'll have no choice but to join and lower their trade barriers. That's the best way to do it as shown be practice. It's not perfect, but it's better than the rest, like democracy."

Are you naive? Since you are asking, I think that you are to a degree and deeply influenced by CNN and other Left wing media.

Truth of the matter is that what you have described above has been tried by politicians for decades and is not resulting in reciprocal trade. What is the definition of insanity? Trying the same thing over and over again and expecting different results?

And some of these deals when not followed end up in front of the WTO were a panel takes months if not years to debate, then impose solutions. If you have followed at all Fortress Paper it is one big case of China screwing its partners around. There are dozens and dozens of these.

Cardboard
There is no such thing as reciprocal trade. Countries trade with numerous other countries. With some they run a trade surplus, with some they run a trade deficit. In the end these will net to a net trade surplus or deficit that is mainly determined by the country's savings rate. In many cases running trade deficits, even large ones, is actually a very positive thing. Trying to implement something like reciprocal trade would be a colossally stupid thing.

Of course a lot of this has been talked about extensively on this thread. Should you have followed and participated in good faith you may have learned something. Instead you characteristically chose to ignore all that and focused on spouting off about liberal media, who said what on what channel, or whatever bee is in your bonnet. Oh well...
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on March 08, 2018, 10:53:26 PM
The interesting thing is that I think global trade does even out wealth worldwide, at least below the 95th percentile incomes.  Trade's not a zero-sum game, but the cost of labor disparities between the first world and everyone else will almost certainly lower first-world incomes and raise others' incomes.  It's not at all clear to me how the first world can combat that (because trade isn't zero-sum, just throwing up tariffs and turning into fortress America doesn't seem like it will solve the problem.)
Of this I am afraid you are wrong. Yes, trade evens out wealth disparities but not because it lowers income in wealthy nations but because it raises incomes in poor nations. Tariffs could eliminate trade and turn into Fortress America. This of course would inflict a lot of pain onto America but would also slow convergence of incomes. Though it would not raise America's income. But in the end it will turn out to be unsuccessful and the convergence would happen anyway. There is no benefit of course, aside from getting that warm feeling of superiority for a while.

Now all of this talk about incomes refers to country aggregates. But as usual the situation on the ground is different and progress creates winners and losers. To rehash as familiar story think about the period of Berkshire's mills shutting down as the US lost competitiveness in weaving thread. The US as a country did fabulously well during that period. But that wasn't any consolation for the people working at the mills for whom life really sucked.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on March 09, 2018, 06:22:48 AM
I still find truly interesting but, not surprising, that some on this thread who basically would want us to accept at face value their vision of the world have missed the big picture. One of them should run for the Nobel prize of economics since he claims to know it all. Everything else is stupid or else.

Trade deficits and imbalances between countries will always exist and there will always be poorer countries mostly providers of low value add products and with cheaper labour. That is not new and will not change.

However, unfair trade practices should be corrected. And the only way to do it is for someone to step up, say enough is enough and to take measures to make the other side understand that the game is over. Thank goodness Mr. Trump gets that and now we even have Musk who left his economic council denouncing some of these practices.

Am I wrong in my thinking? Maybe. However, when I look at what the stock market is doing which is supposed to reflect the collective wisdom, I don't see any major outperformance by NUE, AKS or X since this has been announced on March 1. That should tell you something. The stock market has not collapsed either which according to the "globalists" or more accurately described the "don't create any ripple crowd" was a sure thing on any trade retaliation threat.

Cardboard
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on March 09, 2018, 07:04:11 AM
Are you naive? Since you are asking, I think that you are to a degree and deeply influenced by CNN and other Left wing media.

I don't think I've watched CNN since Hurricane Katrina, but whatever, keep tilting at windmills. Trump has been about reducing trade and increasing tariffs for decades, as do most of his close advisors, not the other way around, so we know on which side of this debate you stand.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: RichardGibbons on March 09, 2018, 08:25:55 AM
Of this I am afraid you are wrong. Yes, trade evens out wealth disparities but not because it lowers income in wealthy nations but because it raises incomes in poor nations.

I'm curious about this.  If all the high-wage manufacturing jobs migrate to China because labor is cheaper there, why wouldn't that cause an excess of labor in USA, pushing down the price of labor?  If you increase the supply of something and decrease the demand, doesn't it typically cause the price to fall?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on March 09, 2018, 08:39:39 AM
https://en.wikipedia.org/wiki/Lump_of_labour_fallacy
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: RichardGibbons on March 09, 2018, 08:55:33 AM
I still find truly interesting but, not surprising, that some on this thread who basically would want us to accept at face value their vision of the world have missed the big picture. One of them should run for the Nobel prize of economics since he claims to know it all. Everything else is stupid or else.

I love this--your arguments are largely void of facts and evidence, so if someone actually starts providing evidence, you call them elitist.  The whole "celebrate stupidity, insult intelligence" thing that has started during my lifetime is a really bad trend, I think.

However, unfair trade practices should be corrected. And the only way to do it is for someone to step up, say enough is enough and to take measures to make the other side understand that the game is over. Thank goodness Mr. Trump gets that and now we even have Musk who left his economic council denouncing some of these practices.

Am I wrong in my thinking?

This is actually a good question, and I think you're largely right about the theory, but the challenge is figuring out what's an unfair trade practice in a world with competitive advantages and disadvantages.

Maybe it's just what countries have agreed to in the WTO? But that doesn't appear to be what America is looking for, since softwood lumber comes up again and again--and USA loses again and again--in the WTO.  If steel from Canada is a problem, then America ought to take Canada to the WTO, win the case, and make Canada face the consequences (reparations and tariffs).

If you had an easy way to define an unfair trade practice (not just "Trump says it's unfair, therefore it's unfair"), it would help my understanding.  Because as I say, it seems difficult to me to distinguish between an unfair trade advantage and competitive advantage.  I can't do it, but if you can, then we can examine the proposed tariffs and decide whether each one is address an unfair trade practice or is just an illegal attempt at protectionism.

Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: flesh on March 09, 2018, 09:23:54 AM
Agree with the last bit by RG.

If you wipe away the rhetoric in this thread you're left with.... what's been done so far has worked and it's certainly possible there are instances where it's worth taking a stand. Until a deep dive has been done and reproduced on a case by case basis by those who have access to all the information you can't know or come close to knowing. It's certain that there are times when you should shoot for large multi-lateral agreements, use the wto, and take a loud mouth stance.

I haven't done/seen such a analysis on a country by country basis. Until I have, it seems I can't say which method I would over weight at the moment. Possibly all of them.

Zooming out, I think as the worlds largest economic power, you should lean towards leniency in general, to the point of letting others get a slightly better deal, someone has to take that position, to lead. However, when it's out of whack, there should be a sense of urgency. The politicians in charge at a given moment likely fall on a spectrum between the two and the balance self corrects as a result, given time.

Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: RichardGibbons on March 09, 2018, 09:25:18 AM
https://en.wikipedia.org/wiki/Lump_of_labour_fallacy

I think that's trivially refuted. Imagine a world where robots have the same capabilities as humans, and robots can create more robots out of solar energy and carbon in the air and are therefore free.  In such a world, why would you expect humans to get paid anything for doing work?

I think maybe the flaw in using the Lump of Labor fallacy is that the argument that the economy would create more jobs doesn't actually imply that those jobs would have the same income.

If you believe national labor markets are mostly efficient, humans would be allocated to the highest return opportunities.  If those highest return opportunities are offshored, then humans need to get allocated to lower return opportunities, which lowers the amount the humans can get paid.

In fact, the whole argument seems really odd if you believe in any sort of labor market efficiency at all.  Like, suppose some factory worker is making $30 an hour.  I think the claim you're making is that effectively the economy has an infinite supply of $30 an hour jobs (but not $31/hour jobs, because the factory worker would be doing that instead), such that you can eliminate any number of those jobs and another one will pop into existence.  That seems bizarre to me, defying the laws of supply and demand.

I think I'd agree that until we have free robot labor, every country effectively has an infinite supply of jobs, just not at the same income.

I think I heard on a podcast that when you looked at societal upheavals like the industrial revolution, the lump of labor fallacy came into play and everyone eventually ended up with a job.  But if you examine what "eventually ended up with a job" means, it actually meant "the people using the old paradigm largely couldn't fit into the new paradigm, but they eventually died, leaving only people who grew up with the new paradigm (who all had jobs)".  I wish I remembered the source for that, because it was pretty interesting.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on March 09, 2018, 09:42:28 AM
99% of world population used to work in agriculture. Now that has been mechanized heavily and so low single digits work in agriculture in most places. Are we seeing 90%+ unemployment?

In your sci-fi scenario, what you're talking about would be a large discontinuity with historical processes, not the kind of thing that is happening with globalization and Ricardo comparative advantage kind of stuff. In that case, we'd probably be in a post-scarcity society, so the problems and opportunities would probably be very different.

But as things stand right now, trade benefits both sides in the vast majority of cases. That doesn't mean that it'll benefit every single individual or group, but clearly the world and the US are much better off having done a lot of trade than if every country had tried to stay a self-contained economy. This is 101 stuff. After all, would you further split US states from trading with each other? How about self-contained cities that can't trade with neighbors? Borders are imaginary lines on a map... You get better productivity if you look at the world as a single unit and have market forces allocate resources to where they are most productive. That where tariffs and nationalists gum things up and make it hard. Trade has brought billions of people out of poverty, and these people will buy US goods, and sell them cheaper goods than they otherwise would get, freeing up capital for other things, and as they get out of poverty, millions will become engineers and scientists and entrepreneurs that will make and discover things that Americans (and everyone else) will benefit from. And since science and technology and finance benefits from a network effect, adding more nodes in the system won't just have a linear benefit.

It's part of evolutionary psychology for humans to rank themselves on a relative basis, but in the end, it's not rational. It's stupid to try to keep others down just to have a higher relative standing when you could have a higher absolute position by cooperating and trading.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on March 09, 2018, 09:58:30 AM
Guess I wouldn't expect his advisors (except maybe Cohn, who's out) to challenge Trump too much:

https://twitter.com/PTetlock/status/972159614375661569

(https://pbs.twimg.com/media/DX3Nug3WsAAbyEM.jpg:large)
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: RichardGibbons on March 09, 2018, 10:13:07 AM
99% of world population used to work in agriculture. Now that has been mechanized heavily and so low single digits work in agriculture in most places. Are we seeing 90%+ unemployment?

No, but I didn't say that there would be 90% unemployment.  I actually said there are an effectively infinite number of jobs, just not at the same wage.

In your sci-fi scenario, what you're talking about would be a large discontinuity with historical processes, not the kind of thing that is happening with globalization and Ricardo comparative advantage kind of stuff. In that case, we'd probably be in a post-scarcity society, so the problems and opportunities would probably be very different.

The point of the robot example isn't to show a post-scarcity world, but rather to show that labor costs depend on the supply of labor.  So what happens if you have a robot that can do everything humans can do at 90% of the cost of humans?  Do human wages remain the same?  What if they can do it at 50% of the cost?  Do human wages remain the same?  Do you interpret my example as humans making the exact same amount they do today right until robots can do everything for free, and then suddenly human wages fall from $30 to $0 overnight?

Really, it's just supply vs. demand.  If the supply of labor increases, the place where the supply and demand curves intersect falls.

But as things stand right now, trade benefits both sides in the vast majority of cases.

I agree with this with a couple provisos, which I wrote about here on my blog (https://rbgibbons.com/2016/12/12/the-problem-with-trade/) a while back. 

FWIW, I think the second flaw I discussed on my blog probably isn't applicable in the vast majority of cases.  So I suspect we largely agree here.  But it's more interesting talking about the edge cases than the obvious places where trade is good.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: EliG on March 09, 2018, 10:17:57 AM
https://en.wikipedia.org/wiki/Lump_of_labour_fallacy

FWIW...

(https://pbs.twimg.com/media/DX3XJvVV4AARmV8.jpg:small)
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on March 09, 2018, 10:29:52 AM
99% of world population used to work in agriculture. Now that has been mechanized heavily and so low single digits work in agriculture in most places. Are we seeing 90%+ unemployment?

No, but I didn't say that there would be 90% unemployment.  I actually said there are an effectively infinite number of jobs, just not at the same wage.

In your sci-fi scenario, what you're talking about would be a large discontinuity with historical processes, not the kind of thing that is happening with globalization and Ricardo comparative advantage kind of stuff. In that case, we'd probably be in a post-scarcity society, so the problems and opportunities would probably be very different.

The point of the robot example isn't to show a post-scarcity world, but rather to show that labor costs depend on the supply of labor.  So what happens if you have a robot that can do everything humans can do at 90% of the cost of humans?  Do human wages remain the same?  What if they can do it at 50% of the cost?  Do human wages remain the same?  Do you interpret my example as humans making the exact same amount they do today right until robots can do everything for free, and then suddenly human wages fall from $30 to $0 overnight?

Really, it's just supply vs. demand.  If the supply of labor increases, the place where the supply and demand curves intersect falls.

But as things stand right now, trade benefits both sides in the vast majority of cases.

I agree with this with a couple provisos, which I wrote about here on my blog (https://rbgibbons.com/2016/12/12/the-problem-with-trade/) a while back. 

FWIW, I think the second flaw I discussed on my blog probably isn't applicable in the vast majority of cases.  So I suspect we largely agree here.  But it's more interesting talking about the edge cases than the obvious places where trade is good.

If you postulate that machines are suddenly better than humans at everything, that's a very special thing. I assumed that meant not only better at physical work, but also at intellectual work. Maybe that's not what you meant.

As things stand, the most boring, repetitive, dangerous, and mind-number jobs are being automated, and more jobs are being created in fields that require creativity, or at least thinking (programming, designing, arts (just Netflix and Amazon will soon be spending something like 20bn on creating content that wasn't being created before), experiences (food, travel, live events, etc), healthcare, engineering, architecture, science, etc). To me, that's a good thing.

Blue collar jobs have been romanticized for too long, but there's a reason why almost everybody aspires for their kids to stay in school and do something else with their lives...
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on March 09, 2018, 10:57:03 AM
"The whole "celebrate stupidity, insult intelligence" thing that has started during my lifetime is a really bad trend, I think."

You think? You should be quite worried Richard as they will be coming for you and your rich family.

And denying them employment such as mega projects including Kinder Morgan TransMountain and all these LNG plants will not help your cause either. There is a direct relation between crime and employment.

Moreover, do you believe that the Greens will spare you because you were on their side once they run hungry?

Any of you guys truly watching what is going on??? Who won the election in Italy this week-end? This is all over the world. While it is interesting to look at theories and economics, the herd does not have 5 years to re-educate themselves to put food on the table for their families.

Finally, if the current global approach is so perfect why does Canada has to spend $600 million dollars just to protect the coming G7? Should lease a cruise ship instead for a month and let them party quietly:

https://www.thestar.com/news/canada/2018/02/27/federal-budget-allocates-600-million-for-g7-summit-in-charlevoix-quebec.html

Cardboard
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: netnet on March 09, 2018, 11:33:02 AM
Interesting discussion, but this thread has mostly evolved into a political/theoretical discourse.

My practical question, (should I start another thread?) now that we really seem to have tariffs: what are the market implications for this?

% probability of a mild but contained trade tiff or
% of a full on trade war

The markets have shrugged off the tariffs and a full on trade war.  Is this one of those animal spirits/ridiculous optimism prior to crack-up.
Some have argued quite convincingly that just stay fully invested no matter what. (h/t racemize) Others of us are not so sure.  The US stock market teaches one thing-stay invested, which probably should be the base case, but the markets in Germany in say 1928 says something entirely different.

(Not a setup for a joke, but a side note, what is the difference between an
)
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: RichardGibbons on March 09, 2018, 03:01:12 PM
"The whole "celebrate stupidity, insult intelligence" thing that has started during my lifetime is a really bad trend, I think."

You think? You should be quite worried Richard as they will be coming for you and your rich family.

I don't think violent class struggles are likely in the short term, and if they are, I think they'll be a reflection of the cities in which they happen.  So for Vancouver, it's likely that they would go for the Chinese and people who own expensive west-side houses.  It's unlikely they'd start by targeting a family of four that rents a 1100 sq. ft. townhouse.

And denying them employment such as mega projects including Kinder Morgan TransMountain and all these LNG plants will not help your cause either. There is a direct relation between crime and employment.

Hmm, you think in a province of 4.6M people, 800 jobs is the difference between democracy and Mad Max?  Curious.  I think if there were a significant number of jobs created in BC, Horgan wouldn't have started down this path.  (I would guess if you factor in a small chance of huge job losses as a result of an oil spill, the expected number of jobs created would be pretty close to zero or negative.)

Moreover, do you believe that the Greens will spare you because you were on their side once they run hungry?

Not quite sure what this means.  The Greens are shorthand for soylent green?

Any of you guys truly watching what is going on??? Who won the election in Italy this week-end? This is all over the world. While it is interesting to look at theories and economics, the herd does not have 5 years to re-educate themselves to put food on the table for their families.

I agree.  I think when you start to get gross inequality, bad stuff starts happening, like people electing the Nazis, the NDP, Hugo Chavez, and Donald Trump.  This is why society should take actions to stop gross inequality, rather than encouraging gross inequality.

Finally, if the current global approach is so perfect why does Canada has to spend $600 million dollars just to protect the coming G7? Should lease a cruise ship instead for a month and let them party quietly:

The cruise ship thing is actually a really good idea.  The $600M number is insane.

One can't simply say "we're discussing globalism, therefore everything bad that happens in the world is the result of globalism."  That said, this is actually another really interesting argument for you to make, since almost all anti-globalism protesters at these meetings are left-wingers.  I would've thought that I would be making the anti-globalism argument, not you.

Just to be clear, are you suggesting that generally free, global trade is bad and leads to instability in the world?  Because, while I think it's possible to make a solid, credible argument for that point of view, I really wouldn't have expected to hear that argument from you.  (If this isn't what you're arguing, what is is that you're arguing?)


Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: RichardGibbons on March 09, 2018, 03:04:14 PM
That is a really great chart, EliG. Thanks for posting it.  I need to think about how to reconcile that with the very popular statistic that median wages haven't increased much at all since the 1970s to figure out what's happening.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: RichardGibbons on March 09, 2018, 03:29:19 PM
My numbers:
% probability of a mild but contained trade tiff or
100%: This has already happened.

% of a full on trade war
5%: I think the world won't start this, only Trump.  But I think Trump is too flighty to continue to add the tariffs that would be needed to create a full on trade war.  Plus, even if he wanted to do this, I think he doesn't have the time to do it--midterms are too close.

In terms of stay fully invested vs not: For myself, I would say, "stay fully invested".  The challenge with the "sell now" approach is that you have to be right not just about what will happen, but the outcome when it does happen.  World War 2 was a really big deal.  So, one might think that WW2 would be bad for the stock market, but it wasn't too bad, kind of your average bear.

I think the primary case where you can be confident that the market will be completely demolished is if you get a scenario where nukes or biological weapons start flying around, but the right strategy to prosper in that environment is almost orthogonal to investing altogether (fallout shelters, food supplies, etc). 
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: no_free_lunch on March 09, 2018, 07:32:11 PM
I think the berkshire 2004 annual report succinctly explains buffets view on the trade deficit. It was already oosted but i wanted to throw the text in too.  He is basically saying that trade is good but not unlimited trade where you are exchanging goods for wealth.  He recommends government action to combat it.

Trump and buffet agree on this one.

Working off my phone so please excuse the formatting.


Quote
But as I argued in a November 10, 2003 article in Fortune, (available at berkshirehathaway.com),
our country’s trade practices are weighing down the dollar. The decline in its value has already been
substantial, but is nevertheless likely to continue. Without policy changes, currency markets could even
become disorderly and generate spillover effects, both political and financial. No one knows whether these
problems will materialize. But such a scenario is a far-from-remote possibility that policymakers should be
considering now. Their bent, however, is to lean toward not-so-benign neglect: A 318-page Congressional
study of the consequences of unremitting trade deficits was published in November 2000 and has been
gathering dust ever since. The study was ordered after the deficit hit a then-alarming $263 billion in 1999;
by last year it had risen to $618 billion.
Charlie and I, it should be emphasized, believe that true trade – that is, the exchange of goods and
services with other countries – is enormously beneficial for both us and them. Last year we had $1.15
trillion of such honest-to-God trade and the more of this, the better. But, as noted, our country also
purchased an additional $618 billion in goods and services from the rest of the world that was
unreciprocated. That is a staggering figure and one that has important consequences.
The balancing item to this one-way pseudo-trade — in economics there is always an offset — is a
transfer of wealth from the U.S. to the rest of the world. The transfer may materialize in the form of IOUs
our private or governmental institutions give to foreigners, or by way of their assuming ownership of our
assets, such as stocks and real estate. In either case, Americans end up owning a reduced portion of our
country while non-Americans own a greater part. This force-feeding of American wealth to the rest of the
world is now proceeding at the rate of $1.8 billion daily, an increase of 20% since I wrote you last year.
Consequently, other countries and their citizens now own a net of about $3 trillion of the U.S. A decade
ago their net ownership was negligible.
The mention of trillions numbs most brains. A further source of confusion is that the current
account deficit (the sum of three items, the most important by far being the trade deficit) and our national
budget deficit are often lumped as “twins.” They are anything but. They have different causes and
different consequences.

A budget deficit in no way reduces the portion of the national pie that goes to Americans. As long
as other countries and their citizens have no net ownership of the U.S., 100% of our country’s output
belongs to our citizens under any budget scenario, even one involving a huge deficit.
As a rich “family” awash in goods, Americans will argue through their legislators as to how
government should redistribute the national output – that is who pays taxes and who receives governmental
benefits. If “entitlement” promises from an earlier day have to be reexamined, “family members” will
angrily debate among themselves as to who feels the pain. Maybe taxes will go up; maybe promises will
be modified; maybe more internal debt will be issued. But when the fight is finished, all of the family’s
huge pie remains available for its members, however it is divided. No slice must be sent abroad.
Large and persisting current account deficits produce an entirely different result. As time passes,
and as claims against us grow, we own less and less of what we produce. In effect, the rest of the world
enjoys an ever-growing royalty on American output. Here, we are like a family that consistently
overspends its income. As time passes, the family finds that it is working more and more for the “finance
company” and less for itself.
Should we continue to run current account deficits comparable to those now prevailing, the net
ownership of the U.S. by other countries and their citizens a decade from now will amount to roughly $11
trillion. And, if foreign investors were to earn only 5% on that net holding, we would need to send a net of
$.55 trillion of goods and services abroad every year merely to service the U.S. investments then held by
foreigners. At that date, a decade out, our GDP would probably total about $18 trillion (assuming low
inflation, which is far from a sure thing). Therefore, our U.S. “family” would then be delivering 3% of its
annual output to the rest of the world simply as tribute for the overindulgences of the past. In this case,
unlike that involving budget deficits, the sons would truly pay for the sins of their fathers.
This annual royalty paid the world – which would not disappear unless the U.S. massively
underconsumed and began to run consistent and large trade surpluses – would undoubtedly produce
significant political unrest in the U.S. Americans would still be living very well, indeed better than now
because of the growth in our economy. But they would chafe at the idea of perpetually paying tribute to
their creditors and owners abroad. A country that is now aspiring to an “Ownership Society” will not find
happiness in – and I’ll use hyperbole here for emphasis – a “Sharecropper’s Society.” But that’s precisely
where our trade policies, supported by Republicans and Democrats alike, are taking us.
Many prominent U.S. financial figures, both in and out of government, have stated that our
current-account deficits cannot persist. For instance, the minutes of the Federal Reserve Open Market
Committee of June 29-30, 2004 say: “The staff noted that outsized external deficits could not be sustained
indefinitely.” But, despite the constant handwringing by luminaries, they offer no substantive suggestions
to tame the burgeoning imbalance.
In the article I wrote for Fortune 16 months ago, I warned that “a gently declining dollar would
not provide the answer.” And so far it hasn’t. Yet policymakers continue to hope for a “soft landing,”
meanwhile counseling other countries to stimulate (read “inflate”) their economies and Americans to save
more. In my view these admonitions miss the mark: There are deep-rooted structural problems that will
cause America to continue to run a huge current-account deficit unless trade policies either change
materially or the dollar declines by a degree that could prove unsettling to financial markets.
Proponents of the trade status quo are fond of quoting Adam Smith: “What is prudence in the
conduct of every family can scarce be folly in that of a great kingdom. If a foreign country can supply us
with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the
produce of our own industry, employed in a way in which we have some advantage.”
I agree. Note, however, that Mr. Smith’s statement refers to trade of product for product, not of
wealth for product as our country is doing to the tune of $.6 trillion annually. Moreover, I am sure that he
would never have suggested that “prudence” consisted of his “family” selling off part of its farm every day
in order to finance its overconsumption. Yet that is just what the “great kingdom” called the United States
is doing.
If the U.S. was running a $.6 trillion current-account surplus, commentators worldwide would
violently condemn our policy, viewing it as an extreme form of “mercantilism” – a long-discredited
economic strategy under which countries fostered exports, discouraged imports, and piled up treasure. I
would condemn such a policy as well. But, in effect if not in intent, the rest of the world is practicing
mercantilism in respect to the U.S., an act made possible by our vast store of assets and our pristine credit
history. Indeed, the world would never let any other country use a credit card denominated in its own
currency to the insatiable extent we are employing ours. Presently, most foreign investors are sanguine:
they may view us as spending junkies, but they know we are rich junkies as well.
Our spendthrift behavior won’t, however, be tolerated indefinitely. And though it’s impossible to
forecast just when and how the trade problem will be resolved, it’s improbable that the resolution will
foster an increase in the value of our currency relative to that of our trading partners.


We hope the U.S. adopts policies that will quickly and substantially reduce the current-account
deficit. True, a prompt solution would likely cause Berkshire to record losses on its foreign-exchange
contracts. But Berkshire’s resources remain heavily concentrated in dollar-based assets, and both a strong
dollar and a low-inflation environment are very much in our interest.

Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on March 09, 2018, 08:15:19 PM
The problem it’s the above is that Trump tariffs don’t really fight the trade deficit. The Gorilla in the room is China and it seems that Trump of sucking up to them rather than trying them to reduce some of the tariffs. The steel and aluminum tariffs mainly hit Canada, which runs a minuscule trade surplus with the US of $17B CAD (relative to the total annual trade of $300CAD).

I think Navarro will have a hell of a time to construct a narrative of Trump’s intuitions.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: no_free_lunch on March 09, 2018, 09:11:49 PM
Ok.  Fair point.  So as long as canada is excluded we are all good with this then?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: RichardGibbons on March 10, 2018, 01:00:13 AM
Ok.  Fair point.  So as long as canada is excluded we are all good with this then?

Just to make the devil's advocate argument--and be a really strange Canadian--it's not clear to me why Canada should be excluded.  Just because USA has a big trade surplus with Canada doesn't mean that it can't have an even bigger trade surplus with Canada.  If your primary goal is to reduce the trade deficit, you can do it just as effectively by increasing the surplus with Canada as reducing the deficit with China.  Oil would be an obvious choice, since oil is even more important for national security than steel.

Putting that aside, I don't know the answer to your question because I don't know about the impact when retaliations hit.  If the rest of the world adds their own tariffs on US goods, doesn't that just leave USA in the same place with respect to the trade deficit as before, just with tariffs and less trade? I mean, I guess if total trade involving the USA importing or exporting falls by 10% because of tariffs, that would reduce the trade deficits by 10%.  But I think that's not what you're suggesting.

So is there some reason to believe that retaliatory tariffs won't hit America exports, effectively lowering American exports roughly the same degree that tariffs lower foreign imports?

Another thing I was thinking about was that this might actually be a consumption tax strategy to bring in revenue.  The tax cut is dramatically reducing government revenue, so maybe this is a way to get some of that lost revenue back in the form of a consumption tax.  If it's just steel, it probably isn't enough to move the needle, but if it's expanded to a bunch of goods then you're effectively introducing a regressive tax on everyone while still claiming that you're not raising taxes.  I don't feel like doing the math to figure out if that would contribute a significant amount of government revenue, but if so, it would be a clever strategy.

I also wonder why USA doesn't just go through the WTO and introduce tariffs based on other countries not meeting USA's labor and environmental standards.  Then the tariffs would actually be legal and if other countries tried to retaliate, USA would just win in the WTO.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on March 10, 2018, 05:20:56 AM
Unintended consequences here we go:

Trump steel tariffs may leave these U.S. steelworkers jobless

http://www.reuters.com/article/us-usa-trade-steel-jobs/trump-steel-tariffs-may-leave-these-u-s-steelworkers-jobless-idUSKCN1GL2V9

Quote
Lang is one of around 780 workers at the Novolipetsk Steel PAO (NLMK) mill, NLMK's U.S. subsidiary which imports around 2 million tons of steel slabs annually from its Russian parent company. The slabs that the mill rolls into sheets for customers including Caterpillar Inc, Deere & Co Harley Davidson Inc and Home Depot Inc, are almost impossible to acquire from U.S. steel producers.

Bob Miller, Chief Executive Officer of NLMK's U.S. unit, said if his company's customers refuse to accept a 25 percent price hike as a result of the tariffs, nearly 1,200 workers could eventually lose their jobs - and the ones in Farrell would be the first to go when supplies of imported slabs run out.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on March 10, 2018, 06:44:11 AM
Unintended consequences here we go:

Trump steel tariffs may leave these U.S. steelworkers jobless

http://www.reuters.com/article/us-usa-trade-steel-jobs/trump-steel-tariffs-may-leave-these-u-s-steelworkers-jobless-idUSKCN1GL2V9

Quote
Lang is one of around 780 workers at the Novolipetsk Steel PAO (NLMK) mill, NLMK's U.S. subsidiary which imports around 2 million tons of steel slabs annually from its Russian parent company. The slabs that the mill rolls into sheets for customers including Caterpillar Inc, Deere & Co Harley Davidson Inc and Home Depot Inc, are almost impossible to acquire from U.S. steel producers.

Bob Miller, Chief Executive Officer of NLMK's U.S. unit, said if his company's customers refuse to accept a 25 percent price hike as a result of the tariffs, nearly 1,200 workers could eventually lose their jobs - and the ones in Farrell would be the first to go when supplies of imported slabs run out.

A photo op with Trump in from of 500 rustic looking steelworkers will be worth it, even if 5000 jobs go to hell somewhere else. And I don’t think they would be unique to Trump either, almost any politician would make the same deal in a heartbeat. You want to be leary of politicians fixing things for you, especially when it concerns the economy.

A logical approach to trade would have been to go after the Gorilla (China) in term of trade deficit and have a serious talk a out the trade barrier they are putting up. There is an amazing amount of tariffs in China for all sorts of things (cars, consumer goods , but also many industrial parts) while they export the same thing in a good old mercantilistic fashion. but, I am guessing they it just takes too much time and is too messy and doesn’t provide the same populistic payback than saving a few steelworkers jobs.

I am wondering - who will be on the receiving end of this? If we get a  trade war, Boeing uses tons of aluminum and exports most of their airplanes and is and iconic  ÙS brand - stock looks bubbly too. Looks like stock they could release a lot of air in a hurry.
somewhere else.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: VAL9000 on March 10, 2018, 07:31:56 AM
I disagree with tariffs and am very supportive of free trade.  At the same time, I am very comfortable with all kinds of taxes as a means to support the government, which in turn supports the people.

I'm torn on this issue.  Here are things that are interesting to me:
 - a lot of coal is used to make steel
 - a lot of steel is used in infrastructure spend
 - Trump is working on an infrastructure spending bill
 - you can only buy allied steel or tariffed steel, which the government will raise revenues on

Conclusion: If I'm going to spend hundreds of billions on infrastructure then I want to make sure that spend stays in the US as much as possible.

Trade wars aside, this doesn't seem like a terribly stupid plan.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on March 10, 2018, 12:40:44 PM
There's no such thing as a free lunch. If the infrastructure plan costs more than it otherwise would have, for the exact same infrastructure, then it's US taxpayers that are paying those higher costs (sooner or later), and aren't spending the difference on other things (other products, other services, other investments, etc). It makes everyone a little poorer, except if you own a steel mill.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: no_free_lunch on March 10, 2018, 02:53:39 PM
Not according to buffet. He is saying if you are running a trade deficit it net net is making you poorer.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: VAL9000 on March 10, 2018, 03:51:26 PM
There's no such thing as a free lunch. If the infrastructure plan costs more than it otherwise would have, for the exact same infrastructure, then it's US taxpayers that are paying those higher costs (sooner or later), and aren't spending the difference on other things (other products, other services, other investments, etc). It makes everyone a little poorer, except if you own a steel mill.

This is true, but it comes down to being a tax.  If Trump raised income taxes by 1% I doubt that all of the US's trading partners would similarly freak out, even though that move would have a more detrimental effect on trade.

I think we are observing a disproportionate response given the recent tax cuts.  Yes, tariffs reduce trade but tax cuts increase trade.  If you sum up all of the policies enacted by Trump to date, I think you will find that they are net positive for trade.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on March 10, 2018, 03:53:38 PM
There's no such thing as a free lunch. If the infrastructure plan costs more than it otherwise would have, for the exact same infrastructure, then it's US taxpayers that are paying those higher costs (sooner or later), and aren't spending the difference on other things (other products, other services, other investments, etc). It makes everyone a little poorer, except if you own a steel mill.

This is true, but it comes down to being a tax.  If Trump raised income taxes by 1% I doubt that all of the US's trading partners would similarly freak out, even though that move would have a more detrimental effect on trade.

I think we are observing a disproportionate response given the recent tax cuts.  Yes, tariffs reduce trade but tax cuts increase trade.  If you sum up all of the policies enacted by Trump to date, I think you will find that they are net positive for trade.

I think what people and markets have been reacting to is what this is a sign of, not the tariffs alone.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: VAL9000 on March 10, 2018, 04:05:35 PM
I think what people and markets have been reacting to is what this is a sign of, not the tariffs alone.

Fair.  I think we will have to wait and see how far this goes while remembering that, for the most part, anything that is done can be undone.

Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on March 13, 2018, 11:38:45 AM
Looks like more tariffs coming:

https://www.politico.com/story/2018/03/13/trump-demands-aides-strengthen-china-tariffs-460416
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on March 13, 2018, 02:02:25 PM
https://www.cnbc.com/2018/03/13/trump-is-considering-imposing-tariffs-on-60-billion-of-chinese-goods-reuters-citing-source.html
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: John Hjorth on March 13, 2018, 02:23:32 PM
How do my fellow board members perceive this situation right now, based on that the tariffs imposed was based "national security" considerations, while Mr. Trump after that has been tweeting like this (https://twitter.com/realDonaldTrump/status/970451373681790978).

What do you expect will happen if this one ends up in WTO?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: RichardGibbons on March 13, 2018, 03:32:43 PM
What do you expect will happen if this one ends up in WTO?

I imagine he'll lose in the WTO, and if this is anything like the travel ban, Trump's tweets may hurt his case. That said, USA has been adding software lumber tariffs against Canada numerous times over the past 20 years, but then losing when Canada appeals. But even when USA loses the dispute after a few years, they've effectively provided a competitive advantage to their own industry and hurt Canada's, achieving their goal.

So, I don't think whether tariffs are just has anything to do with it. It doesn't matter if the rest of the world gets screwed or if the tariffs break international law.

Rather, it's all about Trump's brand--MAGA, protectionism, and criticizing trade deals. And Trump was completely upfront about this topic in his election campaign. Americans may suffer from inflation as a result of tariffs, but it really is simply Trump doing what he said he would.

While these tariffs are clearly bad news for American allies, I'm curious how the countries who aren't allies actually feel about this. Right now, nobody can match America's military and economic power. But by imposing tariffs, pulling out of trade agreements, and generally acting as an unreliable ally, America is weakening their own economic influence and increasing the relative attractiveness of trade deals with other countries. Russia's got to love that--they certainly gain significantly from this. Possibly China, too--it'll be targeted by tariffs, but over the long term, considerable value accrues as a result of countries being more likely to do deals with China than America. This has a reasonable chance of China, rather than America, becoming the dominant economic force in the Pacific.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: CorpRaider on March 13, 2018, 04:21:59 PM
Trump was completely upfront about this topic in his election campaign. Americans may suffer from inflation as a result of tariffs, but it really is simply Trump doing what he said he would.

True.  Didn't he say something today about China?  I hope the non allies will take steps to try and have a more balanced trade arrangement.  If not, who knows who will get elected next time.  It could be a lot worse than a gameshow host.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Value^2 on March 14, 2018, 08:11:44 AM
There you have it, now even some European companies has began to question the logic behind tariffs EU has put in place. It's just matter of time when those unelected bureaucrats will give up.

Volkswagen brand queries logic of EU import tax on U.S. cars
“You have to ask yourself why we in Europe demand a 10 percent tax on American cars. The Americans don’t do that,” Herbert Diess said on Wednesday at a news conference after the division reported results."
https://www.reuters.com/article/us-usa-trade-autos-germany/volkswagen-brand-queries-logic-of-eu-import-tax-on-u-s-cars-idUSKCN1GQ1D1


It's unlikely, that  one of the Germany's largest exporter would side with Trump if they thought he was wrong/unfair.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: EliG on March 19, 2018, 09:51:13 AM
Manufacturing owner, The Metalworking Group of Cincinnati:

https://twitter.com/MikeSchmittMWG/status/975752442540421122

"Well, just received a 35% increase from our old contract pricing for cold rolled carbon steel.  This is a shock.  It is unnecessary to be punished by our own government.

And, yes, this is USA steel not subject to the tariffs."
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: EliG on March 21, 2018, 07:47:47 PM
Manufacturing owner, The Metalworking Group of Cincinnati:

https://twitter.com/MikeSchmittMWG/status/975752442540421122

"Well, just received a 35% increase from our old contract pricing for cold rolled carbon steel.  This is a shock.  It is unnecessary to be punished by our own government.

And, yes, this is USA steel not subject to the tariffs."

This story ended up in the WSJ Editorial:

https://www.wsj.com/articles/steel-tariff-blues-in-red-state-america-1521672773

back door link to get around the paywall:

https://t.co/ZoEI6u15br
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on March 22, 2018, 04:25:00 AM
Manufacturing owner, The Metalworking Group of Cincinnati:

https://twitter.com/MikeSchmittMWG/status/975752442540421122

"Well, just received a 35% increase from our old contract pricing for cold rolled carbon steel.  This is a shock.  It is unnecessary to be punished by our own government.

And, yes, this is USA steel not subject to the tariffs."

This story ended up in the WSJ Editorial:

https://www.wsj.com/articles/steel-tariff-blues-in-red-state-america-1521672773

back door link to get around the paywall:

https://t.co/ZoEI6u15br

The workaround will be to import finished goods made from steel, destroying way more jobs than will be created in the steel industry in the US. Trump will have to escalate the trade war to cast a much wider net, if he want to “win” this one.

Anyone has any idea for food shorts? ARNC (Al fabricator ) comes to my mind. They are also a huge supplier for Boeing, which would be a great target for Europeans or China, if the trade war escalates.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Hawks on March 22, 2018, 06:47:00 AM
As the U.S. retreats from global free trade/agreements and isolates itself around walls and tariffs, China and Russia win big time imo. And your President doesn't seem to realize it.  Will be interesting to see how the American public reacts to all this.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Value^2 on March 22, 2018, 08:13:28 AM
As the U.S. retreats from global free trade/agreements and isolates itself around walls and tariffs, China and Russia win big time imo. And your President doesn't seem to realize it.  Will be interesting to see how the American public reacts to all this.


 Wilbur Ross:" Judge President Trump on his results, don't judge Trump by your theory about what might be results."
https://www.cnbc.com/video/2018/03/20/wilbur-ross-the-case-for-tariffs.html
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Hawks on March 22, 2018, 12:56:10 PM
Ross doesn't know his history. Tariff walls increase prices for imported goods, and raise prices for domestic made goods because companies raise their prices after protection (this has already started with steel prices).  Imo, the red states in the U.S. could get really hurt here, depending upon what China does.  The Chinese will hurt Trump where it really hurts (ie his base) imo.  The next month or so will tell the story.  U.S. consumers will see the results before the Nov elections and vote accordingly.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: RichardGibbons on March 22, 2018, 01:31:17 PM
Wilbur Ross:" Judge President Trump on his results, don't judge Trump by your theory about what might be results."

I'm curious if he said the same thing when Hugo Chavez was elected President of Venezuela in 1998.  I've searched with Google, but haven't been able to find a quote like that.

But, Ross seems like a consistent, stand-up guy. He probably thought Chavez ought to be given a chance and judged only after his policies had had their impact. I imagine he just didn't get around to saying it in Chavez's case.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: EliG on March 22, 2018, 08:39:46 PM
https://twitter.com/JoeBarri/status/976559246748934146

Quote
NEW: The tariffs on steel and aluminum imports from the following countries are suspended until May 1, 2018:

- Argentina
- Australia
- Brazil
- Canada
- Mexico
- member countries of the European Union
- South Korea


https://twitter.com/ReformedBroker/status/977021168703164416

Quote
So no tariffs at all then. It’s almost as if this was just a pre-special election ploy to win Pittsburgh that is no longer useful now.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on March 22, 2018, 09:07:03 PM
This thread seems all about the anti-trade from B.C. such as Gibbons and Elig who won't support Canadian goods to be exported to Asia such as oil, LNG and lumber and in the same vein do protest at anything that Trump does to favor U.S. exports to Asia

Cardboard
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on March 22, 2018, 09:11:48 PM
Yep, basically no aluminium and steel tariffs. Though apparently Japan is still getting spanked. They're gonna love that. How much you wanna bet that what actually happened is that someone forgot to add them to the list?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Value^2 on March 22, 2018, 09:20:47 PM
Ross doesn't know his history. Tariff walls increase prices for imported goods, and raise prices for domestic made goods because companies raise their prices after protection (this has already started with steel prices).  Imo, the red states in the U.S. could get really hurt here, depending upon what China does.  The Chinese will hurt Trump where it really hurts (ie his base) imo.  The next month or so will tell the story.  U.S. consumers will see the results before the Nov elections and vote accordingly.
Heh, you have no idea what you're talking about.  Ross knows his history much better than anybody else, you should study first  how they met (https://seekingalpha.com/article/3964571-adventures-donald-trump-hidden-possibilities-distressed-casino-bonds).

 Also you said that "China and Russia win big time imo".... lets see in few years what actually happens, but i think nothing could be further from the truth.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: EliG on March 22, 2018, 09:22:55 PM
This thread seems all about the anti-trade from B.C. such as Gibbons and Elig who won't support Canadian goods to be exported to Asia such as oil, LNG and lumber and in the same vein do protest at anything that Trump does to favor U.S. exports to Asia

Cardboard

I'm in Ontario, and I'm pro-pipelines. The more, the merrier.

Cardboard, explain me like I'm five: how would steel/aluminum tariffs make U.S. exports to Asia more competitive?

BTW, Trump already suspended them. So it's a moot point anyway.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on March 22, 2018, 09:54:18 PM
This thread seems all about the anti-trade from B.C. such as Gibbons and Elig who won't support Canadian goods to be exported to Asia such as oil, LNG and lumber and in the same vein do protest at anything that Trump does to favor U.S. exports to Asia

Cardboard
Cardboard,

I'd say it's quite presumptuous to assume that you know how Eli and Richard would vote or what their positions are on hydrocarbon trade with Asia. Already it turns out that you were completely wrong about about Eli.

However, you have stated many times here that a person should always be looking out for number one and anything else is disingenuous. So let's conduct a thought experiment. Let's say I'm a totally self interested BC resident. The kind that you like. I'm currently sitting on a fortune in real estate. A fortune supposedly backed by beautiful landscapes and pristine waters with swimming Orcas. Why would I want a bunch of pipes carrying toxic stuff? What's in it for me? If all goes according to plan I get nothing. If it doesn't I potentially stand to loose a lot of money. That's not a very appealing proposition.

So according to your operating principles it is completely reasonable (even right) for BC people to oppose pipelines. But I guess your operating principles become more flexible when they intersect your ideology and/or portfolio holdings.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: meiroy on March 23, 2018, 01:53:34 AM


The U.S. current account deficit is not due to export and import of goods and it has not been due to this reason for many many years now.   People who spend their time moving money around for "financial products" can easily understand that.

The tariffs are not going to resolve the deficit, of course, however, they do signal that the U.S. is not willing to continue and shoulder the cost of development or supporting various countries.   The reason is simple 1. these countries do not share the same interests as the U.S. 2.  Even with the expansion of U.S. economy the share of its economy as part of the global economy is still shrinking significantly, and thus the U.S. should not be expected to continue and carry the global economy cost via reserve currency and having its debt for all to grab and manipulate for their own economies.    3. Various countries have in fact abused this passiveness from the U.S. with the support of U.S. corporations which naturally care about their bottom line and not the welfare of the U.S.  e.g. transferring technology or accepting Joint Ventures etc. just so they can sell to the local markets.  The long-term cost to the U.S. economy and safety is tremendous.

There is NO country in the world right now or in the near future that can take the U.S. place.  The suggestion that it can be China or Russia is laughable.  They do not have the economies to take this role, not even close, nor would other countries bet their futures on their economies. There is a reason why the rich from these countries buy safe havens in the west. An only solution is a group of countries and there's no chance of that happening.   Bottom line is increasing global instability.





Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cigarbutt on March 23, 2018, 08:02:58 AM
« There is NO country in the world right now or in the near future that can take the U.S. place.  The suggestion that it can be China or Russia is laughable.  They do not have the economies to take this role, not even close, nor would other countries bet their futures on their economies. There is a reason why the rich from these countries buy safe havens in the west. An only solution is a group of countries and there's no chance of that happening.   Bottom line is increasing global instability. »

Long term issue but potential « market » ramifications.

This whole question is based on the fact that the USD currency has become THE reserve currency. Since WWII, the predominance of the USA economy (share of US GDP/world GDP) has slowly but steadily decreased but it is still the dominant player and international trade is still massively dominated in USD denominated transactions (with the Euro a distant second). Holding the global reserve currency status comes with significant advantages but also comes with disadvantages (costs). By adopting a global economy model based on the USD reserve currency status, huge incentives were created for trading partners to run trade surpluses based on an export-based growth model and huge incentives were created for the US to run trade deficits and to stop saving (and eventually to borrow). The US started as a creditor nation with trade surpluses. Now the elastic has been stretched in the other direction. It seems that the focus now is on reducing the costs related to holding the global reserve currency while not much is said about the potential adverse effects from losing the associated privileges.

This model is imperfect but has allowed many countries to « catch up ». China is a glaring example of that. Efforts to reduce or eliminate the US trade deficit may be based on a reasonable thought process but doing so will inevitably reduce international trade, will somehow induce US « forced » savings and will put a brake on the catching up of the trading partners. Resistance expected.

