Posted on 06/01/2018 6:05:22 AM PDT by reaganaut1
So much for Donald Trump as genius deal-maker. We are supposed to believe his tariff threats are a clever negotiation strategy, but on Thursday he revealed he’s merely an old-fashioned protectionist. His decision to slap tariffs on steel and aluminum imports from Europe, Canada and Mexico will hurt the U.S. economy, his own foreign policy and perhaps Republicans in November.
In March Commerce Secretary Wilbur Ross dangled temporary exemptions to 25% steel and 10% aluminum tariffs to extort trade concessions from U.S. allies. Mr. Ross withdrew the exemptions on Thursday, saying the U.S. “was unable to reach satisfactory arrangements” with Canada, Mexico and the European Union. He means they didn’t unilaterally surrender.
Mr. Ross announced the tariffs under Section 232 of the 1962 Trade Expansion Act ostensibly to circumvent the World Trade Organization. WTO rules let countries adopt tariffs to protect national security, but Canada, Mexico and Europe are hardly a threat.
Canadian steel and aluminum are actually integral to U.S. national defense, as Commerce’s Section 232 reports acknowledge. Mr. Trump complained that Lockheed ’s F-35s cost too much, but now he’s going to make U.S. fighter jets and other weapons more expensive, which could give Russia an advantage in international arms sales. Brilliant. Another irony is that Mr. Trump has denounced China for using national security as a pretext to promote domestic industries like semiconductors. He’s essentially doing the same.
American businesses rely on complex cross-border supply chains that take time and money to change. Most will have to internalize the tariff costs, which will mean raising prices or hiring fewer workers and paying lower wages. The tariffs also create uncertainty as businesses petition Commerce for product exemptions while delaying investment. Note to Mr. Trump: Regulatory uncertainty was a big reason growth was so slow during the Obama years.
(Excerpt) Read more at wsj.com ...
Nicely put. Thanks for succinct post!
Right on cue.
If a country’s steel industry is decimated by dumping inferior product via “friendly” trade partners’ arbitrage, foreign exporters can then charge whatever they want in the new captive market. Eventually the cost of the imported product will rise above the domestic manufactured product.
I think that’s right, he is looking for concessions, and if you never push the buttons on your threats then you will never get concessions.
It’s the first step, leadership requires pain.
Well said
I see what you did there. Very clever
Complex cross-border supply chains that take time and **money** to change.
Congressman and senator wink. It’s how we got into this mess.
On Trish Regan show yesterday or day before, she showed a list of US tariffs versus Chinese tariffs. I had no idea how bad it was.
Did you know they charge us a 65% tariff on wheat and rice and we charge them NOTHING?!!
I cannot imagine which administration EVER thought that was an acceptable arrangement. It’s the US putting a gun to its head daily and pulling the trigger daily. It was beyond ignorant; it was insane.
Jamaica Mon. Massive bauxite deposits.
Because these countries dumping their product here at scrap prices is “fair”.
Australia remains the world’s largest bauxite producer with output of 63 million tonnes in 2008, the year preceding the global economic downturn which had a deep impact on the bauxite/alumina industry. In second place was China at 32 million tonnes followed by Brazil (25 million tonnes), India (20 million tonnes) and Guinea (18 million tonnes). Jamaica had by then fallen to sixth place in the world, producing 14.6 million tonnes of bauxite... Jamaica’s share of world bauxite output has therefore fallen from 18.1% in the 1970s to about 7.1% of total world production of 205 million tonnes in 2008.
With over one-half of the country’s alumina capacity still closed in 2012, and output hovering around the 10 million tonne per annum mark, Jamaica’s position in the world industry would have experienced further slippage.
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Shipping would be cheap and they have a lot of Bauxite
The anti-Trump WSJ hates Trump. So I suppose this belongs in Breaking News?
Ah, the WSJ, never Trump as always.
I don’t think Trump is either a protectionist or a free trader. He is a pragmatic populist negotiating for the best deals.
As a Canadian my position is maybe if we had a real leader, not the boy toy, maybe a deal could have been reached with Trump.
That is without a doubt very true. Look at prices for basic goods in Australia vs Canada. Canada benefits from being next door to the worlds largest economy.
Depends what you mean by protectionism. Canada disgustingly operates a certain form of protectionism in that it highly subsidizes aerospace. IMVHO, that is a practice of corporate welfare, that causes much bitterness from Canada’s West. (Quebec gets handouts, BC and Alberta get squat).
I guess the US operates that sort of corporate welfare/protectionism in Iowa with ethanol.
That would work if your customers are overseas, too. If they are in the US, you would not move operations overseas, you would move to US suppliers of steel and aluminum.
*** “We stopped manufacturing steel because other countries could sell it to us cheaper and we couldn’t export into those countries. Now we have to pay THEIR price for steel.
It’s like oil. Mideast cheap oil was a great thing until OPEC discovered extortion” ***
Well said and very true
Excepting China, for discerning purchasers, imported steel is manufactured to very precise American ASTM specifications.
So, who ever wrote this bs was afraid to put their name on this bs posing as news.
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