Markets Plunge as Trump Plans Tariffs on Steel and Aluminum

By artappraiser on Thu, 03/01/2018 - 4:46pm |

By Ana Swanson @ NYTimes.com, March 1, 47 mins. ago

The trade measures would take effect next week, imposing tariffs of 25 percent on steel and 10 percent on aluminum. President Trump promised they would be in effect “for a long period of time.”
Stocks fell as Mr. Trump announced the move, with the industrial sector seeing the steepest declines.

URL:

https://www.nytimes.com/2018/03/01/business/trump-tariffs.html

22397 reads

Comments

The Real Risks of Trump’s Steel and Aluminum Tariffs

By Neil Irwin @ The Upshot @ NYTimes.com, 18 minutes ago

A higher price for the metals isn’t the main concern; it’s the chance that the global trade system will be undermined.

My underlining, it's just plain stupid, symbolically helping old-fashioned industries to the detriment of many other industries that will cut costs (i.e., pay or jobs) to pay the higher prices for raw materials:

[...]

Who wins and who loses?

The big winners are the United States steel and aluminum industries. For years, those industries have lobbied for more aggressive government action against what they view as unfair practices by global competitors, and they’re now getting their way.

The most immediate losers are the industries that rely on steel and aluminum as an input and will face higher prices. That includes some of the nation’s biggest industries: the automobile sector; aerospace; heavy equipment; and construction. In short, the chassis of a Ford, the body of a Caterpillar bulldozer, the wings of a Boeing aircraft, and the steel girders inside a New York skyscraper are all about to get more expensive.

After the president’s announcement, Wall Street quickly reflected this divide: Shares of U.S. Steel and Century Aluminum were each up about 7 percent shortly afterward, while shares of Ford, Caterpillar and Boeing were each down about 3 percent.

The industries that use steel and aluminum are considerably larger as a share of the United States economy than are steel and aluminum producers. By one estimate, from Lydia Cox of Harvard and Kadee Russ of the University of California-Davis, steel-using industries employ 80 times as many people as steel-producing industries [....]

It's the same simplistic idiot way he approaches everything. Says he knows about an excellent health care plan, but doesn't and doesn't even understand what's needed. Says he's gonna bring jobs back but he doesn't have the simplest understanding of how to do that, he's imagining this WWII world, remembering what he read about in a picture book in grade school about Rosie the Riveter. You definitely do not make for a lot of jobs by creating a huge increase in the cost of raw materials, instead, there will be contraction of them.

by artappraiser on Thu, 03/01/2018 - 5:01pm

Ditto the above, these tariffs could reduce growth here and everywhere else:

Trump's Tariff Headwind May Buffet Smooth-Sailing U.S. Economy

By Sho Chandra and Rich Miller@ Bloomberg.com, March 1

Tariffs seen reducing growth as much as 0.2 percentage point
Fed’s Dudley says trade war could damage global growth outlook

by artappraiser on Thu, 03/01/2018 - 5:04pm

It's worse - it's like infrastructure, where he sees a pool of money, and already has a bunch of cronies lined up to steal a huge chunk of it. He'll sell off access to natural resources to the Chinese or Russia or MSM/Saudi, or whoever does pay-to-play. That's his gig.

by PeraclesPlease on Thu, 03/01/2018 - 5:05pm

Axios.com's Jonathan Swan says he's going against his own administration's advice:

Why it matters: These tariffs have the potential to roil markets and affect relationships with allies. Trump is also touching the third rail of international trade law — he’s using an arcane trade law known as Section 232 to justify his actions. He’s saying “F You” to the World Trade Organization and arguing the global overproduction of steel and aluminum constitutes a national security threat to the U.S. He's also breaking with Capitol Hill and top officials — including Gary Cohn, James Mattis, Steven Mnuchin and Rex Tillerson — who have been arguing strenuously against these tariffs.

I'm really worried about it if he isn't convinced to back down, it could be serious trouble for the world economy. This is different than with foreign policy relations,so far that's been handled by minions and Congresscritters going out and smoothing concerns by saying "he didn't really mean it, we're staying with NATO" or whatever. This is different, he's just doing it. No explaining,it's going to happen and from now on other countries simply won't want to trust anything anyone else says on economy, they'll figure they can't trust what Cohn or Mnuchin promises.

by artappraiser on Thu, 03/01/2018 - 6:05pm

Trump’s tariff war nudges Cohn toward White House exit

The president's top economic adviser lost a battle to prevent the imposition of steep tariffs pushed by protectionist advisers.

@ Politico.com, 03/01/2018 04:50 PM EST

by artappraiser on Thu, 03/01/2018 - 6:29pm

Wow. Next week.
Whiskey Tango Foxtrot.

by moat on Thu, 03/01/2018 - 7:07pm

I hereby render to Moat the Dayly Line of the Day Award for this here Dagblog site, given to all of Moat from all of me.

I THOUGHT, WHAT THE HELL DOES THAT MEAN?

WHAT THE FUCK?

HAHAHAHAH

(Hello to Marc Maron)

by Richard Day on Thu, 03/01/2018 - 9:11pm

This is good news for American aluminum and steel workers and businesses that cater to them. If Trump is able to enact stiff tariffs like this in other industries, Democrats may see their hopes of taking back one or both houses dashed.

by HSG on Thu, 03/01/2018 - 7:52pm

You sound like Peter (not verified), just with better writing skills.

by barefooted on Thu, 03/01/2018 - 8:30pm

Democrats may see their hopes of taking back one or both houses dashed.