IMO, the trend in trade deficits for the US is not sustainable. FWIW I see three potential scenarios.

1-Like many things, we could just muddle through. Reading articles and reviews from the late 1980’s about Japan and the « unsustainable » situation and the rhetoric associated with it, one wonders if this will just come to pass, somehow. But the trade deficit with Japan still exists and the scale of the deficit with China is much larger (and increasing). The US, despite the « shale boom », has continued, so far, to significantly carry a net negative trade imbalance with trading partners. Interesting to remember that, since 2008-9, household deleveraging has been correlated with a break in the trend of increasing global trade. The US government/Federal Reserve has taken the relay with debt accumulation but it is hard to see how this can continue much farther. So « adjustments » may occur over a long period and be less acutely painful.

2-Somehow, the USD global reserve currency status will be « renegotiated ». The Bretton Woods Agreement was just really work in progress. It was really designed on the premise that the US could permanently run trade deficits and the unwinding of the « deal » was simply postponed in 1971 when the convertibility was temporarily (!) suspended. The Bretton Woods Aggreement is clearly running out of steam and, although hard to envision now, international « cooperation » may occur and another temporary new and better equilibrium may be reached. It’s just that the global « mood » for globalisation seems to have changed. A blip or secular change?

3-With the Cold War, relative stability was achieved because of the mutually assured destruction dynamics (the MAD :) doctrine). In the case of international trade, there is a risk that individual players involved in regional blocs may see an advantage in pursuing a strategy where it is felt that the opposing partner will relatively suffer more financially with certain actions without taking into account the vicious circle taking effect globally. This was the context behind the beggar-thy-neighbor policies of times past. Potential self-reinforcing loops. There are very strong interest groups in the US who may pull in the wrong direction for the country as a whole and there is an alignment of a significant faction of top advisors whose actions may be more ideological in nature in terms of the economic dependence and vulnerability that the US has developed with trading partners, especially China. The world is a competitive place and, maybe, this is part of a master plan to level the playing field in a way. Cooperation may not be encouraged. If this comes down to who can inflict the most damage without blinking, there are definite risks to world trade and more. The USD reserve currency status has been a pillar support for globalization. Decreased support for globalization will automatically force a re-assessment of the costs (and advantages) tied to this status.

At this point, there is no viable alternative to the USD reserve currency status and the present model has reached its limit. We are at a juncture point. Potential pain and potential opportunities. Whatever scenarios considered, it is reasonable to expect decreasing levels of global trade and changing patterns of savings. Some people who have thought about this and who feel that the limit has reached its limit submit that the « transition » to a new world trade model will be reached when either internal or external factors will come into play. External in the sense that international countries will start to question the value of the USD as a reserve currency and internal in the sense that the US itself will take steps to reduce the trade deficits, thereby reducing global trade and « forcing » domestic savings.

Final thought: many circumstances point to factors that will decrease the status of the USD as an international reserve currency going forward, constituting a form of global monetary tightening at the same time as the « domestic » central bank is applying quantitative tightening. Unease.

Interesting times.

Tend to be optimist but will conclude with a quote from rukawa (contemporary thread):
« My point is that if humans are a tremendously stability destroying species and we happened once...it implies nature is inherently unstable. And if that is the case there is no reason to believe the status quo is safe for us. »

Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: RichardGibbons on March 23, 2018, 11:17:28 AM
This thread seems all about the anti-trade from B.C. such as Gibbons and Elig who won't support Canadian goods to be exported to Asia such as oil, LNG and lumber and in the same vein do protest at anything that Trump does to favor U.S. exports to Asia

A couple years ago, I was pro-pipeline, but I became anti-pipeline after hearing that they don't actually know how to clean up a dilbit spill and based on the climate change "lock in oil exports" argument.  I have kids, so I want the world to be a stable place.

I'm good with lumber trade and most other trade.  The part I struggle with is that, while I think trade is a positive sum game, when the western world is far ahead of the rest of the world economically, a likely result is that the middle class in the west declines while the rest of the world catches up.  That'll be tough on the middle class in the west, but I don't have a solution to that, though I continue to think about it a lot.

That said, if today you support Trump adding a bunch of tariffs, then today you and Value^2 are the anti-trade guys on this thread.  Of course, I also recognize that if Obama had done the exact same thing that Trump is doing now, you would've been violently opposed to it.  One of the cool things about your style of argument is that it isn't about logic, consistency, or reason.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: JRM on March 23, 2018, 03:01:36 PM

A couple years ago, I was pro-pipeline, but I became anti-pipeline after hearing that they don't actually know how to clean up a dilbit spill and based on the climate change "lock in oil exports" argument.  I have kids, so I want the world to be a stable place.


What is your stance on natural gas pipelines?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: RichardGibbons on March 23, 2018, 06:37:41 PM
What is your stance on natural gas pipelines?

I don't have strong feelings, but mildly positive. I don't think a "gas spill" would have the same hugely negative environmental impact as a dilbit spill. There are still the global warming implications, but natural gas is better in that respect than oil, and there's a limit to the rate at which we can eliminate the use of fossil fuels.

That said, I could easily be persuaded to change my opinion on NG pipelines by someone with good arguments.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on March 23, 2018, 07:51:16 PM
https://www.transmountain.com/existing-pipeline

One needs to first read this above. Once you have, you realize that oil has moved for decades already through an almost identical route and that a marine terminal is already in place meaning that vessels already move crude around Vancouver.

https://www.transmountain.com/diluted-bitumen-information

Regarding dilbit or bitumen it does not flow into a pipeline since it is too thick. A significant amount of diluent or condensates is mixed to give it the required gravity.

Guess what? It has been flowing into the existing pipe for decades.

So this whole project is purely a capacity increase. There is really nothing new.

I wonder how much more misinformation and misleading arguments will be posted on this website to basically defend a belief or the new religion of many left atheists: climate change.

Cardboard
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: John Hjorth on March 23, 2018, 08:33:49 PM
Yep, basically no aluminium and steel tariffs. Though apparently Japan is still getting spanked. They're gonna love that. How much you wanna bet that what actually happened is that someone forgot to add them to the list?

rb, yes, this will actually be interesting to follow going forward from now.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on March 23, 2018, 08:36:52 PM
Yep, basically no aluminium and steel tariffs. Though apparently Japan is still getting spanked. They're gonna love that. How much you wanna bet that what actually happened is that someone forgot to add them to the list?

Yeah, the Japanese probably were forgotten. LOL

The tariffs against the Chinese are risky too, but they make a whole lot more economic and political sense than tariffs against allies.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: LC on March 23, 2018, 10:07:21 PM
Cardboard, I'm sure you've read the article on Enbridge's dilbit spill:

https://insideclimatenews.org/news/20120626/dilbit-diluted-bitumen-enbridge-kalamazoo-river-marshall-michigan-oil-spill-6b-pipeline-epa

Very good read to understand what is being moved and also how much/little control the pipeline operators and government have over the situation.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on March 23, 2018, 10:38:03 PM
Yep, basically no aluminium and steel tariffs. Though apparently Japan is still getting spanked. They're gonna love that. How much you wanna bet that what actually happened is that someone forgot to add them to the list?

Yeah, the Japanese probably were forgotten. LOL

The tariffs against the Chinese are risky too, but they make a whole lot more economic and political sense than tariffs against allies.
Yea the China stuff is gonna be really interesting. The Chinese response has been remarkably measured. An opening salvo sort to speak. Pork is in there which is a shot across the bow to Iowa. My guess is that if this were to escalate the Chinese will target agricultural product. That will have minimal economic impact but it will raise a holy hell of a political stick. They'll do it because it's the smart play.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: RichardGibbons on March 23, 2018, 11:03:45 PM
Guess what? It has been flowing into the existing pipe for decades.

So this whole project is purely a capacity increase. There is really nothing new.

I'm pretty sure everyone who's done the least bit of reading on this knows that it's twining an existing pipeline.

I wonder how much more misinformation and misleading arguments arguments I don't like will be posted on this website to basically defend a belief or the new religion of many left atheists express concerns about a threat well-established by science: climate change.

FTFY.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on March 24, 2018, 02:44:20 AM
https://www.transmountain.com/existing-pipeline

One needs to first read this above. Once you have, you realize that oil has moved for decades already through an almost identical route and that a marine terminal is already in place meaning that vessels already move crude around Vancouver.

https://www.transmountain.com/diluted-bitumen-information

Regarding dilbit or bitumen it does not flow into a pipeline since it is too thick. A significant amount of diluent or condensates is mixed to give it the required gravity.

Guess what? It has been flowing into the existing pipe for decades.

So this whole project is purely a capacity increase. There is really nothing new.

I wonder how much more misinformation and misleading arguments will be posted on this website to basically defend a belief or the new religion of many left atheists: climate change.

Cardboard

The project is about building a new pipeline with more than double the capacity and decommissioning the old one. It is not about increasing the capacity on an existing pipeline. The old pipeline is I think 50 years old, it does not have the diameter and the steel (plus concern about the age and fatigue ) and right now operates at reduced flows, compared to the existing pipe.

I do think it makes sense to build a new pipeline, which ought to be safer than operating and aged 50year old pipeline.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: JRM on March 24, 2018, 05:34:03 AM
I don't know about Canada, but the U.S. has Code of Federal Regulations related to construction and maintenance of oil and gas pipelines.  I wouldn't be very concerned about safety of the new pipeline.  I would focussing my concern on the safety of the 50+ year old pipelines these companies are trying to retire.  They are retiring it for a reason.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on March 24, 2018, 05:47:46 AM
Reading? Here is a description of the project:

https://www.transmountain.com/project-overview

Please read these links and form your own opinion.

Do not fall for those making misleading statements and pursuing some agenda.

Of course, that is unless you believe that these links represent "fake news" or some conspiration.

Cardboard
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cigarbutt on March 24, 2018, 06:00:27 AM
Interesting link with a graph focusing on the export/import component of the savings imbalance.
https://howmuch.net/articles/historical-trade-deficit-usa

-The trade deficit has grown much faster than GDP.
-Diminishing imports seems to be an inconvenient way to effectively improve the balance.
-Breaking trends with growth of the trade deficit has a nasty tendency to coincide with periods where automatic stabilizers kick in.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: RichardGibbons on March 24, 2018, 11:23:12 AM
I don't know about Canada, but the U.S. has Code of Federal Regulations related to construction and maintenance of oil and gas pipelines.  I wouldn't be very concerned about safety of the new pipeline.  I would focussing my concern on the safety of the 50+ year old pipelines these companies are trying to retire.  They are retiring it for a reason.

They do not intend to retire the old pipeline.  Regardless of that, most people are far less worried about the safety of the new pipeline than they are about a dilbit spill from one of the tankers.  I would support the construction of a new pipeline and the elmination of the old one if the capacity remained the same.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on March 24, 2018, 11:45:38 AM
This thread used to be about trade and tariffs. However it seems that whenever Cardboard gets involved every topic shift to pipelines and who supports them or doesn't. Maybe we should move back to the original purpose of this thread.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Hawks on March 24, 2018, 12:28:52 PM
I agree with your last post rb.
As I have previously stated,  I do believe that we in North America and Europe should not underestimate the increasing military and economic power and influence of China and Russia, especially China.
Putin's political influence and interference in the past 10 years (U.S. Britain, France, Austria, Poland, Italy, Ukraine) continues to strength his thirst for power.  And Russia's nuclear might far surpasses anything that a N. Korea or Iran can muster. The growing influence of the extreme right in Europe is especially worrisome; they all find comfort and support from Putin. And the response from the European powers to all of this has been tepid at most. Putin and his oligarchs must laugh that so little has been done to them as they amass their fortunes and power and influence.
But in my view, China is more of a concern over the next 20 years. We have been told for years that the rising new world power to contend with is China. Asian countries now seek allegiance to China economically to keep their economies strong, and seek assurances from the U.S. for military protection. But with growing economic ties and Chinese military buildup, will some of those smaller nations start to turn away from the U.S. as their main protector?  Right now, they seem to be performing a balancing act between the 2 powers. Imo, for the U.S. to withdraw from the TPP Agreement with primary Asian nations was a major mistake. America could have retained both strong economic and military alliances by signing that pact. Instead, they withdrew and now are entering trade wars via tariffs which typically throughout history, have created more job losses than they created. But Trump doesn't know history and has no idea. China is always mindful of the long term game and they have made great strides in many ways these last 10-20 years. I have visited China recently and was astounded by how far they have come from being an agrarian, inward looking society. Without writing a book here, China is a power to be reckoned with now and in the future imo.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Hawks on March 24, 2018, 02:01:53 PM
To add to my last comment, remember that China holds U.S. $1.2 trillion of American debt. If America pushes too hard here, the Chinese could start reducing their U.S. Treasury bonds and U.S. interest rates would rise significantly. That is a big hammer they have, but they have other levers to push before hitting that button (i.e. tariffs on U.S. soybeans, cars for example). China is no 3rd rate nation anymore.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: VAL9000 on March 24, 2018, 04:38:51 PM
To add to my last comment, remember that China holds U.S. $1.2 trillion of American debt. If America pushes too hard here, the Chinese could start reducing their U.S. Treasury bonds and U.S. interest rates would rise significantly. That is a big hammer they have, but they have other levers to push before hitting that button (i.e. tariffs on U.S. soybeans, cars for example). China is no 3rd rate nation anymore.

Will this increase in interest rates serve to balance out the inflationary impact of the new tariffs?  Isn't the US economy seeking inflation these days?

I read a wsj article today that pointed out brexit has, economically speaking, been a non-event with none of the forecasted downsides coming to pass.  Weird right?

I know these tariffs are supposed to be bad, but I'm also interested in seeing how the US economy will adapt.  I'm even more interested in seeing if China will get real about opening up it's economy and adopt global trade norms.  This would be a fantastic result, but I think China will continue to push the limits of fairness for as long as it is advantageous for them to do so.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on March 24, 2018, 04:55:52 PM
To add to my last comment, remember that China holds U.S. $1.2 trillion of American debt. If America pushes too hard here, the Chinese could start reducing their U.S. Treasury bonds and U.S. interest rates would rise significantly. That is a big hammer they have, but they have other levers to push before hitting that button (i.e. tariffs on U.S. soybeans, cars for example). China is no 3rd rate nation anymore.
Chinese (or any other foreign) holdings of US treasuries are irrelevant. I've explained that many times on this board. I think even in this thread. The whole US owes China X amount of money is either a political bullshit argument or a scary tale that people who don't understand international economics tell themselves. China doesn't have a choice. They're basically stuck with the bonds.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on March 24, 2018, 05:02:25 PM
To add to my last comment, remember that China holds U.S. $1.2 trillion of American debt. If America pushes too hard here, the Chinese could start reducing their U.S. Treasury bonds and U.S. interest rates would rise significantly. That is a big hammer they have, but they have other levers to push before hitting that button (i.e. tariffs on U.S. soybeans, cars for example). China is no 3rd rate nation anymore.

Will this increase in interest rates serve to balance out the inflationary impact of the new tariffs?  Isn't the US economy seeking inflation these days?

I read a wsj article today that pointed out brexit has, economically speaking, been a non-event with none of the forecasted downsides coming to pass.  Weird right?

I know these tariffs are supposed to be bad, but I'm also interested in seeing how the US economy will adapt.  I'm even more interested in seeing if China will get real about opening up it's economy and adopt global trade norms.  This would be a fantastic result, but I think China will continue to push the limits of fairness for as long as it is advantageous for them to do so.
Well Brexit didn't actually happen yet. So it may be a bit premature to look for effects. But they'll be there. Furthermore, once Brexit actually happens the tariffs that will come online even if there's no deal are going to be fairly small, nothing like the US is trying to do. I actually think passporting is going to be a bigger issue for Britain than tariffs.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: John Hjorth on March 24, 2018, 05:20:22 PM
You beat me to it, rb,

To me, no need to elaborate further on the bonds. [It's Thriftville vs Squanderville, ref. Cigarbutt's post.]

Facts:

Topic started 1st March 2018. We now have 27 pages of posts during 25 days. [Some posts perhaps more or less off topic, but still with value for the curious reader, who want to learn something.]

How did this turn out, compared to the basis situation on 1st March 2018? It has evolved to a non-event - for the basis situation - a nothing. All based on - yes .. - basically - bluff.

- - - o 0 o - - -

From what I have read so far, China does not appear to use other things than just measured, modest response here, so far.

The US will get the steel and aluminium it needs, and there will be no empty shelves in shops in China. Bilateral tariffs create opportunities for others.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cigarbutt on March 25, 2018, 06:09:59 PM
Just noise or tectonic shift?

It seems that China is stuck with a "too big to exit" problem.
More thoughts FWIW.

Free trade is good but the USD status has prevented the corrective effects of floating exchange rates.

Fundamentally, developed countries have put in place social welfare services and unfunded entitlements whose funded portion has been financed by domestic future generations (topic on its own that could be discussed separately but this concept may have something to do with a changing pattern of support from the younger age cohorts for the present system) and by foreign debt-security holders (topic of this post).

The internal imbalance is different in the US vs the other developed countries but the even if the US carries slightly less burdensome crade-to-grave entitlements, it spends a very large amount on the federal healthcare shemes, GSEs are heavily involved in mortgages and the government provides implicit (explicit?) support to student debt.

Fundamentally, the external trade imbalance has allowed to compensate for the inability of the productive market sector to provide for what is being promised.

Also, the QE programs have (IMO) only posponed adjustments that will eventually occur somehow.

Stable or decreasing trade imbalance with China and the rest of the world means painful domestic adjustments. That will occur if the balance is restored through intrinsic and/or extrinsic mechanisms.

From the perspective of China, looking at all the usual definitions, their foreign reserve level is way too high and way too concentrated in US government debt. But alternatives are limited. USD devaluation could materially decrease the value of their reserves so they have to consider too that the elastic has been stretched too far in terms of public and private debt accumulation in the US and other developed countries. Another option would be to increase FDI in the US (think about that for a minute). The One Belt One Road initiative has several objectives (some conflicting) but one of the objectives is likely to channel USD into real assets outside of China. I understand that the initiative will be financed at the level of 65% directly with their trade surplus. I submit that China is also stuck between a rock and a hard place (internal and external obstacles). It is difficult to see how the US could let China invest and control infrastructure, the grid etc. Some time ago, I followed some acquisitions made by Chinese entities in the Canadian energy sector. They bought smaller players at a relative bottom but wonder if they think that they made a good deal as they are probably scratching their heads when assessing the transportation of oil and gas gridlock and when thinking about how they would have addressed the "problem" domestically.

This imbalance talk has been going on for so long and maybe this is still noise and maybe changes will occur gradually but I submit that at least some consideration should be given to the possibility that developed countries come to rely on savings and capital investment in real assets in order to finance a modern welfare that will continue to enable capitalism and democracy to coexist in relative harmony.

Impossible to define clearly a tipping point though.

I understand that there is a framed quote by William Blake (English poet) in a Mr. Trump's New York Hotel that says: "You never know what is enough until you know what is more than enough".

In 1971, the US Treasury secretary said "Our currency, but your problem" (President Nixon said it differently but it's more straightforward and less polite), but now I say (FWIW): Your problem has become our problem.

Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on March 25, 2018, 07:04:49 PM
Cigarbutt, I'm sorry I know you wrote a long post but you're pretty much off the mark.

The funding status of social programs doesn't really have an impact on trade. To the extent that you may make an argument that it does it would actually run the other way. Unfunded social programs leading to trade surpluses rather than deficits.

No, foreign security holders do not finance local social programs.

China cannot use USD reserves to finance belt and road. They can only use their reserves for very few things: FDI in the US (as you've correctly identified), they can swap securities such as change from bonds to equity but the government can prevent that if it so chooses, or use it to run trade deficits with the US in the future.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cigarbutt on March 25, 2018, 08:04:23 PM
I see your point.
Let's stay away from the flow of funds and unfunded wording/semantics for a minute.

If you hold the savings/investments part constant,
do you agree that the trade deficit will match the government deficit? (or vice versa)

Back to the real world,
Let's say I run a trade deficit with you that is matched by a deficit that I maintain in my personal finances.
And let's say that because I assume that our trade imbalance will continue, I promise my children that this will allow me to pay for future tuition fees.
Somebody has to do the savings.
Makes sense?

As far as the OBOR initiative I want to learn but I had done some work before the post.

https://www.think-asia.org/bitstream/handle/11540/6810/Understanding_Chinas_Belt_and_Road_Initiative_WEB_1.pdf?sequence=1

https://www.researchgate.net/publication/307861824_One_Belt_One_Road-_The_New_Silk_Road


Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on March 25, 2018, 09:33:47 PM
I see your point.
Let's stay away from the flow of funds and unfunded wording/semantics for a minute.

If you hold the savings/investments part constant,
do you agree that the trade deficit will match the government deficit? (or vice versa)

Well I don't really know what you mean by hold the savings/investing part constant. But I have a feeling I know where you're going with it. But I don't agree. It won't work like that. The only way it comes close is only in a very particular theoretical case that has no relation to real life.

Back to the real world,
Let's say I run a trade deficit with you that is matched by a deficit that I maintain in my personal finances.
And let's say that because I assume that our trade imbalance will continue, I promise my children that this will allow me to pay for future tuition fees.
Somebody has to do the savings.
Makes sense?
Yea that's a bad example. A still flawed example (because i can't think of a better one right now) but more indicative of the real world using your template would be this. I have a family and you have a family (wife and kid). You also have a house and a joint account with your wife. Your family runs a trade deficit with my family. I accept that fact because you are willing to mortgage bits of your house to me. I can't call your loan or reposes your house so my only choice is to keep refinancing. But that's ok with me.

Your only income comes from charging your wife and kid rent to be in the house. Your wife charges you for what she does around the house. Those charges get settled by who owns how much of the savings account. You promise your kid that you would cover your wife's home schooling fees when the time comes that he needs to go to school. You're house price also appreciates, the joint account earns interest and you can hike the rent whenever you want. Quite a different situation isn't it?

As far as the OBOR initiative I want to learn but I had done some work before the post.

https://www.think-asia.org/bitstream/handle/11540/6810/Understanding_Chinas_Belt_and_Road_Initiative_WEB_1.pdf?sequence=1

https://www.researchgate.net/publication/307861824_One_Belt_One_Road-_The_New_Silk_Road
In my opinion OBOR is very smart. Quite the opposite of America First. But from an international finance perspective it's a big FDI program. The countries that receive Chinese investment will have to run trade deficits with China. A lot of the countries already do so this is also a way for the Chinese to convert reserves from bonds to equity. Just not USD reserves but reserves from those respective countries. It's also a great example of why running a trade deficit can be very good.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cigarbutt on March 26, 2018, 05:46:33 AM
rb,
Thanks for the discussion even if I keep being off the mark and keep using flawed arguments. :)
These topics are complex and multi-variable.
A lot of leading figures have gone wrong on these issues.
I start with the assumption that I'm wrong and try to become less wrong.

IMO it will be very hard for China to use (directly or indirectly) their foreign reserves to support FDIs. But it's part of the Plan.

What the previous examples depict is the twin-deficit problem. Most people (from the scholar to the average person) would think that this would eventually lead to a significant depreciation in the currency and that has not occurred. Why?  Does it matter?

I happen to think (opinion) that deficits matter. Thinking of the government deficits, I understand that the present strategy is to decrease taxes in order to "starve the beast". Similarly (in a way working out the problem backwards), for the trade deficits, the main emphasis has been on the external component of the imbalance (it's China's fault) instead of dealing with internal inconsistencies.

With all due respect, even if the following are true, the focus on the savings glut of others, on currency manipulation, on intellectual "theft", on the role of the US as an investment haven for foreign investors, the key corresponding internal issue has been the inabilty to balance bugets, to save and to invest in productive activities instead of consumption. Conceptually, I would prefer that the growing imbalance self-corrects or corrects from the inside.

George Soros has often been wrong (sometimes very wrong) but I submit that he has done very well for himself and a lot of that has to do with his understanding of international financial flows and imbalances. In fact, in certain circumstances, I would tend to consider betting along with him instead of along scholars or other experts. I understand that he has positioned himself in this area. The Chinese authorities have warned Mr. Soros, in a state-controlled paper: "there can be no doubt" that his thesis is wrong...

This is nothing new and here is a link that was written a while back but is still relevant. At least, it reflects a lot of my opinions.

https://www.ssc.wisc.edu/~mchinn/TIE_Su06_ChinnSteil.pdf

If John Hjorth made it this far in my post, he may find solace in the fact that the authors conclude by saying that the US needs a product (conceptually), at least temporarily, that would make one of his holdings even more profitable. But diabetes is mostly a preventable disease. Prevention is based on the premise that actions are sometimes needed before long term consequences are baked in the cake. Diet coke just isn't enough.




Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: John Hjorth on March 26, 2018, 06:02:46 AM
Thank you, Cigarbutt. I did. I always do, because I appreciate all your posts on any topic here on CoBF, because I learn from them.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on April 04, 2018, 05:52:55 AM
Who could have seen this coming?

https://www.cnbc.com/2018/04/04/china-new-us-tariffs-including-soy-cars-and-chemicals.html
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: valcont on April 04, 2018, 06:36:35 AM
Who could have seen this coming?

https://www.cnbc.com/2018/04/04/china-new-us-tariffs-including-soy-cars-and-chemicals.html

Typical Chinese bluster. You can't be a trade surplus country and dictate the trading terms. Trump should call their bluff and escalate. We may have to pay a dollar more for the water guns but their populace will revolt. Hard to maintain an authoritarian regime and fund the mass employment programs by  killing the goose that laid the golden eggs.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: hillfronter83 on April 04, 2018, 06:56:03 AM
Who could have seen this coming?

https://www.cnbc.com/2018/04/04/china-new-us-tariffs-including-soy-cars-and-chemicals.html

Typical Chinese bluster. You can't be a trade surplus country and dictate the trading terms. Trump should call their bluff and escalate. We may have to pay a dollar more for the water guns but their populace will revolt. Hard to maintain an authoritarian regime and fund the mass employment programs by  killing the goose that laid the golden eggs.

An authoritarian regime and people could probably sustain more pain than a democratic society. Just look at Russia and North Korea. Interesting time...
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on April 04, 2018, 07:11:34 AM
Who could have seen this coming?

https://www.cnbc.com/2018/04/04/china-new-us-tariffs-including-soy-cars-and-chemicals.html

Typical Chinese bluster. You can't be a trade surplus country and dictate the trading terms. Trump should call their bluff and escalate. We may have to pay a dollar more for the water guns but their populace will revolt. Hard to maintain an authoritarian regime and fund the mass employment programs by  killing the goose that laid the golden eggs.

It's China that is blustery..?

When both sides are losing a lot, it's not a huge consolation to think that the other side is losing more. We had to destroy that village to save it? Hurting 99% of the US economy to try to set up photo ops with steelworkers and coal miners is worth it?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: no_free_lunch on April 04, 2018, 07:15:43 AM
Since we are on the "berkshire" and fairfax message board, I thought this was relevant.

Quote
We  hope  the  U.S.  adopts  policies  that  will  quickly  and  substantially reduce  the  current-account  deficit.

http://www.berkshirehathaway.com/2004ar/2004ar.pdf

So buffet has some bluster as well.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on April 04, 2018, 07:19:26 AM
Who could have seen this coming?

https://www.cnbc.com/2018/04/04/china-new-us-tariffs-including-soy-cars-and-chemicals.html

Typical Chinese bluster. You can't be a trade surplus country and dictate the trading terms. Trump should call their bluff and escalate. We may have to pay a dollar more for the water guns but their populace will revolt. Hard to maintain an authoritarian regime and fund the mass employment programs by  killing the goose that laid the golden eggs.

An authoritarian regime and people could probably sustain more pain than a democratic society. Just look at Russia and North Korea. Interesting time...

Yes, especially when they put a nationalistic spin on this. A similarity to this situation was the Vietnam war. The US won all the battles but lost the war, because the Vietkong were willing to endure much more pain than the US to reach their goal.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on April 04, 2018, 07:22:34 AM
Since we are on the "berkshire" and fairfax message board, I thought this was relevant.

Quote
We  hope  the  U.S.  adopts  policies  that  will  quickly  and  substantially reduce  the  current-account  deficit.

http://www.berkshirehathaway.com/2004ar/2004ar.pdf

So buffet has some bluster as well.

Do you think Buffett's strategy would be this one? Do you think there are other smarter levers to rebalance an economy and encourage things like investment and savings and encourage freer trade and a reduction of tariffs and distortions?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Hawks on April 04, 2018, 07:31:14 AM
Do not underestimate China.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: no_free_lunch on April 04, 2018, 07:34:05 AM
Liberty,

Quote
Yet  policymakers  continue  to  hope  for  a  “soft  landing,” mean while counseling other countries to stimulate (read “inflate”) their economies and Americans to save more.    In  my  view  these  admonitions  miss  the  mark:    There  are  deep-rooted  structural  problems  that  will cause  America  to  continue  to  run  a  huge  current-account  deficit  unless  trade  policies  either  change  materially or the dollar declines by a degree that could prove unsettling to financial markets.

I think he more or less is advocating for what trump is doing regarding China trade.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on April 04, 2018, 07:45:34 AM
Liberty,

Quote
Yet  policymakers  continue  to  hope  for  a  “soft  landing,” mean while counseling other countries to stimulate (read “inflate”) their economies and Americans to save more.    In  my  view  these  admonitions  miss  the  mark:    There  are  deep-rooted  structural  problems  that  will cause  America  to  continue  to  run  a  huge  current-account  deficit  unless  trade  policies  either  change  materially or the dollar declines by a degree that could prove unsettling to financial markets.

I think he more or less is advocating for what trump is doing regarding China trade.

I don't think so, and see nothing there that supports it except in the broadest possible way. There's more than one way to change trade policies.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: no_free_lunch on April 04, 2018, 08:15:04 AM
What do YOU think he is suggesting then?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on April 04, 2018, 08:18:21 AM
What do YOU think he is suggesting then?

Competence? Integrity? Coherence?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: valcont on April 04, 2018, 08:22:31 AM


It's China that is blustery..?

When both sides are losing a lot, it's not a huge consolation to think that the other side is losing more. We had to destroy that village to save it? Hurting 99% of the US economy to try to set up photo ops with steelworkers and coal miners is worth it?

99% of the economy! Where are you getting your numbers? Last time I checked, US trade is 11% of the GDP. Even if you account for the supply chain disruptions , we are talking 15-20%. US is a closed economy and can self sustain. But if we let China cheat and steal, that'll be the end of it. Coal and Steel has nothing to do with it.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: valcont on April 04, 2018, 08:26:12 AM

An authoritarian regime and people could probably sustain more pain than a democratic society. Just look at Russia and North Korea. Interesting time...

Yes, especially when they put a nationalistic spin on this. A similarity to this situation was the Vietnam war. The US won all the battles but lost the war, because the Vietkong were willing to endure much more pain than the US to reach their goal.

Nope. Russians and North Koreans have never seen an economy that worked for them. Chinese have. The grand bargain is authoritarian regime for economic prosperity. You take one leg down and its house of cards.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on April 04, 2018, 09:32:34 AM

An authoritarian regime and people could probably sustain more pain than a democratic society. Just look at Russia and North Korea. Interesting time...

Yes, especially when they put a nationalistic spin on this. A similarity to this situation was the Vietnam war. The US won all the battles but lost the war, because the Vietkong were willing to endure much more pain than the US to reach their goal.

Nope. Russians and North Koreans have never seen an economy that worked for them. Chinese have. The grand bargain is authoritarian regime for economic prosperity. You take one leg down and its house of cards.
Yep, and American would be treated as liberators when they invade Iraq. The Iraq war will only last a few weeks. Afganistan will be easy to win cause they're just a bunch of goat herders. Americans don't have a good track record of predicting the outcome of wars. Now we've moved on to the part where trade wars are easy to win.  ::)
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on April 04, 2018, 09:53:27 AM


It's China that is blustery..?

When both sides are losing a lot, it's not a huge consolation to think that the other side is losing more. We had to destroy that village to save it? Hurting 99% of the US economy to try to set up photo ops with steelworkers and coal miners is worth it?

99% of the economy! Where are you getting your numbers? Last time I checked, US trade is 11% of the GDP. Even if you account for the supply chain disruptions , we are talking 15-20%. US is a closed economy and can self sustain. But if we let China cheat and steal, that'll be the end of it. Coal and Steel has nothing to do with it.
I don't know when's the last time you checked, but today trade is 28% of US GDP. Factor in supply chain disruptions and the numbers get huge.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on April 04, 2018, 10:21:08 AM

An authoritarian regime and people could probably sustain more pain than a democratic society. Just look at Russia and North Korea. Interesting time...

Yes, especially when they put a nationalistic spin on this. A similarity to this situation was the Vietnam war. The US won all the battles but lost the war, because the Vietkong were willing to endure much more pain than the US to reach their goal.

Nope. Russians and North Koreans have never seen an economy that worked for them. Chinese have. The grand bargain is authoritarian regime for economic prosperity. You take one leg down and its house of cards.

Not if the US takes that leg down. Then the US will be the bully and the Chinese will back their government. If anything it will cement their ruling. History had shown many times that nations don’t crack due to outside pressure, they unite and tend to fight back. I do think the Vietnam analogy holds, the Chinese will be able to take a lot of pain, if they feel their cause is just, the US will take a lot of opioids.

If Trump tanks the economy, he will be disposed of quicker than his supporters think, probably after midterm elections.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on April 04, 2018, 10:35:45 AM
Call me old fashioned, but I think the way to promote free trade is to sell the idea to the public in your country and in other countries, to honor the agreements you enter into and to keep the moral high ground to be able to lead others and be an example that other countries want to follow, etc. Trade is built on stability, not instability, so you want to be a stabilizing force rather than a destabilizing one.

Trump has spend the past 2 years bad mouthing trade and surrounding himself with xenophobes and protectionists, trying to convince US citizens that other countries are bad and just trying to screw them over, he's been flip flopping around on existing treaties and future ones, threatening people left and right while praising others that don't deserve praise. He doesn't take responsibility for anything and blames everyone else but himself for his failings. He supports whatever industries that have a chance of giving him electoral advantage or that belong to his friends, and attacks those of his perceived enemies, rather than representing the country as a whole and keeping the office of the president above the fray, etc. Nationalists in other countries like to paint the US as someone who wants to keep them down, and Trump is playing right into their hands and making it harder for the free traders in those countries to engage with the US.

Seems to me a recipe for less free trade, not more of it.

Don't get me wrong, I'm not dumb, I see what he's trying to do with these tariffs and bargaining chips. I just think there's a high risk it doesn't turn out how he thinks it will and the game of chicken ends with a collision where both sides are worse off and there's no winner (free trade is a win-win, so restricting it tends to be a lose-lose).
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cigarbutt on April 04, 2018, 10:54:53 AM
Changing global trade dynamics: noise within a stable pattern and a linear outcome or maturation to instability?

Opinion: some time should be devoted to the latter, in terms of the potential outcomes.

Here is food for debate with two opposing views:
http://www.cumber.com/winners-and-losers-from-global-trade/
http://www.cumber.com/why-david-blond-is-wrong-on-trade/

Both try to define the “right track”.
The first, a Ph.D using models and prescribing policies with which Mr. Buffett may be comfortable.
The second, more down to earth using game theory strategies (who could be hurt the most) in order to “restore” balance.

Can we learn from opposing views?

This has been a long term issue and Mr. Buffett’s concerns, as described in the 2004 annual report, are a reminder that imbalances (even if significant and worsening) can be accompanied by noise, can somehow muddle through and can remain irrational longer than most participants can tolerate (mentally or financially).

Maybe, we are stuck in some kind of equilibrium. Maybe not though, as humans are not wired to naturally integrate complex nonlinear scenarios.

In early 2005, Mr. Buffett very rationally expected the value of the US dollar to depreciate and expected inflation. In early 2005, the trade-weighted USD index stood at around 109 and the CPI was at around 3%. Fast forward to now and numbers are respectively about 118 and 2%. Of course, that did not prevent Mr. Buffett from making a lot of $ and the outcome may reassure in the framework of linear evolution and slow adaptive changes but present investment stance may need to integrate the fact that inflation has occurred in a disguised and pervasive way through:

-very elevated asset price levels (wealth effect)
-extremely high debt levels (levels never seen during peacetime)
-almost guaranteed to be unfulfilled entitlement promises
-implicitly embedded future tax confiscation

Concerning these fundamental items, what progress has been made since the 2004 report was written?

Moving in the right direction?

So, a least some consideration should be given to growing inconsistencies that are linked to trade imbalances and that may require an unexpected and perhaps painful restructuring.

In 2005, Mr. Buffett said that we needed “substantive suggestions to tame the burgeoning imbalance”. I would humbly add that the more we wait, the more difficult the adjustments.

Opinion: restructuring deals are absolutely fascinating, but there are always relative winners. The fulcrum security is always confirmed after the fact.

Milton Friedman was a proponent of free trade (he explained it very well) but one of his major economic "discoveries" was that there was no free lunch.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Hawks on April 04, 2018, 11:42:14 AM
Liberty
Totally agree with your last post. Well said.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: valcont on April 04, 2018, 12:24:47 PM
Call me old fashioned, but I think the way to promote free trade is to sell the idea to the public in your country and in other countries, to honor the agreements you enter into and to keep the moral high ground to be able to lead others and be an example that other countries want to follow, etc. Trade is built on stability, not instability, so you want to be a stabilizing force rather than a destabilizing one.

Trump has spend the past 2 years bad mouthing trade and surrounding himself with xenophobes and protectionists, trying to convince US citizens that other countries are bad and just trying to screw them over, he's been flip flopping around on existing treaties and future ones, threatening people left and right while praising others that don't deserve praise. He doesn't take responsibility for anything and blames everyone else but himself for his failings. He supports whatever industries that have a chance of giving him electoral advantage or that belong to his friends, and attacks those of his perceived enemies, rather than representing the country as a whole and keeping the office of the president above the fray, etc. Nationalists in other countries like to paint the US as someone who wants to keep them down, and Trump is playing right into their hands and making it harder for the free traders in those countries to engage with the US.

Seems to me a recipe for less free trade, not more of it.

Don't get me wrong, I'm not dumb, I see what he's trying to do with these tariffs and bargaining chips. I just think there's a high risk it doesn't turn out how he thinks it will and the game of chicken ends with a collision where both sides are worse off and there's no winner (free trade is a win-win, so restricting it tends to be a lose-lose).

I think your hatred towards Trump blinds you to the obvious. He is not my favorite nor do I approve of his social policies. As for the trade, no one including Trump is disputing that free trade is beneficial as long as it is fair. And that's the key point. That's why he quickly backed off from punishing Europeans. But Chinese are not acting as fair partners and they are the ones who are reneging on their agreements. I don't try to reason with the thief and show him the moral high ground.

I think fairer but lesser trade will be beneficial to the US. It will help reduce the income inequality and would lift more boats rather than the Oligopolies that we have today.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on April 04, 2018, 12:36:03 PM
Call me old fashioned, but I think the way to promote free trade is to sell the idea to the public in your country and in other countries, to honor the agreements you enter into and to keep the moral high ground to be able to lead others and be an example that other countries want to follow, etc. Trade is built on stability, not instability, so you want to be a stabilizing force rather than a destabilizing one.

Trump has spend the past 2 years bad mouthing trade and surrounding himself with xenophobes and protectionists, trying to convince US citizens that other countries are bad and just trying to screw them over, he's been flip flopping around on existing treaties and future ones, threatening people left and right while praising others that don't deserve praise. He doesn't take responsibility for anything and blames everyone else but himself for his failings. He supports whatever industries that have a chance of giving him electoral advantage or that belong to his friends, and attacks those of his perceived enemies, rather than representing the country as a whole and keeping the office of the president above the fray, etc. Nationalists in other countries like to paint the US as someone who wants to keep them down, and Trump is playing right into their hands and making it harder for the free traders in those countries to engage with the US.

Seems to me a recipe for less free trade, not more of it.

Don't get me wrong, I'm not dumb, I see what he's trying to do with these tariffs and bargaining chips. I just think there's a high risk it doesn't turn out how he thinks it will and the game of chicken ends with a collision where both sides are worse off and there's no winner (free trade is a win-win, so restricting it tends to be a lose-lose).

I think your hatred towards Trump blinds you to the obvious. He is not my favorite nor do I approve of his social policies. As for the trade, no one including Trump is disputing that free trade is beneficial as long as it is fair. And that's the key point. That's why he quickly backed off from punishing Europeans. But Chinese are not acting as fair partners and they are the ones who are reneging on their agreements. I don't try to reason with the thief and show him the moral high ground.

I think fairer but lesser trade will be beneficial to the US. It will help reduce the income inequality and would lift more boats rather than the Oligopolies that we have today.

I think you missed my point. The goal might be noble, but he's going about it wrong if he wants to achieve that goal, and I'm not even sure if that's truly his goal (based on his statements and actions and the ones of his advisors).

Trumps thinks attacking China will be popular in a populist way, that's why he's doing it. He's basing a lot of his beliefs on random FOX News segments and whatever his mogul friends and protectionist advisors slip into his ear (a lot of it factually wrong).  Autocrats like Trump all need an external enemy to blame for their country's problems, and China and Mexico have been Trump's go to for a while.

That's why I'm afraid that this could turn badly. There's no grand plan or strongly held ideals to aim for here. If we're lucky it won't blow up, but he's playing with fire and mostly thinking about himself, like with most things he does.

I do dislike Trump a lot, but it's not an irrational dislike, it's quite rational given that he's everything that people like Buffett and Munger warned about all their lives. Narcissistic nepotistic compulsive liars con artists who are sexual aggressors, braggarts and bigots don't rank high on my fave list, I don't know about yours.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on April 04, 2018, 01:00:04 PM
https://twitter.com/ErinBurnett/status/980979636338417664
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: valcont on April 04, 2018, 01:06:58 PM
I think you missed my point. The goal might be noble, but he's going about it wrong if he wants to achieve that goal, and I'm not even sure if that's truly his goal (based on his statements and actions and the ones of his advisors).

Trumps thinks attacking China will be popular in a populist way, that's why he's doing it.

He's basing a lot of his beliefs on random FOX News segments and whatever his mogul friends and protectionist advisors slip into his ear (a lot of it factually wrong).  Autocrats like Trump all need an external enemy to blame for their country's problems, and China and Mexico have been Trump's go to for a while.

That's why I'm afraid that this could turn badly. There's no grand plan or strongly held ideals to aim for here. If we're lucky it won't blow up, but he's playing with fire and mostly thinking about himself, like with most things he does.

I do dislike Trump a lot, but it's not an irrational dislike, it's quite rational given that he's everything that people like Buffett and Munger warned about all their lives. Narcissistic compulsive liars con artists who are sexual aggressors, braggarts and bigots don't rank high on my fave list, I don't know about yours.

Ok so if Obama had imposed the tariffs , would it be ok since he was supposedly driven by higher ideals? I am separating policy from personality since I'm only interested in the end goal which is fair trade.

Do you like the status quo that we have with China and Mexico? If you do then there is no discussion to be had. But if you think negotiations can work then I'm telling you that unless you show the stick there won't be any progress. America tried to negotiate in good faith for the last 20 years and failed.

Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Hawks on April 04, 2018, 01:17:09 PM
And you think that the U.S. has never been a "thief" in world trade?  Really?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on April 04, 2018, 01:20:29 PM
I think your hatred towards Trump blinds you to the obvious. He is not my favorite nor do I approve of his social policies. As for the trade, no one including Trump is disputing that free trade is beneficial as long as it is fair. And that's the key point. That's why he quickly backed off from punishing Europeans. But Chinese are not acting as fair partners and they are the ones who are reneging on their agreements. I don't try to reason with the thief and show him the moral high ground.

I think fairer but lesser trade will be beneficial to the US. It will help reduce the income inequality and would lift more boats rather than the Oligopolies that we have today.
Maybe you want to be specific about this fair trade and what you mean cause unless you're talking about coffee then it's just a made up thing.

Also please explain how imposing tariffs will help reduce income inequality. And I'm really interested in how tariffs will do something about the oligopolies we have.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: John Hjorth on April 04, 2018, 01:32:40 PM
...If Trump tanks the economy, he will be disposed of quicker than his supporters think, probably after midterm elections.

This hands on approach - and hands on, practical based -  line of thinking - for my part - has a lot of personal appeal to me.

With regard to the latest posts from Valcont in this topic, perhaps one should try to think - as example - about the US techs barred penetration to China, the lack of possibility for many global companies to "settle" in China with wholly owned subs, and on and on.

Please don't put me in any camp here. I really try to stay openminded.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: EliG on April 04, 2018, 01:37:53 PM
Do you like the status quo that we have with China and Mexico? If you do then there is no discussion to be had. But if you think negotiations can work then I'm telling you that unless you show the stick there won't be any progress. America tried to negotiate in good faith for the last 20 years and failed.

https://twitter.com/crampell/status/981629722684809221

"Challenge for Trump administration messaging that tariffs are just a negotiating tactic: China hears those comments too. Administration apparently wants China to be scared the tariffs might come, but markets to be reassured that they won't."

Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Hawks on April 04, 2018, 01:38:58 PM
Name me one time that the U.S. played "fair" with trade, business, politics, etc in Central and South America over the years. Anyways, let's see how all this unfolds with the U.S. and China.
Hoping cooler heads prevail.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cigarbutt on April 04, 2018, 01:46:01 PM
So, we can agree that the aim is "fair" trade.
But what is your definition of "fair" trade?

And if you conclude that the present situation is far from "fair", how do you get there (steps, time frame etc)?

President Lincoln had "protectionist" tendencies but was a wise man and he said: "We can complain because rose bushes have thorns or rejoice because thorn bushes have roses." Your definition of "fairness" may be a matter of perspective.

Please elaborate.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: valcont on April 04, 2018, 01:47:35 PM

Maybe you want to be specific about this fair trade and what you mean cause unless you're talking about coffee then it's just a made up thing.

Also please explain how imposing tariffs will help reduce income inequality. And I'm really interested in how tariffs will do something about the oligopolies we have.

Fair trade is if you can sell your widgets in my country without any preconditions/taxes than I should have the same right in your country. That means no slowing down google, forcing Apple to share designs and partnering with the Chinese business to sell.

The promise of free/fair trade was that the new markets will open for American services/products. If that is not happening than there is no point in offering free trade and trigger mass layoffs. Charge tariffs to make the cheaper imported products unattractive and get them manufactured here or in a country that open its markets.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on April 04, 2018, 01:47:38 PM
I think you missed my point. The goal might be noble, but he's going about it wrong if he wants to achieve that goal, and I'm not even sure if that's truly his goal (based on his statements and actions and the ones of his advisors).

