I believe this is his most controversial move yet and I honestly do not have a prediction of an outcome. It is economically dangerous. With his Steel and Aluminum tariffs he is disregarding "the rules" of which the USA was the primary architect. In terms of Trade, the USA is too important to ignore, however if this escalates it could bring on a recession.
Great discussion group...thanks!
Oh just read this article now....a few hours after I posted this: http://nationalpost.com/opinion/john-ivison-the-great-patriotic-trade-war-against-the-u-s-begins-on-canada-day The problem with these Tariffs is that it is going to cost us more for some goods. :( As the USA will now be paying 25% more for steel. You cannot produce enough internally.
Another article I read... http://nationalpost.com/news/politics/the-good-the-bad-and-the-ugly-heres-what-could-happen-if-trumps-trade-war-escalates
Another article on the Trade Off. More jobs but less overall wealth. Example of Washing Machine prices. The tarrif protected industry gets more jobs. However, overall incomes are lost to paying more for the Tariffed products.
Information from another article... "Shortly after tariffs were announced, steel suppliers, no longer as fearful of price competition, began jacking up prices — they’re no fools. That has meant a 40 percent increase since January in the cost of steel for their customers who use it in their finished products, according to the U.S. Chamber of Commerce. They can either pass that increase on to you or be less profitable.
The story is the same with aluminum: Brewers are forecasting that they’ll pay $347.7 million more for aluminum cans. That has small craft-beer makers such as Melvin Brewing in Alpine, Wyo., which packages 75 percent of its products in cans, fretting about impending prices rises and the risks of passing them along to consumers. Try not to be bitter about it.
Job losses from the metal tariffs alone could top 400,000, according to an analysis by Trade Partnership Worldwide, a nonpartisan consultancy that supports free trade. So while U.S. Steel can celebrate the restart of two blast furnaces in Granite City, Ill., and bring back about 800 workers, 7,500 jobs will be lost elsewhere, the consultancy estimates." https://www.nytimes.com/2018/06/15/opinion/sunday/trump-china-tariffs-trade-farmers.html
I think it is safe to say right now...Option2 - Destabilize is occurring.
I think we have to wait and see what actually happens. At the end of the day, is this just a bargaining move? It seems that exemptions are waiting to happen.
@okaybut I just hope the playing field is evened out. I don't want to cheat anyone else but I also don't want us to be cheated. If the trade is pretty equal I'll be fine with it. We've been hearing how uneven the trade is for years and now that we have someone working for us seems like the right time to level it out so it's fair for everyone. The only exception would be a small, poor country who is just getting their feet off the ground so to speak and need a little help in doing so. Give them an advantage for a few years until they get things going and then even it out gradually so they aren't hit all at once.
@katielass I agree. Canada has to lower Dairy tariffs (we have a very active lobby group holding them up) and duties on customer online orders. However, I think Canada is the only country the USA has a surplus with (or close to even).
@okaybut yes, I think so too. One thing for sure is Trump understands business better than any of his critics so I'll trust him to do the right thing. He's not interested in turning the tables, just evening things out.
Tariffs are a bad idea all the way around EXCEPT, as a tool to shake the rest of our "allies" off of them. Funny how I can order and import most anything from Canada to my home with no issue and virtually everything a Canadian buys from the US gets slammed with hidden tariffs, taxes, and duties.
"Canadians pay little attention to tariffs, understandably so. Unlike sales taxes, they are invisible at the cash register. And the topic is about as entertaining as reading a phone book. But Canada's 8,192 tariffs categories – each with 18 tariff treatments! – are in dire need of tidying. And if Canadians don't take Ottawa to task, then they can only blame themselves for the Canada-U.S. price gap. Sophie Cousineau The Globe and Mail MONTREAL Published February 8, 2013 Updated May 11, 2018"
I'm an economics student,I absolutely love economics. I recently had to give a presentation on word trade, free trade and economic sanctions. I chose the south african apartheid and the economic sanctions implied by different nations and trade areas as part of my investigations and trumps economic sanctions and disputes with China . Sure,some of his arguments are valid and some could imply there are dumping methods reinforced through loop holes by both the world trade organisation and china,that hurt local producers but the overall and greater impact has been damaging. Because while he makes you believe that he is stimulating aggregate demand for domestic products,trade partners refuse to accept imports or open new disputes,as has been the case,for products your country is exporting at ridiculous costs. At the end of the day,no one is a winner in a war. And definitely not one initiated ,or worse,fought by Trump .