Hal, your wet dream is trump’s wet dream. What does that say about you?

by CVille Dem on Thu, 03/01/2018 - 9:00pm

This is where we disagree. Trump's tariffs are good for the democrats. While it might modestly increase jobs in the steel and aluminum industries it will hurt most other people. I don't think most people will be glad to pay higher prices for cars, washing machines and everything else that uses steel and aluminum because they're so happy for the steel workers. Because of higher prices people will buy less or put off some purchases so that means less jobs in those industries. Higher prices on caterpillar heavy machinery, Boeing planes etc means that less will be sold, especially exported. That means less jobs in those industries. It's good for the airplane manufacturers in France which is Boeing's main competitor. It's going to hurt more people than it helps and that's before other nations retaliate.

by ocean-kat on Thu, 03/01/2018 - 9:17pm

Hal hal-lucinating again. After a few minutes research, US steel employment is about 142,000 employees. US consumption varies, but in 2013 consumed around 110 million metric tons of steel, with 87 of that from US, 23 million metric tons (21%) imported.

According to the American Iron and Steel Institute, "labor productivity has seen a fivefold increase since the early 1980s, going from an average of 10.1 man-hours per finished ton to an average of 1.9 man-hours per finished ton of steel in 2014."

Aluminum employment is even lower.

142,000 steel jobs are a rounding error in US employment data. Even if we made all steel here, jobs would go up only about 30,000.

In typical Hal fashion, he is already pronouncing the demise of Democratic Party chances in November.

Hal has shown he believes Trump's idiotic trade barriers are a "genius" move, and hopes his ultimate dream killing NAFTA is next..

Hal loves Trump. Hal has said zero on the damage Trump is doing to millions here and the world, now and in the future. Why?

Trump is the awaited one, the anti-"neoliberal", but most of all, drumroll...the anti-Clinton..!!

by NCD on Fri, 03/02/2018 - 10:23am

Just watched rerun of Brian Williams MSBNC show, at the end he interviewed GOP politico Mike Murphy who said everyone "behind the scenes" in GOP land are freaking out real bad that Trump went off the rails with two things in a row, the guns thing and now the tariffs. That before that everyone was going yeah, he's bad optics but look at the results of what we got done with his administration, everything's okay, we got the tax bill yadda yadda. So they were still hopeful about elections. But now he said, everyone's "scared". especially after this tariffs move.He said it's like the White House is the "thunderdome" all of a sudden, before they could control or ignore.

So oceankat's comment is actually correct:, this is good for the Dems.It's gonna hurt the economy but it's good for November for the Dems. According to a Mike Murphy,they are scared if he keeps acting like this, they have no chance. He said something like the candidates are going to have to really focus on local issues, not national, if he keeps acting like this, to have any chance.

by artappraiser on Fri, 03/02/2018 - 12:17am

Oh yeah, he also said this about GOP candidates in a real soup now: or maybe if they are real lucky, they have a Sanders wing person running against them, then they have it easier.

by artappraiser on Fri, 03/02/2018 - 12:21am

OK is right, agree. Trump is accelerating and likely deepening the next recession, with the exploding deficits, rising interest rates and uncertainty for business climate.

More money in steel plutocrat pockets after Republicans already looted the Treasury to rain billions on Wall Street is not a campaign plus for the GOP.

Also agree in a most of the country, moderates have better chances.

by NCD on Fri, 03/02/2018 - 12:40am

I think we're all right and you and AA are doing a better job making the argument than I. There seems to be a consensus here that a trade war won't be good for the economy. We'll see if we or Hal is right. The only question I have is how fast it will get worse. It might just be a slowing of growth but if Canada and Europe take strong action in retaliation it could get bad fast and spin out of control.

by ocean-kat on Fri, 03/02/2018 - 1:47am

Thanks. Stephen Roach, today:

There’s nothing strong about U.S. economic fundamentals, says Stephen Roach

Momentum can be fleeting, especially for a saving-short U.S. economy that is consuming the seed corn of future prosperity. With dysfunctional policies pointing to a further compression of saving in the years ahead, the myth of sound U.S. fundamentals has never rung more hollow.

by NCD on Fri, 03/02/2018 - 10:18am

Canada, Brazil — but not China — will be hit hardest by Trump's ...

By Thomas Franck @ CNBC-3 hours ago

[....] Canadian and Brazilian steel comprised 16 percent and 13 percent of U.S. steel imports as of September 2017. China, frequently criticized politically for dumping cheap steel on trade partners, is not one of the top 10 importers of steel to the U.S.

In response, Canadian officials promised to respond to U.S. tariffs; Canadian Trade Minister Francois-Phillippe Champagne said the taxes would be "unacceptable," and said he'd take measures to defend the country's workers.

Other top sources of steel used domestically include South Korea, Mexico and Russia [....]

by artappraiser on Thu, 03/01/2018 - 8:50pm

Remember, the pie graph in total, is just 20-25% of US steel consumption. Just imports.

