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Author Topic: Your Beer is About to Get More Expensive
airforce
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And you can thank President Trump for that. Jim McGreevey, CEO of the Beer Institute, says that Trump's 10% tariff on imported aluminum will cost the beer industry $347.7 million. He estimates those added costs will trigger more than 20,000 job losses.

And the beer industry will not be the only ones hit. Anything made out of aluminum will now cost more.

And that 25% tariff on imported steel? Cars, trucks, pipelines, anything made of steel (that's a lot of things) will suddenly become more expensive.

This is not hypothetical. Trump recently imposed tariffs on washing machines and solar panels. You can ask ConSigCor what happened to the prices of solar panels.

If you make steel or aluminum, you're going to love these tariffs. And well you should. The rest of us are now subsidizing your paycheck.

Onward and upward,
airforce

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ConSigCor
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Beer in a can tastes like shit anyway. Same goes for soft drinks. If it isn't wrapped in glass I do without.

America was stupid for ever subsidizing Chinese metal in the first place. I would rather pay more for something made here.

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"The time for war has not yet come, but it will come and that soon, and when it does come, my advice is to draw the sword and throw away the scabbard." Gen. T.J. Jackson, March 1861

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airforce
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That's another thing - most of the imported aluminum comes from Canada, not China. What is our beef with Canada?

Onward and upward,
airforce

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The Answer
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quote:
Originally posted by airforce:
That's another thing - most of the imported aluminum comes from Canada, not China. What is our beef with Canada?

Onward and upward,
airforce

My beef with Canadians began when they started speaking English. They (really, Great Britain) booted out my French ancestors a long time ago, and those folks had to go way the hell out of their way, thousands and thousands of miles through wilderness or thousands and thousands of miles on a ship, to get to French soil, at the time in Louisiana. I guess I get to be American for that, but damn, what a dick move.

I digress.

I'm okay with imports duties by itself. There used to be a time when the federal government was funded that way, not through individual taxation. But the combination sucks.

Import taxes = prices of goods go up. That means the poor people in this country have to spend more tomorrow to get the same thing they got for cheaper yesterday. The taxes will all be passed on to the consumer, as per market dynamics.

A side point. Aluminum is one of the, if not the, cheapest types of recyclable material. Glass is much more expensive to recycle. Plastic is also much more expensive to recycle. You make aluminum more expensive, bottlers/canners will switch to other materials, which are more expensive on the back end and fill up dumps quicker.

--------------------
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airforce
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quote:
Originally posted by The Answer:
...I'm okay with imports duties by itself. There used to be a time when the federal government was funded that way, not through individual taxation. But the combination sucks....

Agreed. If the government were cut down to its constitutional size, I would have little problem with tariffs and excise taxes to fund the government. But these tariffs are solely to subsidize the steel and aluminum industry - at the expense of the rest of us. No one is even trying to make the claim that this will help fund the government.

Onward and upward,
airforce

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Onward and upward,
airforce

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airforce
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The trade war has just begun. Not many people alive today remember it, but this is precisely how the Great Depression began.

quote:
Thus the new tariff law has resulted in this: The protected industry now makes a high profit to which it is not justly entitled. The average French citizen has been duped out of five francs by his government, and must therefore do without the article or service he would have bought with it. One segment of the economy has profited at the expense of many others. True enough, because of the artificial price increases, new jobs have been created in the protected industry. But what is not seen is the fact that the extra money now spent for iron must necessarily result in reduced spending for other products and services, and thus fewer jobs in those industries. And worst of all, the people have been encouraged to think that robbery is moral if it is legal.
~ Frédéric Bastiat

Onward and upward,
airforce

[ 03-02-2018, 01:43 PM: Message edited by: airforce ]

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ConSigCor
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Answer, I used to know a bunch of Cajuns from the swamp country. If you wanted a good cussing, all you had to do was mention Canada.

On the metal issue: America used to be awash in iron and steel. Foundries were everywhere. I had family that worked in the steel mills in Ohio until they closed down because they could no longer compete with foreign scrap metal. Many of those mills could be fired up again. We just need to get off our asses and do it.

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"The time for war has not yet come, but it will come and that soon, and when it does come, my advice is to draw the sword and throw away the scabbard." Gen. T.J. Jackson, March 1861

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The Answer
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quote:
Originally posted by ConSigCor:
Answer, I used to know a bunch of Cajuns from the swamp country. If you wanted a good cussing, all you had to do was mention Canada.

On the metal issue: America used to be awash in iron and steel. Foundries were everywhere. I had family that worked in the steel mills in Ohio until they closed down because they could no longer compete with foreign scrap metal. Many of those mills could be fired up again. We just need to get off our asses and do it.

My ancestor is Charles de Latour.

Charles de Latour

Pretty tough setup. My blood has been on this continent since 1610. None of my grandparents' grandparents' immigrated. The last 400 years of my family, that which is documented, is here, in America. My mother's side is unclear because they were confederates during the War, and the courthouses and churches that held family records were burned to the ground. But DNA testing says they were original settlers in the south, namely in the states of Virginia and Georgia.

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Semper Vigilantes, Numquam Exspectantes

Always Watching, Never Waiting

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ConSigCor
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Answer, the guys I knew pronounced their last names 'De Nay' and 'Do Toe'. Have no idea now how they spelled it. They worked the oil rigs out in the gulf back when the industry was booming.

Your history is somewhat like mine. Family has been here since 1623. One of them was one of 4 men who settled a place that would later be called Salem Mass. My direct Welsh line comes from Virginia near Martinsville.

Phil Sheridan tried to burn the Shenandoah valley to the ground in 64. Was your family up in that area?

[ 03-02-2018, 04:02 PM: Message edited by: ConSigCor ]

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"The time for war has not yet come, but it will come and that soon, and when it does come, my advice is to draw the sword and throw away the scabbard." Gen. T.J. Jackson, March 1861

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ConSigCor
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Ross Warns Of “Some Casualties” In Trump Trade War But Navarro Expects “No Retaliation”

“All this hysteria is a lot ado about nothing.”

| Zero Hedge - March 3, 2018

Following widespread ‘panic’ responses to President Trump’s new trade tariffs plan, several administration officials have been dispatched to change the narrative from ‘the sky is falling’ to ‘America first’.

On the heels of former Nucor CEO Dan DiMicco’s comments that “China is a cheater,” and that those arguing against these tariffs and expecting higher costs “don’t know shit,” which followed Larry Kudlow’s comments that “tariffs are prosperity killers,” Commerce Secretary Wilbur Ross appeared on CNBC and at the same National Trade Council Director Peter Navarro (who some pinpoint as starting this push for a trade war in Trump’s mind) appeared on Fox Business.

Ross and Navarro had similar messages, summed up by Ross as “all this hysteria is a lot ado about nothing.”

Commerce Secretary Wilbur Ross told CNBC on Friday that President Donald Trump’s tariffs are “no big deal.” During an appearance on “Squawk on the Street,” Ross said the tariffs will have a “broad” but “trivial” impact on prices.

Ross used a can of Campbell Soup to stress his point about what he calls insignificant price increase from Trump’s tariffs.

“In a can of Campbell Soup, there are about 2.6 pennies worth of steel. So if that goes up by 25 percent, that’s about six-tenths of one cent on the price on a can of Campbell Soup,” Ross argued. “I just bought this can today at a 7-Eleven … and it priced at a $1.99. Who in the world is going to be too bothered?“

The Commerce Secretary added that there’s been “tremendous over-reaction in markets.”

“Economic strength is military strength,” Ross said, stressing the president is right on that, and noted that countries threatening retaliation would need to find substitutes if they cut of U.S. imports, which could actually hurt their economies..

“In any war there may be a few causalities and that may just be the nature of the beast.”

Ultimately, Ross concluded, it’s the president’s decision and everyone should “rally around” it.

Navarro was a little more boisterous, as is his way, in an interview on Fox Business.

Reiterating Ross’ comments that the price effects would be minimal, Navarro told Maria Bartiromo on Fox Business’ “Mornings with Maria.”

The price of a six-pack of beer will rise by about 1 cent, and car manufactures will pass along a $45 increase per passenger car,according to Navarro.

“This whole idea that there’s a big downstream effect – it’s just part of the fake news that’s going to be put out to oppose these tariffs,” Navarro said.

“A penny for a six pack of beer—that’s worth it to put Americans back to work in two industries that we need.”

Despite concern over international companies imposing their own sanctions and raising prices for U.S. consumers, Navarro is not worried about retaliation.

“I don’t believe any country in the world is going to retaliate because they know we are the biggest and most lucrative market in the world and they know they are cheating us and all we’re doing is standing up for ourselves.”

And then they traded places with Wilbur Ross heading over to Fox Business and telling them that the recent US stock market drop was not just due to Trump’s tariff announcement…

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"The time for war has not yet come, but it will come and that soon, and when it does come, my advice is to draw the sword and throw away the scabbard." Gen. T.J. Jackson, March 1861

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airforce
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A penny more for a beer is not going to affect me, particularly since I don't drink anymore anyway. But that really isn't the point. We are being forced to subsidize industries that can't compete with the foreign competition, at the expense of other industries that can. I have no problem with opening up a steel mill; my problem is being forced to.

What no one is talking about, is that tariffs overall cost jobs. The beer industry will lose $347 million; how eager will a beer company be to invest in new equipment - especially since that equipment will now cost more as well. And the same for the soda industry, or airlines, or taxi companies, or any other industry that uses aluminum or steel.

From Henry Hazlitt, in Chapter 11 of Economics in One Lesson.

quote:
...Now let us look at the matter the other way round, and see the effect of imposing a tariff in the first place. Suppose that there had been no tariff on foreign knit goods, that Americans were accustomed to buying foreign sweaters without duty, and that the argument were then put forward that we could bring a sweater industry into existence by imposing a duty of $5 on sweaters.

There would be nothing logically wrong with this argument so far as it went. The cost of British sweaters to the American consumer might thereby be forced so high that American manufacturers would find it profitable to enter the sweater business. But American consumers would be forced to subsidize this industry. On every American sweater they bought they would be forced in effect to pay a tax of $5 which would be collected from them in a higher price by the new sweater industry.