Trumps thinks attacking China will be popular in a populist way, that's why he's doing it.

He's basing a lot of his beliefs on random FOX News segments and whatever his mogul friends and protectionist advisors slip into his ear (a lot of it factually wrong).  Autocrats like Trump all need an external enemy to blame for their country's problems, and China and Mexico have been Trump's go to for a while.

That's why I'm afraid that this could turn badly. There's no grand plan or strongly held ideals to aim for here. If we're lucky it won't blow up, but he's playing with fire and mostly thinking about himself, like with most things he does.

I do dislike Trump a lot, but it's not an irrational dislike, it's quite rational given that he's everything that people like Buffett and Munger warned about all their lives. Narcissistic compulsive liars con artists who are sexual aggressors, braggarts and bigots don't rank high on my fave list, I don't know about yours.

Ok so if Obama had imposed the tariffs , would it be ok since he was supposedly driven by higher ideals? I am separating policy from personality since I'm only interested in the end goal which is fair trade.

Do you like the status quo that we have with China and Mexico? If you do then there is no discussion to be had. But if you think negotiations can work then I'm telling you that unless you show the stick there won't be any progress. America tried to negotiate in good faith for the last 20 years and failed.

If Trump isn't interested in free trade (nothing tells me he is, even if it's one of his keywords used to coat his protectionism), getting free trade would basically be an accident. There are more effective ways to get to fair trade than accidentally, y'know.

You're basically making the Bush argument of "you're either with us or against us". That's BS. There's a thousand ways that things could be done, and this one just happens to be one that I don't think is particularly good, and coming from this clownshow, I don't have high hopes that it'll go very well.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: valcont on April 04, 2018, 01:49:58 PM
Name me one time that the U.S. played "fair" with trade, business, politics, etc in Central and South America over the years. Anyways, let's see how all this unfolds with the U.S. and China.
Hoping cooler heads prevail.

Ok so two wrongs make a right?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on April 04, 2018, 01:51:46 PM
Name me one time that the U.S. played "fair" with trade, business, politics, etc in Central and South America over the years. Anyways, let's see how all this unfolds with the U.S. and China.
Hoping cooler heads prevail.

Ok so two wrongs make a right?

Exactly!
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: mrholty on April 04, 2018, 03:39:35 PM
I think you missed my point. The goal might be noble, but he's going about it wrong if he wants to achieve that goal, and I'm not even sure if that's truly his goal (based on his statements and actions and the ones of his advisors).

Trumps thinks attacking China will be popular in a populist way, that's why he's doing it.

He's basing a lot of his beliefs on random FOX News segments and whatever his mogul friends and protectionist advisors slip into his ear (a lot of it factually wrong).  Autocrats like Trump all need an external enemy to blame for their country's problems, and China and Mexico have been Trump's go to for a while.

That's why I'm afraid that this could turn badly. There's no grand plan or strongly held ideals to aim for here. If we're lucky it won't blow up, but he's playing with fire and mostly thinking about himself, like with most things he does.

I do dislike Trump a lot, but it's not an irrational dislike, it's quite rational given that he's everything that people like Buffett and Munger warned about all their lives. Narcissistic compulsive liars con artists who are sexual aggressors, braggarts and bigots don't rank high on my fave list, I don't know about yours.

Ok so if Obama had imposed the tariffs , would it be ok since he was supposedly driven by higher ideals? I am separating policy from personality since I'm only interested in the end goal which is fair trade.

Do you like the status quo that we have with China and Mexico? If you do then there is no discussion to be had. But if you think negotiations can work then I'm telling you that unless you show the stick there won't be any progress. America tried to negotiate in good faith for the last 20 years and failed.

If Trump isn't interested in free trade (nothing tells me he is, even if it's one of his keywords used to coat his protectionism), getting free trade would basically be an accident. There are more effective ways to get to fair trade than accidentally, y'know.

You're basically making the Bush argument of "you're either with us or against us". That's BS. There's a thousand ways that things could be done, and this one just happens to be one that I don't think is particularly good, and coming from this clownshow, I don't have high hopes that it'll go very well.

I agree with much of what you wrote.  I'm a free-trader but my experience has shown me that the US is generally open to all and often closed.  I also understand China's policy in the short and long term and it makes sense.  I think Trump is playing checkers while most of the others play chess yet I also appreciate the fact that the US is willing to talk Tariff's and what is fair.  Hell for years that is what half the US populace has wanted the Democrats to do. 

If Obama had done this the unions (of all including the UAW and everybody else) would be lining up behind him.  The only positive is watching my facebook friends who are socialist/protectionist/Sanders fans twist trying to hate Trump on this for something they secretly support.

I have no problem with this change in US policy (+ a change in requiring others to pay for our role as World Police) if it was part of a rational plan.  Its not.  Trade wars usually lead to real wars.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on April 05, 2018, 05:13:51 PM
https://www.cnbc.com/2018/04/05/trump-asks-us-trade-representative-to-consider-100-billion-in-additional-tariffs-on-chinese-products.html

https://twitter.com/NBCNews/status/982059216268480512
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on April 05, 2018, 06:04:18 PM
https://www.cnbc.com/2018/04/05/jamie-dimon-backs-trumps-legitimate-complaints-over-trade.html

Cardboard
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: EliG on April 05, 2018, 06:30:00 PM
Republican Senator Ben Sasse:

(https://pbs.twimg.com/media/DaD2Bb0WAAEQDys.jpg:large)
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cameron on April 05, 2018, 07:20:01 PM
seems illogical for me to laugh at those that adhere to free efficient markets when it comes to the stock market but somehow side with them when it comes to macroeconomics.

I'm by no means a fan of Trump but I have yet to hear anyone give a good reason that's not some cookie cutter textbook free market blah blah blah answer as to why we shouldn't impose these tariffs. I'm all ears.

Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on April 05, 2018, 07:27:55 PM
seems illogical for me to laugh at those that adhere to free efficient markets when it comes to the stock market but somehow side with them when it comes to macroeconomics.

I'm by no means a fan of Trump but I have yet to hear anyone give a good reason that's not some cookie cutter textbook free market blah blah blah answer as to why we shouldn't impose these tariffs. I'm all ears.
Well in the long run you'll be poorer. Not by much really, just somewhat poorer. But in the short run you'll inflict a lot, and I do mean A LOT, of pain on the very people who you're trying to help. Also these people that are going to take the pain are the ones that are least able to shoulder it. So you're being really cruel for no gain.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: LC on April 05, 2018, 07:53:31 PM
Let's invert: can we name a country in the modern world that has imposed a strict tariff regime and has prospsered as a result?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on April 05, 2018, 08:00:15 PM
Ok guys, here's a proposal.

Let's say that the US does the following. Impose a federal sales tax, nothing too big, say maybe around 3-4%. Food and basic necessities should be excluded. Anyone earning under 35-40k gets a sales tax tax credit to offset it. Then you hike income tax on higher incomes in a progressive manner. Say 2% higher tax starting at the $80,000 level gradually moving up to 5% higher at the top bracket. Also introduce a more progressive scale for the taxation of interest.

Now all this extra revenue that's collected doesn't go into general revenue. It goes into a separate pot that funds an earned income tax credit on a progressive scale - you get less as you earn more. This tax credit gets phased out maybe around the 60k mark.

Thoughts? I'd especially like to hear from our tariff loving members.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: valcont on April 05, 2018, 08:59:36 PM
Well in the long run you'll be poorer. Not by much really, just somewhat poorer. But in the short run you'll inflict a lot, and I do mean A LOT, of pain on the very people who you're trying to help. Also these people that are going to take the pain are the ones that are least able to shoulder it. So you're being really cruel for no gain.

Oh I see. Its about protecting the little guy. BTW what about the Chinese pork/soybean consumers? Wouldn't they hurt more because of the Chinese tariffs? If tariffs are ineffective, why is China responding?

US has way more tolerance to bear pain than China. Easier to feed 300m than 1.4B.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: valcont on April 05, 2018, 09:00:07 PM
Let's invert: can we name a country in the modern world that has imposed a strict tariff regime and has prospsered as a result?

Yes. Its called PRC.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: LC on April 05, 2018, 09:51:03 PM
Let's invert: can we name a country in the modern world that has imposed a strict tariff regime and has prospsered as a result?

Yes. Its called PRC.

Got a link?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on April 06, 2018, 04:30:13 AM
seems illogical for me to laugh at those that adhere to free efficient markets when it comes to the stock market but somehow side with them when it comes to macroeconomics.

I'm by no means a fan of Trump but I have yet to hear anyone give a good reason that's not some cookie cutter textbook free market blah blah blah answer as to why we shouldn't impose these tariffs. I'm all ears.

While I think Trump has a point with his tariffs, the way he introduces them leaves the Chinese government no choice but to retailiate, unless they chose to “lose face”, which would be a bigger disaster for the officials than the pain this may cause for their economy. I think Trump does a big tactical mistake and underestimates their opponents (a mistake the US has repeated a lot) , the same mistake that lead to WW1 because no side felt they could back down and one side felt they needed to be offensive. Governments don’t crack from outside pressure either, the Chinese will endure a lot of pain if they have to, but I am not so sure about the US. US has elections and can change their leadership and direction very quickly and that and the lack of tolerance to endure hardship will make it very hard to “win” this trade war.

Let see if we are willing to tank our economy for this, I think the Chinese are willing to follow through.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cameron on April 06, 2018, 05:30:34 AM
seems illogical for me to laugh at those that adhere to free efficient markets when it comes to the stock market but somehow side with them when it comes to macroeconomics.

I'm by no means a fan of Trump but I have yet to hear anyone give a good reason that's not some cookie cutter textbook free market blah blah blah answer as to why we shouldn't impose these tariffs. I'm all ears.
Well in the long run you'll be poorer. Not by much really, just somewhat poorer. But in the short run you'll inflict a lot, and I do mean A LOT, of pain on the very people who you're trying to help. Also these people that are going to take the pain are the ones that are least able to shoulder it. So you're being really cruel for no gain.

You couldn't say the same thing about the sales or VAT tax?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cigarbutt on April 06, 2018, 06:14:50 AM
-Free trade is good (if...).
-The trend in the US international trade and services deficits is unsustainable.
https://fred.stlouisfed.org/series/BOPGSTB
-Somehow need a reconciliation (peaceful or not).

"Let see if we are willing to tank our economy for this, I think the Chinese are willing to follow through."

With these macro questions, often end up with circular arguments in terms of cause and effect because the economy is so complex and in fact is a big circle: what goes around comes around. Despite this issue, I disagree with the above statement.

With all this economic sabre rattling, it is tempting to expect worse scenarios but this could be simply noise. I submit that the outcome of trade disputes primarily depends on the underlying economic conditions and not the other way around.

From most of the serious stuff I looked at, the Smoot-Hawley tariffs and the protectionist mindset of the times did not "cause" the economic downturn (although it clearly accentuated the severity and the duration).

I don't know what the global economy will do but there is a range of outcomes.

In terms of the trade dispute/protectionist mindset, here's a quote from a political program:

"[W]e realize that there are certain industries which cannot now successfully compete with foreign producers because of lower foreign wages and a lower cost of living abroad, and we pledge the next Republican Congress to an examination and where necessary a revision of these schedules to the end that American labor in the industries may again command the home market, may maintain its standard of living, and may count upon steady employment in its accustomed field."

The quote is from the Republican Party platform that was written in 1928.

The point is that the political and social environment now seems to be unusually open to a protectionist attitude.

The other fundamental point of this post is that a reconciliation is necessary and the outcome will depend on the global underlying economic conditions going forward.

If we continue to hum along somehow, this may go down in history as a non-event.

If the global economy loses steam however, to paraphrase a past President who had an unusual hunch for complex issues: "This sucker could go down".
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: no_free_lunch on April 06, 2018, 07:25:28 AM
Good comments cigarbutt.

All I know is I have been watching the economy, basically daily, for 20 years and it is much more resilient than people give it credit for.  Oil prices went up to $140 barrel and it sustained that.  The GFC was supposed to be the mother of all bear markets and it was but the US at least bounced back fairly quickly.  I don't see how adding tarriffs on $200-300B of products in a $20T economy is going to tank things.  I don't have the formula's but I suspect this will drop GDP by .1% or thereabouts, if at all.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: valcont on April 06, 2018, 08:55:15 AM
While I think Trump has a point with his tariffs, the way he introduces them leaves the Chinese government no choice but to retailiate, unless they chose to “lose face”, which would be a bigger disaster for the officials than the pain this may cause for their economy. I think Trump does a big tactical mistake and underestimates their opponents (a mistake the US has repeated a lot) , the same mistake that lead to WW1 because no side felt they could back down and one side felt they needed to be offensive. Governments don’t crack from outside pressure either, the Chinese will endure a lot of pain if they have to, but I am not so sure about the US. US has elections and can change their leadership and direction very quickly and that and the lack of tolerance to endure hardship will make it very hard to “win” this trade war.

Let see if we are willing to tank our economy for this, I think the Chinese are willing to follow through.

Insanity is keep doing the same thing over and over expecting a different result and your solution is exactly that. US has been trying to negotiate with China for over two decades and we have all seen the results. Chinese, just like North Koreans, understand power and love wusses like Obama who folds easily. As for enduring pain, America can be nationalist too. It wouldn't take much to compensate for the revenue loss but Chinese will be screwed. Do you think Europeans will sit still and import Chinese goods on the same terms? What about other countries that are looking to compete with China ? China is already oversupplied and losing a major buyer wouldn't help its cause. US has tremendous advantages.

Don't believe the media when they pick up some farmer from Iowa and cry foul. They have a specific agenda driven by corporate greed and an intense hatred of Trump. I believe this will play out just like the Trump's election (whom I voted against btw). Disbelief, anger,resignation and finally acceptance. Chinese are already moving to the resignation stage. They didn't match the $100B tariffs last night and are desperate to cut a deal. Trump was right to escalate.
 
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on April 06, 2018, 09:30:58 AM
The Chinese politburo is scared to death about civil unrest. Inflation is the biggest threat especially food.

To maintain control after Tiananmen Square, they opened up the Chinese society over time to capitalism. This is a very different course than Russia which became a wild-West until Putin took control or North Korea where the regime keeps on entrenching itself.

Keeping people employed, maintaining order and avoiding protest is what they need to stay in power and keep the good life.

This is not about Taiwan independence or some territorial battle, so I have a hard time seeing how the general populace on both sides becomes enraged over an economic issue. They will negotiate a deal, try to save face and both sides will claim victory.

Cardboard
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: LC on April 06, 2018, 09:41:54 AM
Quote
Insanity is keep doing the same thing over and over expecting a different result and your solution is exactly that.
I thought it was persistence? Quitting is trying something once and if it doesn't succeed giving up immediately.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: hyten1 on April 06, 2018, 09:45:48 AM
https://www.bloomberg.com/view/articles/2018-04-06/trump-s-tariffs-overlook-how-much-u-s-needs-china

if i have to bet on my life which side can take more pain, i would bet on China.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on April 06, 2018, 09:56:37 AM
seems illogical for me to laugh at those that adhere to free efficient markets when it comes to the stock market but somehow side with them when it comes to macroeconomics.

I'm by no means a fan of Trump but I have yet to hear anyone give a good reason that's not some cookie cutter textbook free market blah blah blah answer as to why we shouldn't impose these tariffs. I'm all ears.
Well in the long run you'll be poorer. Not by much really, just somewhat poorer. But in the short run you'll inflict a lot, and I do mean A LOT, of pain on the very people who you're trying to help. Also these people that are going to take the pain are the ones that are least able to shoulder it. So you're being really cruel for no gain.
You couldn't say the same thing about the sales or VAT tax?
What does VAT have to do with what I wrote above? And actually no, you couldn't say the same thing about the VAT.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rkbabang on April 06, 2018, 09:57:07 AM
Good comments cigarbutt.

All I know is I have been watching the economy, basically daily, for 20 years and it is much more resilient than people give it credit for.  Oil prices went up to $140 barrel and it sustained that.  The GFC was supposed to be the mother of all bear markets and it was but the US at least bounced back fairly quickly.  I don't see how adding tarriffs on $200-300B of products in a $20T economy is going to tank things.  I don't have the formula's but I suspect this will drop GDP by .1% or thereabouts, if at all.

No it isn't a KO punch, but it still isn't a good thing.  I could rip off one of my fingernails with a pair of pliers today and in the grand scheme of things it won't make a major impact on me having a happy life, but it still would not be good. I would still be better off not doing it.

Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cameron on April 06, 2018, 12:22:11 PM
seems illogical for me to laugh at those that adhere to free efficient markets when it comes to the stock market but somehow side with them when it comes to macroeconomics.

I'm by no means a fan of Trump but I have yet to hear anyone give a good reason that's not some cookie cutter textbook free market blah blah blah answer as to why we shouldn't impose these tariffs. I'm all ears.
Well in the long run you'll be poorer. Not by much really, just somewhat poorer. But in the short run you'll inflict a lot, and I do mean A LOT, of pain on the very people who you're trying to help. Also these people that are going to take the pain are the ones that are least able to shoulder it. So you're being really cruel for no gain.
You couldn't say the same thing about the sales or VAT tax?
What does VAT have to do with what I wrote above? And actually no, you couldn't say the same thing about the VAT.

A tariff is basically a tax? Maybe you could explain how im looking at it wrong.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on April 06, 2018, 02:04:54 PM
seems illogical for me to laugh at those that adhere to free efficient markets when it comes to the stock market but somehow side with them when it comes to macroeconomics.

I'm by no means a fan of Trump but I have yet to hear anyone give a good reason that's not some cookie cutter textbook free market blah blah blah answer as to why we shouldn't impose these tariffs. I'm all ears.
Well in the long run you'll be poorer. Not by much really, just somewhat poorer. But in the short run you'll inflict a lot, and I do mean A LOT, of pain on the very people who you're trying to help. Also these people that are going to take the pain are the ones that are least able to shoulder it. So you're being really cruel for no gain.
You couldn't say the same thing about the sales or VAT tax?
What does VAT have to do with what I wrote above? And actually no, you couldn't say the same thing about the VAT.
A tariff is basically a tax? Maybe you could explain how im looking at it wrong.
Ok I see what you mean. Here's how you're looking at it wrong.

Let's say that you're an honest steward of the economy and you're not trying to go on an ego trip or anything like that. You look at the situation and you say that you want to shrink the trade deficit. To do that you want to increase savings. You're correct that VAT or tariff would both do the trick because they're both a tax that'll boost savings.

The problem is that with the tariff you end up poorer because the tariff has the nasty side effect in rearranging production in less optional ways. So you loose productivity. Also the transition period is very painful. On top of that it leaves a bunch of stranded assets which is wealth destructive. The VAT doesn't have these side effects.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on April 06, 2018, 04:09:37 PM
Koch brothers side with Liberty:

https://www.cnbc.com/amp/2018/04/06/koch-brothers-network-breaks-with-trump-over-china-trade-war.html

That is funny. Sorry  ;D

Cardboard
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on April 07, 2018, 10:48:27 AM
Koch brothers side with Liberty:

https://www.cnbc.com/amp/2018/04/06/koch-brothers-network-breaks-with-trump-over-china-trade-war.html

That is funny. Sorry  ;D

Cardboard

What makes you so consistently wrong is that you think about everything in terms of "sides".
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on April 08, 2018, 04:39:51 AM
Article from Stephen Roach:
https://www.bloomberg.com/view/articles/2018-04-06/trump-s-tariffs-overlook-how-much-u-s-needs-china (https://www.bloomberg.com/view/articles/2018-04-06/trump-s-tariffs-overlook-how-much-u-s-needs-china)
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: no_free_lunch on April 08, 2018, 07:36:33 AM
Just remember thta this guy works for morgan stanley.

Just off the bat he talks about China`s coherent policy towards the US.  This policy may involve manipulating the currency exchange rate, throttling US companies internet sites, IP theft, and I don`t even know what else.  Yes, it is very coherent and very consistent.  The US is starting to become more coherent as well.  :)
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: no_free_lunch on April 08, 2018, 07:38:53 AM
Spekulatius, what do you think Buffet is referring to when he referenced the deficit.  In my mind it is either tarriffs or lowering the US currency.  Why do we pay so much attention to Buffet but when he runs counter to us on an issue we choose to ignore him.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cigarbutt on April 09, 2018, 05:49:51 AM
Stephen Roach has been around for a long time, is very knowledgeable about China and has been quite consistent over the years.
I appreciate and respect what he writes even if I don't agree with a lot of what he says (reasonable?).

Opinion:he marvels at the economic miracle that has occurred in China but the awe may prevent him from fully appreciating the incredible challenges and the undesirable political trends characterizing China now.

From another era (2007):
https://piie.com/publications/papers/roach-on-hufbauer1007.pdf

-Trade is multi-lateral and the actual sophisticated global supply chains combined with disruptive technologies allowing to take advantage of comparative wage factors have arisen, in large part, from the US.

-Trade imbalances, absent a working exchange rate mechanism, will require "imposed" measures that will counteract previous trends that allowed the american consumers to earn relatively too much, to pay relatively too little and to stop saving (individuals and governments).

-The blame game with China is a questionable strategy and, at best, would try to address only a part of the problem and not the underlying defining features.

-Stephen Roach asks this still unanswered question:"Who is really to blame for inadequate saving—the root cause of the US trade deficit?"

-Looking at federal, state and local governments budgets of the last 10-15 years, competition of scarce (and insufficent) funds have resulted in funds being maintained for the older generation ie healthcare, long term care and pensions (not saying that this is a bad thing, by itself) at the expense of infrastructure and education. And the squeeze will worsen.

-To win (compete and prosper) in the global economic landscape, an option is to induce higher import prices. The other option is to save, invest and induce lower export prices. Restore the production/consumption balance. Just like value investing (traditional kind, at least), that would mean averageing down, some pain along the way. The right animal spirits need to be awakened and a healthy restraint for infinite QEs at the first hint of lower consumption trends should be maintained.

-Benjamin Franklin popularized the expression: “A penny saved is a penny earned” and IMO, the founding father was on the right track.

-Concerning comments made above about who could endure most pain, I submit that pain should be avoided and investing in a way is relative pain now for less pain later. IMO, China could endure more in the short term but I bet on the long term resilience of the US.

-Stephen Roach's articles can be debated but one of the advantages of his perspective is that it acts like a mirror, forcing the reader to evaluate the challenges ahead.

Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on April 11, 2018, 05:38:05 PM
Spekulatius, what do you think Buffet is referring to when he referenced the deficit.  In my mind it is either tarriffs or lowering the US currency.  Why do we pay so much attention to Buffet but when he runs counter to us on an issue we choose to ignore him.

I am not sure, if Buffett got solution of the deficit correct. Yes, there is too much spending, but does adding a tax to imports fix that issue? I am not sure.

Also keep in mind that Buffets article is from 2004 and he has not written much on this topic that I am aware of recently. Maybe he even changed his opinion on the topic.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on April 11, 2018, 06:29:23 PM
Spekulatius, what do you think Buffet is referring to when he referenced the deficit.  In my mind it is either tarriffs or lowering the US currency.  Why do we pay so much attention to Buffet but when he runs counter to us on an issue we choose to ignore him.

I am not sure, if Buffett got solution of the deficit correct. Yes, there is too much spending, but does adding a tax to imports fix that issue? I am not sure.

Also keep in mind that Buffets article is from 2004 and he has not written much on thr topic that I am aware of recently. Maybe he even changed his opinion on the topic.
As I recall the buffett article called for a voucher system to restrict imports in order to balance trade. It's nothing ground breaking. It's basically a flexible quota system. But how would it work?

Buffett's idea actually is a forced savings. Once implemented you'll get significantly higher interest rates. You'll also get a majour recession with high unemployment. This would be an economic event comparable to 2008 in magnitude. However a better comparison is probably a prolonged 81-82.

And this is why I don't think much will get done. The economic pain that has to be inflicted in order for the US to balance trade is of such magnitude that it's impossible to get it done in a democracy. It's fun to watch Trump run his mouth (or twitter feed) and beat your chest and say screw china. But once pink slips start flying the mood will quickly change. People don't actually care that much about the trade deficit. They care a lot about having jobs and money. If you start inflicting economic pain on people they will vote you out and bring someone else in that will stop the pain.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: no_free_lunch on April 12, 2018, 07:58:00 PM
If I understand correct, Buffet is advocating not via tarriffs but complete shut-down of non-balanced trade.  He sounds populist too based on current definitions.

I am not sure how we can know what rebalancing trade would do to the US economy.  Could cause some pain but a 2008 recession?  Germany has been bumping up the trade surplus for decades and their economy seems to be doing just fine.  Maybe the US dollar will weaken or prices go up a touch but pink-slips?  The US economy is over-heating if anything.  The fed is raising rates so maybe they just don't raise as fast.  Maybe the unemployment goes from 4% to 4.5%.  It would still be one of the lowest unemployment rates in the world.  There are plenty of options, many ways this can play out, if done over a period of years they can rebalance without the general population even noticing.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on April 12, 2018, 08:47:43 PM
The main difference between Germany and the US is that the Germans want to save whereas the Americans don't. So the German surplus happens naturally whereas you have to force the Americans to save into balanced trade. So rates go up. There's a couple of ways to look at it to understand it but what happens economically behind the scenes is the same thing (don't worry about that though).

1. Rates have to go up to induce saving over over spending. These are rates in excess of equilibrium so unemployment is above NAIRU.

2. Since you block imports. All that demand gets channeled inward. The economy cannot handle that capacity so you get inflation. So rates go up.

What I didn't mention in my previous post is that trying to balance trade is akin to swimming upstream. Because rates will have to go up and that causes the dollar to appreciate. That in turn makes imports more attractive.

As for the magnitude of the economic event a back of the envelope calculation is a 2008 event. Probably even bigger in terms of GDP. But the mechanics are not at all 2008. The mechanics are 81-82. Balancing trade is very similar to quashing inflation. You wanna wack that demand hard. But 81-82 was brief because in 81-82 you just wanted to realign expectations. In this case you have to re-calibrate the economy and that takes time - in that aspect more like 08-09 without the crash boom bang. The economic pain and unemployment comes from higher rates and the friction from that re-calibration despite the fact that the US is around full employment now. On paper it works out great but in practice it's really messy.

Now if you wanted to attenuate some of the pain these are a couple of things you could do. though they won't get done:

You could let inflation run a little higher. I really like this one. This is of course economic pain because it would decrease buying power. But it would be widely distributed. Everyone hurts a little but not a lot. This will help a lot with the unemployment part and decrease the human suffering. But I don't think this is politically tenable.... you will see heads exploding all over CNBC.

Do some government saving in the area of defense spending. This is again politically impossible since it's accepted ethos that the military must be showered with money. Furthermore, while it helps, this still involves a lot of economic pain from friction.... getting the guy who makes 80k a year at the Raytheon missile factory to move to a 60k job at xyz factory is not easy.

Btw, this is more or less standard model stuff. It doesn't include anything about retaliatory measures where others are purposely trying to screw with you.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cigarbutt on April 13, 2018, 06:11:40 AM
Another perspective which, I think, says essentially the same thing using different words.
https://ftalphaville.ft.com/2018/04/12/1523505600000/Tariffs-increase-savings-in-a-world-already-drowsy-with-too-much-savings/#comments

Mr. Pettis is an ivory tower type but usually writes interesting thought-provoking stuff. He has, for quite some time, questioned China's capacity to achieve the transition between production and consumption. One way to "solve" the trade imbalance is if the savings rate in China collapses. Then someone would have to pick up the slack.


Comparing international savings rate (Germany and the US):
https://data.oecd.org/natincome/saving-rate.htm

I find it fascinating to compare because Germany is a relatively socialist state with a strong safety net, free healthcare and relative free access to education. Yet, for "cultural" reasons, Germans remain debt averse. In the US, citizens, on net basis, cannot rely as much on public ressources and the economy seems to be driven by credit-backed consumption. And Americans don't save.

Marx (chapter 24, Capital) [One of the lessons of The Art of War is: Know your enemy], described the Faustian conflict between the passion for accumulation, and the desire for enjoyment. It was felt that the capitalist abstinence would lead to its own demise. The US has moved away from accumulation but there is the possibility that the US will have to dance at some point like the Ant told the Grasshopper.

Both Germany and the US are leaders in R+D expenditures. Interesting to note that, in the US, the gap between domestic investments and domestic savings is filled by debt (owed to the future and owed to foreigners).

I believe in reversion to the mean but it is possible, like no_free_lunch suggests, that we won't "feel" it. But there is a range of outcomes.


Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: EliG on April 13, 2018, 06:41:34 AM
http://www.collaborativefund.com/blog/what-were-reading-april13/

Why do Germans save so much?

Quote
German households save about 10 per cent of their disposable income, twice as much as the average EU or American. (In the UK, the savings rate was actually negative in 2016.) What’s more, the German savings rate is remarkably stable over time, unaffected by economic crises and interest rate changes.

According to Harold James, the economic historian and Princeton professor, the German commitment to saving reflects demographic, historical and even psychological currents: “The Germans are much more worried than the Americans, for example. They think they need to prepare for every eventuality, that bad things can hit them and that they need to be ready for that,” he says. James is also convinced that religion plays a role: “There is a Protestant tradition of saving and restraint. Virtuous behaviour means renunciation of present satisfaction.”
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cigarbutt on April 14, 2018, 04:34:06 PM
Two pictures are worth two thousand words.
http://archive.worldmapper.org/display.php?selected=57
http://archive.worldmapper.org/display.php?selected=58

I just read that exposure to too many toys can limit creativity and give kids an addiction to 'stuff' early on.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on April 14, 2018, 08:04:14 PM
http://www.collaborativefund.com/blog/what-were-reading-april13/

Why do Germans save so much?

Quote
German households save about 10 per cent of their disposable income, twice as much as the average EU or American. (In the UK, the savings rate was actually negative in 2016.) What’s more, the German savings rate is remarkably stable over time, unaffected by economic crises and interest rate changes.

According to Harold James, the economic historian and Princeton professor, the German commitment to saving reflects demographic, historical and even psychological currents: “The Germans are much more worried than the Americans, for example. They think they need to prepare for every eventuality, that bad things can hit them and that they need to be ready for that,” he says. James is also convinced that religion plays a role: “There is a Protestant tradition of saving and restraint. Virtuous behaviour means renunciation of present satisfaction.”

Yes, the Germans have a more pessimistic view and saving for the rainy day is part of the cultural backdrop. The real question is why the US population saves s little?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on April 14, 2018, 08:35:06 PM
Ok, it seems to me that we're veering off the topic here. The topic being trade economics. But it's Saturday so what the hell.

What Cigarbutt posted about toys is true. From that perspective, economically, there are different breeds of people around the globe. Japanese are a different breed. And Americans are a different breed as well. Toys are one thing. But they grow different in other ways as well. One of them that's baffling me is the current trend where they consider pets to be part of the family akin to a child. Now i thought I liked dogs (screw cats) just as much as the next guy but apparently I was wrong. This is a little screwy.

Now I have this personal theory which is no way economic or scientific and it's most likely wrong. But i think it may have something to do with conditioning as well as stress and addiction - in a broad sense. You know how in long hours, high stress environments like banking and law there's a higher preponderance of alcohol and drub abuse? Well Americans work a lot! When you look at other really savey places like Germany and the Netherlands... well they work a LOT less than the Americans. It may very well be that the Americans are overworked and over stressed and consumption is their drug of choice to help them cope with their lives.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cigarbutt on April 15, 2018, 12:02:04 PM
The toys trade deficit is only an example of the typical scenario that also occurs across the other major import/export categories: machinery, furniture and bedding, sports equipment and footwear.

A few years ago, built a significant position in Mega Brands, a Canada-based manufacturer of building blocks for kids (bought by Mattel). One of the basic challenges for them, in terms of the competitive landscape, was the wage cost differential . How did they deal with that?

1-They invested ++ in China (manufacturing capacity and low wages).
2-They invested in advanced automation machinery in their Canadian plant (which I visited).

For this specific company, they used internally generated funds to invest in 1- and 2- and I’m glad they did. And free trade is good. But.

Let’s bridge to “trade economics”. In the aggregate, on a net basis, the trade deficit between high wages countries and low wages countries has been rising and this trend is unlikely to stop until the wage gap and the difference in standards of living disappear and consumers from high wage countries have tended to borrow to maintain that trend. Also, in the aggregate, on a net basis, the private players that reinvest in high wage countries in order to increase profitable production do so by buying machinery (which may come from low wage countries) and, to some extent, by borrowing from low wage countries.

In the early 1980’s, trade with China was immaterial. Since then, the plan has been to let China grow and hope for more political, social and economic freedom. And now, China is becoming a formidable competitor with a potential to reach US hegemony. Trade with China is now material and it’s not only about toys. Thucydides’s trap style.

In the past, it was thought/feared that the Soviet Union or Japan models would take over. The models auto-deflated and maybe it’s just a matter of toughing it out. Personally, I would not bet on China but some very savvy people (ie Bruce Flatt from BAM) do:

https://www.forbes.com/sites/antoinegara/2018/04/15/bruce-flatt-brookfield-china/#25c42ce53666

Hat tip to LongTermView.

It’s a tough issue and a coherent domestic and international strategy does not guarantee a positive outcome but IMO it’s worth the try.   
 
So, “The real question is why the US population saves so little?”

It’s not a new problem as people already worried about this in the 1980’s and Mr. Buffett, himself, shared concerns in the early 2000’s.
If “stress” is the issue, I would respectfully submit that a QE-style aggregate Prozac will not be a long term cure.

But the “problem” is getting bigger and an imbalance may be seen as an elastic band that is progressively stretched. There are ways to decrease the pressure but it may snap.

Barbell strategy, anyone?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on May 22, 2018, 03:24:52 PM
Thread: https://twitter.com/ilangoldenberg/status/998867045503643648
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on May 31, 2018, 05:38:56 AM
https://www.cnbc.com/2018/05/31/us-plan-to-impose-steel-and-aluminum-tariffs-on-canada-mexico-and-the-eu-is-99-point-9-percent-done-and-coming-very-soon-source.html
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on May 31, 2018, 06:38:03 AM
Why don't you post the real salty news?

https://www.cnbc.com/2018/05/31/trump-reportedly-said-he-wants-to-stop-german-luxury-car-imports-in-the-us.html

On tariffs, I do believe that they should not exist. If Trump's intention is to force other countries to take them down by threatening with tariffs then ok.

However, if he wants to impose trade barriers to "force" the production of certain goods in the U.S. then he should be impeached.

As simple as that.

Cardboard
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: doughishere on May 31, 2018, 08:07:14 AM
Even the Koch brothers dont like it. lol.

Carboard, arnt you a big trump fan? I quote:

I don't really care if he is arrogant, an idiot or whatever as long as he takes care of real business unlike Obama who was a pathetic useless loser who could only make great speaches.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on May 31, 2018, 08:16:59 AM
I am a fan of about everything he is doing. On tariffs, I stated my red line.

Cardboard
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: doughishere on May 31, 2018, 08:18:28 AM
I am a fan of about everything he is doing. On tariffs, I stated my red line.

Cardboard

lol. steel tariffs are you problem.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on May 31, 2018, 09:02:13 AM
Quote
Trump told French President Emmanuel Macron last month he would maintain his trade policy with the aim of stopping Mercedes-Benz models from driving down Fifth Avenue in New York.

LOL!
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on May 31, 2018, 09:06:22 AM
That is another one with unnamed sources.

There is very likely a IF missing in what he said to Macron but, the media is only good at sensational stuff.

Cardboard
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on May 31, 2018, 09:13:43 AM
1. you posted the link.

2. I tend to believe it's true he brings up german luxury vehicles a lot. He clearly has a bee in is bonnet about that.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: JoJo1 on May 31, 2018, 12:28:41 PM
idiot

at least he will teach european companies, that they have their own chip fabrics, tool design and
building machines  are not essentially an US skill, the european market is bigger than the US.
together with the Jaoanese and the Indians, European will learn to setup a world without being locked to the US for innovation and freedom. Then first disallow buying treasuries into european pension funds ...  selling all those treasuries then
For our company everything runs well with "the Donald". Our customers are all replacing their US product dependencies and buying a lot of electronics and software from european companies.

Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on May 31, 2018, 01:20:10 PM
Well this didn't take long.

https://www.thestar.com/news/canada/2018/05/31/us-will-hit-canada-with-steel-and-aluminum-tariffs-as-of-midnight-tonight.html

Quote
“We have to believe at some point common sense will prevail. But we see no sign of that in the U.S. action today,” Trudeau said in by far his strongest criticism of Trump since the president took office.

He described the moment as “a turning point in the Canada-U.S. relationship.”

Foreign Affairs Minister Chrystia Freeland said the Canadian tariffs would amount to $16.6 billion, the value of Canadian steel and aluminum exports affected by the U.S. tariffs. They will hit not only steel and aluminum products but dozens of others, from soup to boats to toilet paper to playing cards. Freeland said the list was carefully considered and has been in the works for some time, signalling that Canada was anticipating Washington's actions.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on May 31, 2018, 01:28:16 PM
There's the link to the full actual list.

https://www.fin.gc.ca/activty/consult/cacsap-cmpcaa-eng.asp
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: LC on May 31, 2018, 02:12:31 PM
Canada announces retaliatory tariffs:

https://www.cnbc.com/2018/05/31/canada-announces-retaliatory-tariffs.html

-Canada will retaliate against new U.S. tariffs by imposing its own trade barriers on U.S. steel, aluminum and other products.
-Foreign Minister Chrystia Freeland said Canada plans to slap dollar-for-dollar tariffs on the U.S.
-The Nafta partner's proposed import taxes would also cover whiskey, orange juice and other food products alongside the steel and aluminum tariffs.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Uccmal on May 31, 2018, 06:06:59 PM
That idiot Trump is going to cause a recession. 
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on May 31, 2018, 06:11:50 PM
I don't think the current action is of a recession level magnitude. But if they keep at it they'll get there.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: LC on May 31, 2018, 09:34:05 PM
That idiot Trump is going to cause a recession.

Trudeau is smart to match the tariffs, however.

https://en.wikipedia.org/wiki/Tit_for_tat#War
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on May 31, 2018, 10:38:50 PM
Yes, tit-for-tat trade actions are a totally asinine policy that countries are forced to take because they have no other choice. This is because the US policy on trade currently is "Folks!.... People are saying..... That trade wars are really easy to win!.... #WINNING!" It's kinda like MAD in military terms and the US is reaching for the launch codes.

Translation from Canadian of what Trudeau said today: We've tried to be nice and we've been patiently waiting for the US to take its head out of its ass. However the current administration insists to continue on its boneheaded way so we are forced to take these actions today even though we really, really don't want to.

The French finance minister was more blunt - his words:

Quote
Today, in terms of trade, we’re dancing by the edge of the cliff. It takes a lot of self-control to show the U.S. they are completely wrong.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on June 08, 2018, 03:52:06 AM
Trump apparently owns two Mercedes cars. maybe he does not like anyone but himself driving down 5th Avenue in a Mercedes?
https://www.topspeed.com/cars/car-news/the-cars-in-donald-trump-s-garage-ar175144.html (https://www.topspeed.com/cars/car-news/the-cars-in-donald-trump-s-garage-ar175144.html)
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: cobafdek on June 09, 2018, 10:11:26 AM
I heard Trump talking about this, he really can be ain ignorant moron sometimes.

The difference is that it used to be only the left who didn’t understand economics.

https://twitter.com/realDonaldTrump/status/969525362580484098

Can someone please explain trade 101 to the president of the United States?

Yeah, someone should run an ad on Fox and Friends.

https://twitter.com/alex_panetta/status/969556632886800384

. . . I think, this is just Mr Trump's way to move stagnated NAFTA negotiations forward. This is what great deal makers do... Everyone else seems to be playing checkers but Mr Trump plays chess.

I also think  EU and many other commentators are just hypocrite...
https://www.reuters.com/article/us-eu-steel-china/eu-raises-import-duties-on-chinese-steel-angering-beijing-idUSKBN1780VU

Revisiting the early part of this thread, my ruling from the bench:  Value^2 wins:

http://www.businessinsider.com/trump-suggests-dropping-all-tariffs-trade-barriers-at-g7-summit-2018-6
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: John Hjorth on June 10, 2018, 05:20:05 AM
How do you assess the situation now, cobafdek?

[I have no intent to appear condecending here, it's for my part really meant as an open question, and not about "Who wins" in this topic, more like "How do you expect this to play out going forward, from where we are with it right now?"]
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: cobafdek on June 10, 2018, 09:35:04 AM
The U.S. had the leverage going into the trade dispute several months ago, and it continues to have that leverage.   Negotiators like Trump don't make gambits like this without such leverage.  The U.S. can withstand tariffs on its goods better than our trading partners can withstand our tariffs on theirs.

Trump's suggestion about dropping all tariffs - with the ultimate goal of *real* free trade - was a touché psychological move.  Trump took the high ground.  Trudeau, Macron, et al., are left speechless and caught with their pants down.  How can they respond with any credibility if they profess to believe in free trade?

When this is all over, it's ultimately a win-win for the U.S. the rest of the world.  There will be freer trade.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: John Hjorth on June 10, 2018, 09:46:47 AM
Thank you for sharing your thoughts here, cobafdek,

I really hope that your're right. And thank you for reading my question and replying to it the way it was meant by me.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on June 10, 2018, 06:31:52 PM
Trumpf does not have a mandate to propose free trade. He has never discussed this anywhere with the parties here and it was just one idea one of these things with a 5min lifespan that he had in the spur of the moment.

Trumpf is now regarded as a
grown up kid that throws tantrums and is unpredictable. Best thing to do is to isolate it and let it cook in its own juice. Bullying other countries does not work, because if  a country is decided, it will unify when you apply pressure from outside. If he cancels NAFTA, it will hurt Mexico a lot, but there will be considerable pain in the US industry especially the automobile industry. I think it could well bankrupt some companies (suppliers) and maybe even the manufacturers like Ford. The supply chain has become very dependent on supplies from both Canada and Mexico, so abolishing NAFTA would be very costly and disruptive.

The tail end risk for the stock market have increased significantly, but so far Mr. Market does not seem to care.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: tengen on June 12, 2018, 10:10:56 AM
If Trump's trade war hits US citizens in the pocketbook, I believe they will turn on Trump faster than citizens in other countries will turn on their governments for opposing Trump.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rkbabang on June 12, 2018, 10:34:14 AM
The U.S. had the leverage going into the trade dispute several months ago, and it continues to have that leverage.   Negotiators like Trump don't make gambits like this without such leverage.  The U.S. can withstand tariffs on its goods better than our trading partners can withstand our tariffs on theirs.

Trump's suggestion about dropping all tariffs - with the ultimate goal of *real* free trade - was a touché psychological move.  Trump took the high ground.  Trudeau, Macron, et al., are left speechless and caught with their pants down.  How can they respond with any credibility if they profess to believe in free trade?

When this is all over, it's ultimately a win-win for the U.S. the rest of the world.  There will be freer trade.


It is a long term win-win for everyone if this happens (even if everyone doesn't realize it).   But the downside risk is that if no one drops their tariffs there will be less free trade than before.  Yes, the US can probably withstand it better than others, but a falling tide lowers all boats.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on June 12, 2018, 11:54:22 AM
It is a long term win-win for everyone if this happens (even if everyone doesn't realize it).   But the downside risk is that if no one drops their tariffs there will be less free trade than before.  Yes, the US can probably withstand it better than others, but a falling tide lowers all boats.
That statement is not true in the case of Canada and it's probably not true in the case of Canada. In other cases it may or may not be true. But sure, go ahead and tax the crap out of your citizenry and destabilize your economy.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rkbabang on June 12, 2018, 12:44:52 PM
It is a long term win-win for everyone if this happens (even if everyone doesn't realize it).   But the downside risk is that if no one drops their tariffs there will be less free trade than before.  Yes, the US can probably withstand it better than others, but a falling tide lowers all boats.
That statement is not true in the case of Canada and it's probably not true in the case of Canada. In other cases it may or may not be true. But sure, go ahead and tax the crap out of your citizenry and destabilize your economy.

Is that like Schrödinger's Canada where something is definitely not true and only probably not true at the same time?   Anyway I agree, taxation of any type benefits no one, ever.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on June 12, 2018, 12:57:40 PM
No Schrodinger here. I said it's not true for Canada, probably not true for Germany, and not sure of the others. This is due to the nature of the respective trading relationships - i.e. what the countries trade with each other. The level of confidence is based on how well I've researched the respective trading relationships.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on June 12, 2018, 05:51:24 PM
It is true that the US can withstand a trade ware better economically than anyone else, but I don’t think they can withstand a trade war politically as well. The countries that will get tariffs imposed, will feel bullied and in this case, against a foreign villain, it is easy to unify a country and sell some hardship and retaliate back. In addition, the US is trade warmongering  against many countries at the same time, which will lead to a coordinated response, at least to some extend.

Maybe even some trade unions between countries will evolve without the US is this drags on for a longer timeframe.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on June 22, 2018, 10:27:22 AM
https://www.reuters.com/article/us-trump-autos/trump-threatens-20-percent-u-s-tariff-on-eu-car-imports-idUSKBN1JI1YF?il=0
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on June 22, 2018, 11:40:18 AM
My post that was accidentally deleted:

https://www.cnbc.com/2018/06/20/germany-will-offer-to-scrap-the-eus-10-percent-tax-on-us-autos-report.html

To Trump haters, please try to be rational. I see a lot of comments that are based entirely on emotion vs critical thinking.

In the end, we will all be better off since tarrifs worldwide will be taken down one at a time. That is my prediction anyway.

You will I am sure, continue to hate Trump and despise him. That is fine with me. However, I suspect that economic progress will be made out of this. It seems quite ugly for now but, I think that deals will be made. Trump will claim victory. Consumers will pay lower prices and everybody will make more money.

Cardboard
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: John Hjorth on June 22, 2018, 01:26:53 PM
Thank you for picking up the loose end here, Cardboard.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: doughishere on June 22, 2018, 06:35:53 PM
https://www.missourinet.com/2018/06/22/southeast-missouri-nail-company-gets-hammered-by-trumps-tariffs/

resident Trump’s tariff on steel imports that took effect June 1 has caused a southeast Missouri nail manufacturer to lose about 50% of its business in two weeks. Mid Continent Nail Corporation in Poplar Bluff – the remaining major nail producer in the country – has had to take drastic measures to make ends meet.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: doughishere on June 23, 2018, 11:03:47 AM
"I cringe," Dale Stevermer, a soybean farmer and pork producer, said when asked about President Donald Trump's tit-for-tat trade spat with China. "When a tariff even gets talked about, it makes both the buyers and the sellers jumpy. It's going to impact my bottom line, it's going to impact my business livelihood, and, to an extent, it becomes a mental outlook."
Standing on the Easton, Minnesota farm he was raised on, near the apple tree where he met his wife and the fields where he made a living for himself, Stevermer took a long pause.

