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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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.
@goliathtree I am thinking that as well....any other nation/group other than USA, EC or China would be punished severely. But the USA is too "big to fail".
@okaybut I think you're ignoring the fact that part of the thing Trump wants to fix is the enormous tariffs canada has had on our goods for years. Trump didn't start this but he will likely end it with us getting a better deal. You have to expect squawking from the little birds who have managed their economies with our trade assistance for so long. Because of Trump's insistence that the playing field is level, or fair if you will, they might actually have to start managing their economies on their own. Can they do that? Not unless they change. It's the very thing we have warned against socialism.....eventually you run out of other people's money.
@katielass 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 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.