We produce 70-75% here with about 142,000 workers.

by NCD on Fri, 03/02/2018 - 12:43am

Great point, I was not even thinking of that. In a way, though doesn't it make the responses,from like,Canada,on the principle of the thing, not the actuality of the particular damage? Like: let's just put our foot down on trade wars or all hell could break loose?

by artappraiser on Fri, 03/02/2018 - 1:29am

Trump trade policy will turn the US into Brazil

Analysis by David P. Goldman @ Asia Times, March 2

Shielding raw materials exporters while ignoring the decline of America's high-tech capacity, defensive trade action stands no chance of rejuvenating the US industrial base

by artappraiser on Thu, 03/01/2018 - 8:54pm

Europe on Trump tariffs: We will 'react firmly and commensurately to defend our interests'

By Patrick Allen @ CNBC.com, 52 mins. ago

European Commissioner President Jean-Claude Juncker issued a strongly worded statement in response to President Donald Trump's decision to impose steel and aluminum tariffs
Next stop for Europe: Taking the fight to the World Trade Organization
Juncker said "unfair measures put thousands of European jobs at risk"

by artappraiser on Thu, 03/01/2018 - 8:58pm

Krugman on Twitter:

This is really bad, and not just because of the tariffs themselves. They're being justified as Section 232 actions -- national security -- which is transparently bogus and invites retaliation 1/ https://t.co/1ipjHw7pzu
— Paul Krugman (@paulkrugman) March 1, 2018

Continued with the following tweets 8 hrs. ago

It's also worth noting that steel and especially aluminum are very capital-intensive industries, employing remarkably few people. So we're starting at least a low-grade trade war over a very small number of jobs 2/

Oh, and they're also intermediate goods -- inputs into other manufacturing -- so we're looking at downstream job losses 3/

and the following Tweets 5 hrs. ago:

It's starting to look as if I (and almost everyone else) misjudged the state of trade policy. US industry is deeply embedded in international value chains, which means that big business hates the idea of a trade war, which would disrupt its investments 1/

And I thought that big money would talk even in the Trump White House, especially when the national security people would take their side. What I wasn't factoring in was that scandals and dysfunction would drive out all the adults 2/

Even the self-interested, greedy, but not stupid or shortsighted adults. But that's what seems to have happened. What's left is the toddler-in-chief, who's feeling beleaguered and wants to lash out. 3/

and the following Tweets 4 hrs. ago:

Good survey of how strange and dangerous this trade move really is/1

Gah. Here's the link/2

Analysis: Trump has announced massive aluminum and steel tariffs

Washingtonpost.com

by artappraiser on Thu, 03/01/2018 - 9:18pm

Trump’s tariffs will hurt all Americans

by the Washington Post Editorial Board, March 1

Trump gets his tariffs — and much of the world plans to strike back

By David J. Lynch &Caitlin Dewey @ WashingtonPost.com, 3 hrs. ago

President Trump’s decision to levy tariffs on foreign-made steel and aluminum is expected to backfire on U.S. exporters as other countries file legal challenges at the World Trade Organization. Investors appeared shaken by the news, with the Dow Jones industrial average closing Thursday down 420 points for the day.

by artappraiser on Thu, 03/01/2018 - 9:57pm

Trump's ‘Smart’ Tariffs Don't Make Economic Sense

By Annie Lowrey @ TheAtlantic.com, March 1

The president says they'll protect American jobs and bolster national security. They'll likely do neither.

----------------------------------------------------------------------------------------------------------------------------

The White House’s war over steel tariffs, explained

By Alexia Fernandez Campbell @ Vox.com, March 1

The move sparked an internal feud at the White House. Then the stock market plunged.

----------------------------------------------------------------------------------------------------------------------------

In his first act as National Security Advisor perhaps Biegun can explain to Trump that steel & aluminum tariffs are bad for US auto manufacturing.
— Matthew Yglesias (@mattyglesias) March 2, 2018

----------------------------------------------------------------------------------------------------------------------------

Trump’s economic and foreign policy advisors may oppose steel & aluminum tariffs, but a pro-tariff US metal-making trade group rented his hotel, so...https://t.co/ouATdu623Y pic.twitter.com/uyH071QvmF
— Matthew Yglesias (@mattyglesias) March 1, 2018

by artappraiser on Thu, 03/01/2018 - 10:42pm

Gallup poll long-term graph on foreign trade:

from

In U.S., Positive Attitudes Toward Foreign Trade Stay High (link below)

By Jeffrey M. Jones @ The Financial, 15 hrs. ago

Americans' increasingly positive views of foreign trade have stabilized after spiking last year. A strong majority of U.S. adults (70%) see foreign trade as an opportunity for U.S. economic growth through increased exports rather than a threat to the economy from foreign imports (25%). Before last year, no more than 58% had held the positive view of trade.

The results are based on Gallup's annual World Affairs poll, conducted Feb. 1-10. The issue of trade received significant attention in the last presidential campaign, with Donald Trump and Bernie Sanders criticizing U.S. trade deals for their effect on U.S. workers and companies. Trump said he would replace the North American Free Trade Agreement (NAFTA) and the Trans-Pacific Partnership (TPP) with bilateral deals that would better protect U.S. interests. In his first week as president, Trump announced the U.S. was withdrawing from TPP, and his administration continues efforts to re-negotiate the terms of NAFTA [....]

continued @

https://www.finchannel.com/world/america/71877-in-u-s-positive-attitudes-toward-foreign-trade-stay-high

(because can't get embedded link function to work on this piece for some reason)

by artappraiser on Thu, 03/01/2018 - 11:12pm

I just assume at this point Trump is under orders from Putin to destroy the country as much as he can. The closer Mueller gets, the wilder the ride.

What I do hope is that voters remember this time and don't reward Republicans in 2018 or 2020.

by PeraclesPlease on Fri, 03/02/2018 - 1:33am

Re: at this point Trump is under orders from Putin to destroy the country as much as he can.