"It's hard not to have some down days," he said, looking out on his 200 acres of soybeans.
Dale Stevermer wouldn't say who he voted for in 2016, but his wife, Lori, said she voted Republican.

How soybeans -- yes, soybeans -- could impact the midterm elections
https://www.cnn.com/2018/06/22/politics/soybeans-in-the-2018-election/index.html
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on June 23, 2018, 04:46:06 PM
My post that was accidentally deleted:

https://www.cnbc.com/2018/06/20/germany-will-offer-to-scrap-the-eus-10-percent-tax-on-us-autos-report.html

To Trump haters, please try to be rational. I see a lot of comments that are based entirely on emotion vs critical thinking.

In the end, we will all be better off since tarrifs worldwide will be taken down one at a time. That is my prediction anyway.

You will I am sure, continue to hate Trump and despise him. That is fine with me. However, I suspect that economic progress will be made out of this. It seems quite ugly for now but, I think that deals will be made. Trump will claim victory. Consumers will pay lower prices and everybody will make more money.

Cardboard

The car manufacturers may have an opinion on this, but they don’t determine the politics. My own opinion is that a reduction of the import tax for US vehicles wouldn’t be a big deal especially if the US reduces or eliminated the tariffs on trucks.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: doughishere on June 25, 2018, 04:43:50 AM
https://www.bloomberg.com/news/articles/2018-06-25/harley-davidson-to-shift-production-of-motorcycles-out-of-u-s-after-eu-tariffs

Harley-Davidson Inc. plans to shift some production of its iconic motorcycles out of the U.S. in response to retaliatory European Union tariffs.

Each motorcycle will cost an average of $2,200 extra after the European Union raised its tariff on imported U.S. bikes to 31 percent from 6 percent on June 22, the Milwaukee-based manufacturer said Monday in a regulatory filing.

"Increasing international production to alleviate the EU tariff burden is not the company's preference, but represents the only sustainable option .." - company filing
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: doughishere on June 25, 2018, 05:36:25 AM
https://mobile.twitter.com/anaswanson/status/1011032273871888384

Dispatch from Wisconsin, where I ate all the cheese. Trump’s trade war shuts cheesemakers out of foreign markets via @NYTimes

Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on June 25, 2018, 05:58:21 AM
So far, the response to Trump trade war has been smart- hit the red base where it hurts, Agriculture, Whiskey, Motorcycles etc. Easily identifiable US goods made in Red states.

When China runs out of headroom for tariff retaliation, expect them to make life difficult for US companies trying to sell in China’s home market. Again, GM, Ford, Boring but possibly consumer good companies as well.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: doughishere on June 25, 2018, 07:00:29 AM
Heres the disclosure from HOG.


"In the near-term, the company will bear the significant impact resulting from these tariffs, and the company estimates the incremental cost for the remainder of 2018 to be approximately $30 to $45 million. On a full-year basis, the company estimates the aggregate annual impact due to the EU tariffs to be approximately $90 to $100 million."


https://www.sec.gov/Archives/edgar/data/793952/000079395218000038/a8-kitem701tariffdisclosur.htm
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: doughishere on June 25, 2018, 07:05:21 AM
GE Factories in Wisconsin, South Carolina.

https://www.wsj.com/articles/caught-in-trumps-trade-fight-ge-factories-in-wisconsin-south-carolina-1529848513


Cummins(Columbus, Ind.) Will Pay Tariff to Import Engines From Its Own Plants in China
https://www.wsj.com/articles/cummins-will-pay-tariff-to-import-engines-from-its-own-plants-in-china-1529679801?mod=article_inline
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: doughishere on June 25, 2018, 07:44:11 AM
Texas Manufacturing Outlook Survey. All the comments are interesting.


https://www.dallasfed.org/-/media/Documents/research/surveys/tmos/2018/1806/tmos1806.pdf
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: doughishere on June 25, 2018, 12:16:40 PM
Chairman Xi told a group of CEOs that Beijing will start retaliating against US businesses in China:
“In the West you have the notion that if somebody hits you on the left cheek, you turn the other cheek. In our culture we punch back.”

https://www.wsj.com/articles/chinas-xi-tells-ceos-hell-strike-back-at-u-s-1529941334
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: meiroy on June 26, 2018, 01:43:54 AM
1. The U.S. has an extremely open economy while China has an extremely closed economy.   It's like the difference between a huge Yoga ball and a tiny pebble.   This is the cause of the imbalance.   It's not only about import and export of goods but also due to purchase of Treasuries and other financial products, the flow of capital.  It would only get interesting, and useful when it starts going beyond the illusion of limiting the trade of goods.

So, just three commonly known examples, to show how far apart the two economies are:  Chinese can easily purchase RE in the U.S. Americans cannot purchase property in China unless they have lived and worked there for a year and comply with various conditions (as an example, it changes between areas, but that's a general idea). Chinese can easily purchase U.S. currency (if there's a limit it's due to local China limits.)  Americans cannot.  Chinese households can easily invest in American companies via equity. Americans cannot, the Chinese stock markets have strict limitations.  This goes on and on, at the same time that it is declared the Chinese economy is the second largest or even the largest in the world.  The imbalance thus is inevitable, someone is going to have to pay for it, and so far it has been the U.S. and various other defecit countries. 

2. Tariffs on steel, aluminum etc. might be good for China.  Right now, there's massive oversupply and they obviously do not have the willingness to adjust (even though, in the past couple of years there was a bit of an attempt to do just that.). Thing is, this industry is responsible for plenty of pollution, so a big part of the cost is external. Hidden.  Households pay for it.  Shut some of the big plants and you make China, and the world a better place.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on June 26, 2018, 04:50:41 AM
Thanks Meiroy.

Probably worth explaining to Doughishere also that they are still a communist led country. Try to steal all our technology. Claim vast part of the ocean. Do not abide by WTO rulings (see Fortress Paper and Canada vs China if you want proof). Have no democracy and terrible human rights record.

I also do not quite appreciate Xi's mention of this "notion". As a good Irish man Doughishere should not either: that is an ideal, the words of Jesus Christ.

If you look at history, we do punch back quite well in the West. Although sneaky, coward style attacks such as Japan on Pearl Harbor and China crossing into North Korea after defending them throughout WWII that is not in our culture.

Cardboard
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rukawa on June 29, 2018, 08:56:07 AM
1. The U.S. has an extremely open economy while China has an extremely closed economy.   It's like the difference between a huge Yoga ball and a tiny pebble.   This is the cause of the imbalance.   It's not only about import and export of goods but also due to purchase of Treasuries and other financial products, the flow of capital.  It would only get interesting, and useful when it starts going beyond the illusion of limiting the trade of goods.

So, just three commonly known examples, to show how far apart the two economies are:  Chinese can easily purchase RE in the U.S. Americans cannot purchase property in China unless they have lived and worked there for a year and comply with various conditions (as an example, it changes between areas, but that's a general idea). Chinese can easily purchase U.S. currency (if there's a limit it's due to local China limits.)  Americans cannot.  Chinese households can easily invest in American companies via equity. Americans cannot, the Chinese stock markets have strict limitations.  This goes on and on, at the same time that it is declared the Chinese economy is the second largest or even the largest in the world.  The imbalance thus is inevitable, someone is going to have to pay for it, and so far it has been the U.S. and various other defecit countries. 

2. Tariffs on steel, aluminum etc. might be good for China.  Right now, there's massive oversupply and they obviously do not have the willingness to adjust (even though, in the past couple of years there was a bit of an attempt to do just that.). Thing is, this industry is responsible for plenty of pollution, so a big part of the cost is external. Hidden.  Households pay for it.  Shut some of the big plants and you make China, and the world a better place.

I don't think opening up the Chinese economy will do anything to reduce the trade deficit. Because what you are reallly saying is that if Chinese only opening up their economy Americans would stop buying Chinese made ipods and instead invest in Chinese stock. Somehow I don't think the American consumer is going to do that. Or maybe you are saying Chinese will save less and instead buy more American goods. But none of the stuff you cited above demonstrated that the Chinese economy is closed to Western goods...because it isn't.

I also disagree that they are not trying to adjust. The shutdown a bunch of steel capacity and they will continue to do so. They have stopped taking other countries recycling. I think they are adjusting. And I also have to say that in contrast to the US, they are adjusting in the direct face of powerful entrenched interests in China that don't want to adjust. So they are doing something politically difficult.

Anyways you want to eliminate the trade deficit, solve all your health problems and solve the social security crisis, do this:
http://www.bradford-delong.com/2007/06/dealing_with_th.html

Grab 20% of every American''s income...place in an HSA which is used for all health purchases.

This basically solves all your problems...social security, health, trade deficit. Done and DONE.

Now if for some reason you balk at saving 20% of your income...well that is why you have a trade DEFICIT.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on June 29, 2018, 10:17:08 AM
1. The U.S. has an extremely open economy while China has an extremely closed economy.   It's like the difference between a huge Yoga ball and a tiny pebble.   This is the cause of the imbalance.   It's not only about import and export of goods but also due to purchase of Treasuries and other financial products, the flow of capital.  It would only get interesting, and useful when it starts going beyond the illusion of limiting the trade of goods.

So, just three commonly known examples, to show how far apart the two economies are:  Chinese can easily purchase RE in the U.S. Americans cannot purchase property in China unless they have lived and worked there for a year and comply with various conditions (as an example, it changes between areas, but that's a general idea). Chinese can easily purchase U.S. currency (if there's a limit it's due to local China limits.)  Americans cannot.  Chinese households can easily invest in American companies via equity. Americans cannot, the Chinese stock markets have strict limitations.  This goes on and on, at the same time that it is declared the Chinese economy is the second largest or even the largest in the world.  The imbalance thus is inevitable, someone is going to have to pay for it, and so far it has been the U.S. and various other defecit countries. 

2. Tariffs on steel, aluminum etc. might be good for China.  Right now, there's massive oversupply and they obviously do not have the willingness to adjust (even though, in the past couple of years there was a bit of an attempt to do just that.). Thing is, this industry is responsible for plenty of pollution, so a big part of the cost is external. Hidden.  Households pay for it.  Shut some of the big plants and you make China, and the world a better place.

I don't think opening up the Chinese economy will do anything to reduce the trade deficit. Because what you are reallly saying is that if Chinese only opening up their economy Americans would stop buying Chinese made ipods and instead invest in Chinese stock. Somehow I don't think the American consumer is going to do that. Or maybe you are saying Chinese will save less and instead buy more American goods. But none of the stuff you cited above demonstrated that the Chinese economy is closed to Western goods...because it isn't.

I also disagree that they are not trying to adjust. The shutdown a bunch of steel capacity and they will continue to do so. They have stopped taking other countries recycling. I think they are adjusting. And I also have to say that in contrast to the US, they are adjusting in the direct face of powerful entrenched interests in China that don't want to adjust. So they are doing something politically difficult.
I think that rukawa is pretty spot on here. But let me weigh in and make it a bit more wonky.

People continue to fail to understand that trade deficits are the result of savings rates and prefer to indulge into a self righteous us vs them fantasy. If you wanna talk about reducing the trade deficit, you must talk about how you're gonna lift the saving rate. In the context of the opening up of the Chinese economy this is how that argument would sound:

The Chinese drop tariffs on US goods. This is turn increases Chinese demand for US goods due to lower prices. Increased demand creates inflationary pressure in the US. The fed then raises rates to cool the economy. Higher rates drive the savings rates up and the trade deficit down. Cool story.

Now let's look at some facts. China has a very large trade surplus with the US. But China doesn't have a very large trade surplus with the world. So it's not true that China doesn't import. It imports a lot. It just prefers non-US goods. Whereas US loves Chinese goods. Also keep in mind that China sets tariffs in the WTO framework. So when China opens up, it opens up to all but some countries benefit more than others (looking at you Germany and Japan). Chinese imports go up and their trade surplus goes down. It may even turn into a deficit. The yuan goes down. Stateside the dollar goes up in response to higher rates. These 2 things conspire to make Chinese goods cheaper in the US. The currency effect is likely overcome the interest rate effect and the trade deficit with China may even increase. Talk about messed up unintended consequences.

All this being said I fully support opening up the Chinese economy.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: no_free_lunch on June 29, 2018, 11:05:01 AM
Does anyone know, would the tarriff's on auto's that are being discussed affect auto's manufactured domestically by foreign companies?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on June 29, 2018, 11:19:37 AM
Does anyone know, would the tarriff's on auto's that are being discussed affect auto's manufactured domestically by foreign companies?
The finished products will be tariff free because it would be a domestic product. The supply chain would be whacked hard though.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: no_free_lunch on June 29, 2018, 01:27:59 PM
Thanks, that is as I expected.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: SharperDingaan on June 29, 2018, 03:29:46 PM
Does anyone know, would the tarriff's on auto's that are being discussed affect auto's manufactured domestically by foreign companies?
The finished products will be tariff free because it would be a domestic product. The supply chain would be whacked hard though.

The BMW manufactured in the US will be tariff free to a US buyer.
However the price of that BMW will be a lot higher as the foreign parts that went into making it were tariffed by the US.
And that now US manufactured BMW will be tariffed (retalitary) again if the car is sold outside of the US.

One of the results is that a BMW manufactured outside of the US will cost far less to make than one in the US. The assembly plant in the US gets shut down, & BMW just adds the tariff to the cost of a non US manufactured car. Ultimately BMW just sells fewer cars at a higher price in the US - to take home the same revenue, and driving a 'BMW' becomes a better status symbol than it currently is.

Over time, the US ends up with just Ford and GM selling into the US market, & no incentive on either manufacturer to continuosly improve the quality of their product. Welcome back to the sh1t of the 1980's, when quality was so bad that it actually started the J.D.Power Initial Quality Study. http://www.jdpower.com/cars/articles/automotion-blog/30-years-iqs-perspectives-history-new-car-quality.

Foreign manufacturers make more cars in the US, than US manufacturers do, and those workers are non-union and located in the largely Southern states of Alabama, South Carolina, Georgia, Kentucky, Tennessee, Mississippi and Texas. Closing these non-union plants would very likely slow down illegal migration, and be called 'winning'.
https://www.forbes.com/sites/kenroberts/2018/01/22/insult-to-injury-foreign-manufacturers-now-making-more-cars-in-u-s-than-u-s-companies/#7657854e1fd8

Welcome to America!

SD







Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: meiroy on June 29, 2018, 06:17:07 PM
Does anyone know, would the tarriff's on auto's that are being discussed affect auto's manufactured domestically by foreign companies?
The finished products will be tariff free because it would be a domestic product. The supply chain would be whacked hard though.

The BMW manufactured in the US will be tariff free to a US buyer.
However the price of that BMW will be a lot higher as the foreign parts that went into making it were tariffed by the US.
And that now US manufactured BMW will be tariffed (retalitary) again if the car is sold outside of the US.

One of the results is that a BMW manufactured outside of the US will cost far less to make than one in the US. The assembly plant in the US gets shut down, & BMW just adds the tariff to the cost of a non US manufactured car. Ultimately BMW just sells fewer cars at a higher price to take home the same revenue, and driving a 'BMW' becomes a better status symbol than it currently is.

Over time, the US ends up with just Ford and GM selling into the US market, & no incentive on either manufacturer to continuosly improve the quality of their product. Welcome back to the sh1t of the 1980's, when quality was so bad that it actually started the J.D.Power Initial Quality Study. http://www.jdpower.com/cars/articles/automotion-blog/30-years-iqs-perspectives-history-new-car-quality.

Foreign manufacturers make more cars in the US, than US manufacturers do, and those workers are non-union and located in the largely Southern states of Alabama, South Carolina, Georgia, Kentucky, Tennessee, Mississippi and Texas. Closing these non-union plants would very likely slow down illegal migration, and be called 'winning'.
https://www.forbes.com/sites/kenroberts/2018/01/22/insult-to-injury-foreign-manufacturers-now-making-more-cars-in-u-s-than-u-s-companies/#7657854e1fd8

Welcome to America!

SD


They would not close any plants unless it was in the shits, to begin with, and this is just an excuse.    They spent a fortune on these plants and the operation and they are not going to give up instead of waiting a couple of years and see if things change.  Or, two days, because who knows what's gonna happen in two days.  Or like in an hour and a half.

Or, trump can triple the tariffs if he just hears that they are going to close.  Or whatever.  Point is, it's not so black and white.

In addition, people who buy cars just based on cost don't buy BMWs.  Did you notice what's going on with Tesla?

etc.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: meiroy on June 29, 2018, 06:25:23 PM
1. The U.S. has an extremely open economy while China has an extremely closed economy.   It's like the difference between a huge Yoga ball and a tiny pebble.   This is the cause of the imbalance.   It's not only about import and export of goods but also due to purchase of Treasuries and other financial products, the flow of capital.  It would only get interesting, and useful when it starts going beyond the illusion of limiting the trade of goods.

So, just three commonly known examples, to show how far apart the two economies are:  Chinese can easily purchase RE in the U.S. Americans cannot purchase property in China unless they have lived and worked there for a year and comply with various conditions (as an example, it changes between areas, but that's a general idea). Chinese can easily purchase U.S. currency (if there's a limit it's due to local China limits.)  Americans cannot.  Chinese households can easily invest in American companies via equity. Americans cannot, the Chinese stock markets have strict limitations.  This goes on and on, at the same time that it is declared the Chinese economy is the second largest or even the largest in the world.  The imbalance thus is inevitable, someone is going to have to pay for it, and so far it has been the U.S. and various other defecit countries. 

2. Tariffs on steel, aluminum etc. might be good for China.  Right now, there's massive oversupply and they obviously do not have the willingness to adjust (even though, in the past couple of years there was a bit of an attempt to do just that.). Thing is, this industry is responsible for plenty of pollution, so a big part of the cost is external. Hidden.  Households pay for it.  Shut some of the big plants and you make China, and the world a better place.

I don't think opening up the Chinese economy will do anything to reduce the trade deficit. Because what you are reallly saying is that if Chinese only opening up their economy Americans would stop buying Chinese made ipods and instead invest in Chinese stock. Somehow I don't think the American consumer is going to do that. Or maybe you are saying Chinese will save less and instead buy more American goods. But none of the stuff you cited above demonstrated that the Chinese economy is closed to Western goods...because it isn't.

I also disagree that they are not trying to adjust. The shutdown a bunch of steel capacity and they will continue to do so. They have stopped taking other countries recycling. I think they are adjusting. And I also have to say that in contrast to the US, they are adjusting in the direct face of powerful entrenched interests in China that don't want to adjust. So they are doing something politically difficult.
I think that rukawa is pretty spot on here. But let me weigh in and make it a bit more wonky.

People continue to fail to understand that trade deficits are the result of savings rates and prefer to indulge into a self righteous us vs them fantasy.

It's a shame you tend to use so much ad hominem and strawmen arguments, otherwise, discussions with you could be much more productive.

I agree with your comment about saving rates.  Note though that investments and saving rates are linked. This is an accounting identity.   That is, such rates can be forced on country A with capital flows by country B.  More interestingly, local regulations in country B can have an impact on country A. In addition, the relationship can go through country C, which is why tariffs are useless.  The solution of course is that both countries A and B resolve the balance together. Adjust their local regulations.  In practice, though, what happens when one of the countries do not wish to play along?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: meiroy on June 29, 2018, 06:35:40 PM
1. The U.S. has an extremely open economy while China has an extremely closed economy.   It's like the difference between a huge Yoga ball and a tiny pebble.   This is the cause of the imbalance.   It's not only about import and export of goods but also due to purchase of Treasuries and other financial products, the flow of capital.  It would only get interesting, and useful when it starts going beyond the illusion of limiting the trade of goods.

So, just three commonly known examples, to show how far apart the two economies are:  Chinese can easily purchase RE in the U.S. Americans cannot purchase property in China unless they have lived and worked there for a year and comply with various conditions (as an example, it changes between areas, but that's a general idea). Chinese can easily purchase U.S. currency (if there's a limit it's due to local China limits.)  Americans cannot.  Chinese households can easily invest in American companies via equity. Americans cannot, the Chinese stock markets have strict limitations.  This goes on and on, at the same time that it is declared the Chinese economy is the second largest or even the largest in the world.  The imbalance thus is inevitable, someone is going to have to pay for it, and so far it has been the U.S. and various other defecit countries. 

2. Tariffs on steel, aluminum etc. might be good for China.  Right now, there's massive oversupply and they obviously do not have the willingness to adjust (even though, in the past couple of years there was a bit of an attempt to do just that.). Thing is, this industry is responsible for plenty of pollution, so a big part of the cost is external. Hidden.  Households pay for it.  Shut some of the big plants and you make China, and the world a better place.

I don't think opening up the Chinese economy will do anything to reduce the trade deficit. Because what you are reallly saying is that if Chinese only opening up their economy Americans would stop buying Chinese made ipods and instead invest in Chinese stock. Somehow I don't think the American consumer is going to do that. Or maybe you are saying Chinese will save less and instead buy more American goods. But none of the stuff you cited above demonstrated that the Chinese economy is closed to Western goods...because it isn't.

I also disagree that they are not trying to adjust. The shutdown a bunch of steel capacity and they will continue to do so. They have stopped taking other countries recycling. I think they are adjusting. And I also have to say that in contrast to the US, they are adjusting in the direct face of powerful entrenched interests in China that don't want to adjust. So they are doing something politically difficult.

Anyways you want to eliminate the trade deficit, solve all your health problems and solve the social security crisis, do this:
http://www.bradford-delong.com/2007/06/dealing_with_th.html

Grab 20% of every American''s income...place in an HSA which is used for all health purchases.

This basically solves all your problems...social security, health, trade deficit. Done and DONE.

Now if for some reason you balk at saving 20% of your income...well that is why you have a trade DEFICIT.


The financial repression is aimed at Chinese households, it's part of the current growth model there.  This is the reason why Chinese households have such a small portion of GDP.  This is why they have to rebalance (or rebalancing will be forced upon them, sooner or later, debt capacity always has a limit.). So far, they have not.

Anyhow, I'm going to stop here.

Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on June 29, 2018, 07:46:03 PM
Even the cars build in the US contain a lot of parts from the NAFTA zone, so there will be a tariff load on those as well. In general, cars are just going to be more expensive for the US consumers. China will retailiate against US manufacturers in China, once they run out of import good to tariff, which will benefit Chinese car manufacturers.

Over the long term, thr Us manufacturers can adjust their supply chain to US made goods at a great cost, but they will have losses in most foreign markets due to retaliation. I am not sure there would be a net benefit for them, even in the long run.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on June 29, 2018, 08:53:48 PM
They would not close any plants unless it was in the shits, to begin with, and this is just an excuse.    They spent a fortune on these plants and the operation and they are not going to give up instead of waiting a couple of years and see if things change.  Or, two days, because who knows what's gonna happen in two days.  Or like in an hour and a half.

Or, trump can triple the tariffs if he just hears that they are going to close.  Or whatever.  Point is, it's not so black and white.

In addition, people who buy cars just based on cost don't buy BMWs.  Did you notice what's going on with Tesla?

etc.
Meiroy is right here that these plants are extremely expensive so there will be reluctance to scrap them and start over again.

I don't agree that price doesn't matter for things like BMWs and such. Otherwise why don't these companies price product higher? And they don't make really great margins. I don't think that BMW is selling to me for cheaper just cause they're nice guys. 25% is a lot, and BMWs aren't cheap to start with. Customers will notice.

Coming back to the plants issue. While a lot of plants will likely not close, production will get shifted around. These companies are in business to make money. To take a more mundane example than BMW, look at the Camry. All the Camry sold in Canada is made in Kentucky. You have a little fun with tariffs and Toyota will ship Camrys to Canada from Japan and cut production in Kentucky. Factory stays open, but overtime first gets cut, then you have layoffs. People get hurt, they make less money. You wanna do this why?

Also the idea that plants won't close because they cost so much is a door that swings both ways. The idea that a trade war won't be a complete disaster is that you'll have new manufacturing opening up to make up for lost one. But why would someone invest billions of dollars with a new plant when they can just wait it out. It makes sense not to invest when the rules could change any minute and your capital is stranded. Chaos is not an environment in which capitalism and prosperity thrive.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: SharperDingaan on June 29, 2018, 09:56:22 PM
The average payback period for a US auto manufacturing platform is 6-7 years.
www.cargroup.org/automotive-product-development-cycles-and-the-need-for-balance-with-the-regulatory-environment/

Most of the 'transplants' recovered their construction costs some time ago, so they will continue to operate only so long as US marginal revenue exceeds US marginal cost. US revenue will be a function of the cost of manufacturing the car in Mexico, plus freight and tariffs. US cost will be a function of the % of imported tariffed content. Ultimately the transplant shuts in the US, reopens in Mexico, & illegals working in US factories work in Mexican ones instead. The 'wall' that Trump is so desperate to have.

Price matters for a luxury good that is a status symbol. The whole point is that if you have to ask the price you cant afford it, and hence you drive/wear that luxury good to demonstrate to others that you CAN afford it, that you have 'arrived'. A car as a transportation device just has to get you to/from point A to point B reliably.

As long as the US plant is still making money, owners have incentive to squeeze their state for short-term 'adjustment measures'. Subsidies can temporarily hide a lot of losses, but they cant stop the long-term capital allocation process. And the more chaotic the US makes the US business environment the less capital it will get.

Problem is that a lot of US workers (& others) lose their jobs, and the replacement plants/supply lines will not need the same numbers of people as the old ones did.

SD


Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on June 29, 2018, 10:20:23 PM
1. The U.S. has an extremely open economy while China has an extremely closed economy.   It's like the difference between a huge Yoga ball and a tiny pebble.   This is the cause of the imbalance.   It's not only about import and export of goods but also due to purchase of Treasuries and other financial products, the flow of capital.  It would only get interesting, and useful when it starts going beyond the illusion of limiting the trade of goods.

So, just three commonly known examples, to show how far apart the two economies are:  Chinese can easily purchase RE in the U.S. Americans cannot purchase property in China unless they have lived and worked there for a year and comply with various conditions (as an example, it changes between areas, but that's a general idea). Chinese can easily purchase U.S. currency (if there's a limit it's due to local China limits.)  Americans cannot.  Chinese households can easily invest in American companies via equity. Americans cannot, the Chinese stock markets have strict limitations.  This goes on and on, at the same time that it is declared the Chinese economy is the second largest or even the largest in the world.  The imbalance thus is inevitable, someone is going to have to pay for it, and so far it has been the U.S. and various other defecit countries. 

2. Tariffs on steel, aluminum etc. might be good for China.  Right now, there's massive oversupply and they obviously do not have the willingness to adjust (even though, in the past couple of years there was a bit of an attempt to do just that.). Thing is, this industry is responsible for plenty of pollution, so a big part of the cost is external. Hidden.  Households pay for it.  Shut some of the big plants and you make China, and the world a better place.

I don't think opening up the Chinese economy will do anything to reduce the trade deficit. Because what you are reallly saying is that if Chinese only opening up their economy Americans would stop buying Chinese made ipods and instead invest in Chinese stock. Somehow I don't think the American consumer is going to do that. Or maybe you are saying Chinese will save less and instead buy more American goods. But none of the stuff you cited above demonstrated that the Chinese economy is closed to Western goods...because it isn't.

I also disagree that they are not trying to adjust. The shutdown a bunch of steel capacity and they will continue to do so. They have stopped taking other countries recycling. I think they are adjusting. And I also have to say that in contrast to the US, they are adjusting in the direct face of powerful entrenched interests in China that don't want to adjust. So they are doing something politically difficult.
I think that rukawa is pretty spot on here. But let me weigh in and make it a bit more wonky.

People continue to fail to understand that trade deficits are the result of savings rates and prefer to indulge into a self righteous us vs them fantasy.

It's a shame you tend to use so much ad hominem and strawmen arguments, otherwise, discussions with you could be much more productive.

I agree with your comment about saving rates.  Note though that investments and saving rates are linked. This is an accounting identity.   That is, such rates can be forced on country A with capital flows by country B.  More interestingly, local regulations in country B can have an impact on country A. In addition, the relationship can go through country C, which is why tariffs are useless.  The solution of course is that both countries A and B resolve the balance together. Adjust their local regulations.  In practice, though, what happens when one of the countries do not wish to play along?
There was no ad-hominem in there. I didn't say anything about you. And if you follow the discussion here, mostly there's no recognition of the linkage between savings rates and trade deficits. It's all who sells how much to whom.

Furthermore, I was building more technical stuff on what rukawa wrote. He was talking about savings rates and trade deficits. Hence the "I think that rukawa is pretty spot on here. But let me weigh in and make it a bit more wonky." It was only a straw man from the point of view that I didn't address you post which was mostly a rant about a lack of retail investments opportunities for US nationals in China. Which doesn't have much to do with anything about trade economics. Capital flowed pretty much they way it was supposed to. Yes, it was mostly FDI, but capital doesn't have feelings and doesn't care which form it takes. You've also lost me on how the US and other deficit countries are paying for it. I admit that I have a brash style sometimes, but in this case it seems to me that you're just lashing out because you just don't like what I wrote.

Your last post about capital flows is a bit confusing but I think I know what you're trying to say and it's not correct. You say that savings=investment. You're correct there and it is indeed an identity. You're not correct in your assertion that one country can force a savings rate on another through capital flows. Capital flows are a function of trade flows which in turn are a function of savings rates. If too much capital flows into a country it will affect the its exchange rate which will affect trade and bring things into balance.

In all fairness to you, the Chinese have tried to pull that little trick over the 2006-2012 period. They tried it through the currency by keeping the yuan artificially low. The result was a healthy burst of inflation in China until they gave up (it was gonna fail anyway). I have this saying that the laws of economics are not like the laws of physics but they are similar. You can't break the laws of physics. However you can bend the laws of economics only there's just a matter of time until they snap back in your face.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: meiroy on June 30, 2018, 12:55:06 AM
"you post which was mostly a rant about a lack of retail investments opportunities for US nationals in China."

ahahah. You just can't help yourself, can you...

" For any open economy:

Current Account Surplus = Capital Account Deficit, or

Exports – Imports = Savings – Investment

These equations just mean that the global economy is a closed economy in which total savings is equal by definition to total investment. Within the global economy, any country that saves more than it invests must export the excess savings to another country that invests more than it saves, so that the world as a whole balances savings and investment.

Of course, any country that saves more than it invests also by definition produces more goods and services than it can absorb domestically, and so it must export the excess production. That is why a country’s current account and its capital account (which includes changes in central bank reserves) must always balance to zero."

"The accounting identity tells us that the net capital inflows into the United States, also known as the U.S. capital account surplus—and which consists of the total amount of foreign money invested in American stocks, bonds, real estate, factories, businesses, and other investment assets less the total amount of American money invested abroad—is exactly equal to the U.S. current account deficit"

"One implication of this accounting identity is that unlike developing countries that face capital constraints on domestic investment and lack technology and managerial skills, the United States does not benefit from increased foreign investment except in a very few, highly specific cases "

"Americans save so little precisely because of foreign capital inflows, and this must necessarily be the case as long as the capital account is open and the U.S. financial system flexible."







Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cigarbutt on June 30, 2018, 07:09:37 AM
Interesting discussion and a some noise.

In terms of capital flows, a topic that is not often discussed concerns the FDIs.
https://www.ncuscr.org/sites/default/files/page_attachments/Two-Way-Street-2018_Full-Report.pdf

Some takeaways:
-The two economies are significantly entertwined and, from the cumulative numbers point of view, the US has invested much more in China than the opposite.
-The US tends to invest in greenfield projects and China tends to invest in targeted mature industries
-Both countries face relatively high constraints when investing in the other country
-Both can use different tools to implement "adjustments"
-US coastal states are the primary investors in China and receive most China-led investments

IMO, if the current "reciprocal" rhetoric persists, China-led FDIs are likely to decrease more than US-led FDIs which means that the trade imbalance would tend to decrease and/or that China would have added pressure to buy US government debt.

Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: SharperDingaan on June 30, 2018, 09:35:40 AM
Interesting discussion and a some noise.

In terms of capital flows, a topic that is not often discussed concerns the FDIs.
https://www.ncuscr.org/sites/default/files/page_attachments/Two-Way-Street-2018_Full-Report.pdf

Some takeaways:
-The two economies are significantly entertwined and, from the cumulative numbers point of view, the US has invested much more in China than the opposite.
-The US tends to invest in greenfield projects and China tends to invest in targeted mature industries
-Both countries face relatively high constraints when investing in the other country
-Both can use different tools to implement "adjustments"
-US coastal states are the primary investors in China and receive most China-led investments

IMO, if the current "reciprocal" rhetoric persists, China-led FDIs are likely to decrease more than US-led FDIs which means that the trade imbalance would tend to decrease and/or that China would have added pressure to buy US government debt.

Just to add to the added pressure to buy US government debt.
It very possibly doesn't exist.

The US makes great claims as to its strategic mineral reserves (oil, minerals etc.) and is supposedly the largest economy in the world. If China is the 2nd largest economy, and growing - where are the Chinese strategic reserves? And wouldn't it make more sense for them to simply stockpile more reserves that they will actually use - versus just buy more US debt? Less demand for USD, also devaluing the USD, and lowering the size of the contentious annual trade surplus.

SD

Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on July 02, 2018, 03:40:52 AM
https://www.axios.com/trump-trade-war-leaked-bill-world-trade-organization-united-states-d51278d2-0516-4def-a4d3-ed676f4e0f83.html

https://www.cnbc.com/2018/06/30/canadas-tit-for-tat-tariffs-begin-sunday-and-include-whiskey-ketchup.html
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on July 02, 2018, 04:56:42 PM
https://www.axios.com/trump-trade-war-leaked-bill-world-trade-organization-united-states-d51278d2-0516-4def-a4d3-ed676f4e0f83.html

https://www.cnbc.com/2018/06/30/canadas-tit-for-tat-tariffs-begin-sunday-and-include-whiskey-ketchup.html
It will be soo great when the pain subsides.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: cameronfen on July 02, 2018, 06:29:42 PM
anyone interested in buying Nucor or US steel or smaller players i don't know on this news?  They have gone up but not outside normal band. Might be a good trade but I'm basically fully allocated. 
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: valcont on July 02, 2018, 08:32:16 PM
https://www.nytimes.com/2018/07/02/world/europe/trump-nato.html

This is a better approach in dealing with Europeans/Canadians than the trade tariffs. In 2017 , the US spent about 3.6% of their GDP on NATO while Germany was at 1.2% and Canada at 1.3%. Take away their security cover. The US will save on NATO spending and they have to buy US arms just like the Asians and Middle Easterners.Plus the young Europeans/Canadians will take their gap year in Iraq/Afghanistan and gain an appreciation for US's tactics.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on July 02, 2018, 10:13:34 PM
https://www.nytimes.com/2018/07/02/world/europe/trump-nato.html

This is a better approach in dealing with Europeans/Canadians than the trade tariffs. In 2017 , the US spent about 3.6% of their GDP on NATO while Germany was at 1.2% and Canada at 1.3%. Take away their security cover. The US will save on NATO spending and they have to buy US arms just like the Asians and Middle Easterners.Plus the young Europeans/Canadians will take their gap year in Iraq/Afghanistan and gain an appreciation for US's tactics.
The US did not spend 3.6% of GDP on NATO. The US spent 3.6% of GDP on the military. Also known as that government jobs program. Do you think that the US will make drastic military cuts if it was to leave NATO?

I'm also confused about why you're under the impression that once the US would take that stance these countries would buy US arms. The French, British, and the Germans make pretty damn good weapons as well. If the US steps out of the picture the impetus is even greater to buy weapons produced by your allies.

As to your thoroughly ignorant and insulting suggestion that "young Europeans/Canadians will take their gap year in Iraq/Afghanistan". The only adequate response contains two short words that I'll refrain from typing out of respect for this forum. The only time NATO Article 5 was invoked was by the United States after 9/11 for Afghanistan. In response all Alliance countries sent troops to Afghanistan, provided shelter and cover for CIA black sites, etc. Some of these countries still have conscription in place. Canada was the third largest force in Afghanistan after the US and Britain, taking casualties. To date, how many US service members died defending Canada?

Furthermore, by my count 15 NATO countries under no obligation to do so sent troops to Iraq. A bullshit catastrophe created by the US government. Britain and Spain had their worst terrorist attacks as retribution for their involvement in Iraq. And these are countries that had domestic terrorist organizations that conducted dozens of attacks.

If you think that my post is rude or insulting, you may want to re-read your post again along with my reply and ask yourself if it's not merely proportional or even subdued.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on July 03, 2018, 03:45:19 AM
Most of the spending on military is for salaries, not weapons. It is true that the US spends way more on military than the Europeans as a percentage of GNP, but if the US wesentlich pull back, the incremental European spending on US weapons would be marginal, since the Europeans have the technology (and in fact building them), to produce their own fighter planes, tanks, ships and submarines etc, unlike the Middle eastern countries.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on July 03, 2018, 06:41:09 AM
+1 RB!

I have great respect for our military, support them, many died in combat and demand apologies from Valcont.

We did send our troops right after 9/11 and this despite Bush not even having the decency of naming Canada in his speech of people from multiple countries who died in the attack. We had by far the largest number of casualties (non-U.S.). This was quite an insult at the time.

Cardboard
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: SharperDingaan on July 03, 2018, 07:35:24 AM
The US is the largest arms dealer in the world; 40% bigger than #2 (Russia), 400%+ bigger than #3 (China), and 600% bigger than the big 3 European arms-makers. Arguably, the US & Russia essentially NEED to create conflict around the world to sell weapons. because it's good business to do so. https://en.wikipedia.org/wiki/Arms_industry

A good chunk of the trade is arms for influence, with arms used as currency (as 'aid', petro-$ recycling, etc.). To 'neutralize' the weapons caches the major players need to create continuous brush wars (dictators doing their thing, 'war' on drugs, etc.) and pass on maintainance - to use up the bullets. Simply remove the 'aid and petro dollar' recycling from the US budget, & the numbers look very different.

Apparently NATO either spends more, or the US spends less. Really?
The US is going to CUT spending to get down to European spending levels - and lay off all those people currently employed in the US defence industry??  Lets play!

Apparently this is called winning.

SD
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on July 03, 2018, 10:12:27 AM
https://www.cnbc.com/2018/07/03/trump-tariffs-could-add-5000-to-price-of-new-cars-and-trucks-in-us.html

Starts to add up when you combine with $6,000 to $9,000 more per new home due to higher cost for lumber due to Canadian tarrifs.

I like the idea of no tarrif and free trade and support most of what Trump has done so far but, current strategy hurts way too much American consumers vs the other way around.

He should read his book on how to negotiate properly or we will have Mike Pence soon.

Cardboard
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: no_free_lunch on July 03, 2018, 11:17:04 AM
I think it hits Canada too.

https://business.financialpost.com/real-estate/property-post/canada-strikes-back-at-trump-and-condo-buyers-will-pay-the-price

I am not sure why Canada is now putting on tarriff's.  It seems hypocritical to talk the free trade talk but then act in kind when Trump does it.  If all these econ theories are correct, aren't we best off to ignore the tarriff's?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: cameronfen on July 03, 2018, 11:58:52 AM
I think it hits Canada too.

https://business.financialpost.com/real-estate/property-post/canada-strikes-back-at-trump-and-condo-buyers-will-pay-the-price

I am not sure why Canada is now putting on tarriff's.  It seems hypocritical to talk the free trade talk but then act in kind when Trump does it.  If all these econ theories are correct, aren't we best off to ignore the tarriff's?

No because while US imprort tariffs are a detrement to the US, they also hurt Canada too likely even more due to targetting of industry.  Thus if you dont punish the deviator, you run the risk of being run over.  Obviously not all tarrifs deserve a responce, but Trump has no nuanced motivation for tariffs other than seeing negative numbers turn positive.  And you can argue if no one stands up to him he will keep pushing the button.  In that case I think punishing the deviator is warranted so he will think twice before deviating again. 
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: SharperDingaan on July 03, 2018, 01:33:02 PM
I think it hits Canada too.

https://business.financialpost.com/real-estate/property-post/canada-strikes-back-at-trump-and-condo-buyers-will-pay-the-price

I am not sure why Canada is now putting on tarriff's.  It seems hypocritical to talk the free trade talk but then act in kind when Trump does it.  If all these econ theories are correct, aren't we best off to ignore the tarriff's?

When you meet the bully in the school yard you punch back, dollar for dollar, and where it hurts.
When you pick fights with all the kids in the school yard, guess who gets hurt most - no matter how big you are.
And its not a fair fight. Bullies either learn to play nice or breathe through a straw.

A lot of Americans are going to be losing their jobs, and it is very likely that the blow-back will continue unitil after the US mid-term elections are decided. If the American people are, or are not OK with this, they can demonstrate their responsibility through the ballot box. Until then, most would stop digging the hole deeper.

SD



Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: no_free_lunch on July 03, 2018, 02:30:02 PM
When you meet the bully in the school yard you punch back, dollar for dollar, and where it hurts.
When you pick fights with all the kids in the school yard, guess who gets hurt most - no matter how big you are.
And its not a fair fight. Bullies either learn to play nice or breathe through a straw.

A lot of Americans are going to be losing their jobs, and it is very likely that the blow-back will continue unitil after the US mid-term elections are decided. If the American people are, or are not OK with this, they can demonstrate their responsibility through the ballot box. Until then, most would stop digging the hole deeper.

SD

Yes, I get it.  It's just there is a discrepancy where the arguments are made on one side and not the other.  I hear in great detail how the US is now going to be paying more for all sorts of products and they are suckers for believing in protectionism.  Then we do the same thing.  If I follow everything I have read on this post, the right response is to do nothing at federal level regarding US and work on trade agreements elsewhere.

Are American workers going to be losing jobs?  Unemployment is at decade or maybe multi decade lows so haven't seen that yet.  People have been talking about how Trump will trash the economy for 2 years now..
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: SharperDingaan on July 03, 2018, 03:10:58 PM
When you meet the bully in the school yard you punch back, dollar for dollar, and where it hurts.
When you pick fights with all the kids in the school yard, guess who gets hurt most - no matter how big you are.
And its not a fair fight. Bullies either learn to play nice or breathe through a straw.

A lot of Americans are going to be losing their jobs, and it is very likely that the blow-back will continue unitil after the US mid-term elections are decided. If the American people are, or are not OK with this, they can demonstrate their responsibility through the ballot box. Until then, most would stop digging the hole deeper.

SD

Yes, I get it.  It's just there is a discrepancy where the arguments are made on one side and not the other.  I hear in great detail how the US is now going to be paying more for all sorts of products and they are suckers for believing in protectionism.  Then we do the same thing.  If I follow everything I have read on this post, the right response is to do nothing at federal level regarding US and work on trade agreements elsewhere.

Are American workers going to be losing jobs?  Unemployment is at decade or maybe multi decade lows so haven't seen that yet.  People have been talking about how Trump will trash the economy for 2 years now..

Most people do not think they are about to lose their job, until just before it happens.
If it happens quietly to just a few, its just one of those things. But if it happens to many, and all at the same tiime, its human nature to look for someone/something to blame. Lots of mad citizens with a voting card, and all looking for a place to cast it.

All a trade partner need do is match ONLY on a dollar-for-dollar basis, target versus broadly swipe, and keep proclaiming that the tariffs will go as soon as the US rescinds theirs. Not pleasant, but neither is bullying.

SD
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on July 03, 2018, 06:49:08 PM
The proper end game to this is for a true leader to emerge.

Maybe Theresa May.

That person tells Trump: "Look we will cut a deal between our two countries: no more tarrifs, no subsidies, true free trade."

Of course, it will never been 100% free of shenanigans but, better than status quo.

The world will see that it did not hurt so much and others will follow. I thought that Trudeau could seize the occasion but, we are talking Turdeau.

Cardboard
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on July 03, 2018, 07:09:16 PM
The proper end game to this is for a true leader to emerge.

Maybe Theresa May.

That person tells Trump: "Look we will cut a deal between our two countries: no more tarrifs, no subsidies, true free trade."

Of course, it will never been 100% free of shenanigans but, better than status quo.

The world will see that it did not hurt so much and others will follow. I thought that Trudeau could seize the occasion but, we are talking Turdeau.

Cardboard
The perenial problems you run in when talking free trade with the US are subsidies and Buy American provisions. Until the US gives those up you will not see a free trade deal like the one you imagine. From Trudeau, May, or anyone else, because they're not stupid. Do you see any imminent movement from the US on those two fronts?

In particular I think that US politicians would rather have another GFC than cut Ag subsidies.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on July 04, 2018, 05:40:06 AM
The proper end game to this is for a true leader to emerge.

Maybe Theresa May.

That person tells Trump: "Look we will cut a deal between our two countries: no more tarrifs, no subsidies, true free trade."

Of course, it will never been 100% free of shenanigans but, better than status quo.

The world will see that it did not hurt so much and others will follow. I thought that Trudeau could seize the occasion but, we are talking Turdeau.

Cardboard

Trade in general was already moving into this direction albeit slowly, since over time tariffs were falling. There are a few players like China that are using unfair practices (forced JV, technology “transfer”, closing their market to foreign companies etc ) to achieve some of their goals. Trump uses a misplaced carpet bombing approach where a smart weapon would have been a much better choice.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on July 04, 2018, 06:10:10 AM
You guys are too negative or maybe it is your anti-Trump views that make it as such:

https://www.cnbc.com/2018/07/04/eu-considering-international-talks-to-cut-car-tariffs-report-says.html

https://www.cnbc.com/2018/07/04/trumps-right-on-trade--europe-has-been-free-riding-for-too-long-f.html

I do believe that deals will emerge but, they won't be 100% free trade. Some subsidies will still exist. Although, it will be freer than it the past and Trump will boast about how great that is (and he is).

I am just hoping that it won't be too long. China is already into panic mode:

https://www.cnbc.com/2018/07/03/china-state-media-on-stock-markets-trade-frictions-with-the-us.html

Cardboard
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: doc75 on July 04, 2018, 06:53:41 AM

"We’re only able to run those surpluses thanks to the generosity and kindness of strangers who are willing to take in all of those goods....It’s a lie to say this is an amazing German export achievement — no, it isn’t, it’s because there is a consumer at the other end who’s willing to generate the demand.”

This doesn't make sense to me. So American consumer demand for European products has been high.  What is Europe purportedly doing wrong?  My understanding was that their average tariff was quite low and in line with other countries, including the US. 

