By on March 16, 2018

Steel Worker

Earlier this month, President Trump signed an executive order imposing a 25 percent tariff on foreign steel and a 10 percent tariff on foreign aluminum. Hoping to receive an exception, the Japanese auto lobby warned that the U.S. import tax would definitely inflate the price of models built by the companies it represents. That’s bad news.

However, the White House has already omitted its NAFTA partners from the tariffs, adding that it would consider further exceptions based on countries’ contributions to U.S. national security, military alliances, trading history, and how much they pay into strategic alliances like NATO.

While Japan is a longtime trading partner with the U.S., there currently exists a $69 billion deficit between the two countries. Trump also bemoaned Japan’s unwillingness to accept American imports. Still, the two have shared military alliances throughout the 20th century, with one ugly exception during World War II. They currently operate under the Treaty of Mutual Cooperation and Security and the U.S. currently considers the Japan one of its closest allies, despite it not being a NATO member — placing it in reasonably positive standing for tariff exceptions. 

On Thursday, the Japan Automobile Manufacturers Association (JAMA) said it is anticipating what kind of exemptions might be made for U.S. trading partners beyond Canada and Mexico. Obviously, it hopes to be considered. While Trump’s strategy may be aimed at China, which accounts for almost half of the world’s steel production, Japan is the second highest steel exporter by volume and would be hit hard by the import fees.

According to Automotive News, JAMA Chair and CEO of Nissan Motor Co. Hiroto Saikawa said U.S. tariffs would likely drive up auto prices across the board. “If there is going to be a tariff levied, then everyone will have to raise their prices,” Saikawa said in a recent press conference. “I don’t think this will have any good impact.”

Trump’s initiative drew praise from domestic steel executives and union leaders, but the general mood in Washington is one of concern. Democrats are likely to oppose the president at every turn, and many Republicans have openly voiced their opposition to the tariffs, too. House Speaker Paul Ryan said he understood China’s steel dumping was a serious problem, and certainly unfair to other countries, while urging the president to exercise caution.

“I think the smarter way to go is to make it more surgical and more targeted,” he said.

Ryan said a blanket approach could have “unintended consequences.” As of now, those consequences have not yet fully manifested. Saikawa did not bother to estimate how much Japanese car prices might rise and noted that the country’s automakers try to source steel locally whenever possible. That could help suppress the price bloat, though there’s no way of knowing by how much until more time has passed.

“We do not see the full picture,” Saikawa said. “We have to wait and see.”

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100 Comments on “Japanese Automakers: Trump’s Steel Tariff Will Cost You More at the Dealership...”


  • avatar
    Astigmatism

    “Trump’s strategy may be aimed at China, which accounts for almost half of the world’s steel production.”

    Except that we’re not imposing tariffs on the world’s steel production, we’re imposing tariffs on steel that gets imported into the United States, and of that, Chinese steel accounts for only 3%, compared to 6% for Japan, 24% for our NAFTA partners and 21% for the EU. If Trump’s strategy is aimed at China, I hate to see what a men’s room looks like after Trump aims at the urinal.

    BTW, didn’t TTAC make it is mission for years to point out that the reason the Japanese don’t buy American cars is that the Japanese don’t like American cars?

    • 0 avatar
      scott25

      In a politician’s dream world, the Japanese brands would be producing cars at their factories here to send back to Japan….

    • 0 avatar
      volvo driver

      “Trump’s Steel Tariff Will Cost You More at the Dealership”

      MAGA!!1

    • 0 avatar
      Peter Gazis

      Astigmatism

      BMW & Mercedes both have factories in the U.S. Some of the crossovers they produce here are sold in Europe.

      Toyota, Honda, Nissan & Subaru also have factories in the U.S. NONE of the vehicles they produce here are sold in Japan.

    • 0 avatar
      dont.fit.in.cars

      Nope. China routes its steel THROUGH Mexico and Canada. Example truck chassis built in Mexico is made with Chinese steel. A loophole China exploits.

      NAFTA was suppose to be trade within North America… it’s not.

      • 0 avatar
        Big Al from Oz

        don’t.fit.in.cars,
        “NAFTA was suppose to be trade within North America… it’s not.”

        NAFTA is an accord to facilitate trade between Mexico, Canada and the US, which in turn HAS benefitted the US and the US consumer.

        How do you arrive at this?

        • 0 avatar
          dont.fit.in.cars

          See below. And it’s gutted our manufacturing base.

          • 0 avatar
            Big Al from Oz

            dont.fit.in.cars,
            Here is something you should seriously consider regarding to loss of blue and white collar jobs.

            I’ve also read that 1/3 of all Degreed jobs will be lost to AI enabled computers in the near future. So, just having a Degree offers little protection and ensures good pay.

            “The Impact of New Technology on the Labour Market
            Both blue-collar and white-collar sectors will be affected. The faster the process of the division of labour and the more single working or process steps can be described in detail, the sooner employees can be replaced by intelligent algorithms. One third of current jobs requiring a bachelor’s degree can be performed by machines or intelligent software in the future. Individual jobs will disappear completely, and new types of jobs will come into being. It must be noted in this regard, however, that no jobs will be lost abruptly. Instead, a gradual transition will take place, which has already commenced and differs from industry to industry and from company to company.”

            Here is a cut and paste and link as well to read and learn where the jobs are going. What is amazing countries like Indonesia and Thailand are adopting robotics quicker than the US. So, how can the US compete if it doesn’t invest in the same manufacturing technology?

             Japan currently has the largest stock of industrial robots in operation, primarily in the automotive industry. Driven by a rapidly aging population and low productivity rates, the Japanese government has set its sights on a 20-fold increase in the use of robots in the non-manufacturing sector and a three-fold growth rate of labour productivity in the service sector, both by 2020 (Ministry of Economy, Trade and Industry, Japan, 2015).  Some emerging and developing economies – notably Indonesia and Thailand – are installing robots at a high rate, recognising not only productivity but also quality advantages from automation. (Boston Consulting Group, 2015)

            https://ifr.org/img/office/IFR_The_Impact_of_Robots_on_Employment.pdf

          • 0 avatar
            dont.fit.in.cars

            For BIG AL

            NOPE. That’s a robot industry white paper and your in my wheelhouse now. I’m in packaging industry and familiar with automation. Robot ROI’s in low capital business (small & medium) never pays for itself. 35k for a bot, another 10k for tooling, 10-30K for conveyors, another 10-15K for safety cages and that does not include programing (10-15K). That’s a 2.5 year ROI that can do one station with no guarantee it will run without issues during that time. In addition, small and medium business create multiple product streams in order to survive. The constant change over is havoc on a robot. Combine that with contracts lasting at most three years, its easier to stick with labor.
            High Capital product can afford bots but need an army of programmers and maintenance to keep them running.

            The problem in the workforce is the majority is task complete instead of observation and correction. It’s a byproduct of hiring illegals and people who can’t think for themselves. See it everyday. You don’t because of Oz’s strict immigration laws.

            The key is making equipment that’s helps workers be more efficient, not replace them. Example hand filling pouches. The universal constant (accounting for weighing, filling, sealing and case packing) pouches is 1.25 per minute. A pouching machine with all the fixings is 600-700K and produce about 10 pouches per person per minute. I cut that cost in half and raise from 1.25 to 6.5 per person per minute using 7-8 people at 60 per minute.

          • 0 avatar
            ect

            dont.fit.in.cars, “gutted our manufacturing base” is completely untrue.

