Posted on 03/02/2018 6:13:39 AM PST by reaganaut1
Donald Trump made the biggest policy blunder of his Presidency Thursday by announcing that next week he’ll impose tariffs of 25% on imported steel and 10% on aluminum. This tax increase will punish American workers, invite retaliation that will harm U.S. exports, divide his political coalition at home, anger allies abroad, and undermine his tax and regulatory reforms. The Dow Jones Industrial Average fell 1.7% on the news, as investors absorbed the self-inflicted folly.
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The immediate impact will be to make the U.S. an island of high-priced steel and aluminum. The U.S. companies will raise their prices to nearly match the tariffs while snatching some market share. The additional profits will flow to executives in higher bonuses and shareholders, at least until the higher prices hurt their steel- and aluminum-using customers. Then U.S. steel and aluminum makers will be hurt as well.
Mr. Trump seems not to understand that steel-using industries in the U.S. employ some 6.5 million Americans, while steel makers employ about 140,000. Transportation industries, including aircraft and autos, account for about 40% of domestic steel consumption, followed by packaging with 20% and building construction with 15%. All will have to pay higher prices, making them less competitive globally and in the U.S.
Instead of importing steel to make goods in America, many companies will simply import the finished product made from cheaper steel or aluminum abroad. Mr. Trump fancies himself the savior of the U.S. auto industry, but he might note that Ford Motor shares fell 3% Thursday and GM’s fell 4%. U.S. Steel gained 5.8%. Mr. Trump has handed a giant gift to foreign car makers, which will now have a cost advantage over Detroit. How do you think that will play in Michigan in 2020?
(Excerpt) Read more at wsj.com ...
I hope it’s just a negotiating ploy. But it’s also a waste of effort. He should be focusing on something that will actually help. Building the manufacturing industry will help. One thing that has already happened that has given US manufacturing an edge is the resurgence of the oil industry. Manufacturing depends on oil, gas, and chemicals. Also electricity. But the really big potential, I think, is in robotics, and no one is making a push on that. Everyone is scared to death that it will kill more jobs than it creates. I don’t see how that could be. Manufacturing is already dead, for the most part. We can rebuild, and that will provide new demand for steel and aluminum. No need for tariffs.
Tariffs are popular. Right now POTUS needs to do everything he can to get reelected.
Are these the same commentators that have predicted disasters for Trump’s other policy’s in the past?
So how do American companies compete when foreign governments subsidize steel and aluminum and sell them here below their costs? Does that seem fair?
Buy steel on this drop!
This ill-defined tariff proposal won’t stand, as there is too much pushback across the board.
At most, there will be targeted tariffs, likely aimed at China.
I’m an ex-never-trumper and have come around. And even from that background I’m with him on this. I know it will cost me, but one of the main problems with our country is that people vote their wallets. That’s one reason WHY we’re in the mess we’re in.
Ford designed aluminum into the F150 when the aluminum market was depressed. Its been pretty hot lately with prices increase nearly every month.
Trump is the FIRST PRESIDENT to get it.
The first one.
This is why he won the election. Because voters, unlike our “leaders”, get that America needs to make things right in America.
The problem is every country has significant import tariffs except the USA. The result: huge trade imbalances and the export of jobs from the USA. If you travel to another country you will be shocked at the prices of American made goods. For example an $80,000 BMW made in South Carolina will set you back $300,000 in China because of import tariffs. What do you want to do about that?
A lot of people around here apparently have no problem with Trump's spending and debt so where's the difference?
President Trump hasn’t let me down yet.
I expect these tariffs will prove beneficial to the nation as a whole over time.
Of course the progressives & the never-trumper/globalists will bitch & moan.
China produces more steel because they have more manufacturing though. We need to grow our manufacturing base. That will provide a market for steel and aluminum. Monkeying with the tariffs is a double-edged sword. It helps some industries, like steel in the short run, but it hurts others. And those that it hurts then cut their use of steel and aluminum, which comes back on the steel and aluminum industry. Eventually it backfires. Better to encourage the growth in the manufacturing of the final product, which will increase the demand for steel and aluminum instead of reducing the supply.
And continuing to fund China’s military is retarded.
Yup, and the price is now going up another 10%.
Well let’s see, Trump has experts who advised him that this is a positive move. Nevertheless, the experts on Freerepublic insist they know better. We’ll see. Meanwhile I’ll stand with Trump.
Yes, it is. I'm good friends with a man who owns a small steel biz. He's not happy at all. It's going to cost him a lot of money. Probably will cost a few their jobs eventually if this is not just a threat and turns into a trade war.
I think we mostly agree.
Tariffs protect inefficiency. Sometimes it’s necessary, at other times it is political favoritism.
The only time they are truly warranted is when there’s a good reason to protect a strategic industry. This could be for defense capability. Or, it could be to help a young industry grow.
China protects its auto industry. It is also trying like crazy to develop a national commercial airframe champion, and to become a power in semiconductors, like it has in the solar panel industry.
It does this by charging tariffs, and depressing the wages of its workers.
Robots need maintenance and programming, I think it will lead to more jobs and higher paying ones. The one thing robots don’t do is micro-industries where you make one off’s with 3d printing so there again more jobs and higher pay.
They won't be popular when people see the impacts. Everyone who has a business that this will impact are against this; from small to large business...they are almost unanimous. That attitude will trickle down to their employees.
“Tariffs are a tax on the middle class, which Republicans are supposed to oppose.”
Idiocy. Mark Levin started his program off yesterday with that mantra, and I immediately clicked him off. I have heard that a thousand times.
If that is true, then why do countries so zealously tax American imports coming into their countries when we don’t tax their imports coming into ours?
If tariffs are so crippling to a country’s economy, then why don’t all countries immediately abolish theirs?
I have been lectured to by people on this site that trade deficits are okay. It that is true, then why don’t all the countries in the world compete for larger trade deficits rather than implement tariffs to avoid them?
Morally speaking, if it is okay for other nations to implement tariffs, then why is it so wrong for the United States to implement tariffs?
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