The US negotiator:
We are doomed.
Posted on 03/05/2018 4:14:02 AM PST by SMGFan
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..
6:47 AM - 5 Mar 2018
I remember Rush Limbaugh making fun of Perot on that point.
Go, Trump!
MAGA
In the week ending on February 24, 2018, domestic raw steel production was 1,783,000 net tons while the capability utilization rate was 76.5 percent. Production was 1,770,000 net tons in the week ending February 24, 2017 while the capability utilization then was 75.9 percent.
The DOC believes an 80% capacity utilization rate reflects a healthy industry. By healthy, the Department of Commerce in the Section 232 steel report acknowledged that, “Industry analysts note that utilization of 80 percent or more is typically necessary for sustained profitability, among other factors.” Moreover the Section 232 report for steel suggested, “For most capital and energy-intensive U.S. steel producers, capacity levels of 80 percent or higher are required to maintain facilities, carry out periodic modernization, service company debt, and fund research and development.”
American Aluminum industry(on life support)
The Department of Commerce revealed several findings in its analysis. The following help justify the 80% capacity utilization rate arguments:
Aluminum is essential to U.S. national security. In 2016, the U.S. imported more than 90% of the primary aluminum consumed. Therefore, total reliance of imports cannot provide an assured supply of aluminum.
Imports and global aluminum production overcapacity caused by foreign government subsidies (such as China) have had a negative impact on welfare and production capacity of the U.S. Examples of this negative impact include: declining employment, poor financial status of the U.S. aluminum industry and reduction of R&D expenditures.
Domestic aluminum production capacity continues to decline. According to 2016 data, the U.S. produced 840,000 metric tons, becoming the sixth-largest aluminum producer in the world while ranking as the fourth-largest consumer.
Aluminum is a highly energy-intensive industry (based primarily on gasoline prices). Therefore, competitive advantage goes to those who can produce in countries with lower energy costs (such as the U.S.). China, however, according to 2016 data, appears much less competitive than the U.S. based on energy costs. The cost of electricity in China was $614/mt versus $532/mt in the U.S. per metric ton. See our analysis here of the cost to produce one ton of aluminum.
Regarding the capacity utilization rate, in 2016 the U.S. industry operated at a 48% capacity utilization rate. Meanwhile, in 2017, the only two aluminum (upstream) producers in the U.S., Alcoa and Century Aluminum, operated at a 43% capacity utilization rate as measured in November 2017. Domestic production remains well below demand. In 2016, global primary aluminum consumption was 59.7 million metric tons (an increase of 5.4% year over year). China had 53% of global consumption, the U.S. represented 9% and Germany 4%. Chinese consumption remains well below its production level, while U.S. production is substantially lower than consumption.
U.S. imports of aluminum have increased while exports decreased. Imports increased by 34% in 2016 on a weight basis compared to 2013 levels. For the first 10 months of 2017, imports ran 18% above 2016 levels on a tonnage basis. Primary aluminum (unwrought) represents 63% of the total by value. The second-largest category (aluminum plates, sheets, and strips) accounts for an additional 19% of imports.
Aluminum imports coming from other regions have also harmed the aluminum industry. Aluminum bars, rods and profiles coming from Vietnam have increased by over 800% between 2013 and 2016, with the trend continuing in 2017. A portion of the imports in this category from Vietnam are likely circumvented Chinese products trans-shipped to avoid duties.
Meanwhile, U.S. aluminum exports decreased over the 2013-2016 period. Also, for the first 10 months of 2017, U.S. exports showed a slight decrease in numbers, falling by 8%. U.S. exports go mainly to North American Free Trade Agreement (NAFTA) partners and neighboring countries.
Well said.
And I steadfastly avoid buying any foodstuffs from Mexico — or any South American or Asian country. I will buy food from Canada.
They will if it becomes too costly to import the steel. How can anyone expect an American worker to live on the wage that is paid to a worker in Mexico or Brazil?
This would have been a far greater country by now if we had ignored "two party politics" and elected Perot in 1992. It would have also saved us forevermore from the misery of the Clintons and the Bushes.
A quarter century without Bill, Hillary, Dubya, Jeb! and probably Obama? We could have had it.
Hear hear!
Thank you Sir for keeping your campaign promise!
This is one of the main reasons we voted for you.
It’s called reciprocal trade. We tax other countries the same way they tax us.
Why????
Because if we do not the business moves to the country with the higher tariff.
Why would a business do that?
Answer: Because that way they can sell BOTH to China and the United States for free.
If they stay in the United States and try to sell to China they are TAXED THROUGH TARIFFS. On top of that China will manipulate their currency if we sell too much to them to protect their business.
Wake up China has been in a trade war with the United States for almost 20 years. The United States is being deindustrialized.
Rigged ONE WAY TRADE that the Globalists loves created massive trade deficits, massive job loss, weakening of U.S. dollar, more pollution (factories in countries w/less regulation), less savings, less investment in America, etc. over the last 20 years.
We were a super power with tariffs before these RIGGED ONE WAY TRADE SCAMS.
Reciprocal trade is the only way to do thinks and it’s fair.
Why is this so hard to figure out???
Exactly. Thanks for posting. Steel is very close to capacity.
Bring it Don!
Last time I checked Antarctica was not a nation. But who knows...
For many of us conservatives in academia, NAFTA was just about the last nail in the coffin of American trade equity. It has never been anything except what it is. And we NEED OUT OF IT SOONER THAN LATER.
The original Reagan/Mulroney FTA was very good for both the US and Canada. Most tariffs and trade obstacles were removed, yet revenues for both nations were either unaffected or increased.
The big mistake was bringing Mexico into the deal. Two first world economies partnering with a third world economy is a recipe for failure, as we have seen.
Aluminum is at 48%, which is game over if it continues to decline.
“I just hope Trudeau is not so stupid that he would tie Canada’s future to Mexican participation in NAFTA. Although, “
If Fidel Jr. shows up in Mexico City wearing a poncho and sombrero you’ll know.
The US negotiator:
We are doomed.
I like the Bambi vs. Godzilla analogy.
Bambi was tougher than Trudeau.
The EU 10204 requires the “point of ladle” That means the original melt country must be disclosed.
So true ..
Sadly , Ross is part of Dell now .
And Dell entire workforce is now in Mexico !
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