            Since NAFTA was signed, US manufacturing production (in constant dollars) has doubled. That’s the polar opposite of “gutted”.

            During the same period, direct manufacturing employment in the US has fallen by 1/3. That’s due to technology.

            Fortunately, technology has created many more jobs than it has destroyed. And better jobs, at that. Which is why the US is at full employment.

      • 0 avatar
        Astigmatism

        I don’t understand what “loophole” you think they’re exploiting. Mexico can buy its steel from whomever they want. There’s nothing in NAFTA that says that you have to Buy NAFTA, or that the products you sell to NAFTA partners must be made with 100% NAFTA-sourced raw materials.

        • 0 avatar
          dont.fit.in.cars

          % of Raw materials to be sourced in North America. China provides 50% of the worlds steel

          https://theconservativetreehouse.com/2018/03/02/unhappy-canada-vows-retaliation-for-steel-tariffs-nafta-steel-tariffs-and-an-introduction-to-liu-zhongtian/

          China is building auto parts and shipping to Mexico for install on car bound to US. And shipping raw steel to make truck frames.

          • 0 avatar
            Big Al from Oz

            dont.fit.in.cars,
            Yes. So what? If you read my above comment to you, you’ll see why. The US is not investing to best gain advantage from new technology. Others are doing it better.

            This is called competition. I’d say the US had better become more competitive and tariffs are not going to make the US invest in technology and system to improve productivity. All tariffs do is keep on the same old track with little improvement.

            So, when you go shopping to you go to the most expensive outlets?

            Why should it be any different for countries, business or anything for that matter?

          • 0 avatar
            dont.fit.in.cars

            Simply not true. Regulation or taxes crushes innovation and add what’s happening to capital funding. Wall street controls investing. Would you risk 1 million on a 10 year business with positive cash flow but needs new equipment to gain new markets. A US bank will not fund it but will drop 1 million in a wall street overseas investment fund with a 8-10% return in a heartbeat.

            There are no free markets only controlled markets. Investment groups buy up entire industries…farms, processing, packaging distribution, logistics.

            Long winded but explains it.

            https://theconservativetreehouse.com/2017/12/26/exiting-nafta-the-myth-of-global-markets/

            I’m not a head in the sand guy but see companies move out of state and out of country. There’s been a few to return due to cost of business from Mexico (everyone taking a cut or paying protection). I also see amazing folks building something out of nothing and others fail completely.

  • avatar
    seth1065

    I am sure the prices will go up , and I do not put it pass any car company to blame the tariffs even if they do not effect them, and I think in the long term the tariffs will do more harm then good but that seems to be the way this tariff works, Bush tried it and it lasted a year before he got pushback that helping a fairly small group of steel workers ( about 140,000) vs most who have to pay the higher prices ( millions of manufacturing workers and consumers) was not a good trade off. Much of the steel mills here if the reopen at all will takes years and be very automated is my understanding. I am fine w a level playing field but this tariff does not seem level.

  • avatar
    carguy

    The stupidity of tariffs is that they protect only a few jobs while millions have to pay more for all products that contain steel. This is half-baked populism at its worst.

    Let’s do the numbers just for cars:
    According to American Iron and Steel Workers Institute there are 140,000 steel related jobs in the us.
    WSJ estimates that the tariff will add $300 to the cost of every car.
    Given 15M in annual car sales that would be $4.5 Billion in additional consumer costs or about $32,000 per steel job JUST FOR CARS.

    Once you add every other product to this equation that uses steel (including construction), you will find that this number will multiply many-fold to the point where the consumer cost exceeds any job benefit many times over.

    But who knows, I hear that economic conservatism is considered fake news these days.

    • 0 avatar
      gtem

      Now, extend your numbers for the benefits to local economies inhabited by those 140k steelworkers.

      The steel/aluminum stuff is very much a national security issue to boot. I’d argue the same point for circuit board printing (and a bunch of other stuff).

      • 0 avatar
        Sceptic

        All that money will not just disappear. The money collected in taxes will go towards balancing federal budget, hopefully.

      • 0 avatar
        Big Al from Oz

        gtem,
        The Pentagon released a statement that contrdicts your view. 3% of US metal use is for US defence.

        Who is correct here?

        • 0 avatar
          gtem

          Okay, and what happens in the (unpleasant to think about, but possible) scenario of a large scale conflict where we are either engaged directly with or against a proxy of China or someone else that we now sometimes find ourselves relying on for materials/components going into military hardware? Last year all DJI sourced drones in the US military were grounded when they realized there was a “backdoor” in the software. In an emergency situation a country needs to be self-sufficient for elevated demand for whatever military purposes. We simply lack the industrial capacity to rapidly build up an “arsenal of democracy” like we used to. To say nothing of Australia, you guys are really screwed if China decides to get feisty.

          • 0 avatar
            Vulpine

            Would it really matter? Either way, mankind is screwed if we ever break out into a global-scale war again; somebody, who knows who, WILL use whatever nukes they have, whether in a limited effort to win a single battle or an overall effort to wipe out the opposition. When that happens, society is screwed and pretty much everybody is going to be stuck with whatever they can make locally–if they survive at all.

          • 0 avatar
            Big Al from Oz

            gtem,
            The US has very close alliances. Isn’t this what friends are for?

            The US has the EU, Australia, Japan, Canada, etc. Why would we not help the US in conflict? We are working together now globally in economic reform (except Trump), security and environmental challenges (again, except Trump).

          • 0 avatar
            John Horner

            Military preparedness was just the excuse Trump used, and he used it because it was an exemption allowed under international treaties. The real point was protectionism. How far this goes and what the end game is, nobody knows ….. including Trump.

          • 0 avatar
            highdesertcat

            John Horner, exactly right!

            As to how far this goes? Most of the bluster, including the threat of tariffs, is just a bargaining tool, common in capitalist business dealings.

            By volleying the ball to the opponent’s court, Trump is giving them an opportunity to meet his demands, or not, and then escalate the differences to the next level.

            Most trading partners and NATO will acquisesce to Trump’s demands. In fact NATO already has by paying more money into the kitty, unheard of over the last 25 years.

            Next, the UN.

    • 0 avatar
      TrailerTrash

      If this were true, why are the competitive markets imposing higher tariffs on imported USA goods?
      They are, right?
      Are they not worried about their own?

      And, here is the larger issue Trump is addressing that has nothing to do with cost of goods…it is the condition of the national security.
      I remember how we won the wars…it was through our national power to produce.

      And without a steel or aluminum industry, you got nuthin.

      • 0 avatar
        srh

        “If this were true, why are the competitive markets imposing higher tariffs on imported USA goods?
        They are, right?
        Are they not worried about their own?”

        Simple. Because everybody loses in a trade war.

      • 0 avatar
        Big Al from Oz

        TrailerTrash,
        Post a list of these tariffs and US tariffs.

        I think you’ll find more often than not the US is uncompetitive.

        • 0 avatar
          TrailerTrash

          you don’t know?
          you don’t know there is a common tariff on all imports to the EU?

          you want me to start doing your research?

          http://www.pacificpundit.com/2018/03/04/us-europe-auto-tariffs/

          “On average, the EU applies a 3 percent tariff on U.S. products, while the average tariff applied by the U.S. is 2.4 percent, the European Commission said, adding that isolating cars is “cherry-picking.” U.S. currently applies a 2.5 percent tariff on European car imports.”

          but let’s not get nitpicky and look at only cars and steel or aluminum….