@SW-User Do you think he would get Intellectual property laws from China??
SW-User
@okaybut I find it highly unlikely. To be honest it is the world trade organisation that would have to settle any trading dispute of this nature. And it is a lengthy time consuming process that can take years. The organisation usually aims for both parties to come to a mutually satisfactory agreement. Unless there is clear and/or severe breach of their legislative terms . In short: I think trumps time in office will run out long before any of his disputes reach a settlement. I believe the next president will seek to settle these disputes. They have been damaging for the US economy . I think trump truly does not care about domestic product as much as he displays he does. His aim is to seem likeable and worthy of his presidency,by making quick unplanned economic moves,without calculation and forecasting,as he u understands it will not affect the people he truly cares fo,his circle ,the elite.
Trump has no worries ... Trudeau does ... the Canadian currency has declined almost 30% In the futures market ... and softened further overnight after Trudeaus failed attempt to embarrass Trump.
Essentially the World is forcing Canada to absorb a 30% tariff on all exported and imported goods.
Like Mexico ... if you don't have the reserves to win ... you have to play to get along.
@okaybut I want to ask you a question or two, does Canada and the rest of the free world get a free pass when taking advantage of US health care innovation ? Does Canada and the rest of the free world get a free ride when it comes to living under the protection of the US military ? It is easy to be a socialist state when you can take advantage of the US this way.
I mean the US is the last bastion of capitalism and freedom in this world. When are people going to stop electing little marxist globalista freaks who wish to create a world government where every person becomes a slave to a technocracy. A socialist hell hole which wants to downsize human beings and monitor the rest of us every breath and movement. Agenda 21, Agenda 30, the writing is on the wall. Please wake up and stop electing globalist pansies like Justin Trudeau who are frauds and who hate individual liberty.
@therighttothink50 Okay.... answers 1) I think with Health Care innovation, the USA gets benefits via commerce. Canada has a couple of our own Pharmas, but all others are owned by the USA (ie. Eli Lilly, Phifzer, etc). 2) Definitely USA military has shouldered way too much of the burden. However to some extent now you have to ask how much of the current spending is due to the Military Industrial complex. But this is not an for Trade, it is for NATO agreements. 3) I do not agree with Trudeau and his policies and have a feeling he might be voted out next election to bring in the right. You do remember you had left wing Obama while we had right of center Harper for many years?
the other side said the same thing about Kim Jung Un and look what is happening. if we don't get tough on other countries, they will take advantage of us. i think he is right
@akindheart They not only take advantage of our trade. They get a free ride when it comes to US health care innovation which is huge. These so called socialist utopias do not promote private health care innovation. So the US leads the way and other countries take advantage of all the years of the many US private company's testing and innovation which goes into providing better health care. These socialistas who claim to be part of the free world also mooch on the US by living under the umbrella of security known as the US military. These other countries spend virtually nothing on their military because they know the US military will protect them. The free ride and demolition of the US middle class is over, they need to readjust to reality, not us.
@okaybut It's a complex and deep issue that affects probably every industry and sub-industry. And, for starters we don't have fair trade here. Government restrictions, price support and subsidies distort the prices of practically everything we buy. Then pile on excise taxes and human exploitation.
@okaybut After listening to more than a few members of congress raise their dander over President Trump's muscling in on Trade, we should all be reminded that special interest related to trade probably account for a lot, if not most of the campaign donations that corporations, unions, industry support organizations, and their super rich owners give to our elected officials.
There are about 13,000 registered lobbyist in Washington DC. And they all probably have an interest in trade arrangements favorable to them, regardless of whether it's fair or not.
@Heartlander I think you are right. I was just reading that the Steel/Aluminum Industry will gain jobs...however the cost of these jobs will be $400,000 per job (or something like this). Essentially giving them jobs at the expense of higher costs to everyone else. Not sure other groups are going to like this!
@FelixLegion But with an unemployment rate at a 17 year low (3.9%), who will do the jobs? https://www.reuters.com/article/us-usa-economy-jobs/us-job-growth-picks-up-unemployment-rate-falls-to-39-percent-idUSKBN1I508J It could lead to rapid inflation. I know some areas of USA have been hit hard by manufacturing losses, but will trying to fix them, will it put the entire nation into a bad situation?
@FelixLegion You may be right...I guess we have to watch. If he is able to swing freezer trade deals (ie China is cheating on IP and hidden boundaries, Canada has the milk/butter etc crazy tariffs - but is one of the few surplus countries, etc) - It just might work.