Americans would be employed in a sweater industry who had not previously been employed in a sweater industry. That much is true. But there would be no net addition to the country’s industry or the country’s employment. Because the American consumer had to pay $5 more for the same quality of sweater he would have just that much less left over to buy anything else. He would have to reduce his expenditures by $5 somewhere else. In order that one industry might grow or come into existence, a hundred other industries would have to shrink. In order that 20,000 persons might be employed in a sweater industry, 20,000 fewer persons would be employed elsewhere.

But the new industry would be visible. The number of its employees,the capital invested in it, the market value of its product in terms of dollars, could be easily counted. The neighbors could see the sweater workers going to and from the factory every day. The results would be palpable and direct. But the shrinkage of a hundred other industries, the loss of 20,000 other jobs somewhere else, would not be so easily noticed. It would be impossible for even the cleverest statistician to know precisely what the incidence of the loss of other jobs had been—precisely how many men and women had been laid off from each particular industry, precisely how much business each particular industry had lost—because consumers had to pay more for their sweaters. For a loss spread among all the other productive activities of the country would be comparatively minute for each. It would be impossible for anyone to know precisely how each consumer would have spent his extra $5 if he had been allowed to retain it. The overwhelming majority of the people, therefore, would probably suffer from the optical illusion that the new industry had cost us nothing.

It is important to notice that the new tariff on sweaters would not raise American wages. To be sure, it would enable Americans to work in the sweater industry at approximately the average level of American wages (for workers of their skill), instead of having to compete in that industry at the British level of wages. But there would be no increase of American wages in general as a result of the duty; for, as we have seen, there would be no net increase in the number of jobs provided, no net increase in the demand for goods, and no increase in labor productivity. Labor productivity would, in fact, be reduced as a result of the tariff.

And this brings us to the real effect of a tariff wall. It is not merely that all its visible gains are offset by less obvious but no less real losses. It results, in fact, in a net loss to the country. For contrary to centuries of interested propaganda and disinterested confusion, the tariff reduces the American level of wages. Let us observe more clearly how it does this. We have seen that the added amount which consumers pay for a tariff-protected article leaves them just that much less with which to buy all other articles....

quote:
The number of jobs in the steel is exceeded many times over in industries making steel products, from automobiles to oil rigs, refrigerators, locomotives, etc., etc. Tariffs that save jobs in the steel industry mean higher steel prices, which in turn means fewer sales of American steel products around the world and losses of far more jobs than are saved.

~ Thomas Sowell

quote:
The primary reason for a tariff is that it enables the exploitation of the domestic consumer by a process indistinguishable from sheer robbery.

~ Albert Jay Nock

Onward and upward,
airforce

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ConSigCor
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Trump: Tariffs will ‘come off’ if Mexico, Canada sign ‘new & fair’ NAFTA deal

By Mallory Shelbourne



Trump: Tariffs will ‘come off’ if Mexico, Canada sign ‘new & fair’ NAFTA deal
© Getty Images

President Trump said Monday that tariffs he announced on steel and aluminum imports will "come off" Mexico and Canada if there is “a new & fair” North American Free Trade Agreement (NAFTA).

“We have large trade deficits with Mexico and Canada. NAFTA, which is under renegotiation right now, has been a bad deal for U.S.A.,” Trump wrote on Twitter.

“Massive relocation of companies & jobs. Tariffs on Steel and Aluminum will only come off if new & fair NAFTA agreement is signed.”

We have large trade deficits with Mexico and Canada. NAFTA, which is under renegotiation right now, has been a bad deal for U.S.A. Massive relocation of companies & jobs. Tariffs on Steel and Aluminum will only come off if new & fair NAFTA agreement is signed. Also, Canada must..
— Donald J. Trump (@realDonaldTrump) March 5, 2018

Trump last week announced a plan to impose a 25 percent tariff on steel imports and a 10 percent tariff on aluminum, a move that shook both Washington, D.C. and the global markets.

The president, who railed against trade deals like NAFTA during his campaign in 2016, also slammed Canada on Monday for how the country treats “our farmers” and said Mexico allows drugs to continue “pouring into the U.S.”

“Also, Canada must.....treat our farmers much better. Highly restrictive,” Trump said. “Mexico must do much more on stopping drugs from pouring into the U.S. They have not done what needs to be done. Millions of people addicted and dying.”

...treat our farmers much better. Highly restrictive. Mexico must do much more on stopping drugs from pouring into the U.S. They have not done what needs to be done. Millions of people addicted and dying.
— Donald J. Trump (@realDonaldTrump) March 5, 2018

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"The time for war has not yet come, but it will come and that soon, and when it does come, my advice is to draw the sword and throw away the scabbard." Gen. T.J. Jackson, March 1861

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airforce
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Steel tariffs will help China, not hurt them.

quote:
President Donald Trump apparently believes that "trade wars are good, and easy to win."

They are neither. And, in fact, Trump's plan to slap a 25 percent tariff on all steel imports—something the president is considering as a way to help American steel manufacturers by protecting them from international competition—might indirectly boost China's steel industry while punishing some of America's top allies and trading partners, along with the very American workers the president supposedly wants to help. If the tariffs trigger a trade war, something analysts say could happen, then China probably stands to gain further.

Trump loves to talk about how China has been "killing" U.S. manufacturing, and to blame China for dumping cheap steel into the American market. In reality, the U.S. imported $976 million worth of steel from China in 2017 (up from $906 million the year before), which means China accounted for barely more than 3 percent of all steel imports.

The United States imported far more steel from places like Japan ($1.65 billion), Brazil ($2.44 billion), and South Korea ($2.78 billion) last year. The largest exporter of steel to the United States is Canada, which sent more than 5.6 million metric tons of the stuff worth more than $5.1 billion across the border during 2017.

The new tariffs will be applied to all steel imports, which means close allies like Japan, Korea, and Canada will be hurt by the tariffs more than Trump's favored enemy of China.

"Hitting China and Canada with the same tariff doesn't penalize China relative to anyone else," says Dan Ikenson, director of the Center for Trade Policy Studies at the Cato Institute, a libertarian think tank. "That doesn't, and shouldn't, sit well with exporters from countries that have done nothing wrong."

Think about it like this. Trump's tariff will build a protectionist wall around American steel manufacturers, but it won't entirely stop the flow of foreign steel into the country. Because the wall will be the same height for all imports, the cheaper Chinese steel that Trump likes to vilify will still have an advantage over all other sources.

Meanwhile, American businesses that rely on steel imports will have to pay higher prices, which will be passed along to consumers. All steel-made products will be more expensive if the tariffs are imposed—and the same is true for aluminum products if Trump follows through with his threat to impose a 10 percent tariff on them. That's part of the reason why the stock market dropped 420 points immediately after Trump's surprise announcement of the tariff proposal last week. As Matt Welch explained on Friday, Barack Obama's tariffs on Chinese tires cost American consumers an estimated $1.1 billion in return for preserving 1,200 jobs in the domestic tire industry, while George W. Bush's duties on foreign steel destroyed some 200,000 jobs in other sectors, exceeding the total employment of the American steel industry.

Michael Froman, former United States trade representative during the Obama administration, tells Vox that there's little doubt China is engaged in some unfair trading when it comes to steel and aluminum. The problem, though, is that Trump's tariff proposal "does very little, if anything, to affect China."

"Instead, we're hitting our closest allies and partners with a set of tariffs under the justification of national security," he says.

Those same concerns are causing some Republicans in Congress to challenge the president's proposal. On Sunday, Sen. Lindsey Graham (R-S.C.) said "China wins" if tariffs increase prices for American consumers or create conflict between the United States and its major trading partners.

"You're punishing the American consumer and our allies. You're making a huge mistake," Graham said on CBS' Face The Nation. "Go after China—not the rest of the world."

That's really just the start. China could respond to the Trump tariffs by imposing their own import taxes on American-made products like soy beans, airplanes, or computer technology. If China doesn't respond directly, other countries might. A trade war that draws new protectionist tariffs from the European Union aimed at American exports would harm both trading partners, and indirectly boost China.

Already, European Commission President Jean-Claude Junker has promised to "not sit idly while our industry is hit with unfair measures that put thousands of European jobs at risk," and Chrystia Freeland, Canada's foreign minister, has threatened to take "responsive measures to defend its trade interests and workers."

If the trade war escalates to the extend that current trade agreements are jeopardized, it could drive a wedge between the United States and it's major allies. In that environment, Ikenson warns, China could get away with more rule violations due to the lack of "a coherent, unified response."

In other words, Trump's tariffs and the trade wars they could initiate might indeed be "good and easy to win," but not for the United States.

Onward and upward,
airforce

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ConSigCor
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Trump tariffs a necessary opening move

4 elements for 'rebalancing' American policy

Ian Fletcher


The tariffs on foreign steel and aluminum President Trump announced Thursday are a necessary opening move in a game that will take years to play out, but which America cannot safely delay any longer.

President Trump is absolutely correct that this is a national security issue. A nation simply cannot remain a superpower without producing industrial metals like steel and aluminum. And more tellingly, the United States cannot count on the reliability of foreign supplies, or even accessing them, in wartime.

Opponents of the tariffs have characterized it as the opening salvo in a trade war. But unless the world’s decision-makers become radically more stupid overnight, it will not spiral uncontrollably into a global trade collapse.

History does show, however, that trade conflicts are often ongoing, even under supposedly free-trade regimes. The steel and aluminum tariffs dispute will likely differ only in scale from previous conflicts – like those with Japan in the 1980s that eventually led to the revaluation of the yen in the Plaza Accord.

President Trump’s imposition of tariffs is definitely a jolt to a complacent global trading system. The current charade of international free trade is underwritten by the willingness of the United States to absorb the net surpluses of all the world’s mercantilist powers, to the tune of half a trillion dollars a year. This is destined to fall apart at some point, and better sooner than later.

Will foreign nations retaliate? For sure, and there will be reverberations for years to come as the global trading system works out its trading imbalances – and not just in the U.S. – in a diverse range of goods. This situation will take years of moves and counter-moves to play itself out.

For America to rebalance trade, our strategy needs to rely on four elements:

Use of tariffs on foreign nations to force them to open their markets to our goods.
Revaluation of the dollar, by means of policies like a proposed Market Access Charge, to a trade-balancing level.
Use of tariffs on foreign nations to relocate back to the U.S. the production of more of the goods Americans consume.
An industrial policy that not only focuses on trade but also includes government-funded development of the pre-commercial stages of future technologies – a necessary effort to position America as a nation with high-value goods to export.