          • 0 avatar
            Big Al from Oz

            TrailerTrash,
            There is more to trade than dollar and cents tariffs. Goods and Services can be stopped at the US border with administrative measure, ie, different regulations, expensive red tape, etc.

            Here read this link and you’ll see the US isn’t as “free and easy” as you are lead to believe.

            Here is the view you hold, because Trumps views fit into your simplistic and easy to manage paradigms on what is wrong with the US. Sit down and do much research on global trade.

            ………………………………………..

            Peter Navarro, a White House aide who played a key role in President Trump’s plan to impose new steel and aluminum tariffs, has been making the rounds on television shows to argue that the United States has such low tariffs on imported goods that it is getting taken to the cleaners. As he put it, the result is a “a half-a-trillion-dollar-a-year trade deficit, which is draining us dry, taking our jobs, putting them offshore, harming the workers of America, and driving down wages.”

            ………………………………………..

            The Facts
            Navarro referred to both tariffs and non-tariff barriers.
            Tariffs are simply the levy, or tax, that is added to a product when it is exported from one country to another. In theory, that should be easy to quantify. But, as shown below, there are several ways to measure this.
            Non-tariff barriers are more complex, but can include licenses, quotas or technical barriers. Navarro referred us to a report by the Office of U.S. Trade Representative, which refers to non-tariff barriers by other countries, but it does not have a quantitative comparison or make the case the United States has lower non-tariff barriers than other countries. We checked with several economists and this is really not easy to quantify, though some have tried. Credit Suisse, in a 2015 report, concluded the United States has more non-tariff barriers than other major trading countries.

            https://www.washingtonpost.com/news/fact-checker/wp/2018/03/08/trumps-trade-war-does-the-u-s-have-the-lowest-tariffs-in-the-world/?utm_term=.a9dc4167dede

            Please realise it isn’t just “tariffs” that impede trade.

            If the US removed it’s military sales to countries what would be the US’es trading position?

            Imagine if the Chinese were allowed to buy US military hardware, like Australia? Which way would the trade imbalance sit?

            I’m not saying the Chinese should be able to buy US military tech, but it plays a huge role in global trade with the US.

        • 0 avatar
          TrailerTrash

          Big Al…I don’t need a lecture on trade deficits.

          In fact, you ignored my main point that the real issue is the steel and aluminum…and national security.

          I understand IF you add in everything, like shoes, peanuts and whatever, it becomes more difficult to compare.

          But again…the entire plan evolves around national security…not trade deficits.

          Please try to understand. It is NOT about deficits! You cab have TRUE free trade and STILL have deficits IF your citizens want more goods from someplace else. And that is fine…as long as TRUE free trade exist.
          It does not.

          You do NOT become a world superpower IF you cannot compete or produce major products.

          • 0 avatar
            Big Al from Oz

            Sorry TrailerTrash,
            I think you’ll find most steel for military use is specialised alloys made in much smaller quantities that is relevant to the US military.

            All Trump had to say was “The steel alloys (X) are not to be imported into the US.

            The US military represents 3% of US steel use. So the specialed alloy would be significantly less.

      • 0 avatar
        Lou_BC

        “I remember how we won the wars…it was through our national power to produce.”

        Wow……NO!

        “Our national power to produce” is because in ALL of USA’s wars, continental USA has not been the battle ground.

      • 0 avatar
        John Horner

        The US hasn’t “won” a war in a very long time. Modern wars are nothing like WWII.

    • 0 avatar
      Vulpine

      Anyone remember the Chicken Tax? That one caused a 50% jump in automotive prices, including (but not limited to) pickup trucks that had once been very, VERY economical to buy and own.

      • 0 avatar
        Lou_BC

        @Vulpine – I gave up arguing that one!

        • 0 avatar
          Big Al from Oz

          Lou,
          There is a guy who’s been to Spain over 36 times and swears there is a large F-150 market in the country, with those miniscule village roads to navigate.

          He also lives in Winnipeg in a two bedroom apartment with 17 full size pickups.

          His best claim is the 25% Chicken Tax has no impact on imports. When he is confronted with why then have it? He’s lost. His response is “it doesn’t impact US manufactured pickups”. Boy what about imports. I think he thinks there is only one country in the world the USA. So how can there be imports?

          • 0 avatar
            DenverMike

            Wow, BAFO remembers the Chicken tax (thank god). But BAFO forgets the EU has a Chicken tax of their own.

            And he still can’t come up with a what truck or trucks (make/model, county of origin) the Chicken tax has “deprived” us of.

            Nor how those mysterious ghostly, little trucks would affect the price of the trucks we do have for sale, especially HDs to F-450s, not to mention Tundra/Titans, or high end Big 3.

            Apparently he hasn’t ever heard of such things as US Lemon Laws, a weird concept in his part of the world obviously.

      • 0 avatar
        DenverMike

        @Vulpine – That doesn’t even make sense, even considering it’s total fiction. Even BAFO makes more sense here (not by much).

  • avatar
    TW5

    The issue is not whether tariffs will lead to a bright new future. They won’t. The issue is whether or not the current “free trade” paradigms have anything to offer the US. They don’t.

    Fake free trade is a poison pill that benefits a small upper-class minority, and unless you’re at the pointy end of a capital investment pyramid, and you’re good at skimming extortionate fees, you aren’t going to be particularly affected. It’s sad this needs to be explained considering the growth of the trade deficit and sagging US wages in the 21st century, but many people are oblivious.

    When you realize that our trade deals are fake free trade, and most issues are negotiated among the many nations, you’ll realize we are allowed to negotiate for a better deal regardless of what the WTO says.

    Of course, the rest of the world could be hostile, and announce their own retaliatory tariffs and trade barriers. A trade war could ensue and the global economy could be dragged backwards 50 years.

    If the EU, China, and Japan want to go back to the 1960s, go ahead, make our day.

    • 0 avatar
      srh

      “The issue is not whether tariffs will lead to a bright new future. They won’t. The issue is whether or not the current “free trade” paradigms have anything to offer the US. They don’t.”

      This is false. Free-trade, even “one-sided”, still benefits the US.

      • 0 avatar
        TW5

        It’s not free trade. Are you going to understand that sometime during this century or are you going to keep pretending that the millions of pages of import restrictions, export subsidies, and international trade agreements are tantamount to free (unregulated) trade?

        • 0 avatar
          Lou_BC

          “benefits a small upper-class minority”

          That is true but that is how the USA has always functioned under a fully capitalistic model. All the wealth gets concentrated at the top.

          Government needs to shift some of that wealth down to the middle class and lower class in the form of investment in infrastructure, education, health and social programs.
          The USA is currently very poor at investing in its populace.

          • 0 avatar
            TW5

            Wealth was relatively evenly distributed prior to the industrial revolution, except in the plantation South. The wealthy industrialists captured huge amounts of wealth in the mid-late 19th century. In 1913, the US Federal Reserve Bank was born to stabilize credit and help lubricate the wheels of commerce. Obviously, this would be most beneficial to the capitalist class so federal income tax was introduced in 1916 on wealthy people. Middle class got away Scot free.

            Yes, the United States is terrible at investing in its people. After WWII, the middle class was in great shape, and then this fruitcake Texan named LBJ passed the Great Society. It plotted a course to redirect federal spending from workers to non-workers, while also raising taxes on workers because the top statutory rate was already around 70%.

