Author Topic: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum  (Read 76091 times)

Cigarbutt

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Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
« Reply #350 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?


Liberty

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Cardboard

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Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
« Reply #353 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.

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Cardboard

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Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
« Reply #354 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.

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rb

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Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
« Reply #355 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!

Cardboard

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Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
« Reply #356 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.

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rb

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Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
« Reply #357 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.

JoJo1

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Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
« Reply #358 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.


rb

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Re: Mr. Trump to Impose Stiff Tariffs on Steel and Aluminum
« Reply #359 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.