Relying on any one of these strategies alone would be insufficient, though a better start than doing nothing. For example, the U.S. could eliminate the trade deficit solely by driving down the value of the dollar. But we do not want to simply sell low-value commodities while ignoring the chance to rebuild job-producing supply chains. A better approach for an America First trade and economic strategy is to utilize all four elements in concert. Recent experience has shown that merely out-innovating the world technologically while not securing our own and foreign markets for the products unfortunately results in those industries moving offshore.

The real test of the Trump administration on this issue is going to be in the follow-through. I believe that President Trump intends to continue, that this is not simply a flashy gesture intended to win votes or satisfy the president’s own emotional impulses. But in the bigger picture, America’s future prosperity depends on such a robust approach to correcting failed trade policies.

Ian Fletcher was Senior Economist of the Coalition for a Prosperous America, a nationwide grass-roots organization dedicated to fixing America's trade policies and comprising representatives from business, agriculture, and labor. He was previously Research Fellow at the U.S. Business and Industry Council, a Washington think tank founded in 1933, and before that, an economist in private practice serving mainly hedge funds and private equity firms. Educated at Columbia University and the University of Chicago, he lives in San Francisco. He is the author of "Free Trade Doesn't Work: What Should Replace It and Why."

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"The time for war has not yet come, but it will come and that soon, and when it does come, my advice is to draw the sword and throw away the scabbard." Gen. T.J. Jackson, March 1861

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Trump on trade: Putting Americans first

It is time to try the approach that originally made our country great'

Andy Schlafly

When President Trump announced he would protect American jobs by imposing tariffs on foreign-made steel and aluminum, naysayers of both parties rushed to the nearest microphone or TV camera. Pundits and politicians alike pretended to be “shocked, shocked” that Trump meant what he said as a candidate and that he actually means to deliver what he promised during the campaign.

The Swamp, in short, is not happy. But cheers rose from the manufacturing belt that runs through the states that put Trump in the White House: Pennsylvania, Ohio, Michigan, Indiana, Wisconsin and Iowa.

“This is a good thing for the steel industry and for our country,” said Tim Timken, the fifth-generation leader of TimkenSteel, which has 3,000 employees in Ohio. “We’re standing up to our foreign competition and essentially saying enough is enough,” he added.

While foreign lobbyists warned of a new “trade war” in which other countries retaliate against the United States, U.S. Steel CEO David Burritt pointed out, “We are, and have been, in a trade war for decades. Countries which have economically prospered by creating our current trade imbalance will face repercussions to their own economies if they choose the path of retaliation.”

Peter Navarro, director of the White House Office of Trade and Manufacturing Policy, debunked the notion that the United States could lose a trade war with Europe or Asia. “We are the most lucrative and biggest market in the world. We have the lowest tariffs in the world, we have the lowest non-tariff barriers, we are the free-tradingest nation in the world.”

“And what do we get for that?” Navarro asked. “We get every year a half-trillion-dollar trade deficit that transfers our wealth to other countries and basically offshores our jobs and our factories. All we are asking for is fair and reciprocal trade.”

The rest of the world wants unlimited access to the American consumer without complying with American regulations and without paying American taxes. “Under my administration,” Trump boasted in his speech to CPAC last month, “the era of economic surrender is over.”

“We’re renegotiating trade deals that are so bad, whether it’s NAFTA, whether it’s the World Trade Organization, which created China. China has been like a rocket ship ever since, and last year we had almost a $500 billion trade deficit with China” – money that finances the growing Chinese military.

Critics are exaggerating the cost to consumers by adding a tax to foreign-made steel and aluminum. Commerce Secretary Wilbur Ross ran the numbers and found that the aluminum tariff would add just six-tenths of a cent to the cost of a soup or beer can, while the steel tariff would add about $175 to the cost of a $35,000 car.

Tariffs are much like the out-of-state tuition state colleges charge students whose families have not supported the college through taxes. Most state colleges require out-of-state students to pay more, and most people fully support that sensible requirement.

Similarly, tariffs help level the playing field between offshore manufacturers that escape the extra burdens and costs of operating a business in America and providing jobs to Americans. Requiring those foreign companies to pay more for the privilege of selling to American consumers is perfectly logical given how the foreigners have not been paying American taxes or complying with our regulations.

The resistance to tariffs comes from the same never-Trumpers who assured us that Trump could never be nominated or elected. Peter Navarro noted that nearly all the other presidential candidates opposed Trump on trade, but “guess what? He beat them.”

Thirty years ago, when Donald Trump was in his early 40s, his views on trade were much the same as they are now. He told Larry King that he was “tired of watching other people ripping off the United States.” He told Oprah, “I’d make our allies pay their fair share.”

Trump told Letterman that nations such as Japan have “totally taken advantage of the country. I’m talking about the [trade] deficits. They talk about free trade [but] they dump the cars and everything else.”

Democratic Sen. Joe Manchin, who supports the Trump tariffs, observed that “Free trade hasn’t worked well for West Virginia.” Maybe that explains why Trump carried West Virginia with 69 percent of the popular vote, a whopping 42-point margin over Hillary Clinton in that formerly Democratic state.

Just as entrenched politicians in D.C. have blocked Trump’s efforts to build a border wall, they also protest too much at his effort to impose a few tariffs. Yet the approach of a tariff-less society has been a catastrophic failure for the American worker, so it is time to try the approach that originally made our country great.

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"The time for war has not yet come, but it will come and that soon, and when it does come, my advice is to draw the sword and throw away the scabbard." Gen. T.J. Jackson, March 1861

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"Reciprocal" trade defies basic economics and common sense. A new op-ed at the Cato Institute.

quote:
Despite the immense benefits that Americans have derived from free trade and globalization, as well as the far-reaching costs of protectionism, a “reciprocity” argument—that foreign protectionism against U.S. exports justifies current or even new U.S. protectionism against foreign imports—persists. Indeed, one of the primary justifications for President Trump’s proposed tariffs on steel and aluminum, as well as many other Trump administration trade policy proposals, rests on the notion that it is only “fair” that foreign trade barriers—low or high—be matched by America’s trade barriers. Leaving aside these arguments’ basic factual and historical errors (indeed, most countries’ average tariffs on U.S. iron and steel exports range between 0% and 5%—far less than Trump’s proposed 25%), the President’s reciprocity demands still suffer from many flaws:

1. Reciprocity illogically demands the United States injure its own citizens because other countries injure theirs. There is overwhelming evidence that protectionism distorts markets and reduces economic welfare. For example, last year I documented “a vast repository of academic analyses and contemporaneous reporting that show that American trade protectionism—even in the periods most often cited as ‘successes’—not only has imposed immense economic costs on American consumers and the broader economy, but also has failed to achieve its primary policy aims and fostered political dysfunction along the way.” President Trump’s own Economic Report concludes that “trade and economic growth are strongly and positively correlated…. a 1-percentage-point increase in the ratio of trade to GDP raises per capita income by between 0.5 and 2 percent.” In terms of specific products, a 2006 International Trade Administration study of U.S. sugar trade barriers found that “[f]or each one sugar growing and harvesting job saved through high U.S. sugar prices, nearly three confectionery manufacturing jobs are lost.” The study also found that sugar trade barriers had caused many sugar-using companies to close or move to foreign markets (e.g., Canada and Mexico) where sugar prices were lower. A 2013 Iowa State University report found that getting rid of the sugar program would save consumers up to $3.5 billion per year. The list goes on and on and on. It therefore defies basic common sense to argue that, just because a foreign country harms its citizens through protectionist policies, the United States should do the same.

2. Reciprocity cedes control of U.S. economic policy to other counties. The reciprocity argument maintains that the United States should not unilaterally dismantle protectionist programs while other countries maintain similar (bad) policies, but this approach cedes U.S. control over its own economic decisions to countries like China or the European Union. Yet the United States should remain free to improve its economy, without the need to wait for other countries to do likewise. It’s particularly odd to hear such an argument from “America First” proponents who decry “globalist” policies that supposedly cede control of U.S. “sovereignty” to foreign powers.

3. Reciprocity undermines reform—including through reciprocal trade agreements. The reciprocity approach also would likely prohibit trade reform in the United States—contrary to popular belief, the United States still maintains numerous tariff and non-tariff barriers to trade—or elsewhere. The WTO’s “Doha Round” of global trade negotiations, meant to update and expand the body’s trade-liberalizing agreements, spent over a decade trying, and failing, to produce an agreement among Members to reduce their trade barriers and subsidies. Among the reasons for this stasis was an unwillingness of any WTO Member (including the United States) to expend the political capital necessary to lead the way—a classic “prisoners’ dilemma.” Reciprocity promises the same inaction in the future—thus why many U.S. politicians and industries advocating import protection argue so loudly for reciprocity! Furthermore, new tariff “reciprocity” threats from the Trump administration are threatening to unravel U.S. trade agreements, like NAFTA, that actually have created reciprocal, free trade regimes—to the great benefit of all parties.

4. Reciprocity ignores the many tools that the United States has to address other countries’ protectionism without harming its own citizens. The reciprocity argument also ignores the fact that the United States could unilaterally eliminate many of its trade barriers and still have ample legal tools at its disposal to encourage others’ to follow suit. WTO negotiations, for either all Members or a select group of them (“plurilateral” talks), could introduce new, binding caps on tariff and non-tariff barriers, and the United States would, unlike the current situation, be in a superior moral and diplomatic position to demand them. The United States could also seek to renegotiate its own tariffs through the procedures set forth in GATT Article XXVIII, which would simply require it to lower U.S. tariffs on other products (or allow other Members to raise some of their own). Current and future U.S. free trade agreements could provide another venue for reforms. Finally, WTO and FTA dispute settlement disciplines permit (1) consultations with a foreign government over many of its trade-distorting measures; and (2) if such consultations fail, investigation of the alleged protectionism and eventual imposition of remedial U.S. tariffs on imports from the offending government. WTO dispute settlement has been particularly effective in this regard, as the President’s own 2018 Economic Report documents.

There is no doubt that some (but not all) nations impose higher barriers to imports of U.S. goods and services than the United States does in return. This is not, however, a weakness in the current system but rather a testament to sound American economic policy, which has generated undeniable benefits for the vast majority of Americans. In short, the United States should not start impoverishing its citizens because other nations lack the economic insight or political strength to stop impoverishing theirs. To do so would not only ignore common sense and basic economics, but also lead to higher trade barriers, fewer reforms and therefore a lower standard of living for us all.