            Naturally, this backfired catastrophically. As Democrat workers lost out, they started becoming socialist agitators. Republicans became Chamber of Commerce Coolidge types again. Somewhere along the way the Chamber of Commerce realized they shouldn’t be fighting the socialist agitators. Let them raise taxes on themselves and increase benefits. We’ll offshore all of their jobs and invest in foreign corporations. We’ll push backdoor gun control like Brady Bill and NFA 1968 & 1986 so they can’t mess with us. We’ll sabotage the employer healthcare system and make them push for universal single payer so we can dump our healthcare costs on Uncle Sam. Along the way we’ll cut investment income taxes and then pretend we’re really offended when income taxes go up. Hah!

            Eventually this sort of fatalism manifest itself in Congress, too, since representative democracy is a check on mob rule. Therefore, plutocrats must control Congress to play their Machiavellian games. Corruption became rampant, culminating with the Obama-Clinton affair.

            Trump has basically said “party’s over”. “Fake conservatives and fake socialists can go die under a tree”. It’s quite refreshing, even if it doesn’t lead to endless riches.

          • 0 avatar
            Big Al from Oz

            TW5,
            After WWII the middle class was created from the collapse of the European middle class.

            Industry moved across the Atlantic to support and rebuild. Australia, Canada and NZ experienced the same middle class event.

            Now, WWII is almost long and forgotten others, like the EU have caught up and now newcomers are in the mix.

            We just need to be more competitive.

            I have yet to see or hear anyone in the US state “we are not winning, what do we need to do to improve”. All I hear is “Oh, we are not winning, so who is cheating us”.

            This is a very arrogant attitude.

          • 0 avatar
            TW5

            @ Big Al from Oz

            All we hear is “You Americans are cheating. You’re not allowed to levy protectionist tariffs and subsidies like we do. You’re not allowed to cut corporate taxes that low. You’re not allowed to say ‘no’ to our multilateral trade agreements and our climate accords.”

            We rebuilt the competition in western continental Europe. We rebuilt the competition in Japan. We opened our markets to China and helped Deng Xiaoping transition to modern market-based economic policy.

            I’d hate to think what the world would look like if we actually started playing mean.

          • 0 avatar
            Big Al from Oz

            TW5,
            Please post a link indicating that others claiming the US is cheating.

            Again, come on man, get real here.

            Globally we are hearing and seeing “The world is screwing the US”. How ridiculous. Why is it when the US isn’t the “best” it is obvious that someone else is causing the US to not be the best?

            The US will need to learn to play second fiddle more and more as the world grows. It can’t be the best at everything now, even steel production.

            The US needs to make greater adjustments than any other free nation to fit into the new world.

            Others nations have spent decades creating a system of trade reliant on each others strengths more so than the US. Look at the auto industry. The world outside of the US created a system of standards to streamline auto trade.

            The US was large enough in the past to cover all bases industrially. Now it is more competitive.

            Its competition that the US needs to look at and how to better compete.

            The world isn’t going to change because the US isn’t competitive.

            Take this steel and aluminium issue. When the US was more influential in the global markets did it care about it’s effects on the globe?

            The reality is Chinese expansion is doing what American expansion had done globally.

          • 0 avatar
            TW5

            @ Big Al from Oz

            If you don’t think we are cheating by applying prevailing tariffs on goods and services, like the rest of the world, why do you keep belaboring the point?

            We can snap our fingers and send the developed world back to the dark ages. Japan’s debt to GDP ratio is nearly as bad as Greece’s. Nearly all Chinese GDP growth is trade surplus with the United States, and that deficit bolsters EU suppliers who provide high tech components. Same is true of South Korea. Furthermore, if we actually invested in alternative energy, the Middle East, Africa and Russia would collapse. That’s why the international community tries to lure us into climate agreements where we pay poor nations to let America become more green.

            The world is not growing increasingly independent of the United States. The world is growing more dependent upon us, and our lazy trade policy, and our rampant money printing, and our feckless politicians who sell American industry to the neediest bidder. As they grow it takes more American pork to feed them. If the world was independent, they wouldn’t care about reciprocal tariffs. We certainly didn’t care when they used tariffs for 50 years to keep the US out.

            We rebuilt the competition, and we’ve been handicapping ourselves for generations to be good global citizens. If we complain about people taking advantage of our generosity, it’s because we’d rather not be forced to play rough.

          • 0 avatar
            Big Al from Oz

            TW5,
            First, I didn’t say the US is cheating. Where have I ever written that?

            Second, read all in context. Don’t cherry pick one word without relating the context in which it is used. Politicians do that to prove a point when they don’t have one.

            Comprehend the jist of my argument or point.

            It’s quite simple.
            1. The US feels threatened by competition. The US is falsely overstating, understating, overreaching, etc the situation of it’s trade imbalances to justify what has been described as counter productive measures.

            It appears many in the US feel if we are not number one, then something or someone has caused this, ie, being taken advantage of. I do believe the US is transitioning right now from the “only” major economy to one which needs to share and compete.

            When you are by far the biggest for so long, competition becomes distorted. The US faces real challenges for change and the people of the US must stop this belief that all took American jobs, this is pure nonsense. What the US is encountering is had by all globally and the jobs lost in the US are gone forever. They don’t exist in Mexico, China, the EU or anywhere. So, many in the US feel they are entitled more so than others to gain these jobs back are going to be in for a shock. Because everyone has lost these jobs as well. They just don’t exist on the planet!

            2. For the US to improve it’s position, the US must achieve this. This will not be achieved by attempting to drag down other nations with tariffs and barriers into the US. This has been proven on numerous occasions to not bear fruit. (oh, don’t take that literally either, fruit is traded).

            3. The US is shrinking proportionally as a part of the global system. This means the dominance the US once had with all aspects of nationhood, nation building and expansion has become more competitive, so the US will not be number one at everything.

            4. The US and it’s people must also realise the US didn’t make the world what it is, it didn’t fund it all or build it. It contributed significantly.

          • 0 avatar
            TW5

            @ Big Al from Oz

            Allegations of cheating is implicit in your remarks. If you didn’t think some injustice was being done, you wouldn’t be lecturing.

            What happened when the US mortgage market imploded? The global economy nose dived. Even China was in relatively bad shape because the trade deficit narrowed sharply. Is this the sign of a powerful world independent of the United States? No.

            When the Asian Crisis happened did the American economy plummet? No. It started growing at 5% because we stopped getting robbed for a half decade.

            We’re trying to kick the rest of the global economy out of the house and make them stand on their own feet and develop their own consumer economies. They just keep running up huge credit card bills on our Federal Reserve balance sheet by subsidizing industry out the United States. It’s lucrative “business” (it’s actually economic warfare).

            The reason some very prominent Americans argue against domestic independence and balanced bilateral trade is because they are control freaks who think the rest of the world is our baby and/or they are the corrupt businessmen/politicians selling secrets, IP, and entires businesses to foreign governments for mega bucks. This coopts bankers and wall street fund managers who want to manage their money.

            No more. Party’s over.

  • avatar
    PrincipalDan

    Oh I know, let’s reestablish voluntary automotive import quotas of the 80s!

    Oh wait, there’s almost more “foreign cars” being built in the USA than “American” cars.

    Never mind.