You can treat me like a grade 1 because that's about where I stand on international trade.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: SharperDingaan on July 04, 2018, 06:59:21 AM
It's simply prudence to consider alternatives, it doesn't mean 'do'.
Additionally, any one european nation is too small to go up against a bullying US on its own - whereas collectively its a much fairer playing field.

Every sovereign sets the rules for its sandbox.
China doesn't have to let anybody in, and is free to choose who it will trade with - the same as the US.
The US also doesn't have to buy more goods from China that it sells to them.

The evidence since Trump arrived is that the White House 'hires to fire'
Most would expect that should the GORP loose in the upcoming midterms, current advisors will be looking for new jobs.
Hence all the world need do is let the US feel pain for a few months, and keep matching Trumps tariffs dollar-for-dollar.
It's quite possible that under new advisors, all this tariff BS gets rolled back Jan-01.

SD

Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on July 04, 2018, 10:47:05 AM

"We’re only able to run those surpluses thanks to the generosity and kindness of strangers who are willing to take in all of those goods....It’s a lie to say this is an amazing German export achievement — no, it isn’t, it’s because there is a consumer at the other end who’s willing to generate the demand.”

This doesn't make sense to me. So American consumer demand for European products has been high.  What is Europe purportedly doing wrong?  My understanding was that their average tariff was quite low and in line with other countries, including the US. 

You can treat me like a grade 1 because that's about where I stand on international trade.
Ok, that guy is wrong, you don't export by the grace of your import partners. He's a fund manager and investment types often get this stuff wrong. They're used to look at things through the prism of business and that's not how these things work.

Now let's do the grade 1 international trade thing. Though it's actually more like 4th year of university dumbed down.

Economies have a thing called economic capacity. That's level of production at NAIRU also known as full employment. So in an economy you have a certain level of resources: labour force, machinery, technology, etc. Capacity is the level of production where unemployment is at a level where inflation is stable and unemployment cannot be lowered without triggering inflation. It's a theoretical speed limit of economies and economies like to operate at that speed.

Now an economy produces and an economy consumes. Globally production=consumption. But it varies for individual economies. Take an economy at capacity. If that economy is saving then by definition it consumes less then it produces. What happens with the surplus of production that doesn't get consumed locally? It goes abroad as net exports.

So there you have it. Trade balances are determined by savings rates, not by the demand for a country's products. Australia is a great example of this. Australia is great producer of commodities. It's also generally a trade deficit country -it likes to spend. So in the 2000s when we had a commodity boom and demand for Australian product went through the roof what happened to its trade deficit? Did it go down? No. It went up. A lot. Aussies took all that new money coming into their country and spent it all and then some.

Now back to the EU. Pre GFC the EU was running mostly balanced trade. The GFC hit and some countries* started to save some more in order to fix their balance sheets. Now the EU is running some meh trade surpluses. They're not meaningless, but nothing to write home about. Which is exactly what you'd expect. A little bump in savings, a little bump in the balance of trade. It has nothing to do with demand for EU product.

*There's Germany in there in the EU. Germans were prolific savers pre GFC. But post GFC they went completely mental. This despite having negative interest rates. It kinda has economists scratching their heads. The going theory is that Germany is an aging country and is accumulating assets for retirement.

I hope this helps. Feel free to ask questions.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Jurgis on July 04, 2018, 11:31:28 AM

"We’re only able to run those surpluses thanks to the generosity and kindness of strangers who are willing to take in all of those goods....It’s a lie to say this is an amazing German export achievement — no, it isn’t, it’s because there is a consumer at the other end who’s willing to generate the demand.”

This doesn't make sense to me. So American consumer demand for European products has been high.  What is Europe purportedly doing wrong?  My understanding was that their average tariff was quite low and in line with other countries, including the US. 

You can treat me like a grade 1 because that's about where I stand on international trade.
Ok, that guy is wrong, you don't export by the grace of your import partners. He's a fund manager and investment types often get this stuff wrong. They're used to look at things through the prism of business and that's not how these things work.

Now let's do the grade 1 international trade thing. Though it's actually more like 4th year of university dumbed down.

Economies have a thing called economic capacity. That's level of production at NAIRU also known as full employment. So in an economy you have a certain level of resources: labour force, machinery, technology, etc. Capacity is the level of production where unemployment is at a level where inflation is stable and unemployment cannot be lowered without triggering inflation. It's a theoretical speed limit of economies and economies like to operate at that speed.

Now an economy produces and an economy consumes. Globally production=consumption. But it varies for individual economies. Take an economy at capacity. If that economy is saving then by definition it consumes less then it produces. What happens with the surplus of production that doesn't get consumed locally? It goes abroad as net exports.

So there you have it. Trade balances are determined by savings rates, not by the demand for a country's products. Australia is a great example of this. Australia is great producer of commodities. It's also generally a trade deficit country -it likes to spend. So in the 2000s when we had a commodity boom and demand for Australian product went through the roof what happened to its trade deficit? Did it go down? No. It went up. A lot. Aussies took all that new money coming into their country and spent it all and then some.

Now back to the EU. Pre GFC the EU was running mostly balanced trade. The GFC hit and some countries* started to save some more in order to fix their balance sheets. Now the EU is running some meh trade surpluses. They're not meaningless, but nothing to write home about. Which is exactly what you'd expect. A little bump in savings, a little bump in the balance of trade. It has nothing to do with demand for EU product.

*There's Germany in there in the EU. Germans were prolific savers pre GFC. But post GFC they went completely mental. This despite having negative interest rates. It kinda has economists scratching their heads. The going theory is that Germany is an aging country and is accumulating assets for retirement.

I hope this helps. Feel free to ask questions.

But theoretically - let's go with Aus example - demand for Australian product goes through the roof ... Aussies get all that new money coming into their country and maybe they can't spend it, so they start saving more and savings rate goes up. So theoretically, the demand from abroad could trigger savings rate increase, no? E.g. I earn $1K and save only 10%, but when I start earning $2K I can't spend it - or don't want to spend it - and start saving 60%? No?

Edit: although you can counter with your example of mental-saving Germans who started saving even more as crisis hit, so really if boom hits nobody saves more... apart from few capitalist MMM cases on CoBF  8)  ::)
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on July 04, 2018, 12:13:11 PM
But theoretically - let's go with Aus example - demand for Australian product goes through the roof ... Aussies get all that new money coming into their country and maybe they can't spend it, so they start saving more and savings rate goes up. So theoretically, the demand from abroad could trigger savings rate increase, no? E.g. I earn $1K and save only 10%, but when I start earning $2K I can't spend it - or don't want to spend it - and start saving 60%? No?

Edit: although you can counter with your example of mental-saving Germans who started saving even more as crisis hit, so really if boom hits nobody saves more... apart from few capitalist MMM cases on CoBF  8)  ::)
Oh yea, most definitely you can save and run trade surpluses if you have increased foreign demand. But that's if you want/decide to save. Aussies could have run trade surpluses in the naughts. However I used the Aussie example to show that it's not foreign demand that triggers trade surpluses - which is the premise that started doc's post. It's the decision of whether to save or not. Foreign demand helps, but is more or less irrelevant.

Re your edit: Of course economically and logically the boom time is the time to save. In reality it doesn't work like that cause the boom is the time to party and have a good time. But here we deviate into separate topics, like consumer psychology. Governments are supposed to know better and be the moderating influence by running counter-cyclical fiscal policies. But alas, with some exceptions that doesn't happen either.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Jurgis on July 04, 2018, 12:28:13 PM
But theoretically - let's go with Aus example - demand for Australian product goes through the roof ... Aussies get all that new money coming into their country and maybe they can't spend it, so they start saving more and savings rate goes up. So theoretically, the demand from abroad could trigger savings rate increase, no? E.g. I earn $1K and save only 10%, but when I start earning $2K I can't spend it - or don't want to spend it - and start saving 60%? No?

Edit: although you can counter with your example of mental-saving Germans who started saving even more as crisis hit, so really if boom hits nobody saves more... apart from few capitalist MMM cases on CoBF  8)  ::)
Oh yea, most definitely you can save and run trade surpluses if you have increased foreign demand. But that's if you want/decide to save. Aussies could have run trade surpluses in the naughts. However I used the Aussie example to show that it's not foreign demand that triggers trade surpluses - which is the premise that started doc's post. It's the decision of whether to save or not. Foreign demand helps, but is more or less irrelevant.

Re your edit: Of course economically and logically the boom time is the time to save. In reality it doesn't work like that cause the boom is the time to party and have a good time. But here we deviate into separate topics, like consumer psychology. Governments are supposed to know better and be the moderating influence by running counter-cyclical fiscal policies. But alas, with some exceptions that doesn't happen either.

Right.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on July 04, 2018, 01:07:16 PM
https://twitter.com/ukarlewitz/status/1014600546911580160
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cigarbutt on July 05, 2018, 08:05:40 AM
A look at recent trends and potential impacts for the mainstream:
https://www.bloomberg.com/view/articles/2018-07-04/u-s-jump-in-car-sales-obscures-vulnerability-to-trump-s-tariffs
http://tradepartnership.com/wp-content/uploads/2018/05/232_Auto_PolicyPaperFINAL.pdf

I had an interesting conversation the other day with a neighbor who was complaining about gas prices while washing his brand new RAV4.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on July 05, 2018, 05:11:25 PM
https://www.cnbc.com/2018/07/05/trump-says-us-will-impose-16-billion-in-additional-tariffs-on-china-i.html
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on July 06, 2018, 09:27:48 AM
A look at recent trends and potential impacts for the mainstream:
https://www.bloomberg.com/view/articles/2018-07-04/u-s-jump-in-car-sales-obscures-vulnerability-to-trump-s-tariffs
http://tradepartnership.com/wp-content/uploads/2018/05/232_Auto_PolicyPaperFINAL.pdf

I had an interesting conversation the other day with a neighbor who was complaining about gas prices while washing his brand new RAV4.

Huh? The RAV4 is a fairly fuel efficient car, compared to most other vehicles I see on the road nowadays.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cigarbutt on July 06, 2018, 12:01:58 PM
You are correct. I used a poor example.
The gist is just that as cars/gas are getting potentially more expensive, the demand for trucks and SUVs (including small SUVs) instead of smaller cars continues to be strong.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on July 06, 2018, 12:36:35 PM
That is right. People used improved ICE efficiencies to "upgrade" or get larger cars. A RAV4 now consumes about what a Corolla did 10 years ago.

Consumers were able to pay for that volume of gasoline at $100+/barrel in a lower GDP/capita, lower employment level. I see no reason to see lower consumption at $73 U.S. WTI.

Of course, it does annoy people as they spend more at the pump. It will take some time for people to get used to it. They may cut down on restaurants, some clothing but, the current rise is not enough to alter going to work habits or the occasional family trip IMO.

Trump makes a lot of noise about it because it is a popular water cooler topic and it may sound like he is doing something about it. However, there is nothing he can do other than removing sanctions on Iran. And releasing volume from the SPR could help temporarily but, not all of it is useable right away due to grades.

He should sit down instead with Merkel and cut some deals. Tarrifs are expensive on consumers and government charging any kind of taxes is usually bad as they hate removing them afterwards:

https://www.cnbc.com/2018/07/05/merkel-says-she-would-back-cutting-eu-tariffs-on-us-car-imports.html

Cardboard

Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on July 10, 2018, 12:54:30 PM
Thread:

https://twitter.com/JGodiasMurphy/status/1016707675973877761
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on July 10, 2018, 01:52:15 PM
I guess the dairy farmers are winning?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on July 10, 2018, 05:03:57 PM
"Trump administration announces list of tariffs on $200 billion in Chinese goods"

https://www.cnbc.com/2018/07/10/white-house-releases-list-of-goods-hit-by-200-billion-in-tariffs.html
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: valcont on July 10, 2018, 06:30:32 PM
Trump gets the job done.

https://www.telegraph.co.uk/news/2018/07/08/france-germany-increase-defence-spending-amid-fears-donald-trump/

Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on July 10, 2018, 09:11:29 PM
Trump gets the job done.

https://www.telegraph.co.uk/news/2018/07/08/france-germany-increase-defence-spending-amid-fears-donald-trump/
What job is that exactly?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Lakesider on July 10, 2018, 10:04:03 PM
Trump gets the job done.

https://www.telegraph.co.uk/news/2018/07/08/france-germany-increase-defence-spending-amid-fears-donald-trump/

Seems Russia is doing a pretty good job destabilising the west. Funding trump, brexit and other populists. Trump is creating a barrier between former allies with tariff, pulling out of agreements. Brexit has divided europe.

Seems western governments are worried about the direction this is all going. They are starting to take action, makes you wonder about the information that's not public..
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: MarkS on July 11, 2018, 04:21:34 AM
I found these articles rather unsettling.  After reading them, I'm not sure that Germany could fight its way out of the proverbial wet paper bag.

http://nationalinterest.org/feature/germanys-military-dying-13748
http://carnegieeurope.eu/strategiceurope/?fa=56819
http://www.businessinsider.com/german-military-falls-behind-the-us-puts-it-on-notice-2018-2


Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on July 11, 2018, 06:05:36 AM
He certainly does very well at the job of stating the unconvenient truth:

https://www.cnbc.com/2018/07/11/trump-slams-germany-at-nato-summit-says-its-a-captive-of-russia.html

Now I am looking for some of our leftists friends on this board to twist this into a pro-Russian statement...

I am also very happy that he has helped inform a great deal of our Canadian people/consumers about how they are getting ripped off daily by supply management.

Our farmers control Liberals and brought back to control Conservatives as the one who was supposed to become leader (and teaming up with O'Leary) experienced a very close loss. He was against supply management and that is why opposition mounted to toss him out. And now has been dismissed from shadow cabinet.

Cardboard
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: John Hjorth on July 11, 2018, 06:43:30 AM
Well, with regard to German energy policy, isen't that an internal German matter, about which the German political system has to decide? POTUS seems to think that everything can be used as leverage. [No matter how [to me] foolish the German decisions in that area has been the last few years - I'm here referring to the German decision to shut down all German nuclear powerplants based on the German political sentiment after the TEPCO accident, of which the German Greens was good to take advantage.]

For those interested in the topic, I suggest you to read up on the Nordstream 2 project [, by now [partly] blocked for final approval by the Danish government right now]. It is exactly about such ongoing concerns about dependence of gas from Gazprom, where the gas is needed further down in Europe. The point is the subsea pipeline is right now planned to go south of the Danish island Bornholm through Danish sea territory in the Baltic Sea [exactly where where Nordstream 1 is already now in operation]. The point here is, that the Danish government can't stop the project, because the pipeline can just be placed northbound around Bornholm through international waters. So the construction is actually on its way, outbound from a place near Saint Petersburg, because Russia already knows, that this issue can't be a showstopper.

Pure hypocracy & political spin. The fact is, that Europe needs the gas, and Gazprom needs the payments for the gas. Period. One does not need to like, love, kiss or even sleep with each other to trade.

- - - o 0 o - - -

A bit more off topic: Personally, as a Danish citizen, I'm appalled, upset & embarassed by the fact Denmark [too] is not fulfilling its financial obligations within NATO with regard to contributions. An agreement is an agreement. Period.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: valcont on July 11, 2018, 07:03:25 AM
Trump gets the job done.

https://www.telegraph.co.uk/news/2018/07/08/france-germany-increase-defence-spending-amid-fears-donald-trump/
What job is that exactly?

Job of getting freeloaders off our back. Why is it US's responsibility to protect Europeans so they can take months of vacation, subsidized medicine and social safety net while Americans bust their ass. And if Germany can trade with Russia , it can also manage the relationship.

Lakesider,
   Define destabilizing the west? What kind of friends are these that only believe in leeching off and do not contribute their fair share. America is not an innocent bystander either but I think this whole conversation is good. It'll force America to be accountable when it demand accountability from others.
I will expect Europeans to question America's middle east, fiscal ,climate policy in return. 
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: SharperDingaan on July 11, 2018, 07:18:33 AM
Everyone is a captive of their bigger neighbour.
Russia has Europes gas fields, & there really aren't any other european sources with comparable volumes. Trump also neglects to mention that the Nord Stream 2 pipeline is just a conduit; Germany is not the end-buyer of everything coming coming out of that pipe. It would be a great diversifying measure if east-coast Canada could export Alberta gas to europe in volume, but until there is a pipeline and loading facilities (years away), europe has few options. However, Canada could argue that construction is part of our 2% NATO committment!, as it serves to make europe less reliant on Russia!!

Trump does have a case on defense spending, but the cold-war ended a long time ago.
When the other guy withdraws you don't need as many tanks or planes anymore, so your now SURPLUS tanks and planes can become part of your annual 2%. Obviously this 'peace dividend' has now run its course and todays solution is investment in more/better equipment. But you make your own - you don't buy from the worlds leading arm dealer, using #2 to create conflicts so that both can sell more weapons. 

But what if Trump were gone?
Trade wars end, destabilization ends, defense spending mitigates, lots and lots of good things occurr. Hence, it's getting harder and harder to keep the grip on the keys to power, and replacements are looking more and more attractive.
Hail the Dictators Handbook!

SD
   




 
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on July 11, 2018, 07:22:43 AM
For all uninformed here, 2% GDP spending commitment for all NATO members was struck in 2014 under Barack Obama.

Cardboard
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: valcont on July 11, 2018, 07:43:53 AM

But what if Trump were gone?
Trade wars end, destabilization ends, defense spending mitigates, lots and lots of good things occurr. Hence, it's getting harder and harder to keep the grip on the keys to power, and replacements are looking more and more attractive.
Hail the Dictators Handbook!

SD
 

Dream on. Americans have tasted the blood. Hard to beat him by running on more offshored jobs, illegal immigration and international conflicts. I thought he would be terrible and would fold easily on foreign policy and trade but so far he has done a terrific job.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: doc75 on July 11, 2018, 07:53:52 AM
A bit more off topic: Personally, as a Danish citizen, I'm appalled, upset & embarassed by the fact Denmark [too] is not fulfilling its financial obligations within NATO with regard to contributions. An agreement is an agreement. Period.

My understanding is that no NATO country has breached any agreement.  The 2% GDP figure was an agreed-upon spending goal for 2024.  Not all of the NATO countries are on track to meet that goal, but nobody is offside of any contractual agreement (as far as I know).

All that said, I understand your disdain.   Canadians spend a remarkably small amount of GDP on defence.  I think we've been pretty foolish in that respect, and then of course it's very difficult to increase the budget after it's been cut, because that requires cuts to various entitlements. 

Trump's "inconvenient truth" is inconvenient partly because it's (usually) not the truth.   Previous administrations were also talking about many of these same issues.  The difference now is Trump's full-throttle shame-and-blame game, shouting exaggerated and/or dishonest claims through the loudest megaphone in the world.  It may be effective at stirring the pot and getting some desired concessions, but he's far from a prophet of truth.   
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on July 11, 2018, 08:44:54 AM
For all uninformed here, 2% GDP spending commitment for all NATO members was struck in 2014 under Barack Obama.

Cardboard

Yeah, that spending goal of 2% of the GNP was for 2024 or 6 years from now.
Immediately cranking up spending on defense would just be for pork barrels anyways. I do think that European defense companies will see more business in the next few years as defense budgets are already growing ( Gernany‘s budget is up ~10% YoY).

Besides that, the numbers for the USA and Europe are not comparable . For example more than half the US spending goes into support function and a huge part of it is health care. This is not the case in Europe, at least not to the same extend.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on July 11, 2018, 09:07:35 AM
You guys can keep your head in the sand but, very few nations are on track for 2% by 2024. Only a few have taken this seriously:

https://www.cnbc.com/2018/07/10/trump-pushes-nato-allies-to-increase-spending-as-us-funding-slows.html

I can understand why the Americans are complaining and Trump unlike our politically correct, kick the can down the road, muppet leaders, talks about it which hurts your little feelings and portfolios?

Cardboard





Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on July 11, 2018, 09:31:07 AM
You guys can keep your head in the sand but, very few nations are on track for 2% by 2024. Only a few have taken this seriously:

https://www.cnbc.com/2018/07/10/trump-pushes-nato-allies-to-increase-spending-as-us-funding-slows.html

I can understand why the Americans are complaining and Trump unlike our politically correct, kick the can down the road, muppet leaders, talks about it which hurts your little feelings and portfolios?

Cardboard

I don’t understand what this topic has to do with anyone’s portfolio and I am no snowflake either. The fact remains that things have been moving in the right direction already, before Trump blurted off.

Maybe the US would be better off reducing to defense to 2% of the GNP. There are a lot of potholes that could be fixed with that kind of money saved.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Zorrofan on July 11, 2018, 10:05:06 AM
"Trump does have a case on defense spending, but the cold-war ended a long time ago."
 
Tell that to the people of Ukraine, still fighting Russian backed insurgents and the people of Latvia, who live in fear each day that Russia will pull another "Crimea" to save the Russian speaking people in Latvia from the horror of the West. Didn't Russia invade Georgia as well a few years back?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: John Hjorth on July 11, 2018, 11:16:10 AM
Valcont,

Without quoting any of your posts here, to me, you appear biased towards European countries in general. It's time for you to back your opinions & perceptions with facts [, which you haven't done so far]. The real point here is that there exist no "Europe" [here, understood as: "as a whole" [with regard living conditions, efficiency, productivity, socialtal systems etc. - you just name it.]]
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: John Hjorth on July 11, 2018, 11:48:48 AM
You guys can keep your head in the sand but, very few nations are on track for 2% by 2024. Only a few have taken this seriously:

https://www.cnbc.com/2018/07/10/trump-pushes-nato-allies-to-increase-spending-as-us-funding-slows.html

I can understand why the Americans are complaining and Trump unlike our politically correct, kick the can down the road, muppet leaders, talks about it which hurts your little feelings and portfolios?

Cardboard

I don’t understand what this topic has to do with anyone’s portfolio and I am no snowflake either. The fact remains that things have been moving in the right direction already, before Trump blurted off.

Maybe the US would be better off reducing to defense to 2% of the GNP. There are a lot of potholes that could be fixed with that kind of money saved.

Going through the whole US military industrial complex with a fine-tooth comb woulden't exactly hurt either, ref. the use of the word "spending" in this topic so far.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: valcont on July 11, 2018, 08:59:53 PM
Valcont,

Without quoting any of your posts here, to me, you appear biased towards European countries in general. It's time for you to back your opinions & perceptions with facts [, which you haven't done so far]. The real point here is that there exist no "Europe" [here, understood as: "as a whole" [with regard living conditions, efficiency, productivity, socialtal systems etc. - you just name it.]]

John,
 I feel the same way about China and Canada so the bias is not Europe specific. Canada should just thank its geographical stars that it ended up next to a superpower that finds it too boring to even bully. Ask Taiwan,Phillipines,Ukraine as to how bad can it get.

But China and Europe are a different story. China is clearly an adversary and its actions are designed to undermine US. That's why tariffs will work on China despite all the fear mongering coming out of the left/business owned media. Just compare the Chinese stock market reaction to the US's. They are in the bear market since the tariffs were announced while the US has barely budged.

When I say "Europe" , I'm talking in the context of the security cover provided to it. This security, largely underwritten by American taxpayers, is provided free of cost for so long that a French/German citizen has no qualms protesting against the Iraq war and buying Russian gas!  Let the Germans handle Russia next time it takes over Ukraine and French can go fight in Syria. Good luck with that shoestring budget.

Same goes for the US subsidizing pharmaceuticals . Here is a dated article but still largely relevant.

https://www.theatlantic.com/business/archive/2009/09/does-the-us-really-account-for-so-much-pharma-profit/24465/ 
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on July 11, 2018, 09:55:09 PM
Trump gets the job done.

https://www.telegraph.co.uk/news/2018/07/08/france-germany-increase-defence-spending-amid-fears-donald-trump/
What job is that exactly?

Job of getting freeloaders off our back. Why is it US's responsibility to protect Europeans so they can take months of vacation, subsidized medicine and social safety net while Americans bust their ass. And if Germany can trade with Russia , it can also manage the relationship.
That article basically says that France will move to to 2% of GDP military spend and that Germany committed to get there.. eventually. Furthermore you do realize that NATO is not a pool where money goes in and then gets distributed. These are moneys that individual countries spend on their own armed forces.

I have a hard time figuring out how these countries freeload as you say. The US doesn't actually give them money. Now that France will boost its defense budget by 16 billion euro, will the US cut it's defense budget by 16 billion euro? Everyone knows that the answer is a resounding NO!. So then what good is that to the US? Furthermore this goes to show that there's no freeloading as you say. If the was freeloading, if they spend more on theirs, you get to spend less on yours.

Now if we're on the freeloading topic, the US actually gives Israel about $3.1 billion per year in military aid. You're literally giving them stuff. That's literal free loading. But are any of you fine folks that have you panties in a twist about NATO military budgets upset about that? Nope, you don't hear a peep about that. So I think this is less about actual facts and more about ideology.

As for your comments regarding vacation time and healthcare, I have no idea what it has to do with any of this. It just seems that you just don't like that some people have vacation and access to single payer healthcare.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on July 11, 2018, 10:51:47 PM
A bit more off topic: Personally, as a Danish citizen, I'm appalled, upset & embarassed by the fact Denmark [too] is not fulfilling its financial obligations within NATO with regard to contributions. An agreement is an agreement. Period.

My understanding is that no NATO country has breached any agreement.  The 2% GDP figure was an agreed-upon spending goal for 2024.  Not all of the NATO countries are on track to meet that goal, but nobody is offside of any contractual agreement (as far as I know).

All that said, I understand your disdain.   Canadians spend a remarkably small amount of GDP on defence.  I think we've been pretty foolish in that respect, and then of course it's very difficult to increase the budget after it's been cut, because that requires cuts to various entitlements. 

Trump's "inconvenient truth" is inconvenient partly because it's (usually) not the truth.   Previous administrations were also talking about many of these same issues.  The difference now is Trump's full-throttle shame-and-blame game, shouting exaggerated and/or dishonest claims through the loudest megaphone in the world.  It may be effective at stirring the pot and getting some desired concessions, but he's far from a prophet of truth.
Doc, you're correct about the NATO commitment agreement so yay to you.

But now onto Canada. I don't think that it makes sense to just mindlessly target some level of GDP for expenditure for defense. It makes sense to practically what needs to be done. So let's take a look at that.

We're Canada, so we won't go invade some country in the middle of nowhere who's name we can't pronounce. So we won't need offensive weapons. It's also very unlikely that we'll fight a war with Peru or Thailand or anything like that. What we need is capability to run maritime interdiction missions. Because you don't want piracy or smuggling in your waters. So we'd need some frigates and a couple of destroyers for that. We should also have search and rescue so we'll need some assets for that.

But when it comes to foreign military threats the big one is Russia and a very small but growing one from the US in the south. Realistically there's no way we can fight a conventional war against those adversaries. So spending money on more tanks or APCs or anything like that makes no sense. That's just wasted money. The only thing that makes sense in this situation is nuclear weapons with a strong second strike capability. That means nuclear weapons, plus batteries of ballistic missiles to go along (short, medium, and intercontinental) as well as SLBMs. Missile defense capability should go along with that as well. That would be the smart way to do it.

I would totally support Canada to increase its defense budget by a lot to do what I just mentioned above. Here's the funny thing though. If that were to happen the US would loose its shit. It would loose it just over us trying to build out missile technology. Let alone having nukes 400 miles away from New York and DC. If we were to do that the rhetoric would shift abruptly. Defense budget targets would be forgotten and everyone would talk about how much they love Canada and that Canada doesn't need to do any of that because the US will always be at its side and it has nothing to worry about.

So if Canada is to make some smart investments in defense in its self interest or as a part of a multilateral strategic objective I'm fine with increasing the defense budget. But if we're to mindlessly drop some money on materiel because Donald Trump is having a fit then from my perspective the Trump people can go howl at the wall that Mexico paid for.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: no_free_lunch on July 11, 2018, 11:17:53 PM
China is catching up militarily to the US.  The US will be forced to increase their military spend to counteract this.  By getting their allies to increase their defense budget they will be in a position to increase less than they otherwise would have.  So yes there are savings for the US if they can get others to bump defense spend.  So long as they really believe those countries are their allies.

If the US, as part of their foreign policy, chooses to give another country weapons it's doesn't affect our obligations.

A growing military threat from the US?  Think about what we are discussing right now, the US is telling Canada to increase it's military.  Does that make sense, if the goal is to invade us?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: doughishere on July 11, 2018, 11:51:23 PM
Quote
Trump himself is frustrated with Beijing’s reluctance to offer more concessions, especially after the U.S. reversed a decision to slap crippling restrictions on Chinese telecommunications-equipment maker ZTE Corp., according to a White House official who declined to be identified.

https://www.bloomberg.com/news/articles/2018-07-11/u-s-china-trade-talks-said-to-stall-as-tariff-dispute-escalates

ROFL
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: John Hjorth on July 12, 2018, 01:35:23 AM
Valcont,

Thank you for reading my post the way it was meant. I understand your position on this better after reading your last post. I'm able at least to put it in some local perspective, in the context that I personally consider the Danish military a joke.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on July 12, 2018, 04:06:10 AM
The mission statement of the US department of defense is much broader than that of most other countries:

MISSION

The mission of the Department of Defense is to provide a lethal Joint Force to defend the security of our country and sustain American influence abroad


The last for words cost many hundred billion every year. The mission statement of most countries is just to protect themselves to borders and those of its allies. It’s the reason why the Navy branch is the most costly one within the US military.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on July 12, 2018, 04:35:17 AM
"The mood music of this year’s NATO summit is contrasting sharply to previous international gatherings. They were once seen as relatively routine affairs, with member nations uniting to say the alliance had never been stronger and all pledging to continue to work together."

This year, the boondoggle at taxpayers expense resulted in real work being accomplished. Thank you Mr. Trump for helping the West being stronger than just words.

When I started in business, people knew the meaning and importance of doing what one said he or she would do.

After years of liberalism or letting the incompetent, lazy or abuser get by without consequences, a lot have forgotten.

Cardboard
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: MarkS on July 12, 2018, 04:57:38 AM
This article is dated, actually during the Obama administration.  But it touches on cost not covered apparently under the 2% of the budget aspirations/agreement.

https://www.cbsnews.com/news/gates-criticizes-nato-how-much-does-us-pay/
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: MarkS on July 12, 2018, 05:08:31 AM
Spekulatius has a good point about America's desire to extend and maintain its influence abroad.   Since we're hemorrhaging red ink perhaps it's time to reconsider our role in the world.  Here is a link to an article on why we should consider not protecting Europe any longer. 
https://www.nationalinterest.org/feature/why-america-still-defending-europe-24957
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on July 13, 2018, 04:12:00 AM
Spekulatius has a good point about America's desire to extend and maintain its influence abroad.   Since we're hemorrhaging red ink perhaps it's time to reconsider our role in the world.  Here is a link to an article on why we should consider not protecting Europe any longer. 
https://www.nationalinterest.org/feature/why-america-still-defending-europe-24957

Europeans don’t feel threatened. Right or wrong, but that’s what it is. US is free to pull their troops back, which they have been doing anyways over time. As long as  the US remains in the NATO, they would be obligated to help any nation within NATO that gets attacked, based on the NATO contract. If the US leaves the NATO, then that obligation ceases to exist.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: John Hjorth on July 14, 2018, 11:36:30 AM
Spekulatius has a good point about America's desire to extend and maintain its influence abroad.   Since we're hemorrhaging red ink perhaps it's time to reconsider our role in the world.  Here is a link to an article on why we should consider not protecting Europe any longer. 
https://www.nationalinterest.org/feature/why-america-still-defending-europe-24957 (https://www.nationalinterest.org/feature/why-america-still-defending-europe-24957)

Europeans don’t feel threatened. Right or wrong, but that’s what it is. US is free to pull their troops back, which they have been doing anyways over time. As long as  the US remains in the NATO, they would be obligated to help any nation within NATO that gets attacked, based on the NATO contract. If the US leaves the NATO, then that obligation ceases to exist.

MarkS,

I agree with Spekulatius here, based on general local sentiment. I also think recent NATO developments expose that this is the contrary of how USA wants NATO to work going forward.

Subject to USA being and staying in NATO, it is to me game over for Russia [with one exemption, ref. below] to expand westbound, based on the fourth [1999] and fifth  [2004] enlargements of NATO territory (https://en.wikipedia.org/wiki/Member_states_of_NATO).

I think you have to look at the situation in two dimensions ["Member of NATO" and "Part of Europe" [with a contemporary geographical definition] (https://en.wikipedia.org/wiki/Europe#Contemporary_definition), which complicates assessment of the situation much:

1. A part of Russia [the western part] is now inside, the eastern part outside Europe.
2. There is a large barrel of powder with regard to Finland as part of Europe, but it is not a NATO member. [And there is actually fear in Finland for Russian behavior.]
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: MarkS on July 14, 2018, 02:08:43 PM
John,
I found your comments  and Spekulatius's comments very interesting.  Your comments made me aware that my understanding of the European contemporary mind certainly needs improvement.  Coincidentally a friend of mine who has been living in Amsterdam for the last couple of years just sent me this article from the Asia Times.

http://www.atimes.com/article/natos-problem-is-that-europeans-wont-fight/

The polls cited in the article showing how few Dutch, Belgium and German citizens are actually willing to fight for their countries surprised me.  Europe has contributed so to much to Western Civilization. I'm surprised that more people aren't willing to fight for it.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: John Hjorth on July 14, 2018, 04:22:14 PM
Mark,

To some extent, it's now getting emotional [to the contrary of rational], and to some extent also hypothetical. Shall we continue? - I'm up to it, but please call me out, if you think it's time to do so.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: doc75 on July 14, 2018, 04:43:32 PM
John,
I found your comments  and Spekulatius's comments very interesting.  Your comments made me aware that my understanding of the European contemporary mind certainly needs improvement.  Coincidentally a friend of mine who has been living in Amsterdam for the last couple of years just sent me this article from the Asia Times.

http://www.atimes.com/article/natos-problem-is-that-europeans-wont-fight/

The polls cited in the article showing how few Dutch, Belgium and German citizens are actually willing to fight for their countries surprised me.  Europe has contributed so to much to Western Civilization. I'm surprised that more people aren't willing to fight for it.

Wow, that's quite some article. Sybarites indeed.

I was curious about the source of that poll, so I looked it up.  I believe it's a Gallup poll released in 2015, survey done in 2014.  But I didn't find the actual text of the questions, or the context, in my 3 min search. 

In any case, the US answer was 44%, which I think is telling.  My sense is that far more than half of the population would be willing to fight if the homeland was attacked.

Curious to hear others' thoughts on this. 

Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on July 15, 2018, 08:30:02 AM
John,
I found your comments  and Spekulatius's comments very interesting.  Your comments made me aware that my understanding of the European contemporary mind certainly needs improvement.  Coincidentally a friend of mine who has been living in Amsterdam for the last couple of years just sent me this article from the Asia Times.

http://www.atimes.com/article/natos-problem-is-that-europeans-wont-fight/

The polls cited in the article showing how few Dutch, Belgium and German citizens are actually willing to fight for their countries surprised me.  Europe has contributed so to much to Western Civilization. I'm surprised that more people aren't willing to fight for it.

Fight for what? There is no perception of threat in Europe. Western Europe does not feel threatened by Russia, much less China. I am sure that the Baltic states, Poland, Finland and Ukraine feel different, but that a different matter.

This does not mean that Western Europeans want to abolish the NATO, it just means that they are not too concerning about national security. I am not stating it’s right or wrong, but in a way, it’s nothing else than an somewhat isolationist stance that we see in the US as well.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: shalab on July 15, 2018, 12:37:39 PM
Yes, Spekulatius is right - the USA spent the majority of dollars during the cold war. Countries like Holland, Denmark, Germany are taken care of by being in NATO. It is mostly the problem with previous US governments which instead of worrying about the welfare of their citizens spent money on non-issues.

....

Fight for what? There is no perception of threat in Europe. Western Europe does not feel threatened by Russia, much less China. I am sure that the Baltic states, Poland, Finland and Ukraine feel different, but that a different matter.

This does not mean that Western Europeans want to abolish the NATO, it just means that they are not too concerning about national security. I am not stating it’s right or wrong, but in a way, it’s nothing else than an somewhat isolationist stance that we see in the US as well.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on July 15, 2018, 01:16:02 PM
Actually during the cold war West Germany had a pretty big and well respected military. About half a million active duty troops, another million in reserve, 170,000 civilian personnel and lots of equipment. Germany and Netherlands spent about 3% of their GDP on the military.

I'd also say that peace and stability is a pretty big thing which has benefited the US greatly. Far from a non-issue. However, post like shalab's make me think that the US has enjoyed peace and stability for so long that it's now taken for granted and devalued. People should keep in mind that peace and stability is not necessarily the natural order of things.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: MarkS on July 15, 2018, 04:06:47 PM
The actual question used in the poll was:  If there were a war that involved (insert your country) would you be willing to fight for your country?

http://gallup-international.bg/en/Publications/2015/220-WIN-Gallup-International’s-global-survey-shows-three-in-five-willing-to-fight-for-their-country

The question was clearly light on specifics.  So we have a lot of quibble room concerning interpretation.  But I still think the results are eye opening.  The world wide average is that 61% would be willing to fight for their country.  Western Europe at about 24% is an anomaly - especially when you consider that Germany was actually occupied until about 1990.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on July 24, 2018, 12:26:44 PM
https://www.cnbc.com/2018/07/24/trump-plans-to-give-billions-in-aid-to-farmers-hurt-by-tariffs-report.html

Trump handing out money to the farmers "in key electoral states" that he has hurt with his taxes (tariffs are taxes), aka buying some votes for the midterms, aka subsidizing American farmers (and then expecting other countries not to subsidize their farmers?), aka moving further away from a free market and free trade.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Hawks on July 24, 2018, 01:16:05 PM
Hard to believe that more Republicans are not speaking out about all this. These tariffs, taxes, subsidies, etc are the opposite of what the Republicans have always stood for. Rather shameful imo.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on July 24, 2018, 01:28:42 PM
Hard to believe that more Republicans are not speaking out about all this. These tariffs, taxes, subsidies, etc are the opposite of what the Republicans have always stood for. Rather shameful imo.

That's what I've been trying to say, but few people are still thinking about things, apparently...

The party that claims to be for old-school moral value, religious virtue, free trade, free markets, law abiding, personal responsibility, family values, meritocracy, freedom, standing up to tyrants, etc... Is now apparently fully supporting - or at least too scared to oppose - a guy who's basically the embodiment of exactly the opposite of these things. Just because he keeps using the same couple of salesman/con artist tricks over and over again? Because he gave them a tax cut that any other republican with control of both houses would've passed? ¯\_(ツ)_/¯
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on July 24, 2018, 01:32:09 PM
What the US should do is instead of using general revenue to set the fund for agriculture make the steel and aluminium producers to kick in the 12 billion. I think the conversation about tariffs would be drastically different then.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on July 24, 2018, 01:56:30 PM
These are temporary measures but, of course I will be again likely wasting my time trying to explain...

The Chinese are desperate. Unless you have not noticed their stock market is in a bear market while the U.S. hits records.

Credit problems are also mounting rapidly in China:

https://www.bnnbloomberg.ca/china-s-downgrade-free-defaults-put-focus-on-rating-firms-1.1112691

They are also trying to boost infrastructure in the country to help their economy. This really boosted copper among others today:

https://www.bloomberg.com/news/articles/2018-07-24/yuan-weakens-toward-one-year-low-amid-easing-dollar-strength

Daily on this website we hear about evil Russia and all that. However, none of the same people talk against China who steals technology, hacks, infringe patents, abuse WTO, rulings, even claims a chunk of the ocean, etc.

Cardboard

Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: MarkS on July 24, 2018, 02:04:38 PM
Hi Cardboard,

+1

I'm glad we're trying something new with the Chinese.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cigarbutt on July 24, 2018, 02:05:38 PM
Let's assume, for argument sake, that the goal is to eventually lower tariffs and move closer to free trade.
In this context, the message has been to level the playing field which is perceived to be unfair.
For many reasons, farmers and ranchers have provided significant support (vote).

The US agricultural sector has greatly benefitted from international trade, free-trade agreements and has run a significant surplus.
https://www.fas.usda.gov/data/us-agricultural-trade-and-trade-balance-forecast-fy-2018

A perplexing aspect of today's announcement is that the measures will rely on more central planning in an area that is already heavily subsidized, possibly using a 1933 era protectionist and interventionist program.

The problem then was when the America First rhetoric morphed into a piecemeal plan in order to deal with second order effects and with multiple and strategic interest groups.
https://www.weeklystandard.com/andrew-egger/can-trumps-farm-bailout-save-farmers-from-his-tariffs

The Administration may win if other game players think that is is futile to play. Opinion: slippery slope and not easy.
I hope these measures are only temporary but China may not throw the towel so easily.

Interesting reference from a few years back.
https://www.uoguelph.ca/fare/institute/Docs/FARE_conferenceJosephGlauber_AODA.pdf
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Gregmal on July 24, 2018, 02:23:10 PM
Liberty, are you going to post the news about North Korea dismantling nuclear sites? Or does the prerequisite for your postings have to be inherently anti-Trump? You know Clinton lost right?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: doc75 on July 24, 2018, 02:23:49 PM
Daily on this website we hear about evil Russia and all that. However, none of the same people talk against China who steals technology, hacks, infringe patents, abuse WTO, rulings, even claims a chunk of the ocean, etc.

Important topic.  Start a thread!  I'd be an interested reader.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: ERICOPOLY on July 24, 2018, 05:30:46 PM
Hard to believe that more Republicans are not speaking out about all this. These tariffs, taxes, subsidies, etc are the opposite of what the Republicans have always stood for. Rather shameful imo.


Back in 2009 or 2010, when Fairfax removed the hedges, Prem talked about protectionist policies as the thing he wanted to be watching out for.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on July 24, 2018, 08:13:53 PM
Hi Ericopoly!

Glad to see you back man! Been a lllong time!

I think that Prem was fearful of a similar repeat as during the Great Depression when many countries entrenched following economic hardship. And where is the Dust Bowl these days?

Cardboard


Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on July 25, 2018, 06:15:12 AM
Podcast overview of trade situation so far:

https://overcast.fm/+LHyccaORA
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on July 25, 2018, 06:15:47 AM
Liberty, are you going to post the news about North Korea dismantling nuclear sites? Or does the prerequisite for your postings have to be inherently anti-Trump? You know Clinton lost right?

I've posted my views about that elsewhere. Nothing to do with Clinton. Did you stop talking about Obama after he won?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: MarkS on July 25, 2018, 06:25:16 AM
Trump offers deal to EU - both sides drop al! Tariffs, subsidies ...
https://www.bloomberg.com/news/articles/2018-07-25/trump-suggests-cutting-all-tariffs-ahead-of-key-meeting-with-eu
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cigarbutt on July 25, 2018, 09:05:29 AM
The IMF has just come out with an interesting report which is discussed by the WSJ.
https://www.wsj.com/articles/u-s-increasingly-large-driver-of-global-trade-deficits-imf-reports-1532440799

The article points out that the US domestic policy has, is and will tend to promote wider trade deficits and that the pressure on China should be shared with Germany (stop saving!) and Japan (running out of options?).

"The IMF said large and sustained imbalances pose risk to the stability of the global economy. In the near term, these trends risk aggravating trade tensions...and lead to sharp and disruptive currency and asset price adjustments".

The IMF report can be accessed through this which is a nice summary:
https://blogs.imf.org/2018/07/24/addressing-global-imbalances-requires-cooperation/

The outcome may have something to do with your definition of cooperation.

BTW, concerns described by Mr. Watsa have evolved for the US but, in their last annual report, he still suggest to keep an eye on this:
"We continue to be vigilant, though, about the many risks to global economic growth that prevail, including protectionism and a collapse in world trade {from retaliation}, China unraveling and a significant blow up in the junk bond market, which is trading at record low spreads."

Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: SharperDingaan on July 25, 2018, 09:54:12 AM
Trump offers deal to EU - both sides drop al! Tariffs, subsidies ...
https://www.bloomberg.com/news/articles/2018-07-25/trump-suggests-cutting-all-tariffs-ahead-of-key-meeting-with-eu

The 12B of agricultural bailouts evidence that tariffs are hurting, hence the 'trail balloon'.
Of course the smart global thing, pre US Mid-Terms, is to just let the new tariffs (EU) go into effect. Let Trump double down, and immediatly match. Divert funds-flow away from US bonds, and into their own debt issues - to fund their own bailouts.

Curtail ongoing US ability to grow and roll its debt, and we all pay higher interest rates.
Out of a job, unable to afford rising mortgage costs - and all just before voting day. 'Crowding out' can be a bitch.

All the US has to do is drop the tarriffs, & it goes away.


SD

Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on July 25, 2018, 10:44:13 AM
I believe a bilateral trade agreement with the EU regarding cars and including trucks would be ok with the EU. At least the German car manufacturers have indicated such.


Other than that, the EU has increasingly focused on bilateral trade with countries other than the US. One memorandum was closed with Japan on July 6th and I believe there is another one in the works with China.

The Chinese now seem to intentionally weaken their currency to counteract the effect of Trumps 10% tariff on Chinese imports.  The will need to be careful not to induce a runaway capital flight, but so far, it’s working.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on July 25, 2018, 02:44:42 PM
Succinct explanation of why the whole premise of Trump's argument on trade is flawed and shows he doesn't understand what he's talking about:

https://twitter.com/CliffordAsness/status/1022126553705140225

"It's embarrassing to have to explain this but when you buy groceries you didn't "lose" to the grocer. They got your money, but you got the groceries.

As a much smaller point, he also refers to the purchase price as the "gain" to the foreign entity. No, that's revenue not profit."
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Gregmal on July 25, 2018, 03:10:30 PM
Succinct explanation of why the whole premise of Trump's argument on trade is flawed and shows he doesn't understand what he's talking about:

https://twitter.com/CliffordAsness/status/1022126553705140225

"It's embarrassing to have to explain this but when you buy groceries you didn't "lose" to the grocer. They got your money, but you got the groceries.

As a much smaller point, he also refers to the purchase price as the "gain" to the foreign entity. No, that's revenue not profit."

Liberty I missed you posting the news about Trump getting EU concessions. I was looking forward to hear the negative slant on that.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Lakesider on July 25, 2018, 03:31:18 PM
As much as i dislike trump... he seems to be able to bully his way into getting what he wants. He is causing a lot of damage on the way however.

Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: cobafdek on July 25, 2018, 03:42:02 PM
It's still too early to tell what the final outcome will be, but it's fun to re-post and reassess these predictions from just 6 weeks ago.

The U.S. had the leverage going into the trade dispute several months ago, and it continues to have that leverage.   Negotiators like Trump don't make gambits like this without such leverage.  The U.S. can withstand tariffs on its goods better than our trading partners can withstand our tariffs on theirs.