Onward and upward,
airforce

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ConSigCor
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US Steel Reopens Plant, Brings Back 500 Jobs

Adan Salazar

US Steel CEO David Burritt credited President Trump’s tariffs for prompting the reopening of an idled plant in Illinois.

“This feels like the beginning of a renaissance for us,” Burritt told CNBC Wednesday.

“We’re finally doing the right thing for American workers after decades of unfairly traded steel into the United States.”

The reopen will take four months, during which the plant will restart two blast furnaces and steelmaking facilities bringing 500 jobs back to the area.

“We’re really excited to be able to tell our employees in the community in Granite City, Illinois, that we will be calling back 500 employees,” Burritt said.

In 2015 US Steel announced it would shutter the plant indefinitely.

A company spokeswoman at the time blamed “imports” and “unfair trade,” among other issues, as reasons for the closure.

“If you don’t have customers here to sell to and you can’t make money, you have to shut them down,” Burritt said.

The former Caterpillar CFO claimed US Steel has seen its market cap plummet in recent years, with the number of operational plants dropping from 15 to seven.

“Here we are working hard everyday trying to get the thing back on track and we finally get some good news because we got some courageous leadership in the administration,” Burritt said.

“Big, big thanks to Commerce Secretary [Wilbur] Ross and certainly President Trump for taking the leadership and righting some wrongs. It’s really important that we get this right, and now it’s finally happening.”

President Trump is expected to sign off on tariffs on steel and aluminum imports Thursday, as the media claims the decision will spark a trade war.

Press Secretary Sarah Sanders said at a White House press briefing Wednesday the Trump administration could offer deals to Canada and Mexico.

“We expect that the president will sign something by the end of the week,” Sanders said, adding “there are potential carve-outs for Mexico and Canada based on national security and possibly other countries as well based on that process.”

On Monday Trump reiterated his commitment to reworking the NAFTA agreement to get a better deal for the US, while adding, “To protect our country we must protect American Steel!”

We have large trade deficits with Mexico and Canada. NAFTA, which is under renegotiation right now, has been a bad deal for U.S.A. Massive relocation of companies & jobs. Tariffs on Steel and Aluminum will only come off if new & fair NAFTA agreement is signed. Also, Canada must..

— Donald J. Trump (@realDonaldTrump) March 5, 2018

…treat our farmers much better. Highly restrictive. Mexico must do much more on stopping drugs from pouring into the U.S. They have not done what needs to be done. Millions of people addicted and dying.

— Donald J. Trump (@realDonaldTrump) March 5, 2018

To protect our Country we must protect American Steel! #AMERICA FIRST

— Donald J. Trump (@realDonaldTrump) March 5, 2018


Trump schedules 3:30pm ET meeting on steel and aluminum, as market watches for signs of tariff exemptions for Canada and Mexico

Fred Imbert | Mike Calia


President Donald Trump said Thursday morning there will be a meeting at the White House regarding the U.S. steel and aluminum industries.

The announcement, which came in a tweet, comes as markets watch for more concrete signs that Mexico and Canada would be exempted from the aluminum and steel tariffs Trump unveiled in a surprise announcement a week ago.

Trump is considering a 30-day exemption for Canada and Mexico, which would be tied to negotiations on the North American Free Trade Agreement, two sources familiar with the planning told CNBC. The president has repeatedly threatened to pull out of the 1994 pact if negotiators do not figure out a way to overhaul it.

Thursday morning, Trump tweeted: "Looking forward to 3:30 P.M. meeting today at the White House. We have to protect & build our Steel and Aluminum Industries while at the same time showing great flexibility and cooperation toward those that are real friends and treat us fairly on both trade and the military."

The tweet appears to be signalling that an announcement regarding proposed tariffs on steel and aluminum imports would be coming. Meanwhile, NBC News, citing a White House official, reported that the details are still being worked out – and that the president could sign a largely "symbolic" proclamation.

Upon Trump's announcement last week, investors and lawmakers feared that the tariffs could be a catalyst for a trade war.

Those fears were eased somewhat after White House press secretary Sarah Huckabee Sanders said Wednesday that Canada and Mexico — two key U.S. trade partners — could be exempt from the tariffs.

Trump is expected to formally sign off on the tariffs Thursday or Friday, although some reports said the announcement could have been delayed until next week.

[ 03-08-2018, 07:23 AM: Message edited by: ConSigCor ]

--------------------
"The time for war has not yet come, but it will come and that soon, and when it does come, my advice is to draw the sword and throw away the scabbard." Gen. T.J. Jackson, March 1861

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If I were the CEO of U.S. Steel, I'd be ecstatic too. The steel industry wins. Every other industry loses. How is this a win?

GM and Ford will suffer a $1 billion hit when tariffs are enacted.

Onward and upward,
airforce

[ 03-08-2018, 09:23 AM: Message edited by: airforce ]

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That tariff thing is official. Canada and Mexico are exempt. Sigh.

Onward and upward,
airforce

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REPUBLIC STEEL RESTARTING LORAIN FACILITY, ADDING 1,000+ JOBS AFTER STEEL TARIFFS SIGNED BY TRUMP

Restarting the Lorain facility would provide more than a million tons of new production capacity
Author: WKYC

In response to President Trump signing proclamations Thursday imposing tariffs on steel and aluminum imports, Republic Steel has announced plans to restart its Lorain facility.

The move would bring back more than 1,000 jobs to the Lorain plant, which will be positioned to restart its idled electric arc furnace, casters, and rolling mills on short notice.

Republic currently has open capacity at its Canton melt shop. Restarting the Lorain facility would provide more than a million tons of new production capacity. The company anticipates tht it would take a few months to hire and train employees and restart its idled equipment.

Republic Steel is the nation's leading provider of special bar quality (SBQ) steel.

"Republic is more than prepared to support market demand that has been previously supplied by imports," Jaime Vigil, President and CEO said in a statement. "We maintained our Lorain facility while it's been idled waiting for the opportunity to restart and it appears that time is finally here.

--------------------
"The time for war has not yet come, but it will come and that soon, and when it does come, my advice is to draw the sword and throw away the scabbard." Gen. T.J. Jackson, March 1861

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Not even the Pentagon thinks tariffs are needed for national defense.[/url] A new article at the Mises Institute.

quote:
When politicians run out of good arguments, their last refuge is often the claim that what they want is "necessary for national defense."

Given that there are no economic arguments in favor of tariffs, it makes sense that the administration has resorted to the political "national defense" argument instead.

So, even if the Trump administration were forced to admit that, yes, tariffs are bad for the incomes and standards of living for most Americans, they could still argue that everyone must make sacrifices for the sake of national security.

But do these arguments hold any water?

In a Defense Department memo (two pages, in pdf format), in response to the President's tariff proposal, the Secretary of Defense states that the tariffs are not necessary:

quote:
... the US military requirements for steel and aluminum each only represent about three percent of US production. Therefore, DoD does not believe that the finds in the reports impact the ability of DoD programs to acquire the steel or aluminum necessary to meet national defense requirements
"The reports" mentioned here are Commerce Department reports pushing for the tariffs.

The Defense Department memo goes on to advocate for a far more limited tariff than what the Trump administration wants, stating "DoD continues to be concerned about the negative impact on our key allies regarding the recommended options within the reports ... targeted tariffs are more preferable than a global quota or global tariff."

The memo then concludes by noting that if the administration must have steel tariffs, it should at least wait on imposing aluminum tariffs....

One thing is certain, the DOD will now be paying more for those steel and aluminum products it needs. Which is to say, you and I will be paying more for them.

Onward and upward,
airforce

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The Answer
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quote:
Originally posted by ConSigCor:
Answer, the guys I knew pronounced their last names 'De Nay' and 'Do Toe'. Have no idea now how they spelled it. They worked the oil rigs out in the gulf back when the industry was booming.

Your history is somewhat like mine. Family has been here since 1623. One of them was one of 4 men who settled a place that would later be called Salem Mass. My direct Welsh line comes from Virginia near Martinsville.

Phil Sheridan tried to burn the Shenandoah valley to the ground in 64. Was your family up in that area?

I honestly don't know but it would make sense. My family in north Texas and north Florida (almost all of my mother's side) got there after the civil war.

My Dad's side goes back to a mercenary in the Hundred Years War that was made noble by the dauphin prince after the mercenary force protected the dauphin prince from enemies in the Battle of Orleans. That mercenary was made a baron. His eldest son (my ancestor) took over the barony. His fourth son was a catholic bishop that negotiated a treaty between france and switzerland. Switzerland hasn't had a war since the 1500s. So this treaty ended one of the last Swiss wars.

The great great grandson of the mercenary was a french noble that lived with micmac indians in new france and had numerous battles with the english and other french noble pretenders.

[ 03-10-2018, 04:29 PM: Message edited by: The Answer ]

--------------------
Semper Vigilantes, Numquam Exspectantes

Always Watching, Never Waiting

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The Answer
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Jean de Salazar:

https://translate.google.com/translate?hl=en&sl=fr&u=https://fr.wikipedia.org/wiki/Jean_Salazar&prev=search

Tristan de Salazar:

https://en.wikipedia.org/wiki/Tristan_de_Salazar

--------------------
Semper Vigilantes, Numquam Exspectantes

Always Watching, Never Waiting

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airforce
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This is how the government picks winners and losers.

 -

Onward and upward,
airforce

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The last American manufacturer of steel beer kegs may go out of business.

quote:
..."Tariffs will inadvertently drive the price of American steel higher," CEO Paul Czachor tells Philly.com's Sam Wood. "Within a year, we might have to raise our prices so our kegs cost 30 percent more than an import. That puts the whole business in jeopardy."

American Keg is a small, blue-collar business that the Trump administration might otherwise celebrate. Instead, its 20 employees might find themselves out of a job. They won't be alone. For every steel-producing job in the country there are about 46 steel-consuming jobs, and each of the latter will get a little shakier once Trump's tariffs take effect. When George W. Bush imposed a smaller tariff on imported steel in 2002, an estimated 200,000 jobs in downstream industries were lost.

"We don't make things anymore," is a common Trump refrain. His tariffs will make it significantly harder for Americans to keep making steel kegs, among other things.

