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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SW-User
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.