@therighttothink50 that is not the case. It is not possible for a country to produce all products and services to satisfy the demand of all of its consumers. It would drain the workforce create monopolies reduce competition and skyrocket prices of products. Word trade and free trade allows specialization f.e. in the uk the climate does not allow for producing most fruits n veg,instead they have a great service sector especially in the technological and healthcare (pharma) industries . They export those and are able to import these products from other countries and sell them at reasonable prices. If they had to produce them themselves, they would have to invest heavily into artificial and technological growth of these products,training of workforce,etc. Final product price would make an ordinary good a luxury. The same applies for every country. Read on Scottish Philosopher and daddy of economics,Adam smith.
Tarrif war will likely result in a robust US economy. Other nations are scared of the US power to be self sufficient... We would effectively be immune to global recession.
If current trade partners are reluctant to adjust trade legislation, no doubt new countries will want to get in on US production.. ie Britain (no longer part of EU) and now PRK... Surely current trade parnters will be pressured into renegotiating with USA. Whether they like it or not.
Steel is nothing though in the grand scheme of things. Few people are building. Fewer are buying cars. Shipbuilding is dead. Where does he think his steel tariff is likely to take effect ?
@jackjjackson Public sector hasn't had a pay rise above inflation for ten years. Another generation are working minimum wage jobs. Others are on '0'-hours contracts. As and when needed. The government is floundering. Extrication from the E:U is being dominated by 'Remainers' so delaying everything. until the final details are clear on that, foreign companies don't know whether to jump now or wait. If the opposition were any stronger they'd call an election. but since they aren't..... Absolute mess !
The public voted for one thing and the “public servants” are doing another. AND being paid for it AND getting undeserved pensions the public doesn’t get. Outrageous. @Picklebobble2
@jackjjackson Lots of 'changes in terminology' do not a confident electorate make ! I've known tough times but when you start seeing foodbanks on street corners.....
I am not sure what's going to happen. The real issue though, is that you don't run global trade negotiations, like you do a poker game, or a real estate deal, in the spirit of "let's see what happens".
In both cases, what you're betting on, is that the other party is less informed than you are. That's the wrong bet to make.
As far as Canada is concerned, yes, we sell them more than they sell us, based on our own numbers, but the dairy products thing, is a bit more complex than meets the eye. This is about highly concentrated milk products (milk protein), and is a more recent issue. At one point, there was no tariff on this at all, until we flooded the Canadian market. More to it than even that.
@Northwest As a Canadian, I think these dairy Tariffs should come down. Other than that, the trade equation is fairly well balanced. I think Trump is looking the wrong direction.
Given that the US economy is more than double what the rest of the G7’s are [i][b]combined[/b][/i]... they are going to negotiate better terms with the US .
@TexChik What better terms can Canada give other than a small area of Trade?
According to USA figures, the USA imports less from Canada then it exports - "U.S. goods and services trade with Canada totaled an estimated $673.9 billion in 2017. Exports were $341.2 billion; imports were $332.8 billion. The U.S. goods and services trade surplus with Canada was $8.4 billion in 2017." https://ustr.gov/countries-regions/americas/canada USA has some high tariffs on some products -http://www.businessinsider.com/americas-biggest-tariffs-2010-9#asparagus-and-sweet-corn-213-tariff-3 And so does Canada. Like the USA, only in a very few specialized areas. For us it is milk/dairy etc. These Canadian tariffs do need to come down!!! Canadians are paying way too much when the USA can give them to us cheaper. I hope Trump wins on this.
@okaybut there is a an 87 billion dollar trade deficit with Canada . They tax the crap out of our goods and expect theirs to fly through with no duties . That isn’t gonna happen any more
The glaring omission is whether the trade policy will be good for the United States but since you’ve loaded the question of course you would slant the possible responses. My opinion is that the trade policy will be beneficial to the United States which is the primary JOB of the President.
Those comments didn’t exactly unload your question lol. Of course you have a negative opinion. Everyone gets or should get thst. However the status quo was is and would continue ur to be bad for the US. @okaybut
@jackjjackson It is unfortunate I am coming off that way. I am just looking at the rewards vs the downside. I do believe the world will be much better off with a better USA trade deficit. China will stop paying the bills soon.
Someone qualified what manufacturing jobs are worth trying to resurrect. Times change. It seems to me that a lot are out moded. Kind of like 1850’s style gold mining. However there are plenty of new technologies and new processes that did not exist ten years ago. What’s with all the interest in clinging to the past? Is it unions? The concept of private pensions? Those things are relics.