For American Keg, the tariff is a double whammy. Not only will it increase the cost of the steel needed to make the company's products, but it will increase the cost of the company's products relative to foreign-made competitors. That's because the tariff applies only to raw or unfinished steel (sheets or rolls, for example), and not to steel-made products imported into America....

Trump's tariffs could grow the steel, iron, and aluminum industries by about 33,400 jobs, according to a policy brief released this week by the Trade Partnership, a Washington-based pro-trade think tank. On the flipside, the tariffs are projected to wipe out more than 179,000 other jobs. That's about 146,000 net job losses—five jobs lost for every job gained.

Onward and upward,
airforce

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America’s Forgotten Steel Workers Praise Trump Tariffs – ‘He’s a Godsend’

President fulfilling promises to resurrect US rust belt

Dan Lyman March 12, 2018

American steel workers are praising President Trump’s announcement of tariffs to be imposed upon steel and aluminum imports to the U.S. in his effort to rejuvenate the nation’s production of critical materials, which are used in everything from military tanks to beer cans.

Metal workers calling in to the Alex Jones Show illuminated a variety of upsides to the President’s decision, including the explosion in job prospects and hiring, economic boon, rejuvenation of the downtrodden ‘rust belt,’ and even ramifications for the military and national security.

As manufacturing and industrial employment has been sucked overseas, once-prosperous towns filled with salt-of-the-earth American workers have been hollowed out, now stricken with poverty, drug abuse, and misery.

“People don’t understand the association of Big Steel in any community where a mill is located,” says Scott, an Indiana steelworker. “You’ve got people that sell fasteners, you’ve got people that sell office supplies, you’ve got restaurants and diners that line that area, and supermarkets – it’s all tied together. The steel mill supports so many other businesses in any community they’re in, and when that steel mill is gone, it has a huge impact on any area’s economy, any small business – it’s terrible.”

Scott points out that while the steel industry in his region of Indiana has managed to stay afloat, operations in Illinois, Ohio, Alabama, and beyond have not – leading to subsequent collapses of the local communities due to devastating economic impact.

His plant in northwest Indiana once employed 27,000 people, which shrank down to 4,000 – but it is now in the processing of rapid rehiring.

“Presidential Proclamation on Adjusting Imports of Steel into the United States”

Proclamation: https://t.co/hxduwSoElz
Remarks: https://t.co/nypErcqFSU pic.twitter.com/q92FDYZeUl

— Donald J. Trump (@realDonaldTrump) March 8, 2018

Stephen, an Air Force veteran and steelworker from Pittsburgh, shares a similar story.

“In 2015, there was this threat of TPP – I went from a six-day workweek, down to a three-day workweek, and then a lay-off,” Stephen says. “As soon as President Trump came in, business is booming again.”

All of the steel plants around Pittsburgh had laid off employees or shut down, but new life has been breathed into them and they can’t hire fast enough, he says.

“Trump is on the right path, and he is definitely a Godsend for this entire country,” Stephen asserts. “This is what we feed our families with around here, and it’s been looking bad for a long time, but it’s finally looking up.”

Matt, a second generation steelworker from Ohio, had multiple careers in the steel and coal industries killed by authoritarian enviro-fascists like Barack Obama and his fellow travelers, but is now experiencing an occupational renaissance.

“The job I thought I had for life was shut down, but now since Trump’s been in, that mill has opened back up,” Matt says. “I went underground in the coal mines and hoped to retire there, but Obama, of course, shut that down with the war on coal policies… but coal country and steel country are just booming.”

He points out that Wheeling-Pittsburgh Steel Plant initiated plans to reopen – just weeks after Trump’s election in 2016.

Shockingly, the U.S. has long been importing sub-par steel from nations whose governments subsidize undercutting the cost of American production – a process known as “dumping,” which Trump vowed to combat on the campaign trail.

“It’s amazing to see a Republican president finally stand up and do what he said he was going to do,” asserts Rob, a steelworker from Indiana with nearly three decades experience. “What I’ve seen is just a huge push – we are actually almost running at capacity… We’re hiring right now. We can’t get enough people.”

There have even been speculations that President Trump is returning steel production to the U.S. as a national security measure in the likelihood of future military conflicts.

“Domestically-produced steel is a strategic asset for any country,” asserts steelworker Mark. “It was the steel industry, here in America, that actually won World War II.”

Dan Lyman: Follow @CitizenAnalyst;

--------------------
"The time for war has not yet come, but it will come and that soon, and when it does come, my advice is to draw the sword and throw away the scabbard." Gen. T.J. Jackson, March 1861

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Tariffs may be a godsend for steel workers, but not so much for everyone else. Even the DOD says tariffs aren't needed for national defense, and will in fact raise prices for military equipment.

Onward and upward,
airforce

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American laws, not Chinese dumping, make American industry less competitive. A new essay from the Mises Institute.

quote:
Much has been said about the proposed steel and aluminum tariffs proposed by President Trump. It will likely usher in a trade war the US is ill-equipped to fight. Tariffs are just another tax. In general, tariffs are an all-around bad idea.

However, the underlying message of the tariff is it is put in place to protect employment. The message goes, steel producers deal with unfair practices abroad and, as such, need to have tariffs added to “level the playing field”. This certainly sounds appealing on the surface. Americans love fair play and equal application of rules. The problem is: if the playing field is tilted to the detriment of Americans, it is not due to the actions of foreign competition. The real culprit to the lack of American competitiveness is the American government that is proposing imposing tariffs.

If we step back and understand what competitiveness really is, the concept boils down to being able to produce a product at a particular quality for the best price. All else held equal, the best price always wins. The United States is certainly competitive on the global market. Despite the rhetoric, the US is currently the second largest exporter in the world behind China. The US has a major international presence in computer technology, automobiles, manufactured goods and pharmaceuticals. There is certainly a great deal of competitiveness in the US. If the US was somehow disadvantaged by foreign subsidy, it would be difficult to, say, export $109 billion in automotive products each year.

The problem with US competitiveness doesn’t come from the presence of foreign competition but from internal issues. The issue arises with the regulatory State, which currently burdens the US economy with around $2 trillion in dead weight costs. There are two ways we can look at this:

1. There are approximately 133 million people employed in the productive economy (156 million employed less 23 million employed in the public sector). This $2 trillion represents an additional per employee burden of $15,000.

2. If the government were to fully take on all regulatory functions in-house, it would require an additional, universal income tax of 13% to avoid taking on additional debt. However, since regulations are generally paid for by the business sector, which generated $225 billion last year on estimated profits of $8 trillion, would require an across the board, no deductions allowed corporate tax hike of 25%.

In other words, government regulations are an effective business tax of 25% or personal income tax of 13%. Regulations are just a method that the government is able to impose programs without having to carry the cost on the official books. Since the government isn’t directly collecting the money, it doesn’t get formally registered as a tax and politicians can avoid the uncomfortable discussion with taxpayers when each new rule comes with a new tax hike.

The real question is, how more competitive would US Steel be if they were not protected by tariffs, but absolved of their $15,000 per head average regulatory imposition? The company currently employs 28,900 people. Regulatory reduction would potentially reduce the cost to the company by an estimated $433 million if using the head-count methodology. This goes a lot further than the whopping 500 people the company plans to hire as a result of business shift due to tariffs, or an opportunity cost of $866,000 for each new position added to the company. US Steel could hypothetically use that $433 million to expand employment by 4,300 people paid $100,000 a year or cut prices on steel products by $28 per ton and still maintain the same $341 million net income reported in fiscal year 2017 or shifted their 2015 and 2016 operating losses into operating profits, assuming sales don’t increase related to falling prices.

And this is just isolated to the steel industry. Imagine what Ford, with 202,000 employees, would be seeing in savings. If the same, admittedly not perfect, estimate held, Ford could shed $3 billion in extraneous regulatory costs, which would result in the ability of the company to cut the cost of each of their 2.4 million vehicles sold by $1,250, instead of listening to pundits try and justify a price increase.

Since it’s objectively better to cut regulatory burden to improve American competitiveness and, thus, more employment, why are tariffs still being discussed? A key reason is that the government tends to follow a tax cut with a tax increase elsewhere. When a Republican is in office, this usually manifests as increasing a tax but refusing to call it a tax. Reagan, the tax cutting champion, rolled back nearly all the tax cuts from 1981 in the Tax Equity and Fiscal Responsibility Act of 1982 by referring to them as “closing loopholes” and again in 1983 when Social Security taxes were increased, but referred to as “insurance premiums”. But, of course, he was so not happy about it, you guys.

What better way to convince the public to happily accept a 25% sales tax hike on steel products and a 10% sales tax hike on aluminum products? Just call them job saving tariffs. The government can raise your taxes and pretend they’re the champion of the little guy all at the same time. The government needs to make up for the corporate tax rate decrease it just passed, so expect more taxes beyond steel and aluminum tariffs to manifest. Just don’t expect them to be called taxes.

Onward and upward,
airforce

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Report: Trump to Unveil Massive ‘Package of Tariffs’ Against China

by John Binder 13 Mar 2018 Washington, D.C.

President Trump is expected to unveil a massive “package of tariffs” against China in the coming weeks, multiple sources close to the White House told Politico.

Trump is seeking “steep” tariffs against China for their alleged stealing of intellectual property and dumping of cheap, imported goods in the U.S., sources claim. In a meeting at the White House, U.S. Trade Representative Robert Lighthizer showed Trump a “package of tariffs,” but the populist president demanded the tariffs be even steeper.

Politico reports:

During the meeting, which hasn’t been previously been reported, U.S. Trade Representative Robert Lighthizer presented Trump with a package of tariffs that would target the equivalent of $30 billion a year in Chinese imports. In response, Trump urged Lighthizer to aim for an even bigger number – and he instructed administration officials to be ready for a formal announcement in the coming weeks, according to two people involved in the administration’s trade deliberations. [Emphasis added]

That sent senior officials at the White House, Treasury Department, State Department, Justice Department, the Office of the U.S. Trade Representative and other key agencies scrambling this week to finalize the proposal. While the details were still in flux, aides said the administration is considering tariffs on more than 100 Chinese products ranging from electronics and telecommunications equipment to furniture and toys. [Emphasis added]

Sources with Reuters say Trump is eyeing tariffs on China that would hit at least $60 billion worth of their annual cheap, imported goods in the U.S.