    • 0 avatar
      TrailerTrash

      i don’t think this is any large connection to the automotive scene.
      the amount added to each car is significantly LESS than the cost of all the FORCED safety airbags.
      forced placement of explosives into our cars was much costlier.
      it has everything to do with a larger national security and industrial position.
      the auto part is needless noise.

    • 0 avatar
      Big Al from Oz

      PrincipalDan,
      The 80s issue with Japanese imports was not as voluntary as you would think. The US position was if the Japanese didn’t “volunteer” to reduce vehicle imports into the US, the US would impose tariffs on a wide range of goods.

  • avatar
    Sub-600

    I like the idea of tariffs on principle, steel dumping has been going on for too long. On the other hand it seems silly to blame foreign governments for helping their automakers when we bailed ours out after Japan crushed them, well, Japan and the UAW.

    • 0 avatar
      TW5

      As it pertain to domestic auto manufacturing, you’re right. Tariffs to protect them are absurd. However, steel is used in a much wider context and producing enough to secure US infrastructure and US military demand serves a national security interest, which is critical.

  • avatar
    Vulpine

    That executive order can still be blocked by Congress AND the courts. Remember, the Office of President is only one of three branches of the American government. Either of the other two can override the President if it is felt he has overreached his authority. Even if Congress chooses not to override him, the Courts still can if the orders can be deemed illegal.

    • 0 avatar
      TW5

      On what grounds? Tariffs are not unlawful, and everyone, even the most ardent hate-America-leftists, know that steel dumping is a real thing, and steel quality is occasionally falsified (not just in the case of Kobe Steel).

      Furthermore, we have a national security interest in protecting domestic steel and aluminum production for critical infrastructure and equipment. The same is true of carbon composites and various materials used for conductivity and heat brake. These industries are protected by defense subsidy to keep them domestic. Nations protect domestic production of critical commodities, and some use this practice to justify steel dumping.

      If the courts intervene, it will be nothing but America Last political brinksmanship. Same as blocking the travel ban.

      • 0 avatar
        Big Al from Oz

        TW5,
        And US industry doesn’t take the US military for a ride? Give me a break!

        US industry profits wildly out of the US military.

        • 0 avatar
          TW5

          We’re not talking about the auto industry. We’re talking about materials manufacturers, in this case, steel, carbon, aluminum, and advanced conductors and heat shielding.

          Much of our advanced materials industry is protected and demand subsidies are granted through the department of defense. Apparently, our steel and aluminum production have dropped to the point where core demand for infrastructure and defense cannot be met regularly by American producers. This will be particularly true if the Trump admin focuses on rebuilding the military and US infrastructure.

          We will need more US production, and the Trump admin is apparently not going to listen to advisers who say the US can’t produce it. The Obama administration listened to those people and it appears we were sold slag because Trump is fighting mad about it, and said the US was sold a bunch of crap. I don’t think it was hyperbole.

          • 0 avatar
            Big Al from Oz

            TW5,
            Advanced industry?

            This isn’t the 60s and 70s anymore. The EU has as much advanced tech as do the Japanese as the US.

            The advanced tech the US has is already heavily protected and can’t be exported. Whatever is exported is available globally.

            How many countries put satellites into orbit? What about the particle collider between France, Switzerland and Italy?

            These new SCRAM jets for hypersonic travel why and how can the US protect this technology when it didn’t create it?

            A lot of the technology in the US comes from outside of the US now.

            Even back as far as the Space Race the US relied on countries external to the US for the US to achieve the goals it set.

            Lets be real about things. The US does alot, but it is proportional to it’s population now.

  • avatar
    npaladin2000

    Everyone remember that this only affects steel imported into the US? It’s likely cars built overseas and then imported would not be affected, since they’re not importing metal, they’re importing cars. The only ones that would be affected are the ones who build their cars here, but ship steel in from their homeland rather than buying it locally.

    Ultimately, this is a lot of sound and fury signifying very few losing their investment income in some industry stocks. I doubt most people will even notice the price difference in the products they buy, assuming there even is any.

    • 0 avatar
      Astigmatism

      If your point is that this tariff incentivizes manufacturers to build more cars overseas and fewer in the US, you’re right.

      • 0 avatar
        npaladin2000

        That’s part of the point. The other part is that said manufacturers are overstating the impact some, as only US domestic production that uses imported steel would be affected. Imported cars would not be impacted. Cars built domestically with domestic steel would not be impacted. Any car manufacturer that switches from imported to domestic steel sources would not be impacted (and make no mistake, all these companies have been and will continue to just use the cheapest option available to them, period).

        • 0 avatar
          Astigmatism

          “Only US domestic production that uses imported steel would be affected. Imported cars would not be impacted. Cars built domestically with domestic steel would not be impacted.”

          None of that is true – in fact, it misses the entire point of tariffs, which is to allow the domestic industry to raise its prices to a level it was unable to when foreign competition came in at a lower price. Steel tariffs raise the price of _all_ steel, which gets borne by any industry that use steel (any steel, domestic or imported), meaning that domestic cars are more expensive, which means that foreign cars be more expensive too while staying competitive.

  • avatar
    Big Al from Oz

    It seems there are some in the US who need educating.

    Here’s the problem which is far bigger than the Trump Metals Tax. The Trump Metal Tax highlights the plight of the worker who feels hopeless with the rapid global changes. This ain’t goin’ stop, whether the US has tantrums or not.

    1. The US economy is shrinking proportionally to the world’s by an accelerated pace. 1950 the US was just over 50% of global activity, now it’s down around 20%. This impacts all aspects of the US’es ability to influence outcomes that suit it (when ‘Murica was Great). So, in essence ‘Murica’s greatness is reducing at an accelerated pace.

    The rate of expansion of the US economy is 1/2 to 2/3 that of the whole global economy. If you remove OECD economies the US rate of expansion against the middle income countries like China, Mexico, SE Asian countries etc is more like 1/3 to 1/2. So, it isn’t going to take a long period of time for the US relevance to reduce even further.

    2. As industries globalise production is becoming more specialised, rationalised and centralised. This means countries will become more specialised in industry at producing certain products. Also, as is evident in the aerospace, auto, manufacturing the regions for manufacture are being streamlined (rationalised) to optimise production and reduce costs. This was evident in earlier times. Scotland and Belgium with textiles, the Midlands with metals and manufacture and now the “Rust Belt” in the US.

    So, as we can see the world has confronted similar issues previously.

    3. The US is not this free and sweet, lovely place for business, that gives all away. The US has the largest and most comprehensive set of non tariff trade barriers as well as tariffs globally. So, just focusing on purely tariffs is disingenous about the current situation.

    4. The US (the voting public/consumers) need to take stock of what is occurring and not be drawn into this “it’s not our fault it must be someone else”, when in fact the US is where it is today because of it’s success. As seen by some of our B&B’s comments its easy just to blame another country or immigrant, welfare recipients, etc, without looking at the root cause of what’s occurring.

    The eventual outcome will be the US will sooner or later realise it needs to better work with others as it’s influence reduces, like all smaller countries are currently doing.

    Take the auto industry. As I’ve pointed out for years the US is alone with the way in which it regulates and controls this industry. The rest of the OECD has in place a flexible system that faciliatates trade between countries, then individual countries use other instruments on deciding the makeup of the nations vehicle fleet. That’s why Norway has lots of EVs and Australia V8s even though we use a common standard.

    So, the US will eventually start working with other nations more closely in the area of trade.

