Author Topic: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum  (Read 67810 times)

John Hjorth

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Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
« on: March 01, 2018, 10:55:05 AM »
New York Times [2018.03.01]: Trump to Impose Stiff Tariffs on Steel and Aluminium.

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.
« Last Edit: March 01, 2018, 10:56:46 AM by John Hjorth »
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Sharad

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Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
« Reply #1 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.
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EliG

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Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
« Reply #2 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.

Sharad

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Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
« Reply #3 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.
"If we are not able to ask skeptical questions, to interrogate those who tell us that something is true, to be skeptical of those in authority, then we are up for grabs for the next charlatan - political or religious - who comes ambling along."
- Carl Sagan

EliG

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Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
« Reply #4 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.

Liberty

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Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
« Reply #5 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.
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EliG

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Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
« Reply #6 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/

EliG

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Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
« Reply #7 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.

John Hjorth

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Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
« Reply #8 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!
”In the race of excellence … there is no finish line.”
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EliG

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