#BREAKING: Trump administration looking to impose tariffs on $60 billion of Chinese goods; tariffs would target tech products and telecoms but would not be limited to those – Reuters, citing sources

— Breaking911 (@Breaking911) March 13, 2018

The Politico sources say the tariffs against China will be announced soon, although the details of the tariffs remain unclear.

Trump’s cracking down on China — a commitment he made on the campaign trail — will come in the same month that his senior economic adviser Gary Cohn, an opponent of Trump’s economic nationalist agenda, resigned from the White House.

Report: Free-Traders Gary Cohn, Steve Mnuchin Trying to Weaken Trump’s Expected Tariffs on Chinahttps://t.co/v2PfsmrBvs

— John Binder 👽 (@JxhnBinder) February 27, 2018

As Breitbart News reported, Gary Cohn, Treasury Secretary Steve Mnuchin, Kevin Hassett, and Everett Eissenstat pushed Trump to water down his actions against China’s helping to ruthlessly globalize the American economy.

Most recently, Trump followed through on his economic nationalist agenda by imposing a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum, both designed to protect American workers.

The globalist wing of the Republican Party, including Cohn, House Speaker Paul Ryan, and President George W. Bush consultant Karl Rove — all defenders of the U.S. job-killing Trans-Pacific Partnership free trade deal — opposed Trump’s steel and aluminum tariffs.

Since China entered the World Trade Organization (WTO) in 2001, there have been 3.2 million American jobs lost with 2.4 million of those jobs coming from the U.S. manufacturing sector.

--------------------
"The time for war has not yet come, but it will come and that soon, and when it does come, my advice is to draw the sword and throw away the scabbard." Gen. T.J. Jackson, March 1861

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President Trump has nominated Larry Kudlow, a free trader who opposes tariffs, to replace Gary Cohn, who was fired for being a free trader who opposes tariffs.

Figure that one out. [Confused]

Onward and upward,
airforce

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Steel tariffs could end our energy boom.

quote:
One of the hottest sectors in the U.S. today is energy. The shale revolution brought to you by hydraulic fracturing, or fracking, has produced a historic boom period in the oil and gas industry. Thousands of jobs are being created every month, regulations are coming down, the U.S. is not beholden to the Paris Accord any longer, and domestic output has topped 10 million barrels per day (bpd).

These impressive conditions have enabled the U.S. to become energy independent, surpassing Saudi Arabia. It has also brought the Organization of the Petroleum Exporting Countries (OPEC) to its knees.

A key campaign objective for President Donald Trump was to facilitate the dominance of America’s oil sector. But he is inadvertently placing a significant roadblock on the industry’s path to toppling Russia from the black gold throne: tariffs.

When President Trump announced that he would institute tariffs on steel and aluminum imports, there was a collective sigh of relief emanating from the Middle East.

President Trump did face a lot of pushback from Republicans, oil executives, conservative activists, and free-market think tanks. But he also received a ton of adulation from several groups like the steel industry, unions, Democrats, and the 12-nation cartel.

Hindering America's Energy Renaissance


Today, the U.S. imports four times as much steel as it exports. This has allowed companies that manufacture goods with steel to save a lot of money, resulting in job creation and savings passed down to the consumer. It has been a win-win situation for the country.

An important factor in the resuscitation of U.S. energy is cheap steel.

The domestic sector depends on imported steel for refineries, drilling equipment, pipelines, liquefied natural gas (LNG) terminals, and much more. With Trump’s 25% levy on the element, it is going to become a lot more expensive to complete energy projects, and the industry is already sounding the alarm.

Soon after the White House announcement, a representative of the Interstate Natural Gas Association of America noted that the tariff could create serious issues since the types of pipes and steel used in their pipelines are difficult to source domestically.

The Center for Liquified Natural Gas, a trade organization, stated that LNG export initiatives utilize specific steel components that are not manufactured in the U.S.

Andy Black, CEO of the Association of Oil Pipe Lines (AOPL), warned that constructing arteries to carry petroleum would inevitably rise because specialized foreign steel is needed. His group released a study last year that found a 25% jump in pipeline costs would boost the budget for the average project by $76 million.

It is estimated that oil producers need the international price for a barrel of crude to be $45 to $50 to break even and turn a profit – some reports peg it at as low as $35. This could be affected if operating costs increase from import taxes.

It’s evident that steel may be the key beneficiary of tariffs, but other sectors are already feeling the pinch.

Will a Trade War Hurt US Energy?

In a trade war, countries retaliate. This was witnessed following former President George W. Bush’s steel tariffs. This was seen after former President Barack Obama’s tire levies. This is currently unfolding in the wake of President Trump’s myriad of mercantilist approaches to international trade.

The big fear for oil-producing states is that foreign jurisdictions will react negatively.

Senator Daniel Sullivan (R-AK) told IHS Markit’s annual CERAWeek energy conference earlier this month:

quote:
“There’s a way to do it that focuses on the problem — the real problem — which is China, and do it in a way that we align ourselves with our allies, not alienate them, and I worry that this approach right now could have the opposite effect.”
He is concerned that nations could punish his state by imposing tariffs on energy products, as well as other crucial exports like seafood.

But the sky may not be falling yet.

The International Energy Agency (IEA) forecasts that the U.S. will account for 80% of global oil growth over the next three to five years. Fatih Birol, IEA executive director, does believe it is too premature to determine if the tariffs will impact American oil. She does say, however, that output is so immense the industry will adapt to the changes and crude exports will remain strong.

So, U.S. energy won’t be harmed by the bullets in a trade war? Not quite.

When prices crashed in 2014, investments in new infrastructure were quite minimal. The IEA wrote in a report that these businesses need to begin spending again to prevent crude shortages after 2020. If the costs are too much to bear, will the industry invest in new infrastructure? Only time will tell.

Make Oil Great Again?

It is a great time to be in Texas Tea. West Texas Intermediate (WTI) futures are stabilized at above $60 a barrel, shares of oil companies are climbing, and the U.S. does not need to bow down to OPEC. There are multiple contributing factors to this domestic boom, and one of them is foreign steel. President Trump’s desire for the U.S. to become the world’s largest crude producer is coming to fruition. But unnecessarily placing a costly and substantial hurdle for energy to overcome risks undoing its success.

Onward and upward,
airforce

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Trump will impose restrictions on imports and investments from China. Sigh.

quote:
This afternoon, for the second time in the space of a month, President Trump is expected to invoke his authority under a rarely used statute to levy restrictions on a vast swath of imports and investment from China. The cause for today’s measures is behavior that the U.S. Trade Representative has characterized as rampant, sustained theft of U.S. intellectual property by Chinese entities and the Chinese government.

Although allegations—and the evidence supporting those allegations—that China routinely transgresses in the realm of intellectual property have been accumulating for many years, it does not follow that the appropriate response is to restrict trade and investment. In fact, the collateral damage inflicted by those restrictions will be widespread.

President Trump’s “remedies” are likely to raise production costs for U.S. businesses, diminish U.S. productivity, squeeze real household incomes, reduce the revenues of U.S. farmers and other export-dependent industries targeted by Chinese retaliation, exacerbate tensions with China and other countries adversely affected by the restrictions, and hasten the demise of the rules-based trading system.

Among the imports expected to be targeted by punitive tariffs are information and communication technology (ICT) products, which are presumed to have benefited from IP theft. As a preliminary matter, it’s important to note that most exports of ICT products from China contain more non-Chinese value than Chinese value. On an aggregate basis, non-Chinese inputs (material, labor, overhead, R&D, etc.) account for nearly 50 percent of the value of all U.S. imports from China. For ICT products, the percentage of non-Chinese value is much greater than half.

Remember the inscription on the back of the Apple iPhone? It reads “Designed by Apple in California; Assembled in China.” In 2013, it cost $178.96 to produce an iPhone, but only $6.44 or 3.6% was Chinese value added. Yet, the entire $178.96 is chalked up as imported from China, exaggerating the U.S. bilateral trade deficit, which is the main reason Trump wants to impose tariffs in the first place! It’s important to note that Japanese, Korean, Singaporean, German, and many other (including American) companies will be hurt by U.S. tariffs on Chinese ICTs.

Moreover, ICT products are inputs to value added production in the United States. Raising the costs of computers, devices, and technology components will raise the cost of production or reduce productivity across the U.S. services and manufacturing sectors. Meanwhile, U.S. consumers will have to devote more of their income to ICT products, leaving fewer dollars to spend on other U.S. goods and services or to save and invest in other businesses. The tariffs will make scarce resources scarcer still.

Yet another significant economic cost of Trump’s tariffs is the loss of revenues U.S. farmers and other U.S. targets of retaliation will be forced to endure. China is reportedly preparing to impose restrictions on U.S. soy exports and, almost certainly, other agricultural products will be targeted as well. Don’t be surprised to see U.S. technology companies hurt as well, as China considers justifying its intrusive forced technology transfer policies as a national security imperative. (With his steel and aluminum tariffs, Trump opened the door to abuse of that excuse.)

The appropriate response to China’s infractions would be to use the evidence collected as the basis for a formal complaint at the World Trade Organization. In fact, that should have been done several years ago, but apparently U.S. multinationals were reluctant to go on record with evidence of those infractions for fear of suffering retribution from Beijing. As the problem worsened and a tit-for-tat high tech trade war began to play out in the shadows, a narrative emerged (which has come to dominate the debate over economic relations with China) that the WTO rules are inadequate to restrain certain discriminatory, predatory Chinese industrial policies, and that even if they could be used to discipline those practices, China wouldn’t comply.

This is a false narrative—or, at least, an untested one. The United States has brought only 21 cases against China (but 116 overall), and China has a strong record of compliance when its practices have been found to violate the rules. By circumventing the WTO under the premise that its rules are inadequate to discipline China, and invoking a law that is incompatible with U.S. obligations under the WTO rules, President Trump has delivered a vote of no confidence in a system that has served U.S. interests well for 70 years.

Whether the system endures or something else emerges to fill the void remains an open question. But for the foreseeable future, an environment of higher consumer prices, higher production costs, unpredictable lawlessness, and tit for tat protectionism is likely to prevail.

Onward and upward,
airforce

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ConSigCor
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Both Cato and Mises are beginning to sound like globalist shills. Twenty or thirty years ago everyone pointed out the threat to our industrial base posed by all these "free" trade agreements. Now, everyone seems to support the very thing they once opposed.