    The US is shrinking proportionally as an economic power (it’s still a huge economy, but not disproporportional) with a couple other economic regions that can wield as much influence economically.

    What I find odd is the “Chinese are dumping” steel, apparently. But the Chinese are the biggest users of steel, so it’s logical they will have significant influence over steel globally. I think this is the problem for our politicians as business doesn’t mind cheaper materials, the consumer should also be grateful at the cheaper prices of goods.

    The US needs to forge better and stronger alliances if it wants to survive into the future as a credible and strong influence. Alienating all because you are having issues adjusting to the new world only acclerates the decline of US influence.

    Trump and his true believers better realise the US is nothing without all around supporting it and the US will find it harder to dictate (Trump’s technique) the world order.

    • 0 avatar
      TW5

      Our preeminence is fading specifically because we run huge trade deficits with Asian economies, and we repeatedly give in to American socialists who filter increasingly larger 12-digit-sums into the monstrous Ponzi scheme known as Social Security and Medicare. Regarding trade, we are a sovereign nation that has the right to counter-negotiate just as other nations successfully negotiated the current predicament.

      The American consumer powers the globe, along with 50M consumers in Australia and Canada. For all intents and purposes we are the only functional consumer economies on earth. The factory nations answer to us, not the other way around, and that includes many European nations who launder their trade surplus with the US through the world’s factories in Asia.

      It doesn’t matter how many times the US press yells dictator at Trump, we aren’t going broke for the amusement of factory workers in Beijing.

      • 0 avatar
        Vulpine

        “and we repeatedly give in to American socialists who filter increasingly larger 12-digit-sums into the monstrous Ponzi scheme known as Social Security and Medicare.”

        Dude, that’s YOUR money in Social Security, not some billionaire’s. Same with Medicare. You’ve been paying into those since your very first wage-earner’s paycheck. You’ve been letting congress spend YOUR money to the point that they’ve stolen far more than any one generation has put in and now they’re trying to steal the rest because they’re calling it an “entitlement”. Forgive me, Dude, but I Want My Money BACK!

        • 0 avatar
          TW5

          @ Vulpine

          There is no money. The government can’t put it in a bank account and hold it for you. They’ve been “investing” in the economy, which for the last 50 years means they are giving it to non-working retirees and poor people. Obviously, paying other people’s retirement benefits is not an investment, and when it’s time for you to collect they will raise taxes on someone else to pay for it.

          If Social Security and Medicare were base level income sustenance and healthcare for the elderly poor that would probably be fine. It’s not. It is a lavish income tax credit for the 20% of the US population who has no need for Social Security. Medicare is slowly coming around, but the price tag is still absurd.

          SS and MED are how the middle class are being dismantled. The engender irrational hostility because lack of growth causes scarcity concerns. Scarcity engenders an attitude of “I paid for and I’m going to get my money’s worth”.

          That’s what someone said before they raised taxes on you. It’s a very elegant moral hazard they’ve constructed in DC. A real dehumanizing meat grinder.

          • 0 avatar
            Vulpine

            I feel sorry for you, TW5. I don’t know who indoctrinated you but Social Security has been on the books since WWII; it’s not something someone just dreamed up to screw the proles.

            I strongly suggest you learn some history and learn how this country was supposed to be run. It was actually doing pretty well until ’64, when things really starting going to heck in a handbasket.

          • 0 avatar
            TW5

            Social Security started in 1935, and when it started the qualifying age was above average life expectancy. Social Security is funded by FICA, the Federal Insurance Contributions Act. It’s insurance, not a pension.

            1964 was comprehensive civil rights reform so it’s “interesting” you would pick that particular year. Maybe you meant 1965 when the social security amendments were signed into law, which created Medicaid, Medicare and expanded SS benefits.

          • 0 avatar
            Vulpine

            I picked that year because it was the year after John F. Kennedy was killed and when changes started to be made in national policy. Lyndon B. Johnson started some of those changes.

      • 0 avatar
        Big Al from Oz

        TW5,
        So does every other nation. Trade deficits are not as bad as some are making out. I think the situation has been taken out of context with some unrealistic goals and paradigms used to justify some quite poor decision making by government and by Trump whose knowledge of global business is limited.

        Focusing on purely manufacturing exports as is the current case ie, Canada imports more from the US overall than it exports across the border, yet in manufacturing the Canadians export more to the US is cherry picking.

        And, the Asian’s gaining more wealth is good for the US in the future.

        The way I see the world is, I’d rather live in a town/community with a higher overall average level of income/wealth than a community with one or two rich depressing all around to maintain their position of power.

        The world is a large community if more prosper, we all benefit.

        • 0 avatar
          Shawnski

          Oz, you should represent the UN with all your globalist bs. Let me make it simple for you; the US does not engage in free trade in terms of what we allow in the US vs other countries tax. It’s a long hangover from WWII and geo politics influenced by the State dept. whereas we “trade” with countries unequally to keep our allies happy and prosperous.

          Abuse happens when there is no down side preventing a manufacturer from sending production to China, and send it back to the US with all the benefits of lower labor and environmental costs.

          Trump is playing hardball, and I say ‘bout time. If you think China, Japan, Euro zone are ready for a trade war, think again.

          • 0 avatar
            Astigmatism

            The EU just announced that they were going to impose sanctions on a corresponding amount of US exports. Interpret that as a “trade war” if you like, or simply as a bloc imposing retaliatory sanctions within the WTO rules.

          • 0 avatar
            Big Al from Oz

            Shawnski,
            The reality is this. Within a couple of decades the Chinese will have the definite advantage as the US had for the last 100 years globally.

            The US alone can’t take on the Chinese anymore. The US needs friends to forge closer and closer alliances with for us, the West to maintain our lead over the Chinese.

            So, this means the US needs to learn to play ball with others as it’s not in the position to dictate or have it’s influence implemented more often than not.

            The West is large enough to keep the Chinese at bay for the foreseeable future, but this means the US is losing influence.

            You economic woes, which I fail to see are any different than any other modern country will not change, even with isolationist protectionism.

            Shawnski, you are one of those who fear the future and want to hide in a closet. Maybe some of you guys needs to come out of the closet and look around and see what is occurring and how best to manage the changes.

          • 0 avatar
            TW5

            @astigmatism

            As Trump has already opined, they can’t raise tariffs and expect it to hurt the United States. The damage to US goods and materials exports was done years ago.

            Hollow threat, and a massive strategic blunder as Trump has already said he would apply a tariff on German cars, which would do major damage to the auto industry in Germany.

            US is in control. We have a history of beneficence and fairness. It will endure. But our recent history of degenerate corruption and selling America to the highest bidder is coming to a close.

          • 0 avatar
            Astigmatism

            “They can’t raise tariffs and expect it to hurt the United States. The damage to US goods and materials exports was done years ago.”

            Then I’m sure that the workers who produce bourbon in Kentucky, or OJ in Florida, or cranberries is Wisconsin, have nothing to worry about, as the US is already “damaged,” so what’s one more?

          • 0 avatar
            TW5

            @ astigmatism

            It’s funny you mention those things because they are all agricultural products, which are arguably the most heavily targeted imports. The EU might not target orange products, since they don’t really grow on the continent.

            Whatever, the EU tariffs on the US. Someone else sells to Europe, and then we sell to the someone else who lost their stuff because it had to be sold to Europe.

            We’re not talking about oil. Most food stuffs are quite fungible.

