[Atlantis]

Trump announced a tax on global imports of steel (25%) and aluminium (10%) by citing security concerns, which allows a presidential decision without congress approval.

Chinese steel has already been largely eliminated from the US market due to punitive taxes introduced a couple of years ago. Thus, these measures aim US allies, especially Canada, Mexico, Brazil, the EU, Japan and South Korea.

The EU, Canada and Brazil have already said that there would be counter measures if the US tax were to come into force. The EU intends to tax imports of bourbon, motorcycles and jeans. In response to which Trump has tweeted that he would slap a 25% tax on imported cars. But he has threatened that before.

This looks very much like a rash decision by the president and Wilbur Ross didn't look happy announcing it.

Even if this were to save a few jobs in the US steel and aluminium industries, it risks putting in danger more jobs in industries using steel and aluminium since their costs will increase. Senior republicans like Paul Ryan have appealed to the president to reconsider his decision (Ryan represent Milwaukee, Wisconsin, where Harley Davidson is based).

The decision has been condemned by politicians around the world and even the IMF has been uncharacteristically critical of the US decision. If the tit for tat were to continue we could slide into global recession like in 1929. The major actors will probably halt the escalation, but nothing can be taken for granted as we seem to enter uncharted waters with an unpredictable president.

[quetzalcoatl]

A global depression is certainly a possibility. The causal chain would likely be:

*Tit-for-tat tariff actions
*Increasing panic reaction in markets
*Major stock market crash in US
*Liquidity crisis in US banks
*Trump team bungles managing liquidity
*Bank closures, unable to promptly honor checking transactions
*Panic money hoarding among consumers and businesses
*Economic activity falls of the cliff
*Deflationary holocaust spreads throughout international banking system
*Private businesses can't meet payroll. Demand for non-essential goods and services dry up
*Long term deflationary psychology sets in. It takes a generation to work this out of an economy
*Trump will try and Hoover the ensuing depression, instituting harsh austerity

It should be noted that economies are now so fragile that any number of different triggers might start a similar chain reaction.

[Albert]

Trump escalates trade war rhetoric with threat to tax Europe-made cars

Donald Trump has escalated the threat of a trade war with Europe, warning that the US will slap a tax on cars made on the continent if the European Union (EU) retaliates against tariffs on imports of steel and aluminium.

The American president made a surprise announcement this week that he intends to impose a 25% tariff on steel and 10% on aluminium in an attempt to protect US industry.

The European commission president, Jean-Claude Juncker, said the bloc was prepared to respond forcefully by targeting US imports such as Harley-Davidson motorbikes, Levi’s jeans and Kentucky bourbon whiskey.



On Saturday Trump hit back in typical style, writing on Twitter: “If the EU wants to further increase their already massive tariffs and barriers on US companies doing business there, we will simply apply a Tax on their Cars which freely pour into the US. They make it impossible for our cars (and more) to sell there. Big trade imbalance!”

In another tweet, the president railed against “very stupid” trade deals by earlier administrations and said other countries “laugh at what fools our leaders have been. No more!”

Trump has previously attacked car manufacturers in Europe, especially in Germany, with which the US has a huge trade deficit. Last year, in an interview with the German newspaper Bild, he criticised companies such as BMW, Daimler and Volkswagen for failing to produce more cars on US soil and threatened a border tax of 35% on vehicles imported to the US market.

A few months later, at a closed-door meeting with EU officials in Brussels, he was quoted by Der Spiegel as saying: “The Germans are bad, very bad. Look at the millions of cars that they sell in the US. Terrible. We’re going to stop that.”

BMW, Daimler and Volkswagen operate some of their biggest factories in southern, Republican-leaning US states. German carmakers employ about 33,000 workers in the US and German automotive suppliers about 77,000 more, according to Germany’s automotive industry association.

Cosette Creamer, an assistant professor of political science and trade expert at the University of Minnesota, noted that Trump’s proposals remain vague.

“The administration has not indicated which types of steel and aluminium the proposed tariffs will cover, or whether there will be any exemptions or carve-outs for certain types of steel/aluminium imports or for certain countries,” she wrote in an email on Saturday.