--------------------
"The time for war has not yet come, but it will come and that soon, and when it does come, my advice is to draw the sword and throw away the scabbard." Gen. T.J. Jackson, March 1861

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Those "free trade" agreements like NAFTA were hardly free trade, that's how the Dems got the unions to back them. When a free trade agreement needs 1,500 pages to define what is acceptable trade, it's hardly free.

I'm an old fart, and I can remember when Republicans were for free trade, and Democrats were for tariffs. Things change, and not always for the better.

Onward and upward,
airforce

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When Chuck Schumer agrees with Donald Trump, you know something is very, very wrong. Here is Sen. Schumer, on the floor of the Senate today:

quote:
I don't agree with President Trump on a whole lot, but today I want to give him a big pat on the back. He is doing the right thing when it comes to China. We have watched China rapaciously take advantage of America—of American jobs, of American workers, and of American intellectual property. China's ruthless in how they go after us: They do it quietly, they do it with a smile. And unfortunately, the previous presidents, Democrat and Republican, just stood by as China did what it did to us. President Trump is exactly right.
Onward and upward,
airforce

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China says it's willing to hold talks with the US to resolve trade differences

CNBC

China is willing to hold talks with the United States to resolve their differences over trade, China's foreign ministry said on Monday, as alarm grows over a possible trade war between the world's two largest economies.

Ministry spokeswoman Hua Chunying made the comments at a regular briefing in Beijing.

The U.S. administration last week sent a letter to Chinese economic overseer Liu He seeking a tariff cut on U.S. autos to help cut China's trade surplus with the United States, the Wall Street Journal said, citing unnamed sources.

In the letter, U.S. Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer said China should also buy more U.S. semiconductors and give U.S. firms greater
access to the Chinese financial sector, the Journal said, quoting sources with knowledge of the matter.

In the past few days, fears of a trade war have mounted following U.S. President Donald Trump's announcement on Thursday of plans for tariffs on up to $60 billion of Chinese goods.

Firing a retaliatory warning shot in response to separate U.S. tariffs on steel and aluminium, China declared plans to levy additional duties on up to $3 billion of U.S. imports.

The deepening rift has sent a chill through financialmarkets and the corporate world as investors predicted dire consequences for the global economy should trade barriers start going up.

Liu He, one of China's newly appointed vice premiers, told Mnuchin in a telephone call on Saturday that the U.S. has flouted trade rules with its inquiry into intellectual property, and that China will defend its interests.

U.S. officials say an eight-month probe under the 1974 U.S. Trade Act has found that China engages in unfair trade practices by forcing American investors to turn over key technologies to Chinese firms.

--------------------
"The time for war has not yet come, but it will come and that soon, and when it does come, my advice is to draw the sword and throw away the scabbard." Gen. T.J. Jackson, March 1861

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 -

Onward and upward,
airforce

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It's on. China has joined the trade war battle, slapping a 25% tariff on pork products and 15% on fruits, nuts, and wine.

Nobody wins a trade war. Everybody loses. Except the governments, of course.

Onward and upward,
airforce

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The U.S. has proposed tariffs on another 1300 Chinese goods. This is looking less like a negotiating tactic and more like a trade war every day.

Onward and upward,
airforce

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Ten ways trump's new tariffs will make you poorer. And a 58-page list of more stuff Trump wants to add to the list.

Here's a partial list:

quote:
Vaccines (for humans and for animals)
Malaria test kits
Dental fillings
Anti-freeze and other de-icing fluids
Nuclear reactors (also "parts for nuclear reactors")
Hand-held blow torches
Chain saws
Syringes (with or without needles attached)
Rocket launchers
Grenade launchers
Catalytic converters
Snowplows and snowblowers
Bookbinding machinery
Cash registers
Human blood

Onward and upward,
airforce

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Your brilliant Kickstarter idea could be on sale in China before you’ve even finished funding it

Inside the Knockoff-Tennis-Shoe Factory

China pledges to fight ‘unilateral’ US trade tariffs ‘at any cost’ Beijing defiant after Trump’s latest salvo in trade war

[ 04-10-2018, 08:15 AM: Message edited by: ConSigCor ]

--------------------
"The time for war has not yet come, but it will come and that soon, and when it does come, my advice is to draw the sword and throw away the scabbard." Gen. T.J. Jackson, March 1861

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airforce
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Republicans could face political consequences over Trump's tariffs. China's tariff on soybeans hits squarely at America's heartland, where Trump's supporters are.

quote:
Tariffs have economic consequences, both intended and unintended. They also have political consequences, as Republicans will likely learn in the months ahead.

At the intersection of the economic and political fallout from a potential trade war with China lies the soybean. America is the world's top producer of the crop, and China is the world's largest consumer. China bought more than $14 billion of American-grown soy last year, accounting for 61 percent of total U.S. soybean exports and more than 30 percent of overall U.S. soybean production. In response to President Donald Trump's decision to impose tariffs on more than 1,300 Chinese-made goods last month, China has threatened a 25 percent tariff on soybeans and other American agricultural products.

If soybeans were commonly grown in Brooklyn or San Francisco, Republicans probably wouldn't have to worry about upsetting the people who produce them. But as the GOP tries to keep control of Congress this year, the fact that Iowa, Minnesota, Missouri, and North Dakota are some of the nation's top soybean-producing states is creating some headaches for the party of Trump. Key congressional races across the Midwest could tip the scales in the House, and Republicans are eyeing Democrat-held Senate seats in Missouri and North Dakota to pad a slim 51–49 majority in the upper chamber.

With that in mind, The New York Times has dispatched a reporter to soybean country—specifically to Cass County, North Dakota, the nation's top soybean-producing county—to see what farmers think about Trump's trade skirmishes with China.

"If he doesn't understand what he's doing to the nation by doing what he's doing, he's going to be a one-term president, plain and simple," Robert Runck, a fourth-generation farmer, informs the paper. Runck tells the Times that tariffs would "cost Kevin Cramer some votes" too. Cramer is the Republican congressman who currently represents all of North Dakota, and he's hoping to unseat Sen. Heidi Heitkamp (D–N.D.) in November.

An analysis from the Brookings Institution shows that Trump's tariffs figure to do the most damage to the economies of red states including Iowa, Missouri, Ohio, and Pennsylvania. (Missouri, remember, is hosting a key Senate race this year.)

When it comes to Chinese tariffs on American agricultural products, Brookings found that much of the pain is again concentrated in the Midwest.

 -

Trump's tariffs are his way of fulfilling a campaign-trail promise to revive American steel plants. But the protectionist policies that might help boost steel mills come at the expense of a much larger group within the president's political coalition. For every steel-producing job in the country, there are about 46 steel-consuming jobs—many of which are now on shakier ground because of the higher costs created by tariffs.

And on the agriculture front, the president "has little to no understanding of the farm coalition," Republican strategist Karl Rove tells the Times.


Trump is New Yorker who ran hotels and casinos, then became a TV star. Nothing about that résumé suggests that he would have a detailed understanding of the concerns of a North Dakota farmer—no, Trump Steaks do not count—or an Ohio machine shop worker. But Trump supporters have never seemed to care that the president isn't like them. Indeed, Trump's unwillingness to make phony attempts at courting rural voters is one of the things that made him stand out during the campaign.

But it's one thing to support a candidate who is nothing like you. It's another to keep supporting him, and his party, when he is actively making your job more difficult or your lifestyle more costly.

Trump won the American heartland in part by promising to end a regulatory war on agricultural and industrial jobs, and he has been following through on that promise. But he now risks replacing one set of oppressive economic policies with another, putting farmers and manufacturers on the front lines of a trade war. The fact that he's not directly responsible for Chinese tariffs on soybeans might not save Trump, or the rest of his party, from the ire of those who suffer the consequences of these myopic trade policies.

It's a political cliché that people vote with their wallets. That may hold true even for a president who smashed so many other traditional notions of how to get elected.

Onward and upward,
airforce

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Are you thinking about buying a new TV? Guess what! It's about to get more expensive! Unexpectedly, of course.

President Trump's tariff proposals include a 25% tariff on Chinese televisions and television parts.

China is the second biggest exporter of televisions to the U.S., behind Mexico. Ina report commissioned by two trade associations, the price of Chine TV's are expected to increase by 23%, and all other TV's will increase by about 4%.

But look on the bright side. There isn't anything good on TV these days anyway.

Onward and upward,
airforce

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Trump's former top economic advisor doesn't like tariffs. That makes two of us.

quote:
In his first interview since leaving the White House in early March, former top economic advisor Gary Cohn criticized President Donald Trump's plan to impose tariffs on steel, aluminum, and thousands of Chinese-made goods.

"I believe that we are very good at doing certain things in the United States. Other countries are very good at doing different things," Cohn said during a Tuesday interview on CNBC. "We should buy from them what they're good at. We should sell to them what we're good at."

That opinion apparently clashed with the economic nationalism that has taken hold in the Trump administration. It was widely reported that Cohn's opposition to tariffs provided a bulwark against Trump's demands for protectionism back in 2017, but that the disagreement over trade policy eventually led to Cohn's resignation. Just days after he left the post, Trump announced a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum. Those tariffs have already caused prices to rise and harmed American businesses.

Cohn seemed to confirm those disagreements, describing himself Tuesday as "a free trader" and "a globalist" who is firmly anti-tariff.

Cohn is hardly the only advisor whose opinion has been cast aside by Trump in his quest to reshape American trade policy. The president has steamed ahead with tariff plans despite warnings from members of his own party in Congress, opposition from trade groups, and some strong signals from the stock market. Last week, a group of more than 1,000 economists sent a letter to the White House and Congress urging the removal of barriers to trade. Foreign governments have threatened to respond to Trump's tariffs by targeting the free trade of American agricultural goods, amoung other things. It's been good news for lobbyists, but that's about all.

While Trump has softened a bit on the steel and aluminum tariffs—he has granted temporary exemptions to several major U.S. trading partners, giving them until June 1 to reach bilateral deals with the United States—he's still pursuing additional tariffs on some 1,300 Chinese-made goods. The Office of the United States Trade Representative is currently mulling those proposed trade barriers.

Cohn echoed the concerns of business and trade groups, which have signaled that Trump's tariffs may undo some of the economic good will created by the tax cuts passed in late 2017.