Know you're being facetious here for effect, but it just so happened I was reading something about the same time I read your comment which reminded me: be careful not to start thinking that way. Because that's taking us in a direction of not getting the whole Putin story. It was this article:

Will Russia Meddle in Italy’s Election? It May Not Have To

By Jason Horowitz @ NYTimes.com, March 1

ROME — It happened in the United States. Then there were the Netherlands, France and Germany. One after the other, the West’s leading democracies have staged national elections in which Russia is accused of using social media and fake news to try to influence the outcome.

Now, Italy is holding pivotal elections on Sunday that could shake Europe — and Russian meddling is again a concern.

But the difference this time is that President Vladimir V. Putin of Russia might not even need to bother, because the parties most likely to do well in Italy would probably be favored by Russia, too.

Much has changed since Russia started its online misinformation campaigns, and much of it is good for Mr. Putin.

Just two years ago, Mr. Putin was on the defensive and facing the prospect of Hillary Clinton, no fan of his, occupying the White House. Instead, he got President Trump.

While Mr. Putin did not get his top picks in France and Germany, the angry populism and frustration with migration that is reshaping European politics has significantly weakened his chief adversary, Chancellor Angela Merkel of Germany, and suspicions of yet another Russian hacking roiled the German government on Thursday.

Italy is already traditionally one of the most pro-Russian countries in Europe, and among the favored outcomes for Mr. Putin in Sunday’s election, there are a lot to choose from [....]

Now throw in the whole Syria thing. He is clearly trying to rearrange the whole post WWII world in Russia's favor. But it's a real dicey game,not exactly the work of a brilliant mastermind either.

by artappraiser on Sat, 03/03/2018 - 2:15pm

The word to remember here is "plans", as in he says he's planning to sign an order next week sometime. With all the will he won't he commentary over the last few days and arguments against being put forward from, well, everyone (excepting steel manufacturers), why the big deal media show about what hasn't yet happened? Trying to change the channel again? Floating his biggest trial balloon to date? The best bet is that he'll do it - but there's also a chance he's got his short finger in the air. And if he backs off, he'll swear it was all to show the whole world what he can do if he wants to ... so they better bow down to him or else.

by barefooted on Fri, 03/02/2018 - 1:46am

More analysis from WaPo, but fleshing it out a bit ...

“Markets are responding to the very real economic damage to large sectors of the economy that the tariffs will cause,” said Brad McMillan, chief investment officer for Commonwealth Financial Network, which manages $156 billion in assets. “This is a rational response, based on clear economic factors.”

Adding later,

“There is also the very real possibility – even likelihood, that this is more of a negotiating tactic than a firm policy proposal,” he said. “While there are real concerns here, it is not yet time to panic, and the market’s response shows that as well.”

by barefooted on Fri, 03/02/2018 - 12:24pm

It's not a negotiating tactic in any real sense. That implies he has a policy goal and a plan to achieve it. All he's doing always is just flapping his jaw.

by ocean-kat on Fri, 03/02/2018 - 2:37pm

You're thinking of negotiating as in the accepted definition; Trump sees it as who can talk the biggest game and win the propaganda war. But I think you said that in your last sentence.

by barefooted on Fri, 03/02/2018 - 2:56pm

I think this is an important point. Trump doesn't have goals for the nation with thoughtfully considered policy ideas to achieve them. Everything he says is just stream of consciousness rambling true for him only in that moment. In the next moment he might say something totally different and nothing he says in any moment has any connection to what he might actually do. Whether he's talking about tariffs, gun control, DACA or any other subject.

by ocean-kat on Fri, 03/02/2018 - 2:27pm

on that topic,I think this is a point to keep in mind about some Trump voters who actually knew his real history (as well as probably Putin):

“Many people voted for Trump in order to throw a hand grenade into national politics,” said former Representative Timothy J. Roemer, Democrat of Indiana. “It seems he has done the same thing to Capitol Hill, and no one knows from a tweet to an exchange in an Oval Office meeting what’s next.”

from WHITE HOUSE MEMO: A Week of Policy Surprises Leaves Even Trump’s Supporters Confused by Peter Baker @ NYTimes.com, March 2.

by artappraiser on Sat, 03/03/2018 - 12:59am

And another reminder here by Aaron Blake at the Post, discussing Sarah Sanders briefing and her (par for the course) elusive answers:

On whether Trump's tariffs decision is final: “This is something he's wanted to do for a while. Never say never, but I think he's pretty committed to moving this forward.”

“Never say never?” The president announced Thursday that he would impose a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports. But he didn't announce those percentages until the end of an event, when reporters asked him about it. That led to suggestions that maybe those numbers weren't ready for public consumption. And judging by Sanders's comments — including at Thursday's press briefing, in which she said of the 25 percent figure, “I think that's the intent” — that may be the case.

by barefooted on Fri, 03/02/2018 - 5:36pm

NEW YORK TIMES:

Analysis Trump’s Tariffs Stoke Fears That Trade War Will ‘Kill’ U.S. Jobs

By JIM TANKERSLEY 7:16 PM ET

A global tit-for-tat could crimp economic growth, undermining the stimulation of President Trump’s deregulation push and his signature $1.5 trillion tax cut.
“If the president goes through with this, it will kill American jobs,” said Senator Ben Sasse, Republican of Nebraska. “That’s what every trade war ultimately does.”

Around the World, Threats of Retaliation Against U.S. Exports

By ANA SWANSON 48 minutes ago

Be it Europe, Canada or Asia, other countries said they would respond to Mr. Trump’s steel and aluminum tariffs with restrictions of their own.

