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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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.
@GardenSage We will have to see. In terms of economics what you outline is not correct (ie the great depression likely in part driven by trade closing via USA http://fortune.com/2018/03/04/did-tariffs-cause-the-great-depression/). Trade will have to come back at some point...just at what terms via the USA wants. Also will it come back back after the worlds (including the USA) plunges into a recession or worse.
@okaybut I don't think the dynamics of the great depression are even close to the same as today... But the USA is self sufficient and countries NEED our help. There's no doubt our economy has been withering due to lopsided deals. Let's use our clout to fix them
@GardenSage I don’t Agree. Or else pipelines would not be built From Canada to US to send oil south. Hydro Quebec probably supplies half the east coast in electricity. Ontario feeds Upstate NY and Bc feeds the West all in electricity. Let’s not mention Natural gas. Just a few. Being partners means both are needed no one is too big or self sufficient. Some 30 States work daily with Canadians on different trades.
@Jammy lol when 911 happened, the USA stopped all use on foreign oil for a period and we were paying less that $1 per gallon.
The USA doesn't use it's oil reserves often. We prefer to use everyone else's first. But we have more than enough oil AND natural gas to sustain us for quite a long period of time