        • 0 avatar
          TW5

          @ Big Al From Oz

          Trade deficits are not that bad, but the details of the deficit should be monitored.

          The US economy is sagging, and we’ve been issuing debt to prevent a long implosion (which unfortunately happened anyway). Did US currency values adjust accordingly against people running a trade surplus with the US? No. In fact, China, Japan, and South Korea went on a US debt buying binge to avoid the possibility of natural currency rebalancing.

          Over time are Asian countries transitioning to domestic production and domestic consumption? No. Asia is still looting the US consumer market and to a less extent the Canadian and Australian consumer markets.

          Naturally, the fault does not lie entirely with our major trading partners in Asia. Europe is laundering much of their mercantile trade surplus through the world’s factory by selling components to manufacturers who sell them on to Americans. That’s why our currency battle with China has led to unusual reciprocal capital investments from Europe. Someone must balance the balance of payments to thwart currency adjustment.

          In defense of both Europe and Asia, the US, until very recently, had an archaic tax system that stopped American companies from repatriating foreign profits. This was a very silly arrangement from the 1950s when our Congress correctly assumed that if you were making overseas profits, you were probably just shifting US IP or operations overseas. That’s not the case today so why were left wingnuts refusing to update the corporate tax code? Whatever. It’s 2018. Foreign profits earned by US companies can return without paying US tax on top of foreign tax. Therefore, foreign governments are not required to buy our debt and invest in our markets to replace the capital that wasn’t coming home.

          Maybe that’s why China didn’t withhold the stair truck from Air Force One when Trump arrived. Obama wasn’t so lucky in 2016. Jinping made Obama use the emergency exist staircase on the back of Air Force One. It seems Obama wasn’t really appreciated abroad, despite what they were saying about him on TV.

        • 0 avatar
          threeer

          Al, Asia “gaining more wealth is good for the US” only when their markets are open for fair access of our goods. By and large, they are not. Want to sell an American-made product in China? Slap a huge tariff on it. Decide to build a plant in China to manufacture locally? Be forced into a JV (many times, with a company with Chinese-gov ties). Oh, and give away all of your technical know-how. And if you don’t want to do that, simply have your tech know-how stolen.

          I’m all for “fair” trade. But it has been very, very lopsided for too long now. Yes, America needs to continue to educate the workforce. Yes, America needs to invest in infrastructure and technology. All of this is true. But we also need to quit being taken advantage of and be honest with our trade partners that our current pacts need to be reevaluated to level the playing field.

      • 0 avatar
        Astigmatism

        “We aren’t going broke for the amusement of factory workers in Beijing.”

        With an extra $1.50 a week in our pockets from the tax bill, but an extra $300 in the cost of a car (to say nothing of every other product we buy), it appears that we’re going to be going broke for the amusement of factory owners in Middletown.

        • 0 avatar
          TW5

          When you get an education, you won’t have to ask CNN and WSJ what you should think. You’ll also stop selling out manufacturing employees in Middletown so Mary Barra and the mutual fund mavens on Wall Street can get their incentive bonuses.

          Any clown can stand by and watch China hand out free money to American consumers as long as we promise to turn the Rust Belt into an economic desert. Boring. We’ve been watching that show for nearly 20 years now.

          I’m glad the agent of chaos is shaking people from their state of perpetual stupor, even if they don’t realize what’s happening.

      • 0 avatar
        Big Al from Oz

        TW5,
        Your pre-eminence is fading because proportionally the US is representing less and less of the dollars and product floating around the global economy.

        The US to maintain its influence must take on responsibilities like the Trans Pacific Trade Pact. This represented 40% of global trade and dealings and Trump threw this away.

        The US doesn’t need to directly profit dollars and cents wise, it can also profit politically, which in turn create more opportunities for the US to make dollars and cents.

        The US is similar to the UK’s position in the EU, the EU was a force multiplier for the UK in global influence due to the influence the UK held within the EU. Now with Brexit, the UK will be like Canada or Australia, only very regional in it’s influence.

        The secondary damage of the UK leaving the EU is the money and financial business that flowed through the UK into the EU. This is a major loss.

        There’s a lot to global trade than cars and even steel. Focusing on selected and even trivial issues will not make America Great.

        • 0 avatar
          TW5

          @ Big Al from Oz

          TPP was basically a giant NAFTA to lure the US to its doom. The mindless sheeple were being told that TPP was designed to form partnerships between the US and other nations to counterbalance Chinese expansion.

          It was complete bullshit. China was behind it the entire way, and it was going to function exactly like NAFTA, where various member states gang up on the United States, and they use their collective veto power to overrule a hegemon 300%-500% bigger than they are.

          That is what’s going on with NAFTA right now. Canada and Mexico won’t renegotiate because they want higher non-NAFTA content so they can keep earning big bucks laundering Chinese content through their ports.

          The same would have happened in TPP. The US would have signed. China would have approached every member of TPP and demanded side deals. In the end, China ends up with a free-trade agreement with the United States, and the United States has no leverage because we’ve signed a huge multilateral contract in which we are always vetoed (like the WTO only worse).

          Hillary and Obama and their commerce clowns should be jailed for trying to ratify TPP. That alone was enough to warrant a treason conviction.

        • 0 avatar
          TW5

          @ Big Al from Oz

          TPP was basically a giant NAFTA to lure the US to its doom. The mindless sheeple were being told that TPP was designed to form partnerships between the US and other nations to counterbalance Chinese expansion.

          It was nonsense. China was behind it the entire way, and it was going to function exactly like NAFTA, where various member states gang up on the United States, and they use their collective veto power to overrule a hegemon 300%-500% bigger than they are.

          That is what’s going on with NAFTA right now. Canada and Mexico won’t renegotiate because they want higher non-NAFTA content so they can keep earning big bucks by laundering Chinese content through their ports.

          The same would have happened in TPP. The US would have signed. China would have approached every member of TPP and demanded side deals. In the end, China ends up with a free-trade agreement with the United States, and the United States has no leverage because we’ve signed a huge multilateral contract in which we are always vetoed (like the WTO only worse).

          Hillary and Obama and their commerce clowns should be jailed for trying to ratify TPP. That alone was enough to warrant a treason conviction.

      • 0 avatar
        Ce he sin

        “The American consumer powers the globe, along with 50M consumers in Australia and Canada. For all intents and purposes we are the only functional consumer economies on earth.”

        Eh? How on earth did you arrive at this? Just those three countries out of all the countries in the world?

        • 0 avatar
          Big Al from Oz

          Ce he sin,
          I think many in the US don’t realise there are;

          1. Asia – 500 million people with equivelant incomes to the US.

          2. Europe – 350 million people with equivalent incomes as the US.

          3. South America – 100 million with equivalent incomes as the US.

          4. Africa – Another 100 million.

          5. Then the rest of us, Australia, New Zealand, UAE, Saudi’s, etc. 100 million.

          This sort of makes the US of 330 million look smallish, but still significant.

          The centre of the universe is shifting further and further towards Asia.

          There is a massive consumer global society that consumes like the US.

          As this grows the US goods and services will need become more competitive.

          Tariffs and shunning the US is not the problem. The problem is the US is now becoming apart of the greater world and is on a more equal footing. It is finding this hard as it can’t influence outcomes as it once had.

    • 0 avatar
      TrailerTrash

      BigAl.