WASHINGTON POST:

Canada ‘flabbergasted’ by Trump’s tariff proposals

It was unclear which countries would be subject to the steel and aluminum tariffs, but Canada is the largest exporter of those goods to the United States. The foreign minister threatened retaliatory measures if Canada isn’t exempted.

By Alan Freeman

Shortly before Trump announced tariffs, his former adviser dumped millions in steel-related stocks

Trump may prosper from tariffs even if this Ohio steel town doesn’t

by artappraiser on Sat, 03/03/2018 - 12:04am

Exclusive: Trump was angry and ‘unglued’ when he started a trade war, officials say

by STEPHANIE RUHLE and PETER ALEXANDER @ NBCnews.com, March 2

[....] the public show of confidence belies the fact that Trump's policy maneuver, which may ultimately harm U.S. companies and American consumers, was announced without any internal review by government lawyers or his own staff, according to a review of an internal White House document.

According to two officials, Trump's decision to launch a potential trade war was born out of anger at other simmering issues and the result of a broken internal process that has failed to deliver him consensus views that represent the best advice of his team.

On Wednesday evening, the president became "unglued," in the words of one official familiar with the president's state of mind.

A trifecta of events had set him off in a way that two officials said they had not seen before: Hope Hicks' testimony to lawmakers investigating Russia's interference in the 2016 election, conduct by his embattled attorney general and the treatment of his son-in-law by his chief of staff.

Trump, the two officials said, was angry and gunning for a fight, and he chose a trade war, spurred on by Commerce Secretary Wilbur Ross and Peter Navarro, the White House director for trade — and against longstanding advice from his economic chair Gary Cohn and Treasury Secretary Steve Mnuchin [....]

by artappraiser on Sat, 03/03/2018 - 1:04am

This type of gossip is used to attack most any decision Trump makes using unidentified and probably nonexistent internal stooges producing these melodrams. Reporting an important policy decision as petty palace intrigue just shows how out of touch the MSM has become, a gosssip column not journalism. Trump made another decision last week related to our overreliance on too competetive Chinese or other sourced minerals. the continental US will be surveyed to locate and test the deposits of critical minerals no matter where they are located.

by Peter (not verified) on Sat, 03/03/2018 - 9:56am

No competent Republican wants to work in Trump’s White House. The NRA made a punk out of Donald Trump.

by rmrd0000 on Sat, 03/03/2018 - 10:07am

What's unprecedented is announcing important policy decisions in an off the cuff manner without carefully crafting the executive order or proposed legislation before the announcement. Such reckless and uninformed behavior invites speculation and petty palace intrigue combined with Trump's narcissism often looks like the cause.

by ocean-kat on Sat, 03/03/2018 - 5:01pm

forgive the electorate if their reaction to hearing that Trump came “unglued” and acted rashly is a lack of surprise. America said before the election that it questioned Trump’s temperament and has said ever since that it doesn’t think Trump is levelheaded.

With the poll charts to back it up, in an analysis piece by Philip Bump @ Washington Post, March 2: Americans probably aren’t surprised by reports that Trump ‘became unglued. Especially interesting: the Republican numbers.

by artappraiser on Sat, 03/03/2018 - 1:45pm

a reminder of U.S. "populist" history: electorate very sick of the entrenched status quo, throws an iconoclast in at the top to shake things up.

by artappraiser on Sat, 03/03/2018 - 2:26pm

Fixed link.

by PeraclesPlease on Sat, 03/03/2018 - 5:36pm

thanks.

by artappraiser on Sat, 03/03/2018 - 5:40pm

So now he's threatening European carmakers (again) ... having some fun now!

If the E.U. wants to further increase their already massive tariffs and barriers on U.S. companies doing business there, we will simply apply a Tax on their Cars which freely pour into the U.S. They make it impossible for our cars (and more) to sell there. Big trade imbalance!
— Donald J. Trump (@realDonaldTrump) March 3, 2018

by barefooted on Sat, 03/03/2018 - 2:21pm

OIC, noticed business news mentioning that the metal tariffs would hurt the car industry and I wondered if he was eventually going to address that....so there is actually some ideological belief there, as simplistic and dumb as it might be as regards how cars are currently made....

by artappraiser on Sat, 03/03/2018 - 2:48pm

Wow, NYTimes just published a headline story just to aggravate Hal:

Trump Divides His Blue-Collar Base With Steel Tariff Plan

By NATALIE KITROEFF and ANA SWANSON 12:55 PM ET

President Trump’s announcement that he planned to impose steep tariffs on imported steel and aluminum delighted the industries he had championed.
But the tariffs would allow domestic producers to charge higher prices, affecting manufacturers across the United States.

Updated story placed as a "related": Escalating Trade Fight, Trump Threatens Higher Taxes on European Cars 59 minutes ago

by artappraiser on Sat, 03/03/2018 - 4:18pm

If I were a European nation I'd retaliate by putting tariffs on American farm products. It would hurt rural America, Trump's base and therefore Trump. And it would protect their farmers.

by ocean-kat on Sat, 03/03/2018 - 4:39pm

EU has already mentioned tariffs on Harley Davidson motorcycles, made in Paul Ryan's district, and Bourbon made in Kentucky.

The NYT piece notes there are over 10 times as many jobs dependent on using steel to produce finished product, then jobs making steel, of which we already produce over 70+%.

BMW also exports more cars from its SC plant than any car plant of any company in the US. With the tariffs, it may pay to move that export production, or even the whole plant, offshore.

...oh and AA, it's all about.....HAL...?

by NCD on Sat, 03/03/2018 - 5:01pm

...oh and AA, it's all about.....HAL...?