“All that being said, engaging in escalatory trade war rhetoric – even (and particularly) if you don’t end up following through – is damaging for our diplomatic relations with our allies. Moreover, ‘taxes on cars made in Europe’ won’t impact European firms much since many of these companies assemble or manufacture their cars either in the US or Mexico.”

Creamer added: “It seems to me that if these tariffs are imposed across the board, the detrimental impact on Europe will come not so much from the direct tariffs on steel imported from EU countries (which is actually a small fraction of our steel imports). Rather it will come from the destabilising effects on the European market caused by the flooding of steel from countries that would have otherwise exported to the US.”

Trump campaigned on an “America first” agenda of economic nationalism, promising to bring jobs back. But his latest move was, according to NBC News, a kneejerk reaction born of anger during at the White House. He followed up with a tweet that said trade wars were “easy to win”, rattling US financial markets.

The plan breaks from Republican orthodoxy on free trade and has left members of Congress scrambling. They warned that a trade war would hurt US companies and wipe out recent economic gains. Canada has said it will retaliate for any tariffs on steel and aluminium.

The Arizona senator John McCain tweeted: “The president’s sweeping tariffs will only serve to hurt American workers and consumers, and alienate us from our most important allies and trading partners.”

Michael Steele, former chairman of the Republican National Committee, said: “Our allies are sitting and going, ‘What the hell is your problem?’”

On Friday the Swedish appliance maker Electrolux said plans for a plant expansion in Springfield, Tennessee had been put on hold because of Trump’s announcement.

“Unfortunately, this decision gives foreign appliance manufacturers a cost advantage that is hard to compete against,” spokeswoman Eloise Hale said in a statement to the Tennessean newspaper.

There was also a chorus of media criticism. Rupert Murdoch’s Wall Street Journal, normally supportive of the president, commented: “Protectionism may be his only real policy conviction, and his tweet confirms he doesn’t know what he’s talking about.”

The White House announced on Friday that Trump had held calls with the German chancellor, Angela Merkel, and French president, Emmanuel Macron. The leaders discussed Syria and Russia, according to an official statement that made no mention of trade.

[redcarpet]

Perfect distraction while his family line their pockets. Even Jared Krushner now appears corrupt with his business dealings now being investigated by Special Counsel Muller. EG: Israel business deals, possible bribery, etc.

The chaos from a trade war between the US & the EU-led & China-led Asia trade blocs would be perfect distraction.

On-top of the fact most Americans can't/won't pay much attention to politics in their country. (except maybe a war that kills their relatives (and only temporarily!))

[Atlantis]

Steel production 1980 – 2017 in million metric tons

PRC 14 – 832
Japan 62 – 104
India 10 – 101
US 115 – 81
South Korea 9 – 71
Germany 51 – 43
Turkey 2 – 38
Brazil 15 – 34

While steel production has increased by a factor of 60 in China, 10 in India, 19 in Turkey, 8 in South Korea and 2 in Brazil, it has decreased in the US, Germany and most other Western economies.

The current steel glut is due to overcapacities in China, which is not a market but a state-directed economy. Even though direct exports of Chinese steel to the US have decreased following punitive tariffs a couple of years ago, China has been rerouting its steel exports to the US via third countries like Vietnam, in addition to flooding European markets with dumping practices.

The EU is the successor of the Coal and Steel Union which was created after the war to prevent overcapacity and ruinous national competition in steel and coal which had fed the arms industries in the past.

PS: I never figured out how to do tables in the forum.

[jimjam]

A worker in Panama removed President Donald Trump’s name from a hotel there on Monday. (I would LOVE to see America's Egotist In Chief's reaction to this )



You won't hear about this on Fox Fake News but America's already abysmal brand name around the world is sinking even further in lock step with Donald's shitty brand name.

[Rich]

It should be noted that economies are now so fragile that any number of different triggers might start a similar chain reaction.

Our economies seem incredibly resilient. I mean a lot of people whined like bitches about it but the 2008 down turn was a small set back compared to the 1930s depression. And the 1930s depression in western economies was itself a very mild set back compared to the Holdomor, Mao's great leap forward or the delights of Khmer Rouge rule.

[Hindsite]

Trump announced a tax on global imports of steel (25%) and aluminium (10%) ......
This looks very much like a rash decision by the president and Wilbur Ross didn't look happy announcing it.