Trump's suggestion about dropping all tariffs - with the ultimate goal of *real* free trade - was a touché psychological move.  Trump took the high ground.  Trudeau, Macron, et al., are left speechless and caught with their pants down.  How can they respond with any credibility if they profess to believe in free trade?

When this is all over, it's ultimately a win-win for the U.S. the rest of the world.  There will be freer trade.

Trumpf does not have a mandate to propose free trade. He has never discussed this anywhere with the parties here and it was just one idea one of these things with a 5min lifespan that he had in the spur of the moment.

The tail end risk for the stock market have increased significantly

Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on July 25, 2018, 05:50:14 PM
This is likely to end with some face-saving concessions on both sides, probably with something nominally better than what was before but hailed as a "huge victory" and a "revolution" or whatever. They'll find some headline numbers that dropped a lot to make it look significant, but the real test will be looking at broad numbers. Will this compensate for the damage done to allies relations and America's perception, and to industries where tariffs have pushed buyers to find new suppliers which they may keep afterwards out of inertia..? I don't know. Junker doesn't have the power to do this unilaterally, and it's not like all of a sudden Europe's complex multi-country internal politics don't matter (politicians over there want to get reelected too...), so we're not there yet.

I'd love to see both sides drop all tariffs and do true free trade. But it's not that easy, and Trump hasn't shown much inclination to be a free trader, or even shown that he understands win-win dynamics. To him it's more about his protectionist guys like Miller and Navarro whispering in his ear that everybody's taking advantage of the US and throwing around big numbers...

As explained here (http://www.cornerofberkshireandfairfax.ca/forum/politics/mr-trump-to-to-impose-stiff-tariffs-on-steel-and-aluminum/msg339710/#msg339710), Trump doesn't really understand trade, so he's probably pretty easy to convince (reminds me of the anecdotes about Reagan being convinced to increase military budget by being shown slides with drawings of soviet nukes bigger than US nukes).
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on July 25, 2018, 06:08:22 PM
"As explained here, Trump doesn't really understand trade, so he's probably pretty easy to convince (reminds me of the anecdotes about Reagan being convinced to increase military budget by being shown slides with drawings of soviet nukes bigger than US nukes)."

Now you believe in anecdotes while Reagan's plan (and his team) was to bankrupt the USSR by spending more than they could on military and developing star wars. FYI IT WORKED!!!

Interestingly enough the guy was formerly an actor and a Democrat, to eventually become a two terms U.S. President as a Republican and one under which the U.S. has thrived and did beat both inflation and a super power.

Now we have a graduate from Wharton business school and you think that the guy is a zero, understands nothing and all that in economics, business, etc. while was managing a pretty large business, thousands of employees and complex projects in large cities.

Someone could be rude, appear stupid, make foolish statements but, it doesn't mean that they are totally dumb you know?

Cardboard
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on July 25, 2018, 06:21:50 PM
"As explained here, Trump doesn't really understand trade, so he's probably pretty easy to convince (reminds me of the anecdotes about Reagan being convinced to increase military budget by being shown slides with drawings of soviet nukes bigger than US nukes)."

Now you believe in anecdotes while Reagan's plan (and his team) was to bankrupt the USSR by spending more than they could on military and developing star wars. FYI IT WORKED!!!

Interestingly enough the guy was formerly an actor and a Democrat, to eventually become a two terms U.S. President as a Republican and one under which the U.S. has thrived and did beat both inflation and a super power.

Now we have a graduate from Wharton business school and you think that the guy is a zero, understands nothing and all that in economics, business, etc. while was managing a pretty large business, thousands of employees and complex projects in large cities.

Someone could be rude, appear stupid, make foolish statements but, it doesn't mean that they are totally dumb you know?

Cardboard

It's impressive how shallow your thinking is.

Of course the US successfully bankrupted the USSR by dragging it into an arms race. Doesn't mean that presidents can't be easy to influence using cheap tactics. Not mutually exclusive.

You put more stock into some rich kid's diploma - you've never met stupid assholes who graduated from prestigious schools in your life? - than just reading what he writes and listening to what he says and actually learning about how badly managed his businesses are/were?

Read what Trump actually says about trade deficits and trade flows and tell me that Cliff Asness isn't right about Trump totally misunderstanding these numbers (or repeatedly lying about them, either way).

If I had known that all I needed to impress you was to show you my diplomas, maybe I'd have done it before and saved me the trouble...
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: doc75 on July 25, 2018, 06:53:00 PM
Now we have a graduate from Wharton business school and you think that the guy is a zero, understands nothing and all that in economics, business, etc. while was managing a pretty large business, thousands of employees and complex projects in large cities.


https://www.pennlive.com/news/2017/02/what_is_trumps_real_record_at.html

Not drawing any conclusion from this about his actual knowledge, but he is intentionally deceptive about his academic record.  This tells you a lot about his insecurities.  And, from what I understand, his businesses generally failed until the Apprentice saved the brand.

The man literally cannot stop exaggerating about his accomplishments. Even winning the presidency -- which is a huge accomplishment -- had to be exaggerated:  we had to talk about the size of the crowd.

Critics find this concerning and annoying, supporters either ignore it or don't mind. 

EDIT:  Before the responses come in... Yes, others do this too.  I think Obama has made some claims about being a professor of constitutional law, whereas he's actually a "senior lecturer" (essentially a special sessional lecturer) or something at Chicago.  Many wouldn't even know the difference, but Obama certainly would.  Nonetheless, I can't think of anyone in the same league as Trump in this regard.   It seems so strange to me.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on July 25, 2018, 08:03:39 PM
The memorandum is a deal to make a deal, and not to further escalate  before that, nothing more, nothing less. Buying more soybeans from the US (there is a surplus currently  due to the Chinese buying less) and LNG makes sense.

I do think that the free trade memorwndum only applies to industrial goods. The EU should not have a problem with those. it does not seem to apply to Agricultural goods where the EU isn’t competitive, but supports the farmers for structural reason and to keep the food supply internal. I hope this get worked out to the benefit of both. Trump can make this a victory and perhaps the EU as well.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: EliG on July 25, 2018, 08:33:25 PM
Remarks by Trump and Juncker

https://www.whitehouse.gov/briefings-statements/remarks-president-trump-president-juncker-european-commission-joint-press-statements/

Juncker:

"We’ve decided to strengthen our cooperation on energy.  The EU will build more terminals to import liquefied natural gas from the U.S.  This is also a message for others."

That's a nice middle finger to Putin. Way to go.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: EliG on July 26, 2018, 05:39:39 AM
Liberty I missed you posting the news about Trump getting EU concessions. I was looking forward to hear the negative slant on that.

<Narrator's voice: the EU has not made any concessions>

The best I can tell, the soybean statement is meaningless. The EU commission is not in the business of procuring soybeans. The EU commission is not in the business of telling private importers where to buy their beans. Private EU importers were already in position to buy more soybeans from the US, to replace Brazilian beans being diverted from the EU to China (to replace US beans blocked by the 25% retaliatory tariff).

Similar point on LNG: nothing of any substance was agreed.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on July 26, 2018, 05:46:04 AM
Liberty I missed you posting the news about Trump getting EU concessions. I was looking forward to hear the negative slant on that.

<Narrator's voice: the EU has not made any concessions>

The best I can tell, the soybean statement is meaningless. The EU commission is not in the business of procuring soybeans. The EU commission is not in the business of telling private importers where to buy their beans. Private EU importers were already in position to buy more soybeans from the US, to replace Brazilian beans being diverted from the EU to China (to replace US beans blocked by the 25% retaliatory tariff).

Similar point on LNG: nothing of any substance was agreed.
The soybean announcement makes sense, since Europe is a net importer and as above noted, the diversion of Brazil’s supplies to China probably makes it more economic to purchase US soybeans. Well, I guess that’s exactly how trade should work. Sanctions on fungible goods tend to have low impact.

Building terminals for LNG will take many years, and who knows if it even happens, but it does make sense for Europe to diversify the Energy supplies.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: EliG on July 26, 2018, 05:51:35 AM
BBC News reporter in Brussels:

https://twitter.com/adamfleming/status/1022443299813117952

"EU official confirms the Trump/Juncker agreement is a political pledge by the EU not to do anything that affects the market conditions responsible for Europe buying more beans."


In other words:

Brazilian beans are being diverted to China, US beans are being diverted to the EU. The EU promised not to impose new soybean tariffs in exchange for Trump agreeing not to impose new car tariffs. So much winning.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: SharperDingaan on July 26, 2018, 07:08:13 AM
Notable is that the EU tariffs came into effect June-22, and are staying https://www.bbc.com/news/business-44567636
Indian tariffs go into effect Aug-04, Canadian tariffs went into effect Jul-01, Mexican tafiffs went into effect June 08.
Sucks to be a US farmer.

Agricultural tarriff reprisals started June 08. 7 weeks later there's 12B in 'aid' to US farmers.
EU tariff reprisals started June-22 - 7 weeks later is the week of Aug-06, Where's the aid for US steel, honey? 
12B ain't gonna cut it.

Clearly, this is 'winning' - so why make any changes until after the US mid-terms have been decided?
Agree not to do more 'stupid', but for now .... let the tariffs bite, and demonstrate the value of freer trade to the masses.
Creates a better 'bounce' for everyone when the tariffs come off.

SD


Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: MarkS on July 26, 2018, 07:49:51 AM
Quote from  Karen Ward, Chief Market Strategist for EMEA, JPMorgan Asset Management:

"There is considerable vested interest to protect domestic industry within the EU given 6% of all EU employment is related to the auto industry."

As I understand it, you pay 29% in tariffs to import an American made auto into Germany.
https://www.howtogermany.com/pages/import-car.html

I get the relentless snarky Trump comments.  You hate him.  But what I don't understand is why you guys seem to only criticize the Trump administration's attempts to level the playing field for U.S. companies?  I never hear criticism of our trading partner's attempts to protect certain industries.  Do you actually believe that the tariffs on imported cars into Germany fall under fair trade?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on July 26, 2018, 08:18:15 AM
I get the relentless snarky Trump comments.  You hate him.  But what I don't understand is why you guys seem to only criticize the Trump administration's attempts to level the playing field for U.S. companies?  I never hear criticism of our trading partner's attempts to protect certain industries.  Do you actually believe that the tariffs on imported cars into Germany fall under fair trade?

It's not mutually exclusive. I can dislike tariffs in general and be pro-free trade, and be against Trump's protectionism and his specific approach too. So far his actions and his rhetoric for a few years have been mostly anti-trade and protectionist, and his inclinations are even close to dirigisme (picking winners among industries and companies), even if he pays some lip-service to free trade and free markets when convenient.

The fact that he doesn't understand how trade works (http://www.cornerofberkshireandfairfax.ca/forum/politics/mr-trump-to-to-impose-stiff-tariffs-on-steel-and-aluminum/msg339710/#msg339710) probably doesn't help.

He lies so much that it's hard to keep track too... For example:

https://www.scmp.com/news/china/policies-politics/article/2156882/trump-says-trade-talks-are-going-really-well-us-and

Quote
Trump says trade talks are ‘going really well’. US and China officials ask: ‘What talks?’

Diplomatic sources say no high-level discussions to defuse the growing trade war have taken place since June


[Trump] insisted that negotiations with Beijing were “going really well” – despite recent public statements by his top advisers that talks had broken down.

His remarks effectively contradicted what Treasury Secretary Steven Mnuchin said during a House Financial Services Committee hearing on July 12: that negotiations with Beijing had “broken down”.

According to Chinese diplomatic sources and China experts in the United States, high-level talks and dialogue between Beijing and Washington have been put on hold since US Secretary of Commerce Wilbur Ross made a visit to Beijing in early June.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: MarkS on July 26, 2018, 08:38:19 AM
Liberty,

I don't find you argument that Trump doesn't understand trade very convincing.

Your cited the following:  "It's embarrassing to have to explain this but when you buy groceries you didn't "lose" to the grocer. They got your money, but you got the groceries.

If GM = grocer and German auto dealer = buyer, the problem that you don't account for is the 29% in tariffs paid by GM to the taxing authorities (third parties).
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on July 26, 2018, 09:04:15 AM
Liberty,

I don't find you argument that Trump doesn't understand trade very convincing.

Your cited the following:  "It's embarrassing to have to explain this but when you buy groceries you didn't "lose" to the grocer. They got your money, but you got the groceries.

If GM = grocer and German auto dealer = buyer, the problem that you don't account for is the 29% in tariffs paid by GM to the taxing authorities (third parties).

Except that's not what Trump is saying, right? And that's a cherry-picked example, not trade in general, correct? (I can't seem to find the source I saw recently, but while it's true that the US had lower trade barriers than the EU and China, the average weighted numbers were all low single digits and pretty close to each other.)

He's saying things like "China is making 500bn a year from us, we're the bank being robbed by every one, etc"

So China isn't "making" 500bn, they're just selling us more stuff than we buy from them. Which is kind of expected if you're the biggest consumer economy in the world trading with a country that has been boostrapping its growth through manufacturing, no? And it's true that the US is getting something in exchange for its money, a bunch of goods that they want, at probably better prices than if they couldn't buy them from China.

And that says nothing about who's making/profiting by how much. If the US is selling a bunch of high-margin services and complex goods (airplanes, whatever) and China is selling the US a bunch of low-margin goods, or goods assembled there but with parts that capture the value coming from elsewhere (ie. an iPhone from China counts in those stats as from China, but almost all the value in the iPhone goes to the US, South-Korea and Japan..)... The trade deficit is a revenue number, but the profit number from trade is probably pretty different, especially since a lot of US businesses are global business that might manufacture things in China and then sell them all around the world, bringing back most of the profits to the US yet having their goods counted in trade flows from China (like Apple).

I'm as much against tariffs as the next guy, but Trump is totally misunderstanding (or misrepresenting ) the situation.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: EliG on July 26, 2018, 09:04:27 AM
As I understand it, you pay 29% in tariffs to import an American made auto into Germany.
https://www.howtogermany.com/pages/import-car.html

Your understanding is not correct. 29% is fake news. Okay?

You linked to a page meant for the individuals moving to Germany. The info doesn't apply to bulk commercial imports. EU import tariff on cars is 10%.

The page you linked cites 29%. That number includes:

* 10% tariff on non-EU made cars, as I mentioned above.
* 19% sales tax (VAT) that applies equally to domestic and imported cars.


I get the relentless snarky Trump comments.  You hate him.  But what I don't understand is why you guys seem to only criticize the Trump administration's attempts to level the playing field for U.S. companies?  I never hear criticism of our trading partner's attempts to protect certain industries.  Do you actually believe that the tariffs on imported cars into Germany fall under fair trade?

The U.S. charges 25% tariff on imported light trucks. Go ahead and double-check. Do you actually believe that 25% tariff falls under fair trade?

You are not going to win this argument by cherry-picking the numbers. Look at the average tariffs instead.

simple mean averages
https://www.indexmundi.com/facts/indicators/TM.TAX.MRCH.SM.AR.ZS/rankings

trade weighted averages
https://www.indexmundi.com/facts/indicators/TM.TAX.MRCH.WM.AR.ZS/rankings

Check out where the US stands compared to e.g. Canada or Germany.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: MarkS on July 26, 2018, 09:20:19 AM
Elig,

The U.S. doesn't have a VAT.  The EU has the right to tax it's citizens under their VAT.  The fact that we don't have a VAT that they have to pay gives them an advantage.  So I would not file my comment under fake news.

As to your second point, you really twisted the fair import of my question.  I never once claimed that all of our tariffs were fair.  I simply asked why you guys never seemed to complain about the unfair trade barriers of other countries. 
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: MarkS on July 26, 2018, 10:03:25 AM
Besides even if the tariff is only 10% instead of 29% i still stand by my basic point - that his argument doesn't take into account payments made to third.parties.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on July 26, 2018, 11:29:47 AM
Quote from  Karen Ward, Chief Market Strategist for EMEA, JPMorgan Asset Management:

"There is considerable vested interest to protect domestic industry within the EU given 6% of all EU employment is related to the auto industry."

As I understand it, you pay 29% in tariffs to import an American made auto into Germany.
https://www.howtogermany.com/pages/import-car.html

I get the relentless snarky Trump comments.  You hate him.  But what I don't understand is why you guys seem to only criticize the Trump administration's attempts to level the playing field for U.S. companies?  I never hear criticism of our trading partner's attempts to protect certain industries.  Do you actually believe that the tariffs on imported cars into Germany fall under fair trade?

Nonsense. They added the 19%!VAT, which is not a tariff, since it is applied to domestic build vehicles as well.

The tariff is 10% and it is quite likely that the EU will drop it, if the US drops 25% tariffs on trucks. I am doubting that the US car manufacturer would even like this free trade agreement,  since it is no coincidence that virtually all the profits from US manufacturers come from the tariff protected trucks.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: MarkS on July 26, 2018, 12:02:40 PM
Spekulatius,

Again the actual number is quite meaningless in so far as the point that I was trying to make.  However, I'm not convinced that it's "nonsense."  According to a website on German import taxes:

"Goods imported from non-EU states are liable to import VAT called import turnover tax (Einfuhrumsatzsteuer). The import turnover tax rate equals the VAT rates of 19 percent or 7 percent and is paid to the customs authority.

However, the import turnover tax on goods imported from non-EU states can be deducted as input tax (Vorsteuer). As a prerequisite, the company must have the necessary import documents with customs proof of payment (import declaration).

Exports are exempt from VAT."

 If importing companies can deduct the input tax in its entirety, I will concede.  But so far I can't find out what the deduction actually entails.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: MarkS on July 26, 2018, 01:20:53 PM
It finally dawned on me what you're saying about the VAT tax applying equally to imported and domestically made vehicles. Color me dumb ass.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rukawa on July 26, 2018, 04:10:57 PM
I never hear criticism of our trading partner's attempts to protect certain industries.  Do you actually believe that the tariffs on imported cars into Germany fall under fair trade?

I have criticized my own country Canada extensively which I think is rational given I'm the one who will benefit from free trade policies. I have zero understanding of why anyone on this board defends non-free trade policies given that they are being directly hurt by them. I would be very happy if Canada eliminated all tariffs, eliminated supply management and this is because it would raise my living standards.

As for fair trade..fuck fair trade. Is there any evidence any one of you fair traders have that this is a good policy?!!! Here is the list of countries that practice ultra-free trade meaning they have zero tariffs:

1) Singapore
2) Macau
3) Hong Kong
4) Switzerland
5) Brunei
6) Botswana
7) Iceland

The first 4 are basically rich as fuck and have low unemployment. Botswana is now the richest country in Africa (it recently surpassed South Africa). Brunei is rich but more because of oil than anything else. Iceland is the only country that isn't doing that great.

So basically completely free trade is a spectacularly successful policy. I also just don't get what America is trying to achieve....a dominant position in industries with declining employment and economic importance (steel, coal, manufacturing). Free trade is doing America a favor by forcing it  to specialize in areas with greater value add.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Lakesider on July 26, 2018, 04:20:32 PM
https://www.reuters.com/article/us-usa-congress-trade/u-s-senate-quietly-votes-to-cut-tariffs-on-hundreds-of-chinese-goods-idUSKBN1KG35R?il=0
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on July 26, 2018, 04:21:22 PM
Just like Liberty: not my idea or initiative so screw that:

France's Macron says he's against a vast trade deal between the US and Europe
http://www.cnbc.com/id/105356461

Between Trump and Liberty I see a lot of common traits: think that they are smart or smarter than anyone else, in need of attention (over 9,000 posts here, both on Twitter), many insulting or degrading to folks here. It is an inferiority complex turned into a superiority complex.

The main difference is hypocrisy and using more "refined" terms but to the experienced observer, same kind of a-hole!

Cardboard
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on July 26, 2018, 04:48:47 PM
Just like Liberty: not my idea or initiative so screw that:

France's Macron says he's against a vast trade deal between the US and Europe
http://www.cnbc.com/id/105356461

Between Trump and Liberty I see a lot of common traits: think that they are smart or smarter than anyone else, in need of attention (over 9,000 posts here, both on Twitter), many insulting or degrading to folks here. It is an inferiority complex turned into a superiority complex.

The main difference is hypocrisy and using more "refined" terms but to the experienced observer, same kind of a-hole!

Cardboard

 ???

You're weird. Like, really weird. You keep attacking me unprovoked with these transparent little false narratives you concoct in your head.

I keep saying I'm very pro-free-trade and would love to see all tariffs dropped, but I guess words mean nothing to you.

Keep on dreaming your strange Cardboard dreams...

(btw, you know who has almost as many posts as I do? Parsad and Ericopoly. Why are you insulting them?)
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on July 26, 2018, 05:27:29 PM
Look Cardboard, I get it. You disagree with a lot of what I say, so you just wish I'd go away so you wouldn't have to be exposed to views you disagree with. That's fine, but it's not how the world works.

But I've found a workaround for you. Go in your settings here and put me on ignore, so you'll never have to see my messages again. Problem solved:

(https://i.imgur.com/eDrzPsy.png)
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on July 26, 2018, 08:01:37 PM
I never hear criticism of our trading partner's attempts to protect certain industries.  Do you actually believe that the tariffs on imported cars into Germany fall under fair trade?

I have criticized my own country Canada extensively which I think is rational given I'm the one who will benefit from free trade policies. I have zero understanding of why anyone on this board defends non-free trade policies given that they are being directly hurt by them. I would be very happy if Canada eliminated all tariffs, eliminated supply management and this is because it would raise my living standards.

As for fair trade..fuck fair trade. Is there any evidence any one of you fair traders have that this is a good policy?!!! Here is the list of countries that practice ultra-free trade meaning they have zero tariffs:

1) Singapore
2) Macau
3) Hong Kong
4) Switzerland
5) Brunei
6) Botswana
7) Iceland

The first 4 are basically rich as fuck and have low unemployment. Botswana is now the richest country in Africa (it recently surpassed South Africa). Brunei is rich but more because of oil than anything else. Iceland is the only country that isn't doing that great. .

So basically completely free trade is a spectacularly successful policy. I also just don't get what America is trying to achieve....a dominant position in industries with declining employment and economic importance (steel, coal, manufacturing). Free trade is doing America a favor by forcing it  to specialize in areas with greater value add.

Are you sure that Switzerland is a free trade country? Prices in Switzerland are pretty damn high for a free trade country, often twice the cost of the same goods in Germany. They don’t even allow AMZN to do business there, the population voted against them doing business in Switzerland (out of concern that it would destroy retail). Their agriculture is heavily protected and subsidized as well
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: EliG on July 27, 2018, 05:50:50 AM
DoC has a backlog of 16,000 applications for steel tariff exemptions.

Chart from FT (h/t @ukarlewitz)

(https://pbs.twimg.com/media/Di9R8tgV4AAcxSE.jpg:small)

(https://pbs.twimg.com/media/Di9R-ZmUYAAoiYD.jpg)

(https://pbs.twimg.com/media/Di9SBVmUUAAYurr.jpg)


Republican Senator Ron Johnson:

“This is becoming more and more like a Soviet type of economy here: Commissars deciding who’s going to be granted waivers, commissars in the administration figuring out how they’re going to sprinkle around benefits”
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rukawa on July 27, 2018, 07:23:13 AM
I never hear criticism of our trading partner's attempts to protect certain industries.  Do you actually believe that the tariffs on imported cars into Germany fall under fair trade?

I have criticized my own country Canada extensively which I think is rational given I'm the one who will benefit from free trade policies. I have zero understanding of why anyone on this board defends non-free trade policies given that they are being directly hurt by them. I would be very happy if Canada eliminated all tariffs, eliminated supply management and this is because it would raise my living standards.

As for fair trade..fuck fair trade. Is there any evidence any one of you fair traders have that this is a good policy?!!! Here is the list of countries that practice ultra-free trade meaning they have zero tariffs:

1) Singapore
2) Macau
3) Hong Kong
4) Switzerland
5) Brunei
6) Botswana
7) Iceland

The first 4 are basically rich as fuck and have low unemployment. Botswana is now the richest country in Africa (it recently surpassed South Africa). Brunei is rich but more because of oil than anything else. Iceland is the only country that isn't doing that great. .

So basically completely free trade is a spectacularly successful policy. I also just don't get what America is trying to achieve....a dominant position in industries with declining employment and economic importance (steel, coal, manufacturing). Free trade is doing America a favor by forcing it  to specialize in areas with greater value add.

Are you sure that Switzerland is a free trade country? Prices in Switzerland are pretty damn high for a free trade country, often twice the cost of the same goods in Germany. They don’t even allow AMZN to do business there, the population voted against them doing business in Switzerland (out of concern that it would destroy retail). Their agriculture is heavily protected and subsidized as well

I lazily googled it. Could be wrong...didn't really investigate in detail:
https://www.investopedia.com/ask/answers/040115/which-countries-have-highest-tariffs.asp
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on July 27, 2018, 09:45:00 AM
The scoop on US LNG and soybeans sales in Europe. I think Juncker did a great job here.
https://www.google.com/amp/s/mobile.reuters.com/article/amp/idUSKBN1KG275

Edit - there are no tariffs on LNG from the US or elsewhere and LT there is potential for LNG since EU production is falling and for diversification purposes:
https://ec.europa.eu/energy/sites/ener/files/documents/quarterly_report_on_european_gas_markets_q3_2017_final_20171221finalcover.pdf
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on August 03, 2018, 07:19:01 AM
Who is evil?

"09:52 AM EDT, 08/03/2018 (MT Newswires) -- China said on Friday that it would impose duties on another $60 billion worth of US goods in retaliation for reports that the Trump Administration is considering bumping the levy on proposed tariffs.

The US on July 6 put 25% tariffs on $34 billion worth of Chinese goods. China responded the same day by imposing an equal amount of tariffs on an equal amount of US items. President Trump then instructed the US Trade Representative to find another $200 billion in Chinese goods on which the US could impose levies, but at the time only proposed a 10% duty. Reports this week indicated the administration wants to bump that amount to 25%.

China's Ministry of Commerce said in a statement that it's taking countermeasures to retaliate against the proposed hike in levies. The statement said the decision was made after assessing the impact on consumers, enterprises and the global industrial chain.

The Chinese government said any threat or blackmail by the US would lead to intensification of conflicts that would hurt the interests of all parties.

While the US has said it's imposing levies to fight against unfair trade practices and theft of intellectual property by China, the Chinese government said the US has escalated the ongoing trade dispute.

MT Newswires"

Cardboard

Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on August 03, 2018, 09:48:23 AM
Fake news again:

China says it will retaliate with tariffs on $60 billion in US goods
http://www.cnbc.com/id/105374421

IF the U.S. goes ahead now.

But, which info is correct? What is to prevent the algos from trading on improper info?

Cardboard
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on August 07, 2018, 05:04:39 AM
https://twitter.com/cowsandsod/status/1025146261857546241

Quote
Thanks to #tariffs this load of fencing cost me 35% more than it did in January. That’s a $3000 theft I can’t stand because #tariffs have also ruined the value of my soybeans! #tariffssuck https://twitter.com/cowsandsod/status/1025146261857546241/photo/1
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on August 07, 2018, 07:00:51 AM
I wonder when this is going to show up with inflation numbers. If the 25% tariffs on Chinese goods come to pass, the prices will have to go up, because at least short term, there is probably no substitute.

I think white goods ( washing machines, dryers) have already gone up ~20% in price, presimabky due to higher raw material costs.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: doughishere on August 07, 2018, 07:07:39 AM
https://twitter.com/cowsandsod/status/1025146261857546241

Quote
Thanks to #tariffs this load of fencing cost me 35% more than it did in January. That’s a $3000 theft I can’t stand because #tariffs have also ruined the value of my soybeans! #tariffssuck https://twitter.com/cowsandsod/status/1025146261857546241/photo/1

Make America Great!
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: LC on August 08, 2018, 08:41:02 AM
Fake news again:

China says it will retaliate with tariffs on $60 billion in US goods
http://www.cnbc.com/id/105374421

IF the U.S. goes ahead now.

But, which info is correct? What is to prevent the algos from trading on improper info?

Cardboard

https://www.cnbc.com/2018/08/08/china-announces-25percent-tariffs-on-16-billion-worth-of-us-goods-including.html

Quote
China's announcement comes after the U.S. Trade Representative's office released a finalized list of $16 billion worth in Chinese goods that will be hit with tariffs. The U.S. charges will take effect on Aug. 23. The latest U.S. list brings the total worth of Chinese goods facing a 25 percent tariff to $50 billion.

"This is tit-for-tat exactly," said Art Hogan, chief market strategist at B. Riley FBR. "Our $16 billion comes at a scheduled time, which comes up on the 23rd. China said we see your $16 billion and we'll match your $16 billion."


Fake tariffs being paid with fake money!!!
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: MarkS on August 08, 2018, 09:26:07 AM
Doughishere  and LC

China steals our intellectual property, hacks various institutions, commits serious human rights violations - making us look like angels by comparision, supports oppressive regimes like North Korea, appropriates parts of the South China sea shipping lanes ....... And yet you guys attack Trump for his tariffs against Chinese goods. I honestly don't get it?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: LC on August 08, 2018, 10:43:46 AM
Is that why we're enacting tariffs? To punish IP theft and human rights violations? And the tariffs are going to stop that behavior?

And if that's the concern, why isn't Trump pushing to work with the UN, to work with our allies (the ones still willing to help considering we've alienated them) to address those issues?

Should we start treating all trading partners the same way? We'd never buy another barrel of oil from the Middle East.

The reality is open trade benefits society as a whole - Adam Smith and the course of civilized history have shown this. Regressive trade policies will only benefit those in power.

Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: MarkS on August 08, 2018, 10:55:56 AM
I certainly think that intellectual theft is one of the reasons.  Work with the U.N.???  China has veto power.  So it appears you believe that tariffs are rarely appropriate.  Okay!  Don't agree - but to each his own.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: LC on August 08, 2018, 11:36:29 AM
I don't understand your argument. Are you saying Trump is right to enact tariffs vs. China because they have been stealing IP? That's actually a decent argument as opposed to the human rights issues and other non-economic arguments.

So in terms of IP theft, the question becomes, are tariffs the best means to address IP theft?

I'm not sure I have an alternative suggestion, but placing those tariffs has consequences beyond punishing China for IP theft. Those other consequences must be taken into account. 

Some of those unintended consequences:
-"Commissars deciding who’s going to be granted waivers" as posted by EliG previously
-Tariffs are not on IP-centric goods. They are on raw materials and low "value-add" products. This will stagnate US growth
-Tit-for-tat policy is also going to stunt US growth. China is enacting retaliatory tariffs, and nobody knows who is going to "hurt more". But, US exports more value-add good to China than vice-versa. So if this tariff is to protect IP-producers, it actually does the opposite as US IP-producers seem to be hurt most by China's retaliatory tariffs.
-Historically a trade war of attrition has 0 winners and 2 losers.
-Long term relations with Chinese trade partners and government. Another unknown in terms of what effect this will have.

In general, I share Liberty's view: I lean towards free trade as it is one of the biggest policies to improve quality of life for societies. Take the example of renewable energy technology - solar and wind technology have been stolen by China. The prices for those techs have been dramatically slashed in the last decade to the point that it competes with O&G. So in that case, Chinese IP theft has benefited the US consumer in terms of quality-of-life and in their wallet.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: MarkS on August 08, 2018, 12:11:50 PM
I wasn't making any kind of argument - at least not intentionally.  I've just read numerous posts by you and doughishere in which you wail like professional mourners about the immorality of various Trump's policies.  I thought -  erroneously - that you could support Trump at least in regard to the Chinese.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: LC on August 08, 2018, 02:21:58 PM
Quote
I thought -  erroneously - that you could support Trump at least in regard to the Chinese.

I would love for the Chinese to stop their human rights violations and theft of IP. And I think if the US, its allies, and the international community can successfully pressure them to do that, it's a good thing. The question is how. Hopefully there's someone smarter than I to think of that solution.

But I don't see how a US tariff is the solution. I think it has worse long-term consequences, and all it's done so far is create further economic regression by triggering retaliatory tariffs from China.

If you think this tariff is going to pressure China into stopping its bad behavior, I think it'd be a good discussion to know why you think that, and I'm certainly open to a convincing argument.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: MarkS on August 09, 2018, 06:47:15 AM
Wouldn't it be great if the tariffs were working?

https://ca.reuters.com/article/topNews/idCAKBN1KU0TU-OCATP
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: LC on August 09, 2018, 07:06:42 AM
Wouldn't it be great if the tariffs were working?

https://ca.reuters.com/article/topNews/idCAKBN1KU0TU-OCATP

Quote
“Many economists and intellectuals are upset about China’s trade war policies,” an academic at a Chinese policy think tank told Reuters, speaking on condition of anonymity due to the sensitivity of the issue. “The overarching view is that China’s current stance has been too hard-line and the leadership has clearly misjudged the situation.”

See what happens if you replace "China" with "America"

Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: MarkS on August 09, 2018, 07:19:15 AM
But aren't we the good guys? 
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on August 09, 2018, 07:38:30 AM
You didn't know MarkS? It is only Russia that is bad.

It is interesting but, that is not the assessment from General John Hyten:

https://www.cnbc.com/2018/08/08/us-nuclear-commander-russia-and-china-are-not-our-friends.html

Cardboard
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: LC on August 09, 2018, 08:20:56 AM
But aren't we the good guys?
Sorry I'm having trouble following what you mean with this comment.

It looks to me like there is a faction in China that also understands the uneconomic consequences of tariffs.

That said, the "tit-for-tat" response is the best response to a unilateral tariff.

And if you read further into the article, it seems the outcry is not about the tariffs themselves, but the fact that China has "bragged" about being strong enough to withstand the tariffs.

This is not so different from the US. Just about every economist will tell you the tariffs are uneconomic. And there is certainly a political (and social) faction in the US that opposes Trump. And part of that opposition has to do with his braggart behavior in the international community. This sounds very similar to what the article you posted describes is happening in China.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: MarkS on August 09, 2018, 09:38:53 AM
My "...aren't we the good guys" question is pretty simple.  America wears a white hat.  China wears a black hat.  Anytime the white hats win - no matter how small a victory - I say "yippee ki yay." Shouldn't we all?

https://www.usatoday.com/story/money/2018/07/26/stock-market-says-u-s-winning-trade-war/832596002/

https://www.forbes.com/sites/kenrapoza/2018/06/27/stock-market-says-china-a-loser-in-trade-war/#75e52b4a14ce
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on August 09, 2018, 09:53:47 AM
What about when both hats lose? Or the white hat loses less than the black hat? Can we sell that as a win? Yay! Because that is the most likely outcome here, imo.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: LC on August 09, 2018, 10:13:24 AM
Sorry MarkS I still have no clue what you are talking about. White/black hat in terms of what? Moral authority? Quality of life? Social Equality? Economic policy? US cultural perception?

What is the metric here?

Do you feel like addressing my points on the unintended consequences of tariffs or are we just going to ignore that so you can make populist queries?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on August 09, 2018, 10:26:31 AM
I think LC that you are a Chinese spy.

Cardboard
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: MarkS on August 09, 2018, 10:35:11 AM
Cardboard did he work for Feinstein?  https://nypost.com/2018/08/08/dianne-feinstein-was-an-easy-mark-for-chinas-spy/ :)
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: LC on August 09, 2018, 11:08:19 AM
I think LC that you are a Chinese spy.

Cardboard

You should hit up some of cobafdek's thorazine. He thinks I have multiple personalities, maybe you can compare notes?  :P ;D
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: cobafdek on August 09, 2018, 07:42:58 PM
I think LC that you are a Chinese spy.

Cardboard

You should hit up some of cobafdek's thorazine. He thinks I have multiple personalities, maybe you can compare notes?  :P ;D

Have you ever tested whether your wife has a Trumpian sense of humor?  Here's how to find out!

Ask her:  "Did you know you're a polygamist?" 

If she hesitantly says "no," follow up with  "Don't you feel like one?"

Post the uncensored answers!
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: LC on August 09, 2018, 10:02:08 PM
I see you've developed a sense of humor, if only just a sense!   ;D
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Liberty on September 07, 2018, 10:00:41 AM
For those who wanted more tariffs/taxes (tariffs are taxes):

https://www.cnbc.com/2018/09/07/trump-says-tariffs-on-another-267-billion-in-china-goods-ready-to-go.html

https://www.cnbc.com/2018/09/06/president-trump-hints-to-wsj-that-trade-fight-with-japan-could-be-next.html
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on September 07, 2018, 10:41:49 AM
For those who wanted more tariffs/taxes (tariffs are taxes):

https://www.cnbc.com/2018/09/07/trump-says-tariffs-on-another-267-billion-in-china-goods-ready-to-go.html

https://www.cnbc.com/2018/09/06/president-trump-hints-to-wsj-that-trade-fight-with-japan-could-be-next.html

What about Canada ?...chirp....chirp
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cigarbutt on September 19, 2018, 06:01:15 AM
One take on this implies that the measures taken are part of short-term negotiation tactics in order to restore "fair trade".

Some of it is populist in nature but how the movement has caught on signals a longer-term evolution with nationalist undertones as China is economically getting too close for comfort.

Useful to look at the evolution path taken by one of the architects and test the underlying assumptions.
https://assets.realclear.com/files/2018/09/1012_regulation-v41n3-1-update.pdf

Seemingly unrelated but, for every action, there is a reaction.
https://assets.realclear.com/files/2018/09/1011_b60ba225-49f3-4bd7-991e-4a71650eb598.pdf

The US economy continues its recovery under the recent largest fiscal stimulus outside of war conditions and Chinese officials are becoming advocates for free trade. Interesting times.

Opinion: In terms of the protectionist agenda, we are not even close to the end of the beginning.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on September 20, 2018, 04:29:48 AM
I think one of the misconceptions is that “fair trade” equals a balanced trade balance. However fair trade just means that both parties play by the same rules. It’s just like assuming that a fair soccer game equals a draw.

Not that China plays by the same rules, but even if they did, there would be a substantial trade imbalance with the US.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: SharperDingaan on September 20, 2018, 09:31:15 AM
Trump started the tariff BS as a negotiating tactic - and f'd up
Trump then thought he was playing poker, doubled down - and f'd up again
Now with sagging opinion polls, Trump desperately needs a win on the trade front - before the mid-terms are deceided in 6 weeks.
More and bigger farm bail-outs, keep oil prices low!, and now threats against domestic inteference.

So why on earth resolve a trade deal now, versus just wait 7 weeks? and let the losses bite harder.
Could result in a brand new political evironment.
 
Aparently, this is called winning.

SD
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: LC on September 20, 2018, 09:56:31 AM
https://ca.finance.yahoo.com/news/canadian-officials-mulling-attack-u-s-pharma-says-ottawa-lawyer-165038690.html
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: cubsfan on September 20, 2018, 11:34:51 AM
If a trade war forces North Korea to get rid of it's nukes, it's well worth the price.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: SharperDingaan on September 20, 2018, 03:07:24 PM
https://ca.finance.yahoo.com/news/canadian-officials-mulling-attack-u-s-pharma-says-ottawa-lawyer-165038690.html

Nice find.  It follows that if Canada were to demonstrate that 'compulsory licencing' can be legally done - most other countries would likely do something very similar, and the value of US Pharma would essentially collapse. Canada would also come out net positive, as the cost of the generic will be a lot less than the name brand - and we buy in bulk.

And just to twist the knife ;)
A China would simply copy the US brands and flog the generics back to the US - in quantity. Everybody gets cheaper drugs, the US/China trade deficit declines, and China is now your best bud! Trade can be such a bastard ;D

SD
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on September 20, 2018, 04:08:45 PM
https://ca.finance.yahoo.com/news/canadian-officials-mulling-attack-u-s-pharma-says-ottawa-lawyer-165038690.html

Nice find.  It follows that if Canada were to demonstrate that 'compulsory licencing' can be legally done - most other countries would likely do something very similar, and the value of US Pharma would essentially collapse. Canada would also come out net positive, as the cost of the generic will be a lot less than the name brand - and we buy in bulk.

And just to twist the knife ;)
A China would simply copy the US brands and flog the generics back to the US - in quantity. Everybody gets cheaper drugs, the US/China trade deficit declines, and China is now your best bud! Trade can be such a bastard ;D

SD

There are another ways that hurt the pharmaceuticals. Canada could for example allows reimports from countries where the same pharmaceuticals are sold cheaper.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on September 20, 2018, 07:35:06 PM
https://ca.finance.yahoo.com/news/canadian-officials-mulling-attack-u-s-pharma-says-ottawa-lawyer-165038690.html

Nice find.  It follows that if Canada were to demonstrate that 'compulsory licencing' can be legally done - most other countries would likely do something very similar, and the value of US Pharma would essentially collapse. Canada would also come out net positive, as the cost of the generic will be a lot less than the name brand - and we buy in bulk.

And just to twist the knife ;)
A China would simply copy the US brands and flog the generics back to the US - in quantity. Everybody gets cheaper drugs, the US/China trade deficit declines, and China is now your best bud! Trade can be such a bastard ;D

SD
It's not exactly a great find. It was initially an article published in Maclean's. That's a majour Canadian magazine for our American friends.

It's really more of a Canadian style shot across the bow. Think well before you try to fuck with us.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cigarbutt on September 21, 2018, 03:26:12 AM
...
The middle/lower class high costs of living are due to the increase in services and health care costs.  How is it going to hurt American consumers that cars production will move from country X to Mexico?

Is the deflation exported to the U.S. all these years for all these electric gadgets and items are 100% net positive? Like, at least deduct all those lost jobs.

I think a lot of you guys are missing the big picture of what this is about and it's not just about trade tariffs, or directly about economic aspects, at all.

The international trade game is dirty and rules only seem to be guidelines but I would say that what drive the trade imbalances are wage and productivity differentials. Whether one wants to "force" the equilibrium in a confrontational or in a Buffett-more-nuanced way, before the differentials are corrected ie using protectionist measures, the consequence will be higher prices for the American consumers. If supply chains are disrupted, consumer items like cars are also likely to become more expensive.

There is a price to pay and the policy makers' job sometimes has to do with spreading the costs. And there can be friction costs.

Lawrence Summers has described the advanced economies like the US as functioning democracies because one segment of the economy (the productivity-generating sector) has been able to, at least partially, compensate for the other segment (low-productivity state-funded social services sector). However, to partially finance the second segment, the US has effectively put in place 1-an inter-generational transfer and 2-a relatively low productivity model compared to many of its trading partners. Closing the net international trade imbalance will create a domestic gap and one has to wonder if the middle/lower class realizes that.

Adjustments will come somehow, especially if this is about global hegemony. Just difficult to see how "forced" the changes will come.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: SharperDingaan on September 21, 2018, 07:51:07 AM
It's useful to recognize that trade just results in everyone paying less for the goods that they buy.
If the comparable good can be profitably made and shipped from elsewhere, and sold to me for a cheaper price - that's the one I go with. And that locally made shirt gets displaced in favour of the foreign one made in Bangladesh.

Restrict trade and everyone ends up paying more - as we all have to fall back on the higher price domestic alternative. But if we're currently importing a lot of cheap 'stuff' (& running a trade deficit to pay for it), price will go up by a lot. Hence if inflation is becoming a problem you don't need an interest rate hike, as higher prices will do the work for you. Low rates continue, the trade deficit shrinks, but we all pay more.

Trump is trying to sell the uneducated that it means 'more domestic jobs', as those new domestic purchases have to be made by somebody.  The reality of course is that it means more efficient machinery, and a smaller but higher skilled workforce to operate it; unskilled labour is hired in Bangladesh, not the US. Domestic, standardized, high-volume mass production vs foreign, custom, low-volume, bespoke production. Custom suits fitted up and produced by that 'fly-in' Hong-Kong tailor.

Very bad news if you're a low-skilled worker in the southern US, with very few options. The 'wall', 'border patrols', 'detention centres', and 'military bases' are essentially 'make-work' programs for you - in return for your vote. Hence the politicization.

SD

Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on September 21, 2018, 08:33:53 AM
"Think well before you try to fuck with us."

You guys are totally delusional or just like Freeland who thought she could get as good of a deal as the existing NAFTA.

Canada is a tiny country with population the size of a U.S. state. Totally dependent on the U.S. for cars, oil and so many other things. The U.S. is already fucking us over with oil at the tune of $15 billion/year according to Trudeau but, based on markets it is more like $40-50 billion.

And the country and its leaders are not even smart enough to even have 1 pipeline to ship to another country!

You think that Canada can blackmail the U.S.? You guys are nuts!

Cardboard
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: cubsfan on September 21, 2018, 09:19:35 AM
It's useful to recognize that trade just results in everyone paying less for the goods that they buy.
If the comparable good can be profitably made and shipped from elsewhere, and sold to me for a cheaper price - that's the one I go with. And that locally made shirt gets displaced in favour of the foreign one made in Bangladesh.

Restrict trade and everyone ends up paying more - as we all have to fall back on the higher price domestic alternative. But if we're currently importing a lot of cheap 'stuff' (& running a trade deficit to pay for it), price will go up by a lot. Hence if inflation is becoming a problem you don't need an interest rate hike, as higher prices will do the work for you. Low rates continue, the trade deficit shrinks, but we all pay more.

Trump is trying to sell the uneducated that it means 'more domestic jobs', as those new domestic purchases have to be made by somebody.  The reality of course is that it means more efficient machinery, and a smaller but higher skilled workforce to operate it; unskilled labour is hired in Bangladesh, not the US. Domestic, standardized, high-volume mass production vs foreign, custom, low-volume, bespoke production. Custom suits fitted up and produced by that 'fly-in' Hong-Kong tailor.

Very bad news if you're a low-skilled worker in the southern US, with very few options. The 'wall', 'border patrols', 'detention centres', and 'military bases' are essentially 'make-work' programs for you - in return for your vote. Hence the politicization.

SD

Trump is all about saving jobs and bringing jobs back to America - and that is why he was voted in.
 Elitists love to theorize about "free trade" and it's benefits when it's really not "free trade". 
These trade programs have hollowed out America - and elitists don't care, because, hey - it's a global world!

It's very, very easy for finance folks and other elites to espouse the benefits of  "free trade" and trash Trump - when they have NO fear of their own
jobs ever being outsourced to Bangladesh. Funny how you don't wake up in the morning ever fearing this.

And, of course, this is why Americans elected Trump:   Hillary and Obama had no concern for the "uneducated" in Middle America.
And they told the coal miners - hey, my elites want a carbon tax, so tough beans - learn how to frack oil/gas - and move to North Dakota.

And after years and years of selling the "free trade" angle to Middle America - those folks wised up and said FU - you don't care about me, but Trump does.  Good for them.