"I don't like the tariffs. I don't think we want the steel and aluminum prices going up," Cohn said. "People are concerned that the economic policies of Washington are not as clear this year as they were last year."

Onward and upward,
airforce

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The Trump administration is withdrawing plans to impose a 25% tariff on Chinese imports. That's a good thing.

quote:
The Trump administration's trade war with China is over—or at least it's not starting just yet.

Treasury Secretary Steven Mnuchin, during an appearance on Fox News Sunday, said the administration is withdrawing its plan to impose 25 percent tariffs on more than 1,300 Chinese-made goods valued at more than $150 billion while the United States and China continue trade negotiations.

"We're putting the trade war on hold," Mnuchin said. "Right now, we have agreed to put the tariffs on hold while we try to execute the framework."

There were two major developments this week that may have influenced the administration's shift. First, as Mnuchin suggested, there were two days of intense negotiations between the two countries, which concluded Saturday with the release of a joint statement including several vague promises about China's intention to buy more American products. Second, the Office of the U.S. Trade Representative held three days of hearings on the proposed tariffs, with dozens of American business owners expressing their anger and frustration with the proposal, which they said would do significant damage to the domestic economy.

The Trump administration has already gone ahead with tariffs on steel and aluminum, imposed on supposed national security grounds. The second round of tariffs specifically targeting Chinese goods were to be issued under Section 301 of the Trade Act of 1974, which allows the president to use tariffs as a means of resolving trade disputes or to punish unfair trade practices. The Trump administration has sold the tariffs as a way to close America's trade deficit with China—even though a trade deficit isn't really a problem.

Trump's defenders are likely to seize on Sunday's news as proof that the president was always using the tariff threat as a negotiating tactic to bring China to the table. That may be true, but it's too soon to tell. The concessions made this week by China—most importantly, a promise that China will increase purchases of American imports by $200 billion—sound like a victory for the administration, but leave many details unanswered. It's also unclear whether China has actually agreed to the $200 billion figure, as The Wall Street Journal reported Saturday that Chinese officials had refused to make that commitment.

Even if China did agree to the figure, economists say it would be difficult for America to increase exports by "anything close to that figure," The New York Times reports.

And using tariffs as a negotiating tactic with China might have soured the trade relationship between the United States and Europe. Trade wars, even ones that are narrowly avoided, are complicated and not easy to win.

Still, removing the immediate threat of tariffs is a clear victory for American consumers and businesses. If the tactic helps ease tensions between the United States and China, even better.

Onward and upward,
airforce

Posts: 18046 | From: Tulsa | Registered: Jan 2002  | Report this post to a Moderator
airforce
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Those tariffs are back again. That amounts to $50 billion of new taxes on businesses and consumers.

Sigh.

Onward and upward,
airforce

Posts: 18046 | From: Tulsa | Registered: Jan 2002  | Report this post to a Moderator
airforce
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Here's a thought experiment: What's the difference between Trump's tariffs, and the sanctions we place in Iran and North Korea?

The answer, of course, is none. Both serve to limit free trade, and hurt the country by limiting imports.

Of course, that logic is a little too much for politicians to grasp.

Onward and upward,
airforce

Posts: 18046 | From: Tulsa | Registered: Jan 2002  | Report this post to a Moderator
airforce
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We're standing on the edge of a trade war precipice. And if we step off, or slip, only bad things will happen.

quote:
With the announcement Thursday morning that the White House will press forward with a plan to impose tariffs on steel and aluminum from Europe, Canada, and Mexico, it seems that President Donald Trump has taken another step towards the precipice that turns threats and posturing into open conflict.

As the contemporary world's great powers have edged closer to a major trade war, I've thought a lot about something historian Christopher Clark writes in The Sleepwalkers: How Europe Went To War in 1914, his excellent account of the run-up to the First World War.

The First World War, most Americans probably know, started because of the assassination of an Austrian archduke, Franz Ferdinand.

Like many historical facts, that's only partially true. Ferdinand was gunned down in the streets of Sarajevo on June 28, 1914, but troops did not mobilize for battle until the final week of July and it was mid-August before the real shooting began. The intervening time was filled with a flurry of diplomacy as various factions encouraged or dissuaded the war. From the perspective of June 28, though, it's not at all clear that a conflict was inevitable. Indeed, even a month later it could have been avoided, as officials from Germany and England—neither of which were directly connected to the war's inciting assassination and had at least some reasons to avoid a bloody conflict—nearly reached an agreement in mid-July that likely would have prevented the outbreak of a continent-wide conflagration.

In other words, the assassination alone did not make war happen. But at some point in the six weeks following Ferdinand's murder, the prospect of war tipped from possible to unavoidable.

"The outbreak of war was the culmination of chains of decisions made by political actors with conscious objectives," notes Clark. "The war was in fact 'improbable'—at least until it happened. From this it would follow that the conflict was not the consequence of long-run deterioration, but of short-term shocks to the international system."

The analogy between World War I and the looming trade war only goes so far, of course. Thankfully, there are not millions of lives at stake in the decisions that will be made in Washington, Ottawa, Brussels, and Berlin over the next few weeks—though the stakes are still quite high in other ways. Like in 1914, a trade war between the major economic powers of the globe in 2018 would threaten to smash an international system that has, despite some obvious failings, worked well for the better part of half a century.

A trade war, if we'll have one, is not the result solely of the Trump administration's economic nationalism or its assassination of domestic businesses. Trump trade policies are another short-term shock to the system, and there is plenty of blame to be shared by China and others.

Still, the inciting incident for the coming trade war will be remembered as Trump's announcement on March 5 of new tariffs on all steel and aluminum imported into the United States. That kicked off the period of diplomacy, with the White House agreeing to exempt several major U.S. trading partners from those tariffs until May 1, with the goal of reaching bilateral trade deals before then. In some cases, that worked. Deals are in the works with Argentina, Australia, Brazil, and South Korea.

But even an extension until June 1 did not bring Canada, Europe, and Mexico to the negotiating table. Instead, all three threatened to escalate the conflict by slapping retaliatory tariffs on American goods. Elsewhere, the Trump administration has so far fumbled its attempts to use tariffs to bully China into trade concessions.

"As has been the case every day for the past 16+ months, the U.S. and global economies remain exposed to the whims of an unorthodox president who precariously steers policy from one extreme to the other, keeping us in a perpetual state of uncertainty," says Daniel Ikenson, director of the Center for Trade Policy Studies at the Cato Institute, a libertarian think tank, summing up the current state of affairs.

Now, the clock is really ticking. The exemptions for Canada, Europe, and Mexico will expire at midnight, Commerce Secretary Wilbur Ross announced.

The trade war that seemed improbable for weeks is now slipping closer to inevitable.


European Commission President Jean-Claude Juncker called the tariffs "unjustified" and said the EU will prepare countermeasures, CNBC reported. According to The Wall Street Journal, the European response will target some $3.3 billion in U.S. exports. American agricultural exports are likely to take the biggest hit, which is bad news for farmers who depend on export markets because America literally grows more food than it can consume.

Trump has preemptively responded to the expected European response by threatening additional tariffs on imported cars. That move prompted one German officials to wonder whether the United States is abandoning free trade.

Mexico plans to impose retaliatory tariffs on American steel, pork, apples, grapes, and cheese, among other things. The New York Times said the goods were chosen to have an impact on rural Republican congressional districts in the hopes of applying pressure to Trump's political allies.

Investors and businesses will get hit too. The Dow Jones industrial average fell sharply Thursday after news reports that tariff exemptions for Canada and Europe would expire. Steel-using industries have reported significant price hikes since Trump first announced the tariffs in early March, and a projection released by the Trade Partnership, a Washington-based pro-trade think tank, tariffs are projected to cause 146,000 net job losses—five jobs lost for every job gained—even without accounting for possible retaliation from China, Europe, and other nations.

All sides are still talking to each other and there's faint hope for a last second deal, but that looks increasingly unlikely. "Every country's primary obligation is to protect its own citizens and their livelihoods," Ross said in Paris after meeting with E.U. officials this week, according to the Journal. That doesn't sound like a man who is backing down.

The tariffs on steel and aluminum, don't forget, are being imposed on the administration's vague and unfounded claims that foreign metal somehow undercuts America's national security. The White House is already gearing up to make a similarly laughable argument for tariffs on cars. But how tariffs on European cars and Canadian steel will address the administration's worries about a trade imbalance with China—something that isn't even really a problem—remains completely unclear.

That lack of clarity—or, more accurately, honesty—between the Trump White House and America's top trading partners is compounded by the administration's decision earlier this week to pull the rug out from under a proposed deal with China. After first threatening to impose tariffs on $50 billion of Chinese imports, the administration said less than two weeks ago that those tariffs would be on hold, before reversing course again this week—apparently to the surprise of Beijing.

Negotiating for peace becomes incredibly difficult once trust is lost. A state of uncertainty makes improbable, unnecessary conflicts more likely. The First World War, concludes Clark, became inevitable not due to an assassin's bullet but because "a profound sundering of ethical and political perspectives eroded consensus and sapped trust."

Trump is walking the world to the precipice of another major conflict. It will be less bloody, but no less tragic for its pointlessness.

Onward and upward,
airforce

Posts: 18046 | From: Tulsa | Registered: Jan 2002  | Report this post to a Moderator
The Answer
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I have some sympathy for discriminating against countries that subsidize their industries. But that sympathy does not translate into belief.

If Country A subsidizes its X industry, and Country B does not subsidize its X industry but is a purchaser of X products, the following will happen:

Country A will suffer quality of life reductions to sell X products at below cost. This means Country A is sacrificing other things to the benefit of X.

Country B receives the benefits of cheap X, because it is sold at less than cost. X industries in Country B will temporarily suffer because it cannot compete at lower than cost.

Eventually, Country A cannot afford to continue subsidizing X industry because it is sacrificing too much to maintain it. But it may be forced to continue, because the second it lessens the subsidies or quits altogether, industry X in Country B will pick up the slack when it can sell above cost.

Country A will not benefit in the long run. Country B will not be harmed in the long run. In the short run, sure, it looks like Country A is benefiting and Country B has the detriment - but play out the game longer and the truth becomes apparent.

--------------------
Semper Vigilantes, Numquam Exspectantes

Always Watching, Never Waiting

Posts: 659 | From: Somewhere in these blue ridged mountains | Registered: Apr 2009  | Report this post to a Moderator
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