Actually, Commerce Secretary Wilbur Ross, who nearly always looks unhappy, privately argued for the tariffs just hours before it was announced. It was Gary Cohn that was unhappy with the announcement.

[Crantag]

Actually, Commerce Secretary Wilbur Ross, who nearly always looks unhappy, privately argued for the tariffs just hours before it was announced. It was Gary Cohn that was unhappy with the announcement.

What you present is not news to me, and the reason it is not news to me is I regularly read business/financial press.

What is more, the guy displays his phony notions of economics. The situation is much more dynamic than simply effecting a 1:1 price increase on effected goods, in line with the influence wrought on input costs. This is the sort of argument that might persuade a 5th grader.

[Hindsite]

What you present is not news to me, and the reason it is not news to me is I regularly read business/financial press.

What is more, the guy displays his phony notions of economics. The situation is much more dynamic than simply effecting a 1:1 price increase on effected goods, in line with the influence wrought on input costs. This is the sort of argument that might persuade a 5th grader.

A very smart 5th grader, I might add. This reminds me of the TV show "Are you smarter than a 5th grader."

[Crantag]

A very smart 5th grader, I might add. This reminds me of the TV show "Are you smarter than a 5th grader."

No, not so. A smart 5th grader, a stupid 5th grader, either way. You see, 5th graders are generally quite ignorant of economics, and so they might grasp a simple notion like increasing the cost of steel input will likely increase the price of goods produced by steel. However, lacking much more than a very simple comprehension of economics, they may imagine the price will increase at a straight, 1:1 ratio in line with this increase in input cost; and more over that the story ends right there.

The presentation of the guy was merely reality distorting and nothing else. This doesn't mean he doesn't himself believe it, many people of all ages fail to grasp economics. Unfortunately, this even includes some economists. The reason is that to be qualified as an economist, at a basic level, merely requires completing the necessary course work at a for-profit college, and being able to apply the theoretical precepts of economics is not a necessity to achieve graduation.

It would have been better for such people to choose a different major; they'd have a better time with their education and their career; but that doesn't necessarily mean that is what they do.

[Hindsite]

I trust President Trump, a successful business man, to understand economics and set the policy over congressmen that don't have a clue.
Anyway, other countries are already putting tariffs on most of our products, so why can't we do the same?

[Crantag]

I trust President Trump, a successful business man, to understand economics and set the policy over congressmen that don't have a clue.
Anyway, other countries are already putting tariffs on most of our products, so why can't we do the same?

I am not surprised to hear one like you prefer blind faith.

You aren't choosing Trump over congress, you are choosing to disregard critical thought, in favor of what makes you feel more warm and fuzzy inside. At least be honest about that much.

[Heisenberg]

I'm pretty sure the main reason no one in Europe buys American cars is because they're completely shit, rather than tariffs.

[Hindsite]

I'm pretty sure the main reason no one in Europe buys American cars is because they're completely shit, rather than tariffs.

That was because most of the parts were cheaply made in places like Thailand and Taiwan.
Trump wants to go back to all made in America parts.

[AFAIK]

What is Trump's experience in manufacturing? I thought he just ran a bunch of hotels and golf courses into the ground.

Trump wants to go back to all made in America parts.

He's still unable to manufacture clothes in USA. Where are car companies going to do their upholstery?

[Hindsite]

The United States Steel Corporation announced plans to reopen part of an Illinois factory following President Donald Trump's decision to impose a new tariff on imported steel, The Hill reported.

U.S. Steel said it anticipates the tariff will result in an increased demand for domestic steel and that the company expects to rehire 500 employees within a few weeks, although it might take four months to reopen the plant.

"Our Granite City Works facility and employees, as well as the surrounding community, have suffered too long from the unending waves of unfairly traded steel products that have flooded U.S. markets," the company's CEO David Burritt said in a statement.

[Atlantis]

That was because most of the parts were cheaply made in places like Thailand and Taiwan.
Trump wants to go back to all made in America parts.