      “The Trump Metal Tax highlights the plight of the worker who feels hopeless with the rapid global changes. This ain’t goin’ stop, whether the US has tantrums or not.”

      this is your entire problem. it is NOT that steelworkers are a horse and carriage industry. Steel is produced the same way everywhere.
      But many have and are dumping lower priced metals into the US…forcing our production to close.

      this aint shoes. this aint clothing.
      This is the basics of our abilities to produce big time in time of war.

      And don’t give me the false facts that all countries are equal in today’s technology. America still has the edge, although judging by the crap being ass-slapped on their way across the stage and tossed unskilled into tomorrow bodes poorly.

      And we’ll see if an American tantrum can level the playing field.

      • 0 avatar
        Big Al from Oz

        TrailerTrash,
        I do believe I mentioned proportional regarding technology.

        You see technology goes hand in hand with economic might. So, as the US become a smaller percentage of the global economy, it will have more competition maintaining it’s lead in technology.

        As for steel making, ever hear of the Iron Age? Everyone can make steel in the world. It’s just how efficient you can do it. The US didn’t invest enough into it’s steel plants as it found it easier and cheaper to import steel. There is nothing wrong with this.

        So, you steel plants closed down and now to restart your steel industry or at least expand it it will take investment dollars, not tariffs to protect inefficient methods of production, like your competitors are doing.

        Tariffs will only set the US steel industry backwards.

  • avatar
    Big Al from Oz

    Here is another important part of the US trade deficit. This part Trump should understand. It’s called borrowing money from others.

    Why should the US be able to go around the world borrowing money, then rejig it’s repayments?

    “You can see how economists or politicians can cherry-pick the numbers to make the case they want to make. But here’s the rub: Even if the United States has the lowest tariffs, it does not automatically follow that that is the reason it has a big trade deficit.
    The trade-deficit numbers are also shaped by underlying factors, such as an imbalance between a country’s savings and investment rates. A bigger federal budget deficit — caused by, say, a large tax cut or more government spending — can boost the trade deficit because the country saves less and borrows more from abroad. The booming economy can also be at fault — the more money people have, the more they can spend on goods from overseas. And a strong currency means those foreign goods are cheaper for a particular country and its goods are more expensive for foreign consumers. (The video above explains this is more detail.)”

    • 0 avatar
      TW5

      It does not follow that federal deficits are borrowed from people abroad. Furthermore, the US has the right to cut taxes and stimulate the economy as a means of competing internationally.

      Our debt is held in large quantities by foreign countries because they are manipulating the spot exchange rate to avoid a rebalancing of trade. By purchasing USD in the form of treasuries, China and Japan (the two biggest buyers) can keep the yen and yuan artificially low, giving American consumers an artificial price preference for imported goods.

      Asia once had leverage in the WTO to argue against the United States by claiming our oil import habits and corporate repatriation tax were onerous and unfair. Well, guess what? We addressed both of those issues, yet foreign governments are still buying US debt and their private companies are still dumping investment funds into the US to hedge against their central banks devaluation policy.

      No more BS. We can carry foreign economies when we are strong, but not when the Rust Belt is ruin.

      • 0 avatar
        Big Al from Oz

        TW5,
        The USA does have the right to cut taxes, but then when figures thrown around are quite not true regarding trade imbalances.

        Also, what about stagnant wages affecting savings? This also affects your trade imbalance.

        Like I stated the US is finding it harder to compete globally. It’s not that anyone is screwing the US or the US is this great and lovely country giving all away at the expense of it’s society.

        Have a look at the information I’d given, countries like Indonesia and Thailand are investing more into future industry than the US. The Japanese are investing massively into auto manufacture with robotics.

        It’s competition. The US has been used to heavily influencing how the world trades, now it doesn’t have the same clout.

        You must figure better ways in doing business and tariffs are anti business.

        • 0 avatar
          TW5

          Stagnant wages in the lower middle classes are a symptom of trade imbalance. When the Asian Crisis occurred and global investors were not interested in the Asian labor at any price, US wages rose sharply. Trade deficit was small in nominal and relative terms.

          As Asia recovered, global labor markets preferred Asia again because the Chinese yuan-dollar peg was too lucrative to pass up. This is a battle that Bernanke and Bush would wage against the Chinese central bank, and win. China enacted partial float circa 2005. Unfortunately, it was too late. Damage done. Assembly line workers, manufacturing managers, steel workers, etc. had been turned into retail stooges and Amazon warehouse workers. Wages in the middle classes were practically falling in real terms. Plus, GDP growth was slow and the trade deficit was widening. It would get even worse as oil prices spiked.

          Regardless, the savings argument is somewhat disingenuous because the exogenous spending function of upward socioeconomic mobility is much higher than what the lower-middle class earns. Therefore, wage growth at the bottom isn’t going to lead to a major jump in savings quotient. They will spend the money to climb the socioeconomic ladder in most cases. This is not a phenomenon Asia understands because they tend to be savers. American workers shouldn’t be punished by the WTO for spending.

          Whether or not Asia is better at long-term public investment has little bearing on whether or not they are engaged in unsustainable mercantile trade practices. We’re not competing in a morality contest whereby the winner has right-of-way. Furthermore, they aren’t going to have a customer to buy their wares, if they continue drawing 2% GDP growth out of the US every year.

          There are only about 400M consumers who have the purchasing power and existential determinism to power the global economy. We live in US, Canada, and Australia. Corporate America thought for every 1M Americans they burned on the pyre of trade imbalance, they could create 3M new consumers in China with aggressive advertising and media culture control. Not happening. The Chinese don’t spend like us. So the global economy keeps sagging. We keep printing money. Corporate America keeps raking in record profits afforded to them by a massive capital account surplus to offset the trade deficit.

          It’s a miracle we have someone in the White House who questions the wisdom of this arrangement. Obama certainly didn’t care, unless he thought the government would be allowed to take over 1/6th of the US economy (healthcare). Nope.

          • 0 avatar
            Big Al from Oz

            TW5,
            The US trade imbalances are largely caused by lack of investment, period.

            The US like even Australia is not investing enough for the future. It’s all about dividends and stock prices. Why would you want your dividend reduced to invest in an advanced new steel plant? I won’t see a return for years. Well, we will just import and let another invest into that.

            Toys R’ Us is a classic example of stripping the money out of a company and costing jobs. It isn’t Amazon, it was the investors. So, these jobs are lost by the Chinese or Mexicans? How many US jobs have been lost by poor judgement by Unions and Business?

            Investment into education at the public level. Investment into health for healthy workers. Investment into research. Investment into infrastructure. Investment will secure a better future for the US. And I’m not taking about investing in Wall St.

            Have a look at current Stock prices. A lot that QE money went to stocks, not building highways, research, education, health. Imagine 80 billion a month or at least a part of it being diverted into solid tangible investments?

            The US has not invested wisely in some instances for the future. It’s about the here and now, a fast buck.

            It’s not the world causing the US problems. Look in your backyard first and see what can be done to improve your position.

  • avatar
    John Horner

    Tarrifs on imported steel but not imported cars makes it all the more likely cars will be made outside the US. It would be cheaper for Honda to build an Accord in China with Chinese sourced steel than it would be to make the same car in Ohio.

    Don’t bother to argue that Honda wouldn’t be able to assemble as good of a car in China as it does in Ohio.

  • avatar
    Big Al from Oz

    http://www.abc.net.au/news/2018-03-12/trump-trade-tirade-wont-fuel-us-economic-revival-ian-verrender/9537314

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