Tariffs on Chinese goods?

[AtTheMurph]

The problems of trade imbalances and relative pricing of products from country to country are caused by one simple step taken by governments - fiat currency.

When the world operated on a gold standard a trade imbalance was a temporary occurrence that would soon be rectified as gold left the borrower country, it's currency was devalued and it's purchasing power declined. The relative price for good produced would go down and exports would pick up.

Today we are stuck directly in Tiffin's Dilemma. The dollar holds reserve currency status and is 100% fiat. The world demands dollars to trade so the relative value of the dollar is very high. That makes US goods very expensive to other countries. Demand for them slows. It also means that foreign goods are relatively cheap for US consumers. Our standard of living is enhanced as we can buy much more with dollars.

However, the bad side effects are that we stop producing goods in this countries since they are too expensive for foreign and domestic consumers and we pile up debt.

Tiffin explains all of this and the future outcome. The dollar will lose reserve status and will find it's true value relative to other currencies. Inflation in the US will spike, and standards of living will crash. The only question is when.

On tariffs, why not? We can simply print more money from nothing and still buy exactly as much as we did before.

 

[Fargo]

I've always said we needed to stick it to the Canadians. Their inability to pronounce the letter "u" while throwing into words needlessly is reason enough.

Plus, I don't trust people who are that polite and who won't litter.

That said, the story about the people in British Columbia who adopted the pig and then ate it did raise my estimation of at least some Canadians.

 

[BugI02]

In terms of steel, this is the graphic from the Beeb.

So, it appears that Canada, EU and South Korea are Trump's primary targets.

From: https://www.commerce.gov/news/press...s-steel-and-aluminum-232-reports-coordination

Key Findings of the Steel Report:


The United States is the world’s largest importer of steel. Our imports are nearly four times our exports.
Six basic oxygen furnaces and four electric furnaces have closed since 2000 and employment has dropped by 35% since 1998.
World steelmaking capacity is 2.4 billion metric tons, up 127% from 2000, while steel demand grew at a slower rate.
The recent global excess capacity is 700 million tons, almost 7 times the annual total of U.S. steel consumption. China is by far the largest producer and exporter of steel, and the largest source of excess steel capacity. Their excess capacity alone exceeds the total U.S. steel-making capacity.
On an average month, China produces nearly as much steel as the U.S. does in a year. For certain types of steel, such as for electrical transformers, only one U.S. producer remains.
As of February 15, 2018, the U.S. had 169 antidumping and countervailing duty orders in place on steel, of which 29 are against China, and there are 25 ongoing investigations.

Key Findings of the Aluminum Report:


Aluminum imports have risen to 90% of total demand for primary aluminum, up from 66% in 2012.
From 2013 to 2016 aluminum industry employment fell by 58%, 6 smelters shut down, and only two of the remaining 5 smelters are operating at capacity, even though demand has grown considerably.
At today’s reduced military spending, military consumption of aluminum is a small percentage of total consumption and therefore is insufficient by itself to preserve the viability of the smelters. For example, there is only one remaining U.S. producer of the high-quality aluminum alloy needed for military aerospace. Infrastructure, which is necessary for our economic security, is a major use of aluminum.
The Commerce Department has recently brought trade cases to try to address the dumping of aluminum. As of February 15, 2018, the U.S. had two antidumping and countervailing duty orders in place on aluminum, both against China, and there are four ongoing investigations against China.

And i'm not quite sure why the Beeb chose to chart cost rather than tonnage, as well as using only the latest month's figures.

As you can see at :https://www.census.gov/foreign-trade/Press-Release/2018pr/01/steel/steel3p.pdf Exhibit 3. U.S. Imports For Consumption of Steel Products From Selected Countries and Areas
this choice paints a different picture than charting tonnage

I haven't thought about it yet sufficiently to decide how this might affect my opinions. It does make clear that according to the value of imports, tariffs will affect sophisticated, value added producers (China, Germany) more than commodity steel producers (Brazil, Mexico)

 

[Leadeye]

I would be curious to find out how much regulation played into decisions to close plants here in the US and just buy the materials elsewhere. A project I was working on recently required technical grade permethrin, a chemical found in bug repellents and household sprays. I was surprised to find that it's not manufactured here in the states at all, India and china were the only places to get it in any quantity.

 

[Trigger Time]

This is a negotiating tactic

 

[cayce]

Look at the VERY large percentage of goods made, and sold here, by SLAVE LABOR in Chinese prison camps. Kind of hard to compete with 'labor costs' costs like that.

 

[Kutnupe14]

Look at the VERY large percentage of goods made, and sold here, by SLAVE LABOR in Chinese prison camps. Kind of hard to compete with 'labor costs' costs like that.

I don't think that makes much of a difference to American buyers. Heck, if would save them a noteworthy amount of money, they would be in the "just don't tell me how I got it" category.

 

[Kutnupe14]

[FONT=&amp]The European Union is weighing potential tariffs on U.S. goods ranging from Levi's jeans to Harley-Davidson motorcycles, the president of the EU's legislative body said Friday.The proposed tariffs come in response to President Trump's Thursday announcement that he will impose a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports next week.[/FONT]
[FONT=&amp]"We will put tariffs on Harley-Davidson, on bourbon and on blue jeans — Levi's,” European Commission President Jean-Claude Juncker said on German television, according to Reuters.[/FONT]

EU weighs tariffs on bourbon, blue jeans, Harley-Davidson | TheHill

Countries are lining up their responses. You think HDs are expensive now? ...wait until you have to pay the revenue lost by them overseas.