You are just making it up as you go along. I know of numerous German manufacturers in the US who would like to source local parts instead of importing parts from Germany; however, US manufacturing has substandard quality for most machine parts. Even Tesla cars include about 50% of German-made components. The only field in which the US is still competitive is the defense industry, but Trump is going to change that by cutting R&D funding.

Germany has lost more steel and coal jobs than the US, but it has created new jobs in other sectors, retrained workers and restructured industries in its own rust belt. Instead of tackling its domestic problems in a similar fashion, the US blames foreigners. Instead of managing a distribution of US wealth to all of its regions, US plutocracy exports jobs to maximize profits by making other people work for you. And then you turn around by accusing those you have exploited. That is adding insult upon injury.

In fact, the US is today by far the richest country in the world because it exploits the global economy with its monopolies and global franchises (Mastercard, Visa, Google, Apple, Yahoo, MS, KFC, Amazon, etc.). Each time somebody uses a digital service in Europe, the US makes a profit. The US has a huge trade surplus for services. If the US hits European goods trade, the EU can easily hit US service trade a lot harder without even infringing WTO rules. Too bad we don’t do orange ape, or we could win a trade war real easy.

Europe also has to subsidize US defense R&D by procuring in the US, while US procurement is largely closed to Europeans.

The narrative that you have to protect us from the commies (or from ourselves) just serves to justify your Mafia style protection racket. Now, that your protection racket has destabilized Europe's periphery in the East and in the South, the US has become a danger to European peace and stability. A protection racket is supposed to "protect" and not to endanger. Trump is the new godfather who decided to increase the profits you can squeeze out of your vassal states.

This won’t end well.

[Prosthetic Conscience]

PS: I never figured out how to do tables in the forum.

You can use the 'pre' tags (2nd button on the 2nd line of the formatting tools in the full reply screen) to preserve multiple spaces - if you create the 'table' in a fixed width font (eg with Notepad on Windows) you can line things up pretty easily, eg:

Steel production 1980 – 2017 in million metric tons

PRC                14 – 832
Japan              62 – 104
India              10 – 101
US                115 – 81
South Korea         9 – 71
Germany            51 – 43
Turkey              2 – 38
Brazil             15 – 34

[blackjack21]

You won't hear about this on Fox Fake News but America's already abysmal brand name around the world is sinking even further in lock step with Donald's shitty brand name.

It used to be a great hotel. Great hotel folks. Now, it's falling apart. Sad.

Actually, Commerce Secretary Wilbur Ross, who nearly always looks unhappy, privately argued for the tariffs just hours before it was announced. It was Gary Cohn that was unhappy with the announcement.

Ultimately, tariffs are just taxes on rich transnational merchants. We know why they don't want them. It is because it is a labor arbitrage tax.

You aren't choosing Trump over congress, you are choosing to disregard critical thought, in favor of what makes you feel more warm and fuzzy inside. At least be honest about that much.

You aren't choosing sound nationalist economic policy either. You are simply panicking because this isn't good for China. However, China has had a full year to do something about North Korea. Trump was nice to them, and now he isn't going to be anymore.

I'm pretty sure the main reason no one in Europe buys American cars is because they're completely shit, rather than tariffs.

It could also be that they are nationalists too.

He's still unable to manufacture clothes in USA. Where are car companies going to do their upholstery?

We just need to cut welfare and disability payments. Obama used disability as a run around for unemployment of older workers. So now 1:20 American workers are ostensibly disabled. It's total bullshit.

U.S. Steel said it anticipates the tariff will result in an increased demand for domestic steel and that the company expects to rehire 500 employees within a few weeks, although it might take four months to reopen the plant.

Glorious.

Instead of tackling its domestic problems in a similar fashion, the US blames foreigners. Instead of managing a distribution of US wealth to all of its regions, US plutocracy exports jobs to maximize profits by making other people work for you. And then you turn around by accusing those you have exploited. That is adding insult upon injury.

GATT, NAFTA and MFN status for China were all signed into law by President Clinton.

The narrative that you have to protect us from the commies (or from ourselves) just serves to justify your Mafia style protection racket. Now, that your protection racket has destabilized Europe's periphery in the East and in the South, the US has become a danger to European peace and stability.

It was Merkel who invited in all these refugees, and tried to force the rest of Europe to do so too.

This won’t end well.

That's just so palpably scary...