Comes to mind that when Marx and Engels came up with that catchy slogan workers of the world unite!, there was a reason they included "of the world", they understood a thing or two about trading, economics,etc. I hope Hal comes to see the protectionism thing is very very tricky, has to be micro-managed, more often than not robs Peter to benefit Paul. Who is brilliant enough to micro-manage it? Bernie? I happen to think Bill Clinton & Rubin administration did a pretty damn good job at it,maybe better than any other time in history, and I think it's just plain stupid to attack "Clintonomics" whole cloth as he does. I'll only buy that it could be bettered. That's coming from a lifetime of watching what happened with any alternatives.

by artappraiser on Sat, 03/03/2018 - 5:27pm

P.S. I think if Wilbur Ross-Trumpconomics really got its way, we could have a world depression right quick.I do have faith that there are enough grownups around that that won't happen, though.

by artappraiser on Sat, 03/03/2018 - 5:31pm

The Macroeconomics of Trade War

By Paul Krugman @ NYTimes.com, March 3

Will Trump back down from his urge to start a trade war? Nobody knows; the thing is, he’s been an ignorant trade hawk for decades, he’s feeling beleaguered on many fronts, and word is that his doctor has told him to eat fewer burgers. So there’s surely a lot of pent-up rage that he’s all too likely to take out on the world trading system, especially when he tweets stuff like this:

Donald J. Trump ✔@realDonaldTrump

The United States has an $800 Billion Dollar Yearly Trade Deficit because of our “very stupid” trade deals and policies. Our jobs and wealth are being given to other countries that have taken advantage of us for years. They laugh at what fools our leaders have been. No more!

12:43 PM - Mar 3, 2018

So it’s worth asking what would happen if Trump really did try to close the trade gap – it’s actually $500 billion, not $800 billion, but who’s counting – by imposing tariffs [....]

by artappraiser on Sat, 03/03/2018 - 5:51pm

If Trump advisor Gary Cohn resigns, look out, he is against tariffs, doesn't want any oart of what happens next if Trump goes protectionist.

by NCD on Sat, 03/03/2018 - 6:06pm

Yeah, that would be a sign that his desires can't be tempered. But after that, I can't imagine Congress would just let him destroy the economy. Mattis &Tillerson would be upset,too, if he continues to try tariffs wily nily.

I had a gut reaction that this is different from all the other stuff he's done, along the lines of "ignore the clown in front of the curtain, we're being distracted by a troll", here he was stepping over the line, threatening something he really has the power to change without approval. This is why I buy the stories that he was really angry and frustrated....it was like "I'll show you all!"

by artappraiser on Sat, 03/03/2018 - 7:10pm

Trump can, as President, impose tariffs for "national security", I don't know if Congress can stop him, a vote in Congress is not necessary, it's a Presidential prerogative.

by NCD on Sat, 03/03/2018 - 9:09pm

yeah, I was thinking more along the lines of jumping on an impeachment bandwagon. If it was truly looking like effects would make it so there was little chance of them being re-elected without doing so, I don't doubt that many would. (It's the economy, stupids.) Preceded of course with like, several very serious visits to the White House by leader types trying to convince Mr. President to alter his ways.

by artappraiser on Sat, 03/03/2018 - 10:30pm

Republicans are in a huge bind.

The GOP base thinks evil foreigners stealing from us must pay the tariffs, not Muricans.

Like they thought Mexico would pay for the wall.

The ones, like the workers at the steel cable company in the NYT know the score, they may lose their jobs, but the rest won't figure it out until it hits their wallets or they lose their jobs, which could take quite a while.

So the GOP has a base that doesn't have a clue where a trade war leads - inflation, job losses, recession.

They think it is good for them, that Trump hurts only brown people, liberals and foreigners.

So Ryan et al cannot jump the gun on this or the base will be mad as hell. Ryan and Co. just hope they can personally get re-elected in November before the sheet hits the fan, and when it does, that it will be forgotten by 2020. Their only hope is to dissuade Trump from a trade war, which he seems bent on.

by NCD on Sun, 03/04/2018 - 12:07am

note that Krugman has a second March 3 op-ed with link embedded in the above:

Trade War, What Is It Good For? Absolutely Nothing

excerpt:

[....] Trump has always had a thing about trade, which he sees the way he sees everything: as a test of power and masculinity. It’s all about who sells more: if we run a trade surplus we win, if we run a trade deficit, we lose:

[TRUMP TWEET OF MARCH 2 5:58 AM]

This is, of course, nonsense. Trade isn’t a zero-sum game: it raises the productivity and wealth of the world economy. To take a not at all random example, it makes a lot of sense to produce aluminum, a process that uses vast amounts of electricity, in countries like Canada, which have abundant hydropower. So the U.S. gains from importing Canadian aluminum, whether or not we run a trade deficit with Canada. (As it happens, we don’t, but that’s pretty much beside the point.)

It’s true that trade deficits can be a problem when the economy is depressed, and unemployment is high. That’s why I, like many other economists, wanted us to take a tougher stance on Chinese currency policy back in 2010, when we had around 9 percent unemployment. But the case for worrying about trade deficits, like the case for running budget deficits, has largely evaporated now that unemployment is back to 4 percent.

So we can’t “win” a trade war. What we can do is start a cycle of tit-for-tat, and when it comes to trade, America — which accounts for 9 percent of world exports and 14 percent of world imports — is by no means a dominant superpower.