So, yes, it became politicized when the voters were screwed over for years and years by their own "working class"  Democratic Party.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on September 21, 2018, 10:14:22 AM
It's useful to recognize that trade just results in everyone paying less for the goods that they buy.
If the comparable good can be profitably made and shipped from elsewhere, and sold to me for a cheaper price - that's the one I go with. And that locally made shirt gets displaced in favour of the foreign one made in Bangladesh.

Restrict trade and everyone ends up paying more - as we all have to fall back on the higher price domestic alternative. But if we're currently importing a lot of cheap 'stuff' (& running a trade deficit to pay for it), price will go up by a lot. Hence if inflation is becoming a problem you don't need an interest rate hike, as higher prices will do the work for you. Low rates continue, the trade deficit shrinks, but we all pay more.

Trump is trying to sell the uneducated that it means 'more domestic jobs', as those new domestic purchases have to be made by somebody.  The reality of course is that it means more efficient machinery, and a smaller but higher skilled workforce to operate it; unskilled labour is hired in Bangladesh, not the US. Domestic, standardized, high-volume mass production vs foreign, custom, low-volume, bespoke production. Custom suits fitted up and produced by that 'fly-in' Hong-Kong tailor.

Very bad news if you're a low-skilled worker in the southern US, with very few options. The 'wall', 'border patrols', 'detention centres', and 'military bases' are essentially 'make-work' programs for you - in return for your vote. Hence the politicization.

SD

Trump is all about saving jobs and bringing jobs back to America - and that is why he was voted in.
 Elitists love to theorize about "free trade" and it's benefits when it's really not "free trade". 
These trade programs have hollowed out America - and elitists don't care, because, hey - it's a global world!

It's very, very easy for finance folks and other elites to espouse the benefits of  "free trade" and trash Trump - when they have NO fear of their own
jobs ever being outsourced to Bangladesh. Funny how you don't wake up in the morning ever fearing this.

And, of course, this is why Americans elected Trump:   Hillary and Obama had no concern for the "uneducated" in Middle America.
And they told the coal miners - hey, my elites want a carbon tax, so tough beans - learn how to frack oil/gas - and move to North Dakota.

And after years and years of selling the "free trade" angle to Middle America - those folks wised up and said FU - you don't care about me, but Trump does.  Good for them.

So, yes, it became politicized when the voters were screwed over for years and years by their own "working class"  Democratic Party.
Basically what you're saying is that you have a bunch of Americans with skills at about the same level of with a barefoot, hungry Bangladeshi and they're having a hissy fit.

Here's an alternate view, why don't these guys go out and develop some skills above that of the barefoot Bangladeshi. They don't help themselves and instead go around demanding that the government provide them with job security and well paying jobs. Basically asking for socialism. Sounds pretty lazy and entitled to me.

I became a "finance elite" as you like to call people like me because I went to school, studied hard, busted my ass off, then studied some more and then really busted my ass off working. That's why I don't live in fear of some guy from Bangladesh doing my job. Maybe these guys should try doing a little bit of what I did instead of what they've been doing.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: cubsfan on September 21, 2018, 10:45:57 AM
It's useful to recognize that trade just results in everyone paying less for the goods that they buy.
If the comparable good can be profitably made and shipped from elsewhere, and sold to me for a cheaper price - that's the one I go with. And that locally made shirt gets displaced in favour of the foreign one made in Bangladesh.

Restrict trade and everyone ends up paying more - as we all have to fall back on the higher price domestic alternative. But if we're currently importing a lot of cheap 'stuff' (& running a trade deficit to pay for it), price will go up by a lot. Hence if inflation is becoming a problem you don't need an interest rate hike, as higher prices will do the work for you. Low rates continue, the trade deficit shrinks, but we all pay more.

Trump is trying to sell the uneducated that it means 'more domestic jobs', as those new domestic purchases have to be made by somebody.  The reality of course is that it means more efficient machinery, and a smaller but higher skilled workforce to operate it; unskilled labour is hired in Bangladesh, not the US. Domestic, standardized, high-volume mass production vs foreign, custom, low-volume, bespoke production. Custom suits fitted up and produced by that 'fly-in' Hong-Kong tailor.

Very bad news if you're a low-skilled worker in the southern US, with very few options. The 'wall', 'border patrols', 'detention centres', and 'military bases' are essentially 'make-work' programs for you - in return for your vote. Hence the politicization.

SD

Trump is all about saving jobs and bringing jobs back to America - and that is why he was voted in.
 Elitists love to theorize about "free trade" and it's benefits when it's really not "free trade". 
These trade programs have hollowed out America - and elitists don't care, because, hey - it's a global world!

It's very, very easy for finance folks and other elites to espouse the benefits of  "free trade" and trash Trump - when they have NO fear of their own
jobs ever being outsourced to Bangladesh. Funny how you don't wake up in the morning ever fearing this.

And, of course, this is why Americans elected Trump:   Hillary and Obama had no concern for the "uneducated" in Middle America.
And they told the coal miners - hey, my elites want a carbon tax, so tough beans - learn how to frack oil/gas - and move to North Dakota.

And after years and years of selling the "free trade" angle to Middle America - those folks wised up and said FU - you don't care about me, but Trump does.  Good for them.

So, yes, it became politicized when the voters were screwed over for years and years by their own "working class"  Democratic Party.
Basically what you're saying is that you have a bunch of Americans with skills at about the same level of with a barefoot, hungry Bangladeshi and they're having a hissy fit.

Here's an alternate view, why don't these guys go out and develop some skills above that of the barefoot Bangladeshi. They don't help themselves and instead go around demanding that the government provide them with job security and well paying jobs. Basically asking for socialism. Sounds pretty lazy and entitled to me.

I became a "finance elite" as you like to call people like me because I went to school, studied hard, busted my ass off, then studied some more and then really busted my ass off working. That's why I don't live in fear of some guy from Bangladesh doing my job. Maybe these guys should try doing a little bit of what I did instead of what they've been doing.

Basically what I am saying Rb - is, yes, you are a financial elite that has no use for the middle class and could give 2 shits about them.
You'd be the guy shuttering their Virginia coal mine and telling them to learn how to install solar panels and move to Arizona.
You make it very easy for "uneducated" to vote for Trump cause you are so much better than they are.

These are the forgotten, those that were working in the thousands of factories shuttered, etc.

You make a great Democrat Elitist , my boy!
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: LC on September 21, 2018, 11:04:16 AM
Quote
You'd be the guy shuttering their Virginia coal mine and telling them to learn how to install solar panels and move to Arizona.
You make it very easy for "uneducated" to vote for Trump cause you are so better than they are.
The thing is, is that he is actually "better" than the idiots who are unemployed because the factory got closed. At least about basic economics. Trade freedom and focusing on competitive advantages and all that, this is objectively "better" than protectionism and refusing to re-allocate resources away from unprofitable industry.

You talk about the democrat elites, but where is the blame for the republican idiots who refused to adapt? Who think the way forward is to go back to the 1950s, with a lifetime factory job, full benefits and pension, and casual racism?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: cubsfan on September 21, 2018, 11:31:11 AM
Quote
You'd be the guy shuttering their Virginia coal mine and telling them to learn how to install solar panels and move to Arizona.
You make it very easy for "uneducated" to vote for Trump cause you are so better than they are.
The thing is, is that he is actually "better" than the idiots who are unemployed because the factory got closed. At least about basic economics. Trade freedom and focusing on competitive advantages and all that, this is objectively "better" than protectionism and refusing to re-allocate resources away from unprofitable industry.

You talk about the democrat elites, but where is the blame for the republican idiots who refused to adapt? Who think the way forward is to go back to the 1950s, with a lifetime factory job, full benefits and pension, and casual racism?

But we don't have "fair trade", we have others with large tariffs, etc - killing our imports - what is "free" about that?
I get that free trade is a good thing - no question - until it gets abused by trading partners with tariffs. Trump gives them a taste of their own
medicine.

I totally agree with your republican point - there are plenty of Republicans in the pockets of lobbyist that hate Trump.
Trump is standing up for the American worker that has been screwed over by both. Unfortunately, for the Dems (Party of the Working Class),
their voters saw through the bullshit.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: cubsfan on September 21, 2018, 11:39:40 AM
Who think the way forward is to go back to the 1950s, with a lifetime factory job, full benefits and pension, and casual racism?

Who says we go back to the 50's? We just fight fire with fire - why not?

After all, if these "trade deficits" are such a wonderful thing for all the citizens of countries - why not let Mexico, China, and Germany
have those "wonderful" deficits for 20 or 30 years?

What the heck does racism have to do with free trade anyway? If black unemployment is currently at an all-time low in the USA, how is that racist?

Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Jurgis on September 21, 2018, 11:48:25 AM
Quote
You'd be the guy shuttering their Virginia coal mine and telling them to learn how to install solar panels and move to Arizona.
You make it very easy for "uneducated" to vote for Trump cause you are so better than they are.
The thing is, is that he is actually "better" than the idiots who are unemployed because the factory got closed. At least about basic economics. Trade freedom and focusing on competitive advantages and all that, this is objectively "better" than protectionism and refusing to re-allocate resources away from unprofitable industry.

You talk about the democrat elites, but where is the blame for the republican idiots who refused to adapt? Who think the way forward is to go back to the 1950s, with a lifetime factory job, full benefits and pension, and casual racism?

Wait, I thought republicans argued that "people should adapt" and democrats argued for "lifetime factory job, full benefits and pension" safety nets. So now that orange guy is a prezzy, everything flipped in minds of his supporters? Let's see maybe they can get the universal healthcare through while they still have both houses.  ;D
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on September 21, 2018, 11:50:42 AM
Basically what you're saying is that you have a bunch of Americans with skills at about the same level of with a barefoot, hungry Bangladeshi and they're having a hissy fit.

Here's an alternate view, why don't these guys go out and develop some skills above that of the barefoot Bangladeshi. They don't help themselves and instead go around demanding that the government provide them with job security and well paying jobs. Basically asking for socialism. Sounds pretty lazy and entitled to me.

I became a "finance elite" as you like to call people like me because I went to school, studied hard, busted my ass off, then studied some more and then really busted my ass off working. That's why I don't live in fear of some guy from Bangladesh doing my job. Maybe these guys should try doing a little bit of what I did instead of what they've been doing.

Basically what I am saying Rb - is, yes, you are a financial elite that has no use for the middle class and could give 2 shits about them.
You'd be the guy shuttering their Virginia coal mine and telling them to learn how to install solar panels and move to Arizona.
You make it very easy for "uneducated" to vote for Trump cause you are so much better than they are.

These are the forgotten, those that working in the thousands of factories shuttered, etc.

You make a great Democrat Elitist , my boy!
The thing is that you didn't refute anything I've said. You've just responded with more rhetoric. Blah, blah, blah, elites.

Btw, why is being elite a bad thing? What should one strive for in life? To be a low level dumbass? When did learning and working hard to improve one's position in life become folly? Shouldn't people strive to continually improve themselves and do bigger things?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: cubsfan on September 21, 2018, 01:15:49 PM
Basically what you're saying is that you have a bunch of Americans with skills at about the same level of with a barefoot, hungry Bangladeshi and they're having a hissy fit.

Here's an alternate view, why don't these guys go out and develop some skills above that of the barefoot Bangladeshi. They don't help themselves and instead go around demanding that the government provide them with job security and well paying jobs. Basically asking for socialism. Sounds pretty lazy and entitled to me.

I became a "finance elite" as you like to call people like me because I went to school, studied hard, busted my ass off, then studied some more and then really busted my ass off working. That's why I don't live in fear of some guy from Bangladesh doing my job. Maybe these guys should try doing a little bit of what I did instead of what they've been doing.

Basically what I am saying Rb - is, yes, you are a financial elite that has no use for the middle class and could give 2 shits about them.
You'd be the guy shuttering their Virginia coal mine and telling them to learn how to install solar panels and move to Arizona.
You make it very easy for "uneducated" to vote for Trump cause you are so much better than they are.

These are the forgotten, those that working in the thousands of factories shuttered, etc.

You make a great Democrat Elitist , my boy!
The thing is that you didn't refute anything I've said. You've just responded with more rhetoric. Blah, blah, blah, elites.

Btw, why is being elite a bad thing? What should one strive for in life? To be a low level dumbass? When did learning and working hard to improve one's position in life become folly? Shouldn't people strive to continually improve themselves and do bigger things?

Rb - what you said just shows your arrogance. You are better than these folks, you have no use for them - just like Pelosi/Clinton/Obama.
We're talking about an election, where a party filled with elites like you, get to tell everyone else the way it has to be. Lost your job? Tough shit.

And they just told you to F*&K off.

Who said anyone should not strive to improve their lot in life?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: SharperDingaan on September 21, 2018, 01:36:38 PM
Like it or not you compete against the world for your job.
And if your job is to to serve a production line, it only exists as long as that line continues to operate; which is as long as the production continues to sell. Make the product more expensive (tariffs), less product gets sold, and there are fewer and shorter shifts. Dont sell enough product, and the plant gets shut down - in favour of less production sourced from elsewhere.

Agreed if this is your livelihood the fear of job loss and redundancy is very real (change), and you will do everything you can to try and either stop it, or slow it down. That is the same fear for EVERYONE with a job; the only difference is that the more skilled you are the more options you have - hence return to school and upgrade your skills. 
That isn't elitism.

I'm American, is not a job guarantee.
That barefoot bangladeshi is literally the equivalent of an unskilled American who cannot read or write - but costs much, much less.

Politicians lie, that's their job.
Tell the masses what they want to hear so they'll vote for you ... then do nothing until you need their votes again. Republican or Democrat

Ultimately our 'security' is our ability to do many, and different, things during our working life. Stay flexible, do what you must to make a buck, and strive for wealth by doing it very well and in quantity - no different to our fore-fathers. But we are not entitled to a job, and it can disappear at any time.

SD
 






Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: LC on September 21, 2018, 01:36:43 PM
I mean, this is economics 101. Frictional unemployment is a thing. Dying industries die for a reason.

People who are trying to save these jobs are shooting the messenger and choosing to bury their heads in the sand.

Or maybe it isn't a logical outcry from these "forgotten steel workers". Perhaps they want an emotional recognition. Quite the snowflake response. Of course, there could be some type of social structures to ease the burden frictional unemployment and encourage re-training - but our President is gutting social programs left and right.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: cubsfan on September 21, 2018, 02:56:52 PM
You dudes are missing the point, the party of the working classes fucked over the working class - and the working class gave them the boot.
Now the economy is on fire - but you are predicting we are going back to the 1950's and America is going backward!

Everyone is happy, except the Dems. Now we get to watch these other countries run trade deficits.

"Make America Great Again"  is working.

Have a nice weekend jokers!
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Gregmal on September 21, 2018, 03:08:19 PM
I was at the marina today and looking at boats. Was told that the tariffs greatly effected the prices of 90HP and under engines. As a result there is essentially no price difference between those and the 115-125HP ones that are made in America. The marinas are buying the American made ones, and people are getting better products. I don't think the lower HP engines being 25% more expensive is preventing anyone from owning a boat either.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: cubsfan on September 21, 2018, 03:14:59 PM
I was at the marina today and looking at boats. Was told that the tariffs greatly effected the prices of 90HP and under engines. As a result there is essentially no price difference between those and the 115-125HP ones that are made in America. The marinas are buying the American made ones, and people are getting better products. I don't think the lower HP engines being 25% more expensive is preventing anyone from owning a boat either.

Greg, your CoBF buddies are having none of that - the world is falling apart because Americans are working again.
The US is no longer a "global" player that plays fair and takes it up the ass from their trading partners.

Another case of TDS.



Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cigarbutt on September 21, 2018, 05:11:16 PM
You dudes are missing the point, the party of the working classes fucked over the working class - and the working class gave them the boot.
Now the economy is on fire - but you are predicting we are going back to the 1950's and America is going backward!

Everyone is happy, except the Dems. Now we get to watch these other countries run trade deficits.

"Make America Great Again"  is working.

Have a nice weekend jokers!

Question for you from an 'uneducated' Canadian.

If the economy is now firing on all cylinders and if the trade war is working beautifully, why then are real wages not improving?
https://www.bls.gov/opub/ted/2018/real-average-hourly-earnings-up-0-point-2-percent-for-all-private-employees-april-2017-to-april-2018.htm?view_full
Since April, the "picture" has not changed.
Also, if you disaggregate the data, you may find that the averages hide the uncomfortable conclusion that the higher wages earned by a certain elite are compensated by lower wages for the very forgotten that you refer to.
Have a good weekend too.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: meiroy on September 21, 2018, 09:04:16 PM
OK let's see what I remember from my Ekonomischticks 101.

1. Some professions such as software engineering are built on experience.   So, if basic programming tasks are moved from country A to country B, country A might find itself later on with a lack of experienced programmers. Likewise for other professions.

2. As any value investors would know, time arbitrage is a thing.  We accept waiting for 2 - 5 years (for the U.S.A., I wouldn't try this trick for Venezuela).  Economies work on even a longer scale.  #rhetoricisfun

3. If country A all of a sudden starts to place tariffs on country B.  Does it necessarily mean that party A  *started* a "trade war"?  Yes, if everything was equal between the two.  if, on the other hand, country A has an extremely open economy while country B has an extremely close economy, the word "start" should be removed from the discussion.


3.1 Would tariff resolve trade imbalances? Probably not because it might just go through country C.

4. But, but, country C, D and E and F all do it ( does it go all the way to Z? now I know my...) why can't B? Because B's economy is now significantly large (and was for a long time now) to negatively impact A's economy.


5. Country B spends a tremendous amount of resources and money, which originates from the non-private sector, leading to the fact that private companies in country A find it extremely hard to compete.  Country B products are now extremely cheap and it exports these products to Country A. Because "trade makes things cheaper". Yay.  Is this necessarily a net benefit to country A, in the long run?

6. Country A supports the development of country B in various ways, under the belief that country B's markets and structure will become similar to country A's.  One day, Country A wakes up from its daydreaming and finds out this is not happening.  What should it do?  Should it just continue in the same way because, hey "trade made us all these cheap stuff"?, or should it look into the future, say 5, 10 to 50 years from now?

7. These days, is the surplus or deficit between countries A and B depends on the trade of goods? No.




Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: cubsfan on September 22, 2018, 02:10:46 AM
You dudes are missing the point, the party of the working classes fucked over the working class - and the working class gave them the boot.
Now the economy is on fire - but you are predicting we are going back to the 1950's and America is going backward!

Everyone is happy, except the Dems. Now we get to watch these other countries run trade deficits.

"Make America Great Again"  is working.

Have a nice weekend jokers!

Question for you from an 'uneducated' Canadian.

If the economy is now firing on all cylinders and if the trade war is working beautifully, why then are real wages not improving?
https://www.bls.gov/opub/ted/2018/real-average-hourly-earnings-up-0-point-2-percent-for-all-private-employees-april-2017-to-april-2018.htm?view_full
Since April, the "picture" has not changed.
Also, if you disaggregate the data, you may find that the averages hide the uncomfortable conclusion that the higher wages earned by a certain elite are compensated by lower wages for the very forgotten that you refer to.
Have a good weekend too.

You may be certainly be correct. That I do not know. It does not seem like wages are going up, but jobs are certainly opening up. Even in ILL, I am
seeing help wanted signs all over the place. Job recruiters are real busy. There is certainly an issue with education, where skilled workers are in demand.
This should have happened a long time ago, and did not need to take 8 years.

So lets see how it all plays out. Have a great weekend yourself.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: MarkS on September 22, 2018, 07:29:49 AM
Please excuse my ignorance.  I keep reading from people on this board about how bad tariffs are for the economy.  But I see the market shrug off the possibility of tariffs and continue straight up.  I've also read the following:

"Total Impact of Enacted and Announced Tariffs

If all tariffs announced thus far were fully enacted by the United States and foreign jurisdictions, U.S. GDP would fall by 0.59 percent ($148.33 billion) in the long run, effectively offsetting one-third of the long-run impact of the Tax Cuts and Jobs Act. Wages would fall by 0.38 percent and employment would fall by 459,816.

The 0.59 percent reduction in long-run GDP is one-third the total long-run impact of the Tax Cuts and Jobs Act, which we estimated to raise GDP by 1.7 percent in the long run."

https://taxfoundation.org/tracker-economic-impact-tariffs/#total

If all of the tariffs announced would only have the impact of reducing the benefits of the tax cut by 1/3, that doesn't strike me as particularly bad - especially in light of the positives that might come from challenging China among others.



Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: SharperDingaan on September 22, 2018, 09:24:25 AM
OK let's see what I remember from my Ekonomischticks 101.

1. Some professions such as software engineering are built on experience.   So, if basic programming tasks are moved from country A to country B, country A might find itself later on with a lack of experienced programmers. Likewise for other professions.

2. As any value investors would know, time arbitrage is a thing.  We accept waiting for 2 - 5 years (for the U.S.A., I wouldn't try this trick for Venezuela).  Economies work on even a longer scale.  #rhetoricisfun

3. If country A all of a sudden starts to place tariffs on country B.  Does it necessarily mean that party A  *started* a "trade war"?  Yes, if everything was equal between the two.  if, on the other hand, country A has an extremely open economy while country B has an extremely close economy, the word "start" should be removed from the discussion.


3.1 Would tariff resolve trade imbalances? Probably not because it might just go through country C.

4. But, but, country C, D and E and F all do it ( does it go all the way to Z? now I know my...) why can't B? Because B's economy is now significantly large (and was for a long time now) to negatively impact A's economy.


5. Country B spends a tremendous amount of resources and money, which originates from the non-private sector, leading to the fact that private companies in country A find it extremely hard to compete.  Country B products are now extremely cheap and it exports these products to Country A. Because "trade makes things cheaper". Yay.  Is this necessarily a net benefit to country A, in the long run?

6. Country A supports the development of country B in various ways, under the belief that country B's markets and structure will become similar to country A's.  One day, Country A wakes up from its daydreaming and finds out this is not happening.  What should it do?  Should it just continue in the same way because, hey "trade made us all these cheap stuff"?, or should it look into the future, say 5, 10 to 50 years from now?

7. These days, is the surplus or deficit between countries A and B depends on the trade of goods? No.

Just for balance ....

Trump started with the tariffs in early June, and eveyone responded with matching tariffs. Real smart boy that he is, he didn't put tariffs on just China (apparently the target) - he put them on Canada, Mexico, and the EU as well, escalated, and claimed it as a 'negotiating tactic'. All the counterparties have publicly stated they are just responding in kind - unwind the US tariffs and they will unwind in kind. Not the 'alternative facts' of the white-house propaganda line.

Your preferance for an open economy, does not obligate other countries to follow; your economic model is just one of many.
If you think partners aren't being fair, you don't have to buy from them; if you choose to trade you've accepted the terms. But if you aren't going to buy their cheaper goods - you're going to have to either make them yourself at a higher price, or buy them from somewhere else and pay more. Goods are going to cost more.

You buy from me, and I'll buy from you.
You buy more from me than I sell to you, and you run a trade deficit. The size of that deficit evidences my net comparative advantage over you: if we allow our currencies to float - my currency appreciates and yours devalues. Dont allow your currency to devalue, and you suffer unemployment instead - as you just aren't competitive.

For you to run a deficit, I have to finance you; do this repeatedly for a number of years and I control you.
You may believe that if you owe me enough money (bankrupts view), your continuing ongoing solvency is my problem (your banker). But I know that if I simply refuse to roll over part of your debt, interest rates will spike as you crowd-out the market, and I will earn a lot more on my money (as sovereigns can't bankrupt). If those higher interest rates tip you into recession and you stop buying my goods, it's also a good thing for me; as you're a bum I dont want to sell to, and I'm allready making the margin you would have contributed - on the higher interest being paid on my existing  investments in your country. I might even get the opportunity to buy the Trump Tower at cents in the dollar ;D

Jobs are appearing because the massive QE over the last decade has finally turned the economy around.
But much of that decades worth of displaced labour has retired, and as soon as wage competition appears - machines are going to be replaced with more productive versions that require fewer workers, reducing wage competition. The 'why' the folks on the bottom are not benefitting, whereas the folks at the top are.

SD



Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: cubsfan on September 22, 2018, 10:13:10 AM
Jobs are appearing because of tax cuts, and massive increases in business and consumer confidence.

Obama and Hillary hated big business - and giving them the boot has changed everything in the US.

You are making this way too difficult with all these theories...
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: cubsfan on September 22, 2018, 10:15:43 AM
And certainly the tariffs with China are needed. Until they stop stealing intellectual property and get North Korea under control, why
should we give them a break?   Once lean on North Korea and get rid of the nukes, we can "take it easy on them".
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: LC on September 22, 2018, 11:33:32 AM
Jobs are appearing because of tax cuts, and massive increases in business and consumer confidence.

Obama and Hillary hated big business - and giving them the boot has changed everything in the US.

You are making this way too difficult with all these theories...

You are the one making theories, which do not suit the facts.

Unemployment has been steadily decreasing since 2010:
https://fred.stlouisfed.org/series/UNRATE/

Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: cubsfan on September 22, 2018, 11:43:53 AM
Jobs are appearing because of tax cuts, and massive increases in business and consumer confidence.

Obama and Hillary hated big business - and giving them the boot has changed everything in the US.

You are making this way too difficult with all these theories...

You are the one making theories, which do not suit the facts.

Unemployment has been steadily decreasing since 2010:
https://fred.stlouisfed.org/series/UNRATE/

No shit LC - thank you for the obvious once again.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: LC on September 22, 2018, 12:13:10 PM
Here cubsfan I made a picture because the argument you are making is so well supported by unemployment data that I think everyone should see it how much sense it makes.  ::)
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: SharperDingaan on September 22, 2018, 01:12:53 PM
Jobs are appearing because of tax cuts, and massive increases in business and consumer confidence.

Obama and Hillary hated big business - and giving them the boot has changed everything in the US.

You are making this way too difficult with all these theories...

You are the one making theories, which do not suit the facts.

Unemployment has been steadily decreasing since 2010:
https://fred.stlouisfed.org/series/UNRATE/

No shit LC - thank you for the obvious once again.

Aw shucks Cubsfan ...
How are those 'alternative facts' working out for you in the bunker? ;)

SD

Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: cubsfan on September 23, 2018, 06:10:30 AM
Boy oh boy, you liberal elitists really like to make things complicated with your economic theories and your academic bullshit.

Guys like you alway know what is best for everyone else - especially the working class - who you detest and look down upon.

It's elitists geniuses like you that allowed Middle America to be hollowed out, all the while selling the narrative to the
working class that "this will be good for you" and "don't worry you will adjust" to globalization and trade.

Meanwhile, you have no fear that your job will ever be outsourced to Thailand or Mexico. For you, it's economic theory that
makes sense - and won't impact you.  The "deplorables" and "expendables" will pay the price - hey, let those uneducated
pieces of shit move to North Dakota and start fracking, you say. Yea, just sell the house and move the family and 85 year old mother to
North Dakota! - Don't you know globalization is good for all of us! Make the adjustment - that's what you get for not going to college,
like I did!

You forgot that these are the people that BUILT America - these are the people that MADE AMERICA GREAT.
They were left behind.  It's all so simple you geniuses.  And you forgot that the deplorables actually have a vote.

This "deplorable" class of "uneducated idiots" (your words, not mine) rebelled against their protector, The Democratic Party, led by
Obama and Hillary. The "losers" of globalization saw that the party leaders BECAME the elites - and could care less about them
and their families.  And gave them the hook - when some brave guy, Trump - finally, finally said "I will protect you" , "I will bring your
jobs back", "I care about you".

How simple and obvious this all has been. And the Democrats are STILL in shock. Especially, now, with good jobs coming back and
full employment for blacks and Mexicans and all the other "deplorables".

Only, you elitists want to theorize about the precise optimization of trade rules for globalization - and don't want to admit the good that
is going on in this country - because you just can't stand that Trump is the reason.

That's why the working class rebelled - because of of you academic and finance geniuses with all the answers.

What an arrogant bunch you are.

Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Gregmal on September 23, 2018, 06:59:09 AM
https://www.youtube.com/watch?v=9ipefnrBwEo

The whole thing is good, but in relation to here, start around 4:50
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: LC on September 23, 2018, 11:55:59 AM
There is so much I don't understand - help me here Greg.

Quote
It's elitists geniuses like you that allowed Middle America to be hollowed out, all the while selling the narrative to the
working class that "this will be good for you" and "don't worry you will adjust" to globalization and trade.

The US, decades ago, had a strong manufacturing base. A lot of these businesses have gone overseas. Is this the fault of liberals? If so, how?

Or are we mad at liberals for simply delivering this message to people who lost these jobs?

Or are we mad at liberals for not introducing protectionist policies to protect these jobs at the expense of the rest of the country?

Quote
You forgot that these are the people that BUILT America - these are the people that MADE AMERICA GREAT.
Not to sound crass, but So What? Do we shut down progress so Ford can continue producing Model Ts, because people have some nostalgia they need to indulge? Shit - half the reason Ford/GM/etc. went bankrupt was because they gave pensions to these people. And they're still bitching and moaning?

Quote
Only, you elitists want to theorize about the precise optimization of trade rules for globalization - and don't want to admit the good that
is going on in this country - because you just can't stand that Trump is the reason.
What exactly is "the good" here?
Have manufacturing jobs come back to middle America?
Are we bouncing back as world leaders in raw material processing, mining, electronics manufacturing?
Are the middle parts of the country becoming bastions of wealth which was previously relegated to "liberal elite" cities like NY and SF?
Has there been a large swing in income inequality such that the share of wealth by the top 1% of Americans has decreased, and the huge middle percentages of the country are gaining that share? ]
Are real wages increasing, at all?

The reality is that - yes middle America is employed. But they are (1) making less $$ in inflation-adjusted wages, and (2) this isn't due to Trump at all - it's probably due to the "beautiful deleveraging" that took place over the mid 2010s combined with a bounceback from the recession.

I'm sorry but, you are either forgetting our outright ignoring the data related to real wages and unemployment, and centuries-old, proven economic theory on competitive advantage.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: cubsfan on September 23, 2018, 01:01:41 PM
It's not Greg - it's me.

What is so hard to understand? - the Democratic Party has always been the working class party, until the party gave them the finger.
Unfair trade practices (yes, "free trade" not "fair trade" with tariffs) emptied out those factories - but everything was going to be "just swell".

And then Obama tries to kill the energy business with his stupid carbon tax garbage, killing the coal industry and pipeline construction with
his pit bull EPA. Obama didn't give a shit about those jobs, as long as jokers like Al Gore were happy.

Why not kill those messengers?    They put the policies in place, and destroyed the jobs - for their liberal agenda.
The Republicans played their part too - no doubt - until Trump kicked over the table at the Republican Primary with a message directly to the working class.
Trump was the only Republican that wouldn't play the Washington special interest game - and no ties to the DC swamp filled with lobbyists.

It's the fault of BOTH parties - Democrats and Republicans. Trump is fighting both of them. He said "enough of this" - if trade deficits are so
great let Canada, Mexico and China have them for decades - I'm putting people back to work in this country.

How hard is that to understand? 

It's a populist message. People get to vote. They voted for someone that represented their interest - and both parties are still shell shocked.

The "good" here is good jobs are coming back to America, Capex spending is up, factories are being built - that is all that matters to someone that
is unemployed. Middle America just wanted a fighting chance - and they got it.

Your "reality" is that the "beautiful deleveraging" was in place FAR TOO LONG - because Obama did NOT address unemployment. He strangled
business incentive.  Only the US Federal Reserve saved this economy - and it took 8 frickin years of subpar growth.   Trump has lit a fire under
the economy - which is what Obama SHOULD HAVE done - but he was too busy thinking about his next Noble Prize and Presidential Library.

You just love your economic theories and text book bullshit, just like Harvard boy Obama and Summers. 
But you forgot that People are People - and you can't fit that into your stupid economic models.
They vote for people who have their self interest at heart.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: LC on September 23, 2018, 03:41:41 PM
Whoops - didn't realize you wrote that post. But it's like we can't even agree on the facts.

Quote
Unfair trade practices (yes, "free trade" not "fair trade" with tariffs) emptied out those factories - but everything was going to be "just swell".
No - Chinese labor is simply cheaper. This is a competitive advantage of China. They have more people and you can pay them less. You are asking for protectionist policies to prevent more efficiently made products from entering US markets.

Quote
And then Obama tries to kill the energy business with his stupid carbon tax garbage, killing the coal industry and pipeline construction with
his pit bull EPA. Obama didn't give a shit about those jobs, as long as jokers like Al Gore were happy.

Many issues here:
-Carbon tax didn't kill coal
-Munger's argument that the US should let other countries drain their energy reserves
-The US has no real competitive advantage in energy production
-The coal industry wasn't exactly teeming with millions of jobs
-Ignoring externalities
-Ignoring the growth of solar, wind

Quote
It's the fault of BOTH parties - Democrats and Republicans. Trump is fighting both of them. He said "enough of this" - if trade deficits are so
great let Canada, Mexico and China have them for decades - I'm putting people back to work in this country.
...
The "good" here is good jobs are coming back to America, Capex spending is up, factories are being built - that is all that matters to someone that
is unemployed. Middle America just wanted a fighting chance - and they got it.
...
Your "reality" is that the "beautiful deleveraging" was in place FAR TOO LONG - because Obama did NOT address unemployment. He strangled
business incentive.  Only the US Federal Reserve saved this economy - and it took 8 frickin years of subpar growth.   Trump has lit a fire under
the economy - which is what Obama SHOULD HAVE done - but he was too busy thinking about his next Noble Prize and Presidential Library.
I quoted multiple parts here because this is all really one claim that is unsupported.

Job growth has been on a steady trajectory since 2010 and Trump's policies have not impacted that trajectory.
 
In terms of trade deficits - those countries have matched Trump's tariffs so there will be really no net change except higher prices for everyone including US buyers. This is a form of socialism - all consumers pay higher prices  to subsidize unprofitable national industries.
I prefer my flavor of socialism to ease and shorten frictional unemployment - not extend it.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: cubsfan on September 23, 2018, 04:40:39 PM
Blah, blah, blah - keep making up your own facts LC

FACT: The economy is on fire - and you can't stand it, with your case of TDS - a "never Trumper".
FACT: The economy was substandard under Obama, The Fed did the work not the administration
FACT: Obama never exceeded 3% growth in 8 years - First President in memory to do so.
FACT: EPA regulations strangled growth - all rolled back under Trump - Drilling in Alaska, Pipeline construction, Coal miners working
FACT: China has protectionist policies and STEALS US intellectual property, and supports N Korean regime. Trump tariffs return the abuse.

But you keep ignoring the central issue:  The Working class voted for jobs, not your idiotic trade and economic theories that rob them of their futures.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: SharperDingaan on September 23, 2018, 05:10:01 PM
There is nothing wrong with working class.
The more bustling factories around you, the easier it is to get a job, and the more you get paid. The more money coming in the more food on the table, and the more and bigger toys you can have.  I'd also vote for anyone who brings that back, and my criteria would be how many jobs you have brought back to my area. That's not hard to understand. I get it.

But if I'm in my 50's; do I want my kids doing the same thing I'm doing? - or do I want something better for them.
Because If I can see the writing on the wall, what are their chances of even just maintaining their current life style? Not good.
I'm too old for change; and time is running out on my kids. Fear and frustration. I get it.

Trump is attractive to you, I get it; but to a great many other people he is just toxic - and for a very long list of reasons.
In six weeks you'll know if the rest of the US agrees with you.

Working class is changing, and its not the 50's anymore.
It's no longer just ability to speak and write English, labour, and the willingness to do the dangerous and shit jobs. Larger and larger chunks of it are now done by machine, which is both cheaper and safer. Now you need trade certificates, coding ability/experience, etc. It may be too late for you - but your kids are going to school; so who's going to help you (and them) achieve that?

This is change, it hurts, but you aren't unique.

SD



 
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: cubsfan on September 23, 2018, 05:26:30 PM
There is nothing wrong with working class.
The more bustling factories around you, the easier it is to get a job, and the more you get paid. The more money coming in the more food on the table, and the more and bigger toys you can have.  I'd also vote for anyone who brings that back, and my criteria would be how many jobs you have brought back to my area. That's not hard to understand. I get it.

But if I'm in my 50's; do I want my kids doing the same thing I'm doing? - or do I want something better for them.
Because If I can see the writing on the wall, what are their chances of even just maintaining their current life style? Not good.
I'm too old for change; and time is running out on my kids. Fear and frustration. I get it.

Trump is attractive to you, I get it; but to a great many other people he is just toxic - and for a very long list of reasons.
In six weeks you'll know if the rest of the US agrees with you.

Working class is changing, and its not the 50's anymore.
It's no longer just ability to speak and write English, labour, and the willingness to do the dangerous and shit jobs. Larger and larger chunks of it are now done by machine, which is both cheaper and safer. Now you need trade certificates, coding ability/experience, etc. It may be too late for you - but your kids are going to school; so who's going to help you (and them) achieve that?

This is change, it hurts, but you aren't unique.

SD

What the hell is this garbage?

What's that got to do with Trump getting elected and trade?

You hate working class people - I get it. They are beneath you - I get it. You are smarter than them - I get it. You are better than them - I get it.

That's why Trump got elected.  GET IT?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Gregmal on September 23, 2018, 05:55:24 PM
I grew up in a place called Bergen County NJ. A place just outside NYC(basically where all the wealthy folks who work in NYC live). There I learned of the liberal entitlement. They look down on others while at the same time taking a philanthropic approach to the world, mostly to cater and caress their own egos. They feel good stomping all over the world, frowning upon the gas attendant who makes them wait, the bartender who doesn't see them, the taxi driver who passes by. Massive sense of entitlement. At the same time they love telling others about their "duties" in the world. They love fake altruism. I'm beginning to see that many Canadians share the same traits.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: cubsfan on September 23, 2018, 06:15:59 PM
Greg - so, so true - the distain for the deplorables just gushes out of them.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Gregmal on September 23, 2018, 06:28:13 PM
Greg - so, so true - the distain for the deplorables just gushes out of them.

The WB saying about give praise specifically and cast blame generally I feel is part of the liberal playbook, just inverted. Be generous and philanthropic generally, but you can't name one single individual they've actually helped or benefited specifically. They love the "idea" of being generous and philanthropic. It stops there though unless those traits can live on at YOUR expense.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: LC on September 23, 2018, 07:53:18 PM
Sounds like you guys got your feelings hurt.

Enjoy dealing with that by voting for regression and inefficiency. Very healthy response.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: doc75 on September 23, 2018, 08:08:45 PM
https://www.youtube.com/watch?v=9ipefnrBwEo

The whole thing is good, but in relation to here, start around 4:50

You're kidding?

Break out the tinfoil hats.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Gregmal on September 23, 2018, 08:27:44 PM
https://www.youtube.com/watch?v=9ipefnrBwEo

The whole thing is good, but in relation to here, start around 4:50

You're kidding?

Break out the tinfoil hats.


Not liberal enough? I'll try harder next time
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: SharperDingaan on September 23, 2018, 08:32:41 PM
There is nothing wrong with working class.
The more bustling factories around you, the easier it is to get a job, and the more you get paid. The more money coming in the more food on the table, and the more and bigger toys you can have.  I'd also vote for anyone who brings that back, and my criteria would be how many jobs you have brought back to my area. That's not hard to understand. I get it.

But if I'm in my 50's; do I want my kids doing the same thing I'm doing? - or do I want something better for them.
Because If I can see the writing on the wall, what are their chances of even just maintaining their current life style? Not good.
I'm too old for change; and time is running out on my kids. Fear and frustration. I get it.

Trump is attractive to you, I get it; but to a great many other people he is just toxic - and for a very long list of reasons.
In six weeks you'll know if the rest of the US agrees with you.

Working class is changing, and its not the 50's anymore.
It's no longer just ability to speak and write English, labour, and the willingness to do the dangerous and shit jobs. Larger and larger chunks of it are now done by machine, which is both cheaper and safer. Now you need trade certificates, coding ability/experience, etc. It may be too late for you - but your kids are going to school; so who's going to help you (and them) achieve that?

This is change, it hurts, but you aren't unique.

SD

What the hell is this garbage?

What's that got to do with Trump getting elected and trade?

You hate working class people - I get it. They are beneath you - I get it. You are smarter than them - I get it. You are better than them - I get it.

That's why Trump got elected.  GET IT?

I have a great many good friends who are the 'working class' you claim I 'hate'.
According to you, the working class people (in those factories) got Trump elected. Trade is what keeps those factories selling what they produce, and those workers in a job.

Newfoundland used to have a fishery, then there were no fish - because they had been over-fished.
THE main industry, THE main source of employment in a great many communities, and one of THE primary social identities of Newfoundland - suddenly, GONE. Yes it was devastating, it destroyed a way of life, and it took years to recover - but folks pulled through. Most Newfoundlanders today will tell you that it hurt, but they have came out the better for it.

I get that's not what you want to hear, and that this hits a nerve.
But your enemy is technology, not the world around you.

SD
 


Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: LC on September 23, 2018, 08:36:25 PM
Blah, blah, blah - keep making up your own facts LC

FACT: The economy is on fire - and you can't stand it, with your case of TDS - a "never Trumper".
FACT: The economy was substandard under Obama, The Fed did the work not the administration
FACT: Obama never exceeded 3% growth in 8 years - First President in memory to do so.
FACT: EPA regulations strangled growth - all rolled back under Trump - Drilling in Alaska, Pipeline construction, Coal miners working
FACT: China has protectionist policies and STEALS US intellectual property, and supports N Korean regime. Trump tariffs return the abuse.

But you keep ignoring the central issue:  The Working class voted for jobs, not your idiotic trade and economic theories that rob them of their futures.

Putting the word "fact" in all capitalization doesn't make it true.

1- I'm ecstatic the economy is humming along. However just about every metric shows that this trend is no different than it was under Obama. Frankly, the President's influence over the economy is not very strong. And finally, you're cherry picking because you give all credit to Trump but none to Obama.
2- I see - when the economy is doing well under a guy you like, it's because of him. When it happens under a guy you don't like, he has nothing to do with it. Cherry picking again. Additionally didn't Obama sign into effect a $800B stimulus package that got us out of a giant recession? Hmm...
3- So now you're just really showing us you're an idiot. Obama achieved quarterly gdp growth above 3% eight different times. What Obama did not achieve was >3% gdp growth annually. And neither has Trump. Here you can read the chart yourself: https://www.statista.com/statistics/188185/percent-chance-from-preceding-period-in-real-gdp-in-the-us/
4- Yes a short term spike (in dying industries) at the expense of long term prosperity. What a true value investor you and Trump are!
5- And this is why we are throwing tariffs at Canada Mexico and the EU? Oh and lucky for us neither China nor our traditional allies are imposing matching tariffs on US goods. Aren't we lucky to have such mentally incompetent trading partners!

Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: LC on September 23, 2018, 08:50:11 PM
https://www.youtube.com/watch?v=9ipefnrBwEo

The whole thing is good, but in relation to here, start around 4:50

You're kidding?

Break out the tinfoil hats.
Yea it was pretty bad.

"anonymous" mask? check
CIA created terrorism? check
"they want to keep the masses dumbed down"? check
picture of sheep? check

Hits all the crackpot conspiracy theory criteria.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Gregmal on September 23, 2018, 08:59:41 PM
https://www.youtube.com/watch?v=9ipefnrBwEo

The whole thing is good, but in relation to here, start around 4:50

You're kidding?

Break out the tinfoil hats.
Yea it was pretty bad.

"anonymous" mask? check
CIA created terrorism? check
"they want to keep the masses dumbed down"? check
picture of sheep? check

Hits all the crackpot conspiracy theory criteria.

You wouldn't happen to be a liberal would you?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: LC on September 23, 2018, 09:10:23 PM
Registered independent. And you, a basement dweller?  :P
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Gregmal on September 23, 2018, 09:50:15 PM
Registered independent. And you, a basement dweller?  :P

Nice personal insults... And yea you are so right... Tin foil hats and all. It's definitely the Republicans promoting taking on $100K+ in loans(essentially becoming a slave to the system) in exchange for a worthless liberal arts degree. You got me there!
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Gregmal on September 23, 2018, 10:00:26 PM
I mean seriously guys, how are you so supportive of this crap. In other countries, if you suck at life, they tell you at a young age. In liberal America, if you suck at sports you get a trophy anyway, if you suck academically they put you through school anyway, and whereas in many other countries, you know where you stand by 10 years old, it takes many Americans until they are in their late 20's or early 30's and riddled with debt to figure this out, and then they just cry about how they were misled.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: LC on September 23, 2018, 10:08:26 PM
Greg I think I just realized exactly how well informed you must be. The video you posted has some great nuggets such as:

Quote
another tool they use is brainwashing. they will use the media the advertisements the movies to instill in your mind aspiration attitudes and behaviors to turn you into a non-thinking creature

another tool used to keep the people apathetic to the exploitation is to dumb down the education. the elites dont want the well-informed well-educated population.

another tool used by the elites is fear and terror....to scare the citizens the elites mainly used two methods: propaganda and false-flag terrorist attacks against their own population. 9/11 is one of the many examples of terrorist attacks against their own population by the elites.

I mean you're literally posting 9/11 conspiracy crap. Go crawl back into your basement cave you unevolved troll.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Gregmal on September 23, 2018, 10:15:46 PM
Greg I think I just realized exactly how well informed you must be. The video you posted has some great nuggets such as:

Quote
another tool they use is brainwashing. they will use the media the advertisements the movies to instill in your mind aspiration attitudes and behaviors to turn you into a non-thinking creature

another tool used to keep the people apathetic to the exploitation is to dumb down the education. the elites dont want the well-informed well-educated population.

another tool used by the elites is fear and terror....to scare the citizens the elites mainly used two methods: propaganda and false-flag terrorist attacks against their own population. 9/11 is one of the many examples of terrorist attacks against their own population by the elites.

I mean you're literally posting 9/11 conspiracy crap. Go crawl back into your basement cave you unevolved troll.

I said it's good stuff, pretty interesting, and some of it 100% relevant, such as the first two sentences you wrote above. As such, in typical liberal fashion, you hold me accountable for every single thing in the video, as if I wrote it, believe it, and need it to be true. Classic.

You're literally the guy who reads 5 pages and finds one sentence that is wrong and then throws a temper tantrum. That must be fun.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: cubsfan on September 23, 2018, 10:29:26 PM
Blah, blah, blah - keep making up your own facts LC

FACT: The economy is on fire - and you can't stand it, with your case of TDS - a "never Trumper".
FACT: The economy was substandard under Obama, The Fed did the work not the administration
FACT: Obama never exceeded 3% growth in 8 years - First President in memory to do so.
FACT: EPA regulations strangled growth - all rolled back under Trump - Drilling in Alaska, Pipeline construction, Coal miners working
FACT: China has protectionist policies and STEALS US intellectual property, and supports N Korean regime. Trump tariffs return the abuse.