 

[BugI02]

EU weighs tariffs on bourbon, blue jeans, Harley-Davidson | TheHill

Countries are lining up their responses. You think HDs are expensive now? ...wait until you have to pay the revenue lost by them overseas.

[Insert Lord Darlington quote here]

 

[actaeon277]

Last time around, 19 steel mills went bankrupt. Because they couldn't compete with a china that built too many steel mills.
So, after the 19 mills went bankrupt, China decided (not the market, their government) to divert steel for "infrastructure".
The cost of steel skyrocketed.
My mill loved it, they were rolling the barrels filled with money to the bank.
The people that didn't work anymore didn't like it.
The people that had to pay more for steel than they did even with tariffs.

Free trade is great.
But, don't forget it only works when one side isn't using it as a weapon, and it isn't "free".

 

[Jludo]

Last time around, 19 steel mills went bankrupt. Because they couldn't compete with a china that built too many steel mills.
So, after the 19 mills went bankrupt, China decided (not the market, their government) to divert steel for "infrastructure".
The cost of steel skyrocketed.
My mill loved it, they were rolling the barrels filled with money to the bank.
The people that didn't work anymore didn't like it.
The people that had to pay more for steel than they did even with tariffs.

Free trade is great.
But, don't forget it only works when one side isn't using it as a weapon, and it isn't "free".

I feel like this view takes the stance that a govt controlled economy can outwit a free market? Is China beating us because of their central planning and govt control of economy?
I concede there are tough spots we're sometimes put in but on balance I'd like to see us strive for the least govt economic planning. There are anecdotes that can be told on both sides of the argument.

 

[Thor]

Free markets only work when the markets are free...not weaponized by hostile governments. Ignoring the difference only allows the hostiles to wage a war that you don't recognize. Governments that choose to attack us economically (or in any other way) need to be recognized as the hostiles they are and treated accordingly.

 

[T.Lex]

Free markets only work when the markets are free...not weaponized by hostile governments. Ignoring the difference only allows the hostiles to wage a war that you don't recognize. Governments that choose to attack us economically (or in any other way) need to be recognized as the hostiles they are and treated accordingly.

So, I'll politely ask - what does this mean? Like, a literal casus belli? A Congressional declaration of war (or some continuing resolution that is effectively the same thing)? Do you think there is an appetite for that?

IMHO, the economic aspect of our policymaking should further American interests. Generations ago, we embarked on a policy that rode the wave of globalization. Successfully, mostly.

We cannot turn the hands of time back. A public discussion of the pros and cons would be a healthy thing to have, probably. Try to reach a consensus.

But, there's at least one guy who won't be hurt too badly.

Former Trump Adviser Dumped Millions in Steel Stocks Days Before the President Announced New Tariffs

 

[Woobie]

America: cutting off our nose to spite our face since 1789.

 

[T.Lex]

Trump trade row: EU considers tax on Levi jean imports - BBC News

Unintended consequences, perhaps.

Tariffs on the goods of our enemies, I can see the value of that. (Pardon the pun.) Although perhaps not the utility.

Tariffs on our allies? Makes even less sense.

 

[Thor]

So, I'll politely ask - what does this mean? Like, a literal casus belli? A Congressional declaration of war (or some continuing resolution that is effectively the same thing)? Do you think there is an appetite for that?


We cannot turn the hands of time back. A public discussion of the pros and cons would be a healthy thing to have, probably. Try to reach a consensus.

A - Yes. Allowing our enemies to dump products on our markets (and the ChiComs could care less about the rules) to actively destroy our economy is willful ignorance. As to appetite I could care less. No one is going to ask to pay more for things, but then again no one asks to destroy their jobs and enslave their people. They do so blindly.

B - While we can't turn back the hands of time we can stop doing stupid things.

 

[BugI02]

Thor is correct, intent isn't even that important. Even if people are only dumping excess product in our markets to prop up their domestic producers at our expense, it is damaging to our manufacturing base. No more sinister motivation is required, which is not to say it does not exist

Capitalists something something rope something

 

[T.Lex]

A - Yes. Allowing our enemies to dump products on our markets (and the ChiComs could care less about the rules) to actively destroy our economy is willful ignorance. As to appetite I could care less. No one is going to ask to pay more for things, but then again no one asks to destroy their jobs and enslave their people. They do so blindly.

B - While we can't turn back the hands of time we can stop doing stupid things.

Thor is correct, intent isn't even that important. Even if people are only dumping excess product in our markets to prop up their domestic producers at our expense, it is damaging to our manufacturing base. No more sinister motivation is required, which is not to say it does not exist

Capitalists something something rope something

So the both of you would support a declared war against China? With armies and navies shooting things?

 

[Woobie]

So the both of you would support a declared war against China? With armies and navies shooting things?

I'm not sure I agree with the equivalency I think you're trying to draw.

 

[T.Lex]

I'm not sure I agree with the equivalency I think you're trying to draw.

Oh, I guess I should clarify my own intent.

My question was whether the Chinese actions amounted to casus belli for the INGOers expressing opinions along those lines. I believe the answer was "yes."

If I'm mistaken on that point, I'm open to correction.

But, if I'm not mistaken, I'm exploring the contours of what that means. One end of the spectrum is a shooting war.