A cycle of retaliation would shrink overall world trade, making the world as a whole, America very much included, poorer. Perhaps even more important in the near term, it would be highly disruptive. We live in an era of global supply chains: just about everything produced in America (and everywhere else) uses inputs produced in other countries [....]

by artappraiser on Sat, 03/03/2018 - 7:01pm

Krugman's observation that we are approaching full employment is key because it not only questions the potential to fulfill emerging demand but the lack of preparation made to increase the number of skilled workers through education.

by moat on Sat, 03/03/2018 - 7:13pm

From establishment GOP guys:

Tariffs Are Taxes

By Larry Kudlow, Arthur B. Laffer & Stephen Moore @ NationalReview.com, March 3

One of the ironies of trade protectionism is that tariffs and import quotas are what we do to ourselves in times of peace and what foreign nations do to u‎s with blockades to keep imports from entering our country in times of war.

Or consider that we impose sanctions on U.S. enemies such as North Korea, Russia, and Iran because we want them to feel the economic pain of being deprived of imports.

But now we are imposing sanctions on our own country, putting up tariffs supposedly to make Americans more prosperous. If ever there were a crisis of logic, this is it.

President ‎Donald Trump genuinely believes that his steel and aluminum tariffs will save thousands of blue-collar jobs. And we know from our interactions with him that he truly cares about these workers in Pennsylvania, Ohio, and other Rust Belt states. We do, too, and we don’t want factories to shut down.

But even if tariffs save every one of the 140,000 or so steel jobs in America, they put at risk 5 million jobs in industries that use steel. These producers now have to compete in hyper-competitive international markets using steel that is 20 percent above the world price and aluminum that is 7 to 10 percent higher than the price paid by our foreign rivals.

Steel and aluminum may win in the short term, but steel-and-aluminum users and consumers lose.

Tariffs are really tax hikes [....]

And from Jonah Goldberg (who I don't know how to describe any more), excerpts from March 2 newsletter @ National Review titled A Conspiracy against the People,

President Trump shares with President Obama the idea that nations compete with each other economically. They don’t.

Not long ago, Republicans waxed quite righteous about the Obama administration ‘picking winners and losers’ in the economy.

What’s Populism Got To Do With It?

The funny thing is that this move toward protection is celebrated or condemned as a fulfillment of Trump’s “populist” agenda. I get that we label protectionism “populist” these days — though I’m old enough to remember when protectionism was a technocratic cause. But populism is supposed to mean putting the interests of “the people” first. (The problem with populism is that populists never mean all the people; they only mean their people.) And this move isn’t in the interests of most people. How is it “populist” to punish over 300 million consumers and the 6.5 million workers in steel-consuming industries for the benefit of 140,000 workers in the steel-producing industry? Trump says trade wars are “good” — but when other nations retaliate, farmers, truckers, manufacturers, and Americans in general will pay the price

This isn’t populism in any literal meaning of the word; it’s elitism of the rankest sort. The president is abusing a law beyond its intended purpose to heap favor on a specific industry, while telling Americans that they aren’t paying enough for cars, aluminum cans, and countless other goods. Despite the fact that the U.S. steel industry already provides 70 percent of the steel used in America. This is literally conspiracy against the public [....]

by artappraiser on Sat, 03/03/2018 - 8:25pm

You're allowing your TDS to drive you to rant like a madwoman. The story here is China's dumping of steel products here and in Europe, a very unfair trade practice. The EU has already passed about 30 penalties for China's behavior there and the Department of Commerce here has ruled on this issue. Trump did delay his decision because there was great disagreement about how to proceed. Some people think it is okay for US industries to save money by using dumped steel but profiting from illegal trade behavior damages our economy in the long term. Trump will certainly gain politically among steelworkers and management but it's for doing the right thing that could help expand the US steel industry producing more high paying careers. Trump promised a year ago to confront China about their unfair and illegal economic manupulation and he is keeping his promises even with the organized pearl-clutching from opponents.

by Peter (not verified) on Sun, 03/04/2018 - 10:39am

Watch the "madwoman" stuff, and it's hard to "rant" when you're just pastung others' articles. Trump had a year to coordinate his moves with his team - he didn't, instead just tossing out some tariffs and catching everyone by surprise - allies and enemies alike. Little petulant boy playing president - too bad he never held a real job.

by PeraclesPlease on Sun, 03/04/2018 - 11:27am

Project much about ranting?

by artappraiser on Sun, 03/04/2018 - 12:16pm

March 1, 2016 (for the historically challenged, Obama was President):

U.S. Imposes 266% Duty on Some Chinese Steel Imports

Duties, which affect six other countries, intended to punish dumping to improperly gain market share

China is no longer in the top 8 nations from which US imports less than 23% of our 110 million metric ton annual steel consumption.

Canada is our leading source of foreign steel.

by NCD on Sun, 03/04/2018 - 12:32pm

Peter Navarro, defending Trump's tariffs today on the Sunday talk shows, from Wikipedia:

Assistant to the President, Director of Trade and Industrial Policy, and the Director of the White House National Trade Council, a newly created entity in the executive branch of the U.S. federal government.[1]

Opinions and assessment of trade policy:

Navarro has been a staunch critic of trade with China and strong proponent of reducing U.S. trade deficits. He has attacked Germany, Japan and China for currency manipulation. He has called for increasing the size of the American manufacturing sector, setting high tariffs, and repatriating global supply chains. He was a fierce opponent of the Trans-Pacific Partnership.

