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 ...
And what moral right do you have to dictate to me from who and how much I pay for steel? If you aren’t part of the transaction it’s none of your damn business.
Tariffs are a tax....on everybody. They rarely accomplish what their proponents claim.
We no longer use “Real Money” and we are exchanging bookkeeping entries for hard goods. Sooner or later for those bookkeeping entries to be of any use to their holders they will need to bring them back to exchange them for something tangible. Think of a dollar bill as a check written on an account. If you hold that check you will want to deposit it or cash it in, otherwise it is just a slip of paper.
Across-the-board tariffs are one thing, but tariffs targeted at specific products and (especially) raw materials do nothing but pit one industry against another. A tariff on aluminum sounds great if you’re in the aluminum business, but it’s a disaster if you use aluminum to manufacture products.
This move solidifies the rust belt as Republican.
There is the WTO. But a broader point is that sometimes you need to endure the imperfect because the alternative is worse. And further to the point, you don’t start a fight unless you are fairly sure you can win. In this case I am have a very high degree of confidence that we will lose. Badly.
> I was always anti-tariff in the past, because most nations played it straight on the open market. <
Yep. But suppose China decided to play it straight. No dumping, etc. The Chinese would still crush most US industries. Their workers make peanuts compared to US workers. And the lack of regulations also keep their costs low.
The US cannot just be a nation of consumers. That 20-year-old kid standing on the street corner with no hope...he needs a factory job.
Something has to be done about this. I’m just not sure what.
He now has something they do not like and would like to end. To do so, will require them giving up something.
What if they call his bluff and we are stuck with much, much higher prices which a lot of Americans cannot afford? It’s always good to buy American but the cost is usually higher. We have to decide if we want to pay $7000 for an American made BBQ or $5000 for an identical product from China. As un-American as it might sound, I go for the $5000. My reason, beside saving money, is union workers command far too much wages over non-union. I think a better solution is to bust up the unions with right to work laws.
I could be wrong; I know nothing about economics other than keeping my family budget balanced and pay ZERO interest for credit.
I don’t think so. I have observed for decades how we send containers of agriculture products worth forty or fifty thousand and then get that same container back filled with goods worth hundreds of thousands of dollars. That’s not fair trade, lt’s stupid trade. It has to stop if AmerisourceBergen
Ca is to be great again.
“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.”
Doesn’t anyone remember that we used to have a huge and thriving steel industry, which was destroyed by dumping from foreign countries?
The reason that steel makers only employ 140,000 is that the industry is a shadow of what it used to be. One effect of these tariffs might just be to bring steel making back to our shores.
“And what moral right do you have to dictate to me...”
Are you serious? You must prefer Xi Jinping dictating prices for you over Donald Trump. When our steel industry is destroyed, you must have faith in the tender mercies of a foreign dictator.
And all those industries you want to surrender? During the next war we will have to petition our enemies to supply our steel and computer chips in order to fight them. And our antibiotics to help heal us.
Why do you evade answering my questions instead of going off on the tangential nonsense about “real” money.
If WSJ hates it it must be good policy
Reagan protected ICs and tech. Worked out well
Something has to be done to bring China under control. The trade deficit with them is unacceptable. They care nothing for the rules of trade agreements. They laugh at us. We lose $600 billion per year to them in intellectual property theft. Tarifs are long overdue. If we have to have a trade war so be it.
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?
Isn’t that why Walmart thrives? I believe in low prices and if we put a tariff on imports, our low prices go out the window. As a retiree I must shop low prices.
It is a two way street. If affordable means we will gut our neighbor's jobs, we are in a downward spiral.
In any case, this story hasn't unfolded yet.
It’s always good to buy American but the cost is usually higher.
It is, when American's do not have a level playing field - as they have not.
The rest is labor. When you get to the bottom line, everything is labor. Even the cost of the steel is labor.
I’m happy for you that you have so much money to spend. Those of us on budgets cannot afford higher prices. I barely make it now with SSI and Navy pension. That $30 tax break per month sure won’t cover it especially after 3 years of ZERO COLA. With tariffs come inflation!
Tariffs are how this country was financed the first 100 years. The founders liked them.
Tariffs make sense when trading with nations that violate every norm of environmental rules, use quasi-slave labor, and then dump their products here at a price that our companies cannot compete with.
I’m convinced the globalist free traitors would buy lampshades from Dachau if they were a nickel cheaper.
The free traitors HATE tariffs because they cannot outsource factories to sources of third world slave labor with no environmental laws.
Good for Trump. For just once someone is standing up for America’s workers.
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