But you keep ignoring the central issue:  The Working class voted for jobs, not your idiotic trade and economic theories that rob them of their futures.

Putting the word "fact" in all capitalization doesn't make it true.

1- I'm ecstatic the economy is humming along. However just about every metric shows that this trend is no different than it was under Obama. Frankly, the President's influence over the economy is not very strong. And finally, you're cherry picking because you give all credit to Trump but none to Obama.
2- I see - when the economy is doing well under a guy you like, it's because of him. When it happens under a guy you don't like, he has nothing to do with it. Cherry picking again. Additionally didn't Obama sign into effect a $800B stimulus package that got us out of a giant recession? Hmm...
3- So now you're just really showing us you're an idiot. Obama achieved quarterly gdp growth above 3% eight different times. What Obama did not achieve was >3% gdp growth annually. And neither has Trump. Here you can read the chart yourself: https://www.statista.com/statistics/188185/percent-chance-from-preceding-period-in-real-gdp-in-the-us/
4- Yes a short term spike (in dying industries) at the expense of long term prosperity. What a true value investor you and Trump are!
5- And this is why we are throwing tariffs at Canada Mexico and the EU? Oh and lucky for us neither China nor our traditional allies are imposing matching tariffs on US goods. Aren't we lucky to have such mentally incompetent trading partners!

My god, what a dumb ass you are. First , I'm cherry picking the metrics, then the President doesn't influence the economy, then he does, then he doesn't.
Now the energy business doesn't create jobs, then it does, but doesn't matter in the long run.

Make up your fucking mind already. What nonsense. Go pull another graph out of your ass already.

In the end, you will believe what you want to believe. Look it up numb nuts. Obama never cracked 3% ANNUAL GDP growth with 8 years to do it.
We will see how Trump ends up. But Obama never did. First US President in my lifetime that failed to do so.
And business confidence in this country is way up - with good jobs back.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Gregmal on September 23, 2018, 10:36:18 PM
I'd also point out that business confidence is largely dependent on business owners feeling good about what the guy in office is doing/capable of.

Obama did nothing and relied on the fed. Trump produced tax cuts and deregulation. This might not be the stuff you learn when getting your $100K liberal arts degree, but its pretty much basic Economics 101 stuff.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on September 23, 2018, 10:55:00 PM
Jesus, what is with you guys and the 3% GDP growth? As things are right now, the US economy will generally not do 3% GDP growth. If it does the chances are 90% it's a bad thing, 10% it's a freak accident. You need to leave the 3% GDP stuff alone.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: cubsfan on September 23, 2018, 11:01:31 PM
Are you kidding Rb?  Seriously?

1% additional annual GDP growth means millions of jobs.

You of all smart people know that.

What could be more important?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on September 23, 2018, 11:01:51 PM
I'd also point out that business confidence is largely dependent on business owners feeling good about what the guy in office is doing/capable of.

Obama did nothing and relied on the fed. Trump produced tax cuts and deregulation. This might not be the stuff you learn when getting your $100K liberal arts degree, but its pretty much basic Economics 101 stuff.
Well I actually have (among others) a liberal arts degree. Though it cost a way less that 100k. But guess what, it's an Economics degree. And no, what you say is not in Economics 101. It's also not in 102, 201, 301, etcetera.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on September 23, 2018, 11:37:12 PM
Are you kidding Rb?  Seriously?

1% additional annual GDP growth means millions of jobs.

You of all smart people know that.

What could be more important?
No, I'm not kidding.

I mean in economics we do a lot of complicated things to get to potential growth rates that's really technical. But you can actually see it in practice. As you've stated during Obama's terms he never had a 3% GDP growth year. Nonetheless, the US economy during that time chewed up through A LOT of excess capacity.

To put it another way, you are correct that an extra 1% of annual GDP growth would mean millions of jobs. But with unemployment as low as it is, you don't have the millions of people to do those jobs.

If anything, what the data is pointing to is that economists were too optimistic about the potential growth rate of the US economy. The other thing to keep in mind is that headline growth rate makes for good headlines and political statements but it's really more or less meaningless. Depending on circumstances people in a 1% growth economy could be doing way better than people in a 5% growth economy. In an even more particular case a 0% or -1% growth economy can be a really good thing. So there's a lot of nuance to this stuff.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: cubsfan on September 24, 2018, 12:14:38 AM
Are you kidding Rb?  Seriously?

1% additional annual GDP growth means millions of jobs.

You of all smart people know that.

What could be more important?
No, I'm not kidding.

I mean in economics we do a lot of complicated things to get to potential growth rates that's really technical. But you can actually see it in practice. As you've stated during Obama's terms he never had a 3% GDP growth year. Nonetheless, the US economy during that time chewed up through A LOT of excess capacity.

To put it another way, you are correct that an extra 1% of annual GDP growth would mean millions of jobs. But with unemployment as low as it is, you don't have the millions of people to do those jobs.

If anything, what the data is pointing to is that economists were too optimistic about the potential growth rate of the US economy. The other thing to keep in mind is that headline growth rate makes for good headlines and political statements but it's really more or less meaningless. Depending on circumstances people in a 1% growth economy could be doing way better than people in a 5% growth economy. In an even more particular case a 0% or -1% growth economy can be a really good thing. So there's a lot of nuance to this stuff.

Wait brother - 1% additional GDP growth is very important for employment levels - it's what we are all about. Don't tell me it's meaningless.
And headlines ARE important if it influences business & consumer confidence - and increased CAPEX spending. That is  what creates new jobs.
 The Obama recovery was often called "the jobless recovery" for years. All that bullshit about the "new normal" was true -
precisely because over regulation was strangling economic growth. Bill Gross and company insisted 2% would be the best we could do
BECAUSE of the role of government in regulating and holding back economic growth. The tapeworm of big government in action.

The man, y'all hate, Mr. Trump removed those constraints - and it certainly looks very promising for 3% and perhaps a shot at 4% growth.

And these are good quality jobs - we may actually see some wage growth for Middle America.

Nothing is more important for this country than GDP growth.

You're a smart guy Rb, and maybe you'll eventually get there.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: meiroy on September 24, 2018, 04:17:12 AM
Because this is the crap thread that everyone can write whatever they want, here's mine:

I used to think that Zerohedge is an entertainment site, where now and then they would have something so ridiculous it would be amusing to read.  So, I didn't take it too seriously, but now it seems obvious that their strings are pulled by someone who has a clear agenda against the US and the west.  They should definitely register with FARA. They are, knowingly or not, foreign agents.  Pretty much every post that they have follows a certain path.  It's not about permabear or whatever. It's really not entertaining anymore, people can be easily influenced. Their financing should be revealed.


Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: meiroy on September 24, 2018, 04:27:20 AM
There is nothing wrong with working class.
The more bustling factories around you, the easier it is to get a job, and the more you get paid. The more money coming in the more food on the table, and the more and bigger toys you can have.  I'd also vote for anyone who brings that back, and my criteria would be how many jobs you have brought back to my area. That's not hard to understand. I get it.

But if I'm in my 50's; do I want my kids doing the same thing I'm doing? - or do I want something better for them.
Because If I can see the writing on the wall, what are their chances of even just maintaining their current life style? Not good.
I'm too old for change; and time is running out on my kids. Fear and frustration. I get it.

Trump is attractive to you, I get it; but to a great many other people he is just toxic - and for a very long list of reasons.
In six weeks you'll know if the rest of the US agrees with you.

Working class is changing, and its not the 50's anymore.
It's no longer just ability to speak and write English, labour, and the willingness to do the dangerous and shit jobs. Larger and larger chunks of it are now done by machine, which is both cheaper and safer. Now you need trade certificates, coding ability/experience, etc. It may be too late for you - but your kids are going to school; so who's going to help you (and them) achieve that?

This is change, it hurts, but you aren't unique.

SD

What the hell is this garbage?

What's that got to do with Trump getting elected and trade?

You hate working class people - I get it. They are beneath you - I get it. You are smarter than them - I get it. You are better than them - I get it.

That's why Trump got elected.  GET IT?

I have a great many good friends who are the 'working class' you claim I 'hate'.
According to you, the working class people (in those factories) got Trump elected. Trade is what keeps those factories selling what they produce, and those workers in a job.

Newfoundland used to have a fishery, then there were no fish - because they had been over-fished.
THE main industry, THE main source of employment in a great many communities, and one of THE primary social identities of Newfoundland - suddenly, GONE. Yes it was devastating, it destroyed a way of life, and it took years to recover - but folks pulled through. Most Newfoundlanders today will tell you that it hurt, but they have came out the better for it.

I get that's not what you want to hear, and that this hits a nerve.
But your enemy is technology, not the world around you.

SD


You are implying by your selective examples that all these extinct industries are gone due to "natural death", efficiency and technology.  You are assuming by that that the whole world is this lovely efficiency market, playing by the same rules. It is not.

Local industries in whichever country can be easily crashed due to local regulation in other countries, countries where they do not support the concept of free markets. And once they are crashed it would be increasingly difficult to revive them when things change on the other side.

And just to be clear, this is not a hypothetical discussion.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: cubsfan on September 24, 2018, 06:00:20 AM
Sounds like you guys got your feelings hurt.

Enjoy dealing with that by voting for regression and inefficiency. Very healthy response.

Spoken like a true elitist LC - Vote for my economic model/theory , not what feeds my family.
You make a wonderful leftist who does not have to live with the consequences of your liberal agenda.
Someone else's family always pays the price.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: cubsfan on September 24, 2018, 06:11:41 AM

Local industries in whichever country can be easily crashed due to local regulation in other countries, countries where they do not support the concept of free markets. And once they are crashed it would be increasingly difficult to revive them when things change on the other side.


This is EXACTLY correct - finally someone with some brains around here. Get practical guys, this is not an economics laboratory. This is government, economics, human behavior, defense strategy and foreign policy all rolled together. You fight fire with fire to change the other side and protect your own citizens.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: doc75 on September 24, 2018, 06:22:23 AM
https://www.youtube.com/watch?v=9ipefnrBwEo

The whole thing is good, but in relation to here, start around 4:50

You're kidding?

Break out the tinfoil hats.


Not liberal enough? I'll try harder next time

Not sane enough. Though my thinking may be impaired because I was vaccinated as a child and then spent years going to school.  Double whammy. 








Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: SharperDingaan on September 24, 2018, 08:08:08 AM

Local industries in whichever country can be easily crashed due to local regulation in other countries, countries where they do not support the concept of free markets. And once they are crashed it would be increasingly difficult to revive them when things change on the other side.


This is EXACTLY correct - finally someone with some brains around here. Get practical guys, this is not an economics laboratory. This is government, economics, human behavior, defense strategy and foreign policy all rolled together. You fight fire with fire to change the other side and protect your own citizens.

Too bad then that THE lesson learnt from the Great Depression of 1929, was that competitive protectionism just produces a dust-bowl; and that the misery that line of thinking produced - contributed to the rise of Hitlers Germany and WWII. The Germans too were just trying to fight fire with fire to change the other side - then discovered that they were very good at it.

I would put it to you that Trump is herding the 'downtrodden' to suit his purpose, just as Hitler did with Germanys 'downtrodden' in the early days of the Nazis. And then as is now; anyone who spoke out against it was also branded an 'elitist'. Something the German-American Trump family is very good at doing. https://en.wikipedia.org/wiki/Frederick_Trump

So excuse me if I don't wish to go back to the death and destruction of those times.
I think quite a few others would also agree.

SD




Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cigarbutt on September 24, 2018, 08:17:18 AM
...
You are implying by your selective examples that all these extinct industries are gone due to "natural death", efficiency and technology.  You are assuming by that that the whole world is this lovely efficiency market, playing by the same rules. It is not.

Local industries in whichever country can be easily crashed due to local regulation in other countries, countries where they do not support the concept of free markets. And once they are crashed it would be increasingly difficult to revive them when things change on the other side.

And just to be clear, this is not a hypothetical discussion.

More crap.

Great Britain developed a leading edge during the Industrial Revolution because it led the way. Inevitably, competing countries looked for ways to catch up. The beginning of the end for GB as a leader of the modern economic world was when they started to allocate significant efforts in order to maintain their edge and to protect its base.

To lead and to maintain a lead, one has to constantly challenge the status quo and to act accordingly even if transitions can be painful. Going back in time just won't cut it. Although focus on momentum from the past may alleviate the 'disappointeds', buy time and allow further enjoyment in enclosed or entitled communities.

It is possible (likely?) that the present negotiation situation means both sides (USA-China) will become more "reasonable" and "win", for instance, if China agrees to correct its most abusing practices. If this happens though, in a typical kick the can down the road scenario, this temporary resolution will do nothing to the underlying and undermining imbalance.

Somehow the USD needs to come down. There are strong countervailing forces though.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: cubsfan on September 24, 2018, 08:18:47 AM

Local industries in whichever country can be easily crashed due to local regulation in other countries, countries where they do not support the concept of free markets. And once they are crashed it would be increasingly difficult to revive them when things change on the other side.


This is EXACTLY correct - finally someone with some brains around here. Get practical guys, this is not an economics laboratory. This is government, economics, human behavior, defense strategy and foreign policy all rolled together. You fight fire with fire to change the other side and protect your own citizens.

Too bad then that THE lesson learnt from the Great Depression of 1929, was that competitive protectionism just produces a dust-bowl; and that the misery that line of thinking produced - contributed to the rise of Hitlers Germany and WWII. The Germans too were just trying to fight fire with fire to change the other side - then discovered that they were very good at it.

I would put it to you that Trump is herding the 'downtrodden' to suit his purpose, just as Hitler did with Germanys 'downtrodden' in the early days of the Nazis. And then as is now; anyone who spoke out against it was also branded an 'elitist'. Something the German-American Trump family is very good at doing. https://en.wikipedia.org/wiki/Frederick_Trump

So excuse me if I don't wish to go back to the death and destruction of those times.
I think quite a few others would also agree.

SD

Oh, my god, what bullshit. American citizens just want to go back to work.

Lack of economic stimulus elongated the Great Depression here.
Go read you economic history text one more time.

I'll put you down as a "Never Trumper".
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: LC on September 24, 2018, 08:24:09 AM
Quote
American citizens just want to go back to work
American citizens have been "going back to work" for the past 10 years. Unemployment rates are below 4%. Even U6 is at 7.5%

American citizens are working. Maybe the problem is the lack of real wage growth. Maybe Trump should've directed tax cuts at the middle class.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: cubsfan on September 24, 2018, 08:32:05 AM
Quote
American citizens just want to go back to work
American citizens have been "going back to work" for the past 10 years. Unemployment rates are below 4%. Even U6 is at 7.5%

American citizens are working. Maybe the problem is the lack of real wage growth. Maybe Trump should've directed tax cuts at the middle class.

Maybe the problem is it took 10 years because Obama strangled business and there was no wage growth.
Maybe we will start to see wage growth now.
Maybe Trump had to come in and just change everything for the middle class.

Too bad President Obama didn't do his job - if he did - Hillary would have been a shoe in.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on September 24, 2018, 08:35:14 AM
LOL!

Another one who compares Trump to Hitler because he puts tariffs on $200+ billion of trades with another country while the U.S. economy is $20 trillion and China $12 trillion...

So what is the proposed solution by the Globalist/Liberals? Do nothing. Let China continue to steal all our patents, keep blocking our imports with their own existing tarrifs?

As Buffett and Jamie Dimon said, there is a problem here and it needs to be fixed. Maybe that Trump is taking a more confrontational approach but, to compare this to Hitler is dumb at best.

I am mixed as to how the trade thing will end up but, it is definitely true that Obama strangled business with regulation, showed a clear dislike for all banks (just look at that stupid Elizabeth Warren), killed U.S. AAA rating and certainly did not reduce taxes but, imposed new ones like Obamacare.

I also have to agree with Cubsfan, there is a lot of hypocrisy going around here. There are also examples of people saying one thing on one thread and something on another.

For example RB argues against personal responsibility when it comes to the housing crisis and people who signed loans that turned out bad.

Then here says that one should improve his lot, work hard, go to school and that because of it he succeeded.

While I definitely followed that latter line of thinking, I am still capable to understand that going to school and becoming a doctor, engineer, finance guy, programmer or getting into other lucrative jobs is not available to all people. Some cannot achieve this no matter how they try. And if everyone could and did, then these jobs would no longer be as lucrative due to too much supply.

In a country like Germany, the school system is designed so that people more inclined to manual labour is still rewarded and they have a path to obtain proper training. And Germany is doing really well on the manufacturing side.

So I suspect that school reform should be a key element to ensure that people are allowed a fair chance to succeed.

Cardboard
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: LC on September 24, 2018, 08:42:30 AM
Or maybe you live in a fantasy land.

Why hasn't the rate of economic improvement, nor the rate of employment improvement, changed since Trump took office?

Everything is on the same trendline since Obama.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on September 24, 2018, 08:49:09 AM
Obama started with a bottom (multi-generation crash) and took 8 years to bring it up above where he started.

Then Trump took it as it started to look wobbly and put it back on a 2-3% growth trend from a much larger base.

You can argue with me LC but, the S&P does not lie.

Cardboard
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: cubsfan on September 24, 2018, 08:52:06 AM

So what is the proposed solution by the Globalist/Liberals? Do nothing. Let China continue to steal all our patents, keep blocking our imports with their own existing tarrifs?


Ask yourself Trump's strategy here. This hurts China where it counts - the games are over boys, you're not taking advantage of us anymore.
There is a new sheriff in charge, not a pussy like Obama. All China has to do is get their tariffs under control, stop stealing intellectual property,
and MOST IMPORTANT - get your pit bull North Korea under control.....   China, you do all that - and we're highly likely to go easy on you.

But the days of this abuse are over. It's so simple to see.

So many think Trump is a crazy. Crazy like a fox.

Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: LC on September 24, 2018, 08:58:50 AM
Obama started with a bottom (multi-generation crash) and took 8 years to bring it up above where he started.

Then Trump took it as it started to look wobbly and put it back on a 2-3% growth trend from a much larger base.

You can argue with me LC but, the S&P does not lie.

Cardboard

Take a look at the 10 year SPY. Trendline does not significantly diverge post 2016.

Take a look at the 10 year U3/U6. Same conclusion.

Take a look at the 10 year GNP. Same conclusion.


AND all this makes the GIANT assumption regarding how much influence ANY president has over the economy. I'm only conceding this point for argument's sake, because even with that concession it doesn't appear Trump has done anything significantly different. But in reality (as this forum discussed 4+ years ago), I am skeptical of how much influence the position of President has on the economy.

Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on September 24, 2018, 09:04:11 AM
LOL!

So you can't see the plateau between December 2014 and November 2016?

Can't see the major divergence in the trend line in 2008-2009???

Cardboard
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on September 24, 2018, 09:08:30 AM
Also, if the President or administration has little effect on the economy, then why have you been arguing so vehemently for years about how bad Trump is? This discussion is about the economy isn't?

If it does not matter why do you spend so much time here arguing?

Cardboard
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: cubsfan on September 24, 2018, 09:13:29 AM
Also, if the President or administration has little effect on the economy, then why have you been arguing so vehemently for years about how bad Trump is? This discussion is about the economy isn't?

If it does not matter why do you spend so much time here arguing?

Cardboard

If the President has no impact on the economy, then why are the Trump tax cuts so, so significant for corporate reinvestment?

If the President has no impact on the economy, they why was the Obamacare tax such a disaster for everyone?

We were in a recession - what was the man thinking??

Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: LC on September 24, 2018, 09:22:20 AM
LOL!

So you can't see the plateau between December 2014 and November 2016?

Can't see the major divergence in the trend line in 2008-2009???

Cardboard

Pretty sure we both know 08-09 was an idiosyncratic event.

UR and GNP didn't really plateau in 14/15. These are actual economic figures unlike S&P which can be subject to the voting machine of the crowd.

Quote
If it does not matter why do you spend so much time here arguing?
When I see people writing incorrect stuff it seems silly not to correct them. Also it kills time at work  ;D

Quote
If the President has no impact on the economy, then why are the Trump tax cuts so, so significant for corporate reinvestment?

If the President has no impact on the economy, they why was the Obamacare tax such a disaster for everyone?
Where are the results? UR/GNP have not deviated from the prior period post-2017 (when Trump tax cuts went into effect).
Additionally, I haven't seen evidence for an increase in rate of corporate reinvestment. Would love if you provided some.

The data I found for domestic investment shows no divergence: https://fred.stlouisfed.org/series/GPDIC1


As for Obamacare, I'm sure it wasn't a disaster for people who could finally afford healthcare. And given the massive increases in GNP, market prices, employment during the Obamacare years, it didn't seem to be a "disaster" for the economy either.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on September 24, 2018, 09:44:40 AM
08-09 was like the perfect time to become President and be a hero.

This is not different at all from a hedge fund starting up during these times and then creating a very positive track record from start.

Obama had that advantage. He also had a previous administration along with Bernanke who did exactly what was necessary prior to him even be elected to put in place remedies to the crisis: TARP, AIG bailout, etc.

Then after the initial rebound, he did many things which slowed progress: Obamacare, lost U.S. AAA credit rating, implemented massive regulation. It was called the new normal or 1-2% growth while the near depression had created a massive opportunity for faster growth with lots of pent up demand following the initial rebound in 09.

Also, if you go back to GDP growth rate per quarter in the period leading to the election that I pointed out, it is obvious that rate was slowing and there was talk of a recession incoming.

Although, I know that I am wasting my time. You are so blind to reality.

Cardboard
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: LC on September 24, 2018, 10:06:34 AM
My mistake - I thought being elected into the worst recession in a generation is a bad thing.

Why have we only had 2 quarters of >3% GDP growth in 2 years of Trump? Where is the 5% growth?
Why do we only have a AA+ rating despite 2 years of Trump? Where is the AAA rating?
Why haven't we seen spikes in macroeconomic metrics despite 2 years of deregulation and a year of giant tax breaks for the uberrich? Where is the zero unemployment?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: cubsfan on September 24, 2018, 11:38:19 AM
08-09 was like the perfect time to become President and be a hero.

This is not different at all from a hedge fund starting up during these times and then creating a very positive track record from start.

Obama had that advantage. He also had a previous administration along with Bernanke who did exactly what was necessary prior to him even be elected to put in place remedies to the crisis: TARP, AIG bailout, etc.

Then after the initial rebound, he did many things which slowed progress: Obamacare, lost U.S. AAA credit rating, implemented massive regulation. It was called the new normal or 1-2% growth while the near depression had created a massive opportunity for faster growth with lots of pent up demand following the initial rebound in 09.

Also, if you go back to GDP growth rate per quarter in the period leading to the election that I pointed out, it is obvious that rate was slowing and there was talk of a recession incoming.

Although, I know that I am wasting my time. You are so blind to reality.

Cardboard

This is exactly the point. He had a chance to be the hero for the entire country. President Obama's weakness is that he always thought he was
the smartest guy in the room. He's like those guys from Long Term Capital Management - Harvard, theoretical breed who is too smart for their
own good. What did Obama ever build?  What did Obama ever create prior to being President? What did he ever run?  Nothing.
He had distain for just about everyone.

He gave awesome speeches, like a Pied Piper - and captivated white & black alike - conservatives & liberals.

He had the opportunity to be a great president like Roosevelt or Lincoln - uniting the country during a crisis.
He choose to divide it instead. Identity politics was the way he did it - and Americans have had enough of it.

It really is a shame - cause now Trump is going to destroy any legacy he ever had.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: SharperDingaan on September 25, 2018, 07:28:32 AM
Just to rattle the cage 'cause it's a slow day ....

Your empire needs you!
https://www.amazon.com/STAR-WARS-Empire-Poster-Hanger/dp/B004GWGSOK

SD
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: MarkS on September 25, 2018, 08:14:24 AM
Why bother to rattle the cage with a silly Star Wars reference when you've videos like this. I'm not a big fan of Ted Cruze.  I find him a bit smarmy.  But this is unacceptable and outrageous behavior from the left.   https://www.cnn.com/2018/09/25/politics/ted-cruz-heckled-restaurant-brett-kavanaugh/index.html
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: cubsfan on September 25, 2018, 08:24:56 AM
Disgusting, but all too common.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Gregmal on September 25, 2018, 08:26:18 AM
Why bother to rattle the cage with a silly Star Wars reference when you've videos like this. I'm not a big fan of Ted Cruze.  I find him a bit smarmy.  But this is unacceptable and outrageous behavior from the left.   https://www.cnn.com/2018/09/25/politics/ted-cruz-heckled-restaurant-brett-kavanaugh/index.html

You ever wonder what the average wage is of these left wing protesters? I think they are merely dissatisfied with their economic situation and seeking outlets for their frustration. Republicans are easier targets than the people they look at in the mirror.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: cubsfan on September 25, 2018, 08:31:29 AM
Why bother to rattle the cage with a silly Star Wars reference when you've videos like this. I'm not a big fan of Ted Cruze.  I find him a bit smarmy.  But this is unacceptable and outrageous behavior from the left.   https://www.cnn.com/2018/09/25/politics/ted-cruz-heckled-restaurant-brett-kavanaugh/index.html

You ever wonder what the average wage is of these left wing protesters? I think they are merely dissatisfied with their economic situation and seeking outlets for their frustration. Republicans are easier targets than the people they look at in the mirror.

There is no sense of personal responsibility or accountability - when something does not go their way - it's always someone else's fault.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Gregmal on September 25, 2018, 08:52:17 AM
Why bother to rattle the cage with a silly Star Wars reference when you've videos like this. I'm not a big fan of Ted Cruze.  I find him a bit smarmy.  But this is unacceptable and outrageous behavior from the left.   https://www.cnn.com/2018/09/25/politics/ted-cruz-heckled-restaurant-brett-kavanaugh/index.html

You ever wonder what the average wage is of these left wing protesters? I think they are merely dissatisfied with their economic situation and seeking outlets for their frustration. Republicans are easier targets than the people they look at in the mirror.

There is no sense of personal responsibility or accountability - when something does not go their way - it's always someone else's fault.

You see though, they are partially correct. But taking a step back;

They are not very smart or intellectually sharpened. They are the biproduct of the past couple decades of the rewriting of the educational system. They've been taught common core math, etc, basically brainwashed to think the way the left wants them to. They are right here, it isn't their fault. But because they haven't properly learned to think, they don't realize its the fault of the left-wing elitists, and thus blame who they are told to blame(ie the right).

They are primitive as a result of lacking the proper education. Hence the "me mad, me throw punch" type of caveman mentality. They have essentially become weaponized. Dumbed down bots programmed over decades to attack at the urging of their masters and with the help of the mainstream media.

You almost have to feel sorry for them. Like you would for a dog that gets rabies. They are hard if not impossible to help, because they are too far gone.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: rb on September 26, 2018, 10:34:37 PM
"Think well before you try to fuck with us."

You guys are totally delusional or just like Freeland who thought she could get as good of a deal as the existing NAFTA.

Canada is a tiny country with population the size of a U.S. state. Totally dependent on the U.S. for cars, oil and so many other things. The U.S. is already fucking us over with oil at the tune of $15 billion/year according to Trudeau but, based on markets it is more like $40-50 billion.

And the country and its leaders are not even smart enough to even have 1 pipeline to ship to another country!

You think that Canada can blackmail the U.S.? You guys are nuts!

Cardboard
I don't how Canada is trying to blackmail anyone here. We're not the ones threatening retribution here. Quite the opposite. I'm just pointing out that there we can inflict a lot of pain if need be.

You're correct that overwhelmingly most of out oil goes to the US. But is the US gonna tax oil imports? Maybe Donald Trump is crazy but he's not THAT crazy.

Now onto NFTA and deals. NAFTA was a big deal 25 years ago but not so much today from a tariff perspective. Back then tariffs were still fairly high. Today not so much. The main damage from ripping off these deals comes from supply chain disruptions, not from tariffs. For example, the tariff on cars is about 2.5%. If you get no NAFTA deal what you'll get is a selloff in CAD that will likely bigger than that. So it's quickly settled through FX markets and comparative advantages remain and we'll likely have a bigger competitive advantage.

The thing is that we live in a world with rules and laws. And those rules and laws say that tariffs on cars with no deal are 2.5%. But then Donald Trump comes on and says forget the rules and laws I'm not gonna abide by them I'll tax Canadian cars at 25% cause I feel like it. Of course under laws he can't do that. Because Congress enacts tariffs he can only do it on a national security basis. So he'll go to commerce and say produce a document that says that Canadian cars are a national security threat because (insert bullshit reason here) but cars from Mexico and other places are not. Congress may even let him get away with it. But 1) that is flat out bullshit to attempt a shakedown. And 2) that is actually flat out an attack on Canada and at that point he can go fuck himself!

Yes the US is the main destination for our cars. But trade is fairly balanced. We are the main export destination for US vehicles. We export about 2 million vehicles to the US and we import about 2 million vehicles from the US. Do you not think that the Canadian government will implement retaliatory tariffs about 15 seconds after the US implements theirs? Will the US businesses be happy with us taxing about 2 million of their vehicles? Do you think car companies will abandon a majour economy as a market?

In regards to size, yes we may be a smaller country but we punch above our size in terms of trade with the US. We're the largest export market for the US. Everyone is talking about the trade issue with China because China is big. But we buy about 220% what China buys from the US. All these times I hear people going on about how business people should be politicians because business people do business. Tell me... is it good business to cut ties with your largest customer whom by and large has been a good customer and partner?

Your argument seems to be that when someone comes to shake you down the correct response is "He's bigger than you give him everything he wants!". But if they proceed with punitive auto tariffs on Canada that is flat out an attack on our country and the Rubicon would have been crossed. At that point economics and logic goes out the window and the only thing that matters is inflicting maximum pain right back on the enemy.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: meiroy on September 26, 2018, 11:36:25 PM

This is based on 2010 data, I suspect 2018 data would be higher.

"@Trinhnomics

Conclusion: Of the 2.7% of US consumer goods originating from China, only 1.2% represent China-produced content. And of the 13.9% of US consumer spending attributable to imports, only 1.9% imported from China.

Either way, China imports = ~2% of PCE so LOW CPI PASS-THROUGH"

And:

"First, we know from my previous rants that most of US Urban CPI is driven by services & that has ZERO import content & high because of BAD POLICY (housing+health)" (not including data on CoBF).

As mentioned.  This is extremely important in the context of the unhappy middle-class and why Trump was chosen.   
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: meiroy on September 27, 2018, 12:04:37 AM

Local industries in whichever country can be easily crashed due to local regulation in other countries, countries where they do not support the concept of free markets. And once they are crashed it would be increasingly difficult to revive them when things change on the other side.


This is EXACTLY correct - finally someone with some brains around here. Get practical guys, this is not an economics laboratory. This is government, economics, human behavior, defense strategy and foreign policy all rolled together. You fight fire with fire to change the other side and protect your own citizens.

Too bad then that THE lesson learnt from the Great Depression of 1929, was that competitive protectionism just produces a dust-bowl; and that the misery that line of thinking produced - contributed to the rise of Hitlers Germany and WWII. The Germans too were just trying to fight fire with fire to change the other side - then discovered that they were very good at it.



AGAIN you are implying that it is the USA who is taking the first move here and is the bad guy. The U.S. is still the most open economy in the world. Period. You have a serious and undeniable base bias and you just don't see it or you choose to ignore it. Maybe you are just knowledgeable about the USA and assume everyone else is the same, no idea.

And specifically regarding your comment:

1. It was mainly the reparations that had that horrible economic impact on Germany, exactly as Keynes predicted.  There's plenty analysis to be read on how he got to that conclusion.

2. In WWI it was Germany who first declared war on Russia and then France.  Then Germany ate its own shit.  They maintained the same mindset even after they lost WWI. 

3. Hitler was Austrian, his ideas were there for many decades before he was born. 

enough.

I do agree that the UN, WTO, IMF and etc. were established thanks to the lessons of WWII which is that international trade and cooperation would lead to a more stable world and indeed that succeeded. It is worrisome that this lesson is being forgotten. Absolutely.  Having said that, sometimes it is right to fight when the war already started.  And if you really want to drag WWII into this, if there was one war that it was right and morally correct for the U.S. to fight, it was WWII.

Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: cubsfan on September 27, 2018, 05:25:33 AM


The thing is that we live in a world with rules and laws. And those rules and laws say that tariffs on cars with no deal are 2.5%. But then Donald Trump comes on and says forget the rules and laws I'm not gonna abide by them I'll tax Canadian cars at 25% cause I feel like it. Of course under laws he can't do that. Because Congress enacts tariffs he can only do it on a national security basis. So he'll go to commerce and say produce a document that says that Canadian cars are a national security threat because (insert bullshit reason here) but cars from Mexico and other places are not. Congress may even let him get away with it. But 1) that is flat out bullshit to attempt a shakedown. And 2) that is actually flat out an attack on Canada and at that point he can go fuck himself!



Maybe you can educate me here - I understand the trade war with Mexico and China and totally agree with it.
It's obvious to me the abuses those two countries have imposed on the USA.  I don't understand the trade was with Canada - basically,
because I don't know the specific rational behind it.
I do have faith that Wibur Ross & company know what they are doing. But would like to hear more.

Now, the thing that is not correct: The US President has broad powers with executive orders to enact these policies - it is within his charter -
so explain to me why it is "illegal" - more like - it's policy you don't like. But I'd like to understand why it's illegal.

Barrack Obama, was the king of abuse, when it came to executive orders-  when his environmental efforts were shot down by US Congress - he
choose to instruct his EPA to construct a Byzantium system of environmental regulations - which effectively did the job of implementing his laws.
That was clearly an "abuse of power" that was likely to be shot down by the US courts, although, he knew it would take several years for
the courts to catch up.

Barrack did the same with immigration law - with his executive orders - effectively making current immigration law set by US Congress unenforceable.
All Trump has done is roll back Obama's "illegal" executive orders and abuse of power. The courts were extremely busy during the Obama
administration, as 50% of his executive orders were eventually struck down by the courts. His record was the worst in modern history.

So Presidental executive orders can be abused - but I am not understanding your point that what Trump has done is illegal.
The President has broad powers to use executive orders - but they can always be rolled back by the courts.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: cubsfan on September 27, 2018, 06:00:06 AM

Local industries in whichever country can be easily crashed due to local regulation in other countries, countries where they do not support the concept of free markets. And once they are crashed it would be increasingly difficult to revive them when things change on the other side.


This is EXACTLY correct - finally someone with some brains around here. Get practical guys, this is not an economics laboratory. This is government, economics, human behavior, defense strategy and foreign policy all rolled together. You fight fire with fire to change the other side and protect your own citizens.

Too bad then that THE lesson learnt from the Great Depression of 1929, was that competitive protectionism just produces a dust-bowl; and that the misery that line of thinking produced - contributed to the rise of Hitlers Germany and WWII. The Germans too were just trying to fight fire with fire to change the other side - then discovered that they were very good at it.



AGAIN you are implying that it is the USA who is taking the first move here and is the bad guy. The U.S. is still the most open economy in the world. Period. You have a serious and undeniable base bias and you just don't see it or you choose to ignore it. Maybe you are just knowledgeable about the USA and assume everyone else is the same, no idea.

And specifically regarding your comment:

1. It was mainly the reparations that had that horrible economic impact on Germany, exactly as Keynes predicted.  There's plenty analysis to be read on how he got to that conclusion.

2. In WWI it was Germany who first declared war on Russia and then France.  Then Germany ate its own shit.  They maintained the same mindset even after they lost WWI. 

3. Hitler was Austrian, his ideas were there for many decades before he was born. 

enough.

I do agree that the UN, WTO, IMF and etc. were established thanks to the lessons of WWII which is that international trade and cooperation would lead to a more stable world and indeed that succeeded. It is worrisome that this lesson is being forgotten. Absolutely.  Having said that, sometimes it is right to fight when the war already started.  And if you really want to drag WWII into this, if there was one war that it was right and morally correct for the U.S. to fight, it was WWII.

Of course, the elephant in the room that is NOT mentioned at all by Sharper - with the Marshall Plan, the good old USA rebuilt ALL of Europe and Japan after WWII.
 This was a herculean task - accomplished only by the USA because the major economies of Germany, Russia, France, UK, Japan and Eastern Europe were totally destroyed.
And, of course, after rebuilding these into some of the world's strongest economies, the USA choose NOT to be occupiers.
 
The Russians, of course, extended no such generosity to their Eastern Europe satellites. 

And after the USA rebuilt these destroyed economies - the USA then spent vast sums of money (a large percentage of GDP) to PROTECT
these countries from Russian invasion.

How is it possible you forget such history?

As mentioned by Meiroy - the lessons of WWII and the role the United States has played should not be forgotten.
This is still the most generous country in the world.

Why are these things so hard to acknowledge ?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on September 27, 2018, 07:17:10 AM
"Your argument seems to be that when someone comes to shake you down the correct response is "He's bigger than you give him everything he wants!". But if they proceed with punitive auto tariffs on Canada that is flat out an attack on our country and the Rubicon would have been crossed. At that point economics and logic goes out the window and the only thing that matters is inflicting maximum pain right back on the enemy. "

RB, you know like I do the main problem here: milk!

Trudeau is desperate to keep supply management in place to appease milk producers in Quebec. There is an election coming in 2019 and losing Quebec for him and the Liberals is a big no no.

While Trump wants to help Wisconsin and a few other mid-Western States which allowed him to win the last election and there is also the mid-term election in November.

Regarding the rest of the agreement, I am about certain that adjustments can be made to accommodate both nations and reduce further existing tarrifs that still exist.

However, I am certain that when the largest party says that they don't like a deal, that some concessions will have to be made by the smaller party. The U.S. could shut its border completely with Canada and still be fine. The opposite is untrue.

I think it is crazy for Canada and its citizens to be held hostages by a minority of millionaire farmers who want to retain the right to sell milk to consumers at twice the price of true market rate. And that is true even if not one ounce of milk was coming from the U.S.

Farms like any other business have to adopt with technology, grow and stay competitive. The thought of protecting small, hard working farmers may sound good to most but, when one digs deeper into it, it becomes obvious that protecting smaller farms has failed with this system and they are all shutting down one by one to be replaced by large farms which are of industrial size. The price to produce or quotas become cost prohibitive and create all kinds of issues to smaller farms such as generational transfer.

It is even more amazing to realize that the population support such effort which is very likely the effet of a lack of information as to what is truly going on.

Cardboard
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cigarbutt on September 27, 2018, 08:22:05 AM
RB, you know like I do the main problem here: milk!

Trudeau is desperate to keep supply management in place to appease milk producers in Quebec. There is an election coming in 2019 and losing Quebec for him and the Liberals is a big no no.

While Trump wants to help Wisconsin and a few other mid-Western States which allowed him to win the last election and there is also the mid-term election in November.

Regarding the rest of the agreement, I am about certain that adjustments can be made to accommodate both nations and reduce further existing tarrifs that still exist.

However, I am certain that when the largest party says that they don't like a deal, that some concessions will have to be made by the smaller party. The U.S. could shut its border completely with Canada and still be fine. The opposite is untrue.

I think it is crazy for Canada and its citizens to be held hostages by a minority of millionaire farmers who want to retain the right to sell milk to consumers at twice the price of true market rate. And that is true even if not one ounce of milk was coming from the U.S.

Farms like any other business have to adopt with technology, grow and stay competitive. The thought of protecting small, hard working farmers may sound good to most but, when one digs deeper into it, it becomes obvious that protecting smaller farms has failed with this system and they are all shutting down one by one to be replaced by large farms which are of industrial size. The price to produce or quotas become cost prohibitive and create all kinds of issues to smaller farms such as generational transfer.

It is even more amazing to realize that the population support such effort which is very likely the effet of a lack of information as to what is truly going on.

Cardboard

Isn't it ironic that there is "war" because of...milk?
FWIW quotas and supply management should probably go but the "how to do it" needs to be defined and one may end up with an equivalent of more of the same. The issue is also significant in Ontario and Alberta.

I have a family member involved in improving dairy farms productivity and I understand that many Wisconsin dairy farmers seem to have a hard time but do not seem to attribute the hardship to Canadian farmers or their supply system. There is even a significant movement in the US which goal is to establish supply management on their side of the border.
https://www.thestar.com/business/2018/09/01/dairy-farmers-need-supply-management-in-canada-and-the-united-states.html
https://www.dairyherd.com/article/has-time-come-supply-management

Need to remember also that countries that have abandoned milk production quotas haven't done so well. Part of the explanation may reside in the fact that theoretically lower milk prices for consumers may be mitigated by higher taxes designed, in the end, to go to the producer as a subsidy.

Isn't the solution more about harmonizing practices (to improve productivity) on both sides and do we need to go to war for that?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cardboard on September 27, 2018, 09:15:35 AM
"Isn't the solution more about harmonizing practices (to improve productivity) on both sides and do we need to go to war for that?"

Sure it is but, it becomes war when people don't agree or refuse to make concessions. I would think that a similar system or subsidies for both could be a solution. It would even the playing field.

Milk is milk, chicken, pork, beef, cereals, eggs, water, why do we need to control supply of one or some of them but, not them all?

Cardboard
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: LC on September 27, 2018, 12:14:12 PM
https://www.bloomberg.com/news/articles/2018-09-27/trump-is-said-to-have-avoided-trudeau-more-than-once-at-un

Trump Avoided Trudeau More Than Once at UN, Official Says


“We’re very unhappy with the negotiations and the negotiating style of Canada,” Trump said. “Canada has treated us very badly. Canada has a long way to go.” He said both that there’s a “good chance still” that the U.S. and Canada will reach a deal, but also that “probably or possibly” they won’t.


Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Spekulatius on September 27, 2018, 04:17:32 PM
https://www.bloomberg.com/news/articles/2018-09-27/trump-is-said-to-have-avoided-trudeau-more-than-once-at-un

Trump Avoided Trudeau More Than Once at UN, Official Says


“We’re very unhappy with the negotiations and the negotiating style of Canada,” Trump said. “Canada has treated us very badly. Canada has a long way to go.” He said both that there’s a “good chance still” that the U.S. and Canada will reach a deal, but also that “probably or possibly” they won’t.


How likely are you going to have a reasonable conversation with someone who tells you that you „ have a long way to go“? Trump is just doing is same old bullying, but I don’t think it will work with the EU, Canada or China, especially since has bully‘s everyone at the same time.

Also, the trade issue with Canada has very little to do with milk, it’s just  something that tends t9 his base (farmers). Theremis probably a few hundred million in export business best case, that is little keep more than a rounding error. If it weren’t milk, he would find something else to do a trade spat.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Value^2 on October 13, 2018, 10:44:45 AM
More evidence Trumps policies are working! Clearly helping those who need it most! 

https://www.youtube.com/watch?v=yR-24GIAlBQ

#MAGA
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: cubsfan on October 13, 2018, 04:08:39 PM
More evidence Trumps policies are working! Clearly helping those who need it most! 

https://www.youtube.com/watch?v=yR-24GIAlBQ

#MAGA

This is a nice little clip. Rolling back regulation means so much to small business.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: LC on October 13, 2018, 04:10:54 PM
More evidence Trumps policies are working! Clearly helping those who need it most! 

https://www.youtube.com/watch?v=yR-24GIAlBQ

#MAGA

This is a nice little clip. Rolling back regulation means so much to small business.
Which regulations, exactly, were the ones ruining small business?
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cigarbutt on October 13, 2018, 09:09:47 PM
More evidence Trumps policies are working! Clearly helping those who need it most! 
https://www.youtube.com/watch?v=yR-24GIAlBQ
#MAGA

One of the hypotheses is that animal spirits have been unleashed.
A milder hypothesis is that there has been a renewed oomph.
https://fred.stlouisfed.org/series/PNFI
But, as far as deregulation, the jury may still be out as the deregulation "environment" has pushed sentiment levels but IMO it remains to be seen how this will result in positive fundamental changes.

It is pretty clear that small business optimism is on the rise but breaks from previous trends are not so clear.
https://www.nfib.com/surveys/small-business-economic-trends/

Relevant reference:
https://www.forbes.com/sites/susandudley/2018/08/14/documenting-deregulation/#2ee198061d13
Deregulation is a great idea but I would say that blanket deregulation is not the way to go. When compared, the US GDP ratio over regulatory burden is alreadynear or at the top. It's possible but one needs to repeal, replace AND retain.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: cubsfan on October 14, 2018, 06:53:52 AM
More evidence Trumps policies are working! Clearly helping those who need it most! 
https://www.youtube.com/watch?v=yR-24GIAlBQ
#MAGA

One of the hypotheses is that animal spirits have been unleashed.
A milder hypothesis is that there has been a renewed oomph.
https://fred.stlouisfed.org/series/PNFI
But, as far as deregulation, the jury may still be out as the deregulation "environment" has pushed sentiment levels but IMO it remains to be seen how this will result in positive fundamental changes.

It is pretty clear that small business optimism is on the rise but breaks from previous trends are not so clear.
https://www.nfib.com/surveys/small-business-economic-trends/

Relevant reference:
https://www.forbes.com/sites/susandudley/2018/08/14/documenting-deregulation/#2ee198061d13
Deregulation is a great idea but I would say that blanket deregulation is not the way to go. When compared, the US GDP ratio over regulatory burden is alreadynear or at the top. It's possible but one needs to repeal, replace AND retain.

Yes, maybe a little early to declare victory here , but this was an anecdotal clip that made sense to me.

So much of the previous administrations regulations just flat out strangled business and job growth. Certainly, the EPA was totally out of control, killing
jobs and economic growth in pursuit of Obama's climate change policy. Was good to see Trump take an axe to the EPA and dismantle policies that
were designed over regulate. The Clean Power Plan was on shaky legal grounds and likely to eventually be struct down once the courts caught up with Obama.

These regulations raised energy costs for millions of Americans, killed jobs and economic growth. Now we have needed pipelines being built, drilling in Alaska,
coal industry coming back to life and making cars again.

This is just a sample of the damage that over zealous regulation does to economic growth.  So Value2's clip makes total sense to me.
This is how we might have a chance of attaining 3-4% economic growth that benefits millions of American's.
Title: Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
Post by: Cigarbutt on October 14, 2018, 07:49:28 AM
Yes, maybe a little early to declare victory here , but this was an anecdotal clip that made sense to me.
...
This is just a sample of the damage that over zealous regulation does to economic growth.  So Value2's clip makes total sense to me.
This is how we might have a chance of attaining 3-4% economic growth that benefits millions of American's.

Just in case you're not familiar with Mr O'Leary, he's quite a character.

He is controversial, tends to be blunt and his writing style is not for every one but I feel that you may like:
https://www.amazon.com/Cold-Hard-Truth-Business-Money/dp/0385671741
He has been a very successful businessman but his political talents have not been recognized on this side of the border.
He has three priorities in life: money.