According to Politico, Navarro's economic theories are "considered fringe" by his fellow economists.[44] Al-Jazeera notes that "few other economists have endorsed Navarro's ideas."[45] A New Yorker reporter described Navarro's views on trade and China as so radical "that, even with his assistance, I was unable to find another economist who fully agrees with them."[46] The Economist described Navarro as having "oddball views".[47] The George Mason University economist Tyler Cowen has praised him as “one of the most versatile and productive American economists of the last few decades”, but Cowen noted that he disagreed with his views on trade, which he claimed go "against a strong professional consensus."[44] University of Michigan economist Justin Wolfers described Navarro's views as "far outside the mainstream," noting that "he endorses few of the key tenets of" the economics profession.[48] According to Lee Branstetter, economics professor at Carnegie Mellon and trade expert with the Peterson Institute for International Economics, Navarro "was never a part of the group of economists who ever studied the global free-trade system ... He doesn't publish in journals. What he's writing and saying right now has nothing to do with what he got his Harvard Ph.D. in ... he doesn't do research that would meet the scientific standards of that community."[49] Marcus Noland, an economist at the Peterson Institute for International Economics, described a tax and trade paper written by Navarro and Wilbur Ross for Trump as "a complete misunderstanding of international trade, on their part."[28]

by artappraiser on Sun, 03/04/2018 - 12:13pm

Called Canada’s worst nightmare, Peter Navarro is starting to win policy fights at the White House

By Greg Robb @ Marketwatch, March 3

It wasn’t that long ago that Peter Navarro was the butt of jokes in Washington.

Now, or at least for the moment in the topsy-turvy world of the Trump White House, it looks like he’s getting the last laugh.

Navarro, a trade deficit hawk, has long advocated for Trump to impose trade restrictions on national security grounds and to pull out of the North American Free Trade Agreement.

His primary opponent within the White House has been Gary Cohn, the president’s pro-trade head of the National Economic Council.

The two have jockeyed for Trump’s attention with Cohn seen as coming out on top. But the balance of power shifted to Navarro on Thursday when President Donald Trump announced the U.S. would set tariffs of 25% for steel and 10% for aluminum, sending global stock markets into a free fall.

Newspapers are full of stories of Cohn’s imminent departure from the White House. And a trade publication suggested that Navarro is set for a promotion into Trump’s inner circle.

Simon Johnson, a professor at the MIT Sloan School of Management, said the concern is that Navarro will push Trump to “step outside” the multilateral trade system, including the World Trade Organization that was designed and built by the U.S. after World War II.

“The irony is not that we built and were central to the creation of the multilateral trade system but that it was deliberately, 100% built entirely with the goal of America first,” Johnson said.

“It was in the interest of the U.S. to set up market economies with relatively free and open trade as a counterweight to the Soviet Union,” he said [.....]

by artappraiser on Sun, 03/04/2018 - 12:25pm

The following remark reflects a fundamental flaw with the narrative that other countries are mopping the floor with us:

Simon Johnson, a professor at the MIT Sloan School of Management, said the concern is that Navarro will push Trump to “step outside” the multilateral trade system, including the World Trade Organization that was designed and built by the U.S. after World War II.

“The irony is not that we built and were central to the creation of the multilateral trade system but that it was deliberately, 100% built entirely with the goal of America first,” Johnson said.

This element touches upon ocean-kat's observation that Europeans may start putting tariffs on agricultural products. Without negotiated trade arrangements, our economy can be manipulated to achieve political ends.

by moat on Sun, 03/04/2018 - 1:34pm

NEED A WIN!! CANADA CAN'T BE TRUSTED!!

GEORGE WASHINGTON MADE VERY BAD DEAL TO END THAT WAR!! NOT FAIR AT ALL ...!!!!

by NCD on Sun, 03/04/2018 - 2:00pm

Eh?

by artappraiser on Sun, 03/04/2018 - 7:02pm

The answer is obvious.

by barefooted on Sun, 03/04/2018 - 7:24pm

Re: CANADA CAN'T BE TRUSTED!!

Possible motive on that here. Just sayin'

by artappraiser on Sun, 03/04/2018 - 10:52pm

Reminds me of the Obamas at the Mandela memorial:

by PeraclesPlease on Mon, 03/05/2018 - 1:47am

WHY DID GEORGE WASHINGTON agree to 49 parallels for the border? Why not an even number like 10 or 25..?

He was NOT A GENIUS because he TRUSTED people who LIKE THE COLD and are laughing at America!!!

by NCD on Sun, 03/04/2018 - 11:33pm

You liberals here don't want to admit it because you hate America but the war in Canada, like all our wars, was a war of liberation. As usual the selfless Americans were fighting to liberate the poor oppressed people from the King of England. But you all are gonna distort the true history of the noble sacrifice of real Americans to blame America first.

by ocean-kat on Mon, 03/05/2018 - 2:22am

Wall Street Journal current website headline stories:

Tough Talk on Trade Rattles Investors

A market rally that appeared unstoppable just weeks ago is now at a crossroads, reflecting fears that trade restrictions could threaten the underpinnings of the strongest global economic expansion in years. 231

Bloomberg.com current headline stories

Updated 30 minutes ago

Trump Adviser Sees No Tariff Exclusions as U.S. Allies Protest

Lessons From 2002 Show Economic Bang From Steel Tariffs Was Tiny

May Tells Trump U.K. Has `Deep Concern' About Tariffs on Steel

As China Presents Economic Plan, U.S. Trade Spat Raises New Risk

by artappraiser on Sun, 03/04/2018 - 12:31pm

Markets Plunge as Trump Plans Tariffs on Steel and Aluminum

Comments

Sections

Bloggers