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  1. #1
    valamhic valamhic is offline

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    Trump plays a star game with tariffs on steel and aluminium, but will it spark a trade war.

    US President and idol of conservative people the world over Donald Trump, promised to undo Obama's horrific trade deals. America was been taken for a ride, seen as a rich bully by leftist governments and dictators. China was dumping every conceivable product from metals to computers to smart phones. A military power that can't produce its own steel can be prevented building battle ships and a country that can't produce aluminium can be constrained building aircraft by any enemy in the lead up to war.

    Trump's action have not been well received. The main adverse reaction was from EU Commission President Jean-Claude Juncker who threatened to impose tariffs on Bourbon whiskey, motor cycles and orange juice. President Trump has tweeted that if necessary he will impose tariffs on cars. America is a very important market for EU made cars and the prospect of tit for tat retaliation is suggested.

    It's all one big act of course from the master of persuasion. Trump is pulling America back from the brink to make it great again. Where will it end, there are always the unintended consequences, I though it was great fun until I heard of tariffs on bourbon. Buffalo Trace and Maker's Mark being among me my favorite tipples. I better be careful what I wish for. What do you think?
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  2. #2
    Betson Betson is offline

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    Quote Originally Posted by valamhic View Post
    I though it was great fun until I heard of tariffs on bourbon.
    That is when it started to get serious.

    The EU and China will back down , as Trump said wining trade are are easy.

    Just make the enemy think you are crazier than them and willing to do anything , he is good at that, he will win this war without firing(figuratively) a shot in anger.
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  3. #3
    Dame_Enda Dame_Enda is online now
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    Alfred Eckes Jr., chairman of the U.S. International Trade Commission under President Reagan said that between 1871 to 1913 “the average U.S. tariff on dutiable imports never fell below 38 percent [and] gross national product (GNP) grew 4.3 percent annually, twice the pace in free trade Britain and well above the U.S. average in the 20th century,”"
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  4. #4
    Sync Sync is offline
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    It's a sign of how alone he is. He's upset about Kelly, he's upset about Hope, it's been a horrible week, so he lashes out.

    It's a good idea for countries to band together and try to stop Chinese dumping of goods. This solution a) Won't stop Chinese dumping of goods and b) Splits the US off from those other countries who otherwise would be onside to do something about China. The US imports more steel from Taiwan and Brazil that it does China.

    And millions of Americans are employed in jobs that USE steel compared to 150k or so who manufacture steel. Those jobs will now be impacted by these tariffs.

    There's also the precedent this sets. WTO exists for a reason. Trump's logic here of "national security" could be applied by literally any other country for any product that's important to them.

    So let's say you're Harley Davidson: You're importing steel for your bikes (Because the US need to import steel far outweighs domestic supply). That's now more expensive. You're then trying to sell these bikes in countries where they're now more expensive. So sales go down. That's not a good thing.

    And there's no one to tell him this is a bad thing because everyone he trusts is gone.

    And the Ichan thing stinks to high heaven and will be investigated. No wrong-doing on Trump's part but pretty serious alleged wrong-doing on Ichan's. It'll either result in a standalone SEC investigation or merging into the ongoing one into his behaviour.
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  5. #5
    valamhic valamhic is offline

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    Quote Originally Posted by Sync View Post
    It's a sign of how alone he is. He's upset about Kelly, he's upset about Hope, it's been a horrible week, so he lashes out.

    It's a good idea for countries to band together and try to stop Chinese dumping of goods. This solution a) Won't stop Chinese dumping of goods and b) Splits the US off from those other countries who otherwise would be onside to do something about China. The US imports more steel from Taiwan and Brazil that it does China.

    And millions of Americans are employed in jobs that USE steel compared to 150k or so who manufacture steel. Those jobs will now be impacted by these tariffs.

    There's also the precedent this sets. WTO exists for a reason. Trump's logic here of "national security" could be applied by literally any other country for any product that's important to them.

    So let's say you're Harley Davidson: You're importing steel for your bikes (Because the US need to import steel far outweighs domestic supply). That's now more expensive. You're then trying to sell these bikes in countries where they're now more expensive. So sales go down. That's not a good thing.

    And there's no one to tell him this is a bad thing because everyone he trusts is gone.

