Begun, the trade war has.
The Commerce Department is reportedly going to recommend President Trump enact tariffs on foreign steel and aluminum.
President Trump has been agitating for tariffs ever since he took the oath of office. Now he’s about to get cover to push for them.
The scoop comes via Jonathan Swan at Axios:
- Aluminum: 7.7% tariff on all aluminum exports from all countries. 23.5% on all products from China, Russia, Venezuela and Vietnam. A quota on imports from all countries to a maximum of 86.7% of their 2017 exports to the U.S.
- Steel: Global tariff of 24% on all imports. Tariff of 53% (at least) on steel imports from Brazil, China, Costa Rica, Egypt, India, Malaysia, Korea, Russia, South Africa, Thailand, Turkey and Vietnam. A quota of 63% of 2017 exports for the countries listed in the prior sentence. All other countries can export at 100% of 2017 levels, but above that face tariffs.
SCOOP: Commerce to recommend major tariffs on steel and aluminum.. includes 24% global tariff on steel imports.. would be first shots in a trade war… https://t.co/sp87KO2kZg
— Jonathan Swan (@jonathanvswan) February 16, 2018
This move might violate conservative orthodoxy, but remember Donald Trump didn’t run as a conventional conservative. He ran as a nationalist willing to tweak the economy to benefit American workers. And, in his mind, that means charging countries more to ship their raw materials here. President Trump was elected to defend the American worker. He never made any bones about his intention to enact tariffs.
These tariffs fall right in line with Trump’s thinking over the past 30 years. While China has been trying to woo the President in the past few months, it looks like Trump wasn’t satisfied with their efforts.
What do you think about these new tariffs? Do you support them? Will they help American workers? Tell us your thoughts below and share this story over Facebook!
Pity that none of the liberals on this site want to go to a free-market solution. And it appears that none of you do.
In a free market, the value of the dollar will rise or fall to balance the international trade. Period.
The dollar does not fall to a position that would balance trade because the people in Washington and Beijing want to keep the dollar – yuan at an exchange rate that maintains our trade imbalance. And they do that by law.
China is heavily invested in a mercantilist economic model, and the United States has political ideology that wants to “keep the dollar strong”. Trump’s tariff model keeps the problems of the strong dollar with the political ability to reward his personal friends and hurt his political enemies. And as his dealings with Russia demonstrate, his friends are his business partners, not the friends of America.
Such tariffs would be completely unnecessary save that we have created a tax system which punishes productivity and rewards imports. Eliminate all wage taxes (which would substantially reduce production costs) and implement a 10% sales tax, and everyone else in the world who fails to follow suit will but unable to compete with us. Cash register prices would remain around the same, but American goods and services would immediately see a boost in domestic and global competitiveness.
Will you include a sales tax on all stock transactions? On home sales? On the purchase of members of Congress?
Will you include the tax on foreign purchases by American companies? Will it include a tax on the formation of tax-free foreign corporations?
If you do, maybe we can agree on that.
poppDavid, To respond to your “That’s latin for Tax” comment. There are reasons for tariffs on foreign imports that have nothing to do with creating income for the government. It has been stated that certain nations, such as China and others, are creating an artificial pricing structure for their steel, aluminum and other products that makes it very difficult for U.S. manufactures to compete, in both domestic and foreign markets. These foreign governments can use various forms of subsidies or tax relief to deliberately allow their country’s industries to sell their exports at prices well below their actual cost of manufacture and the world market price. Such artificial pricing structures have a tendency to reduce our industry’s sales and, eventually, their ability to retain the capacity to make and sell these strategic materials, as the demand for domestic products dry up. This causes our capacity
to manufacture strategically necessary materials to fall behind the levels of our strategic competitors. In some instances it could drive them out of business all together. That could put us at a serious disadvantage is the case of war or leave us at the mercies of foreign suppliers after our ability to produce our own materials or products collapses. I know that trade wars have historically been dangerous for the nations involved. The trade wars begun as the result of the Global Depression of the 1930’s, were a factor that led to WWII. I can not read the President’s mind, but he has said that he wants to pressure our international trading partners to treat the U.S. fairly in their trade policies. These countries, are, I suspect, not going to change their predatory trade policies merely because we state that we want a change. Press releases stating that we are actively considering imposing these tariffs may be intended to influence our foreign trading partners that we are serious about the elimination of predatory trade practices. Such changes in new trade policies may, if achieved, be codified in updated trade treaties. These proposed U.S. tariffs may even be imposed, at which time they will become negotiating pawns, open to being reduced or rescinded as part of any new round of trade treaties. Remember what happens when a company gets a monopoly in an essential product in the marketplace. Once they get rid of their competition, there is no stopping them from charging anything they wish for their products and we would have no choice but to pay. So, I doubt whether the President wants to create a situation where our businesses and citizens have to pay more for products, on a permanent basis. Remember, he has used his skill in “the art of the deal” to get things done, such as the new tax legislation, when many thought he could not get that done. Having said that, let me state that when we buy a product at an artificially low price, it can not, nor will it continue indefinitely. So, if trade is balanced, then we may have to pay some more for materials that will be imported, in competition with our domestic sources. This fact may be inevitable if our manufacturing, financial, raw materials, and support industries are to stay in business.
Tariff? That’s latin for Tax. Hey, great! Trump wants to raise taxes.
The VITAL question is; do US steel smelters/ aluminum producers and other manufacturers have the PRESENT CAPACITY – or do these tariffs simply mean that ALL manufacturing processes / buildings / even THE WALL, ALL SIMPLY BECOME A LOT MORE EXPENSIVE?
sounds fair to me. but, what are the tariffs imposed on the u.s. by these countries?
That’s also a fair question! What effect would retaliation do TO EXPORTERS?