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.
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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 ?
@Picklebobble2 It is funny...USA actually exports more to Canada Steel/Aluminum than it receives. It will affect all North American goods via increased costs of all related finished goods. I also cannot see any build up of USA manufacturing to offset USA losses, the Tariff is just too unstable to hold at this point. Canada is going to add equivalent Tariffs on a variety of other USA goods on June 1st.
@okaybut Same with Europe. It will just be selective in the goods it puts it's tariffs on. Knowing that certain U.S. states will be affected if they do.
@okaybut Yeah but it's a good political thing in that certain states will have more political pull than whingeing about it from across the pond. For example, if the UK suddenly puts a hefty tax on.....imported peanut butter, the peanut growers will let Mr.T and co. know they're unhappy and that affects 'campaign donations'.
@okaybut That's how the game is played. Trump needs to appear 'strong' at home and everybody else says the same then you play these tactical games until things level out.
@jackjjackson But these 'building projects', are they bought and paid for ? Or are you doing the same thing we in the UK are ? Building houses that no one can afford in areas where nobody has a use for them ? Countless empty housing estates in Britain because their prices are too high and any industry that was in that area died soon after the '08 crash.
@jackjjackson Still got the problem of that hyper-inflated stock market though haven't you ? That's the bubble you have to keep afloat until the world economy recovers.
@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.....