    And the Ichan thing stinks to high heaven and will be investigated. No wrong-doing on Trump's part but pretty serious alleged wrong-doing on Ichan's. It'll either result in a standalone SEC investigation or merging into the ongoing one into his behaviour.
    A good analysis there. I would ask why is America not producing more steel? Could it be because they can't compete with subsidized steel from these countries.
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  6. #6
    Analyzer Analyzer is offline
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    There is a problem with the US Car industry - basically it has used every possible means for nearly a decade to move product. And the market is saturated with second hand cars, many of them sitting parked, for over a year.

    This has driven down the price of resale. And now millions of customers are holding onto their cars, becuase the difference between a new purchase and the price of the trade in, is simply too large. It does not help given US income growth has hardly grown in real terms for decades.

    It is an overcapacity problem waiting to all crash (pun intended) at once.

    Trump may as well ban Japanese and EU cars - it is the only means available to prevent the car industry going over a cliff. Not sure if he intends to include CAN cars in that - but Canada has a serious problem also, given that Ontario energy prices are far higher than in the states to the South.

    I expect Merkel to lose the plot and to produce a hyteria loaded level of hypocrisy. The Japanese and Koreans will be far calmer and more sensible.
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  7. #7
    gerhard dengler gerhard dengler is offline
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    Quote Originally Posted by Betson View Post
    That is when it started to get serious.

    The EU and China will back down , as Trump said wining trade are are easy.

    Just make the enemy think you are crazier than them and willing to do anything , he is good at that, he will win this war without firing(figuratively) a shot in anger.
    Mad man theory.

    Wasn't this first applied during Nixon's presidency?
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  8. #8
    Dame_Enda Dame_Enda is online now
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    There is a legitimate national security argument for protecting steel in case of a war. In a war you dont want the enemy controlling your steel supply. Theres a long list of US presidents who expressed support for Protectionism before the Great Depression, when the Smooth Hawley Tariff Act of 1930 was wrongly blamed.

    Quote Originally Posted by wikipedia
    ...Tariffs and Great Depression
    Many economists hold the opinion that the tariff act did not greatly worsen the great depression:

    Milton Friedman also held the opinion that the Smoot-Hawley tariff of 1930 did not cause the Great Depression. Douglas A. Irwin writes : "most economists, both liberal and conservative, doubt that Smoot Hawley played much of a role in the subsequent contraction."[59]

    William Bernstein writes "most economic historians now believe that only a minuscule part of that huge loss of both world GDP and the United States’ GDP can be ascribed to the tariff wars "because trade was only nine percent of global output, not enough to account for the seventeen percent drop in GDP following the Crash. He thinks the damage done could not possibly have exceeded 2 percent of world GDP and tariff "didn't even significantly deepen the Great Depression."(A Splendid Exchange: How Trade Shaped the World)

    Peter Temin, explains a tariff is an expansionary policy, like a devaluation as it diverts demand from foreign to home producers. He notes that exports were 7 percent of GNP in 1929, they fell by 1.5 percent of 1929 GNP in the next two years and the fall was offset by the increase in domestic demand from tariff. He concludes that contrary the popular argument, contractionary effect of the tariff was small. (Temin, P. 1989. Lessons from the Great Depression, MIT Press, Cambridge, Mass)[60]

    Nobel laureate Maurice Allais, thinks that tariff was rather helpful in the face of deregulation of competition in the global labor market and excessively loose credit prior to the Crash which, according to him, caused the crisis Financial and banking sectors. He notes higher trade barriers were partly a means to protect domestic demand from deflation and external disturbances. He obserses domestic production in the major industrialized countries fell faster than international trade contracted; if contraction of foreign trade had been the cause of the Depression, he argues, the opposite should have occurred. So, the decline in trade between 1929 and 1933 was a consequence of the Depression, not a cause. Most of the trade contraction took place between January 1930 and July 1932, before the introduction of the majority of protectionist measures, excepting limited American measures applied in the summer of 1930. It was the collapse of international liquidity that caused of the contraction of trade.[61].....
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  9. #9
    gleeful gleeful is online now

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    The EU will impose tariffs on exports from swing states in the upcoming midterms. This will win seats for the democrats.

    Same was done the last time a US president tried this nonsense.
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  10. #10
    gleeful gleeful is online now

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    Quote Originally Posted by Dame_Enda View Post
    There is a legitimate national security argument for protecting steel in case of a war. In a war you dont want the enemy controlling your steel supply.
    The EU is the enemy now?
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