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The United States will impose steel and other metal tarrifs on Mexico, Canada, and the EU. All are large trading partners and allies of the United States. These trading partners will now have to retaliate. It is unclear if the President was on Ambien when he made this decision. Your thoughts?

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156 thoughts on “Gates of Steel

  1. My thoughts? Thoughts on why Trump is doing exactly what he said he would do with trade, that is, putting America First and renegotiating the trade deals?

    First, Mahons, you have so little knowledge about what is taking place and so little curiosity or interest to find out, that I am amazed that you even posted up this little ” trade decision = Ambien-inspired” dig at Trump.

    I think you rely on A Tangled Web commentariat’s ignorance of the issue -mainly because this is not an American based blog -to not call you out on your own ignorance.

    Here, do some research for once: https://theconservativetreehouse.com/2018/05/31/wilbur-ross-delivers-no-more-steel-and-aluminum-tariff-exemptions-for-eu-canada-or-mexico-video/

  2. As I recently explained to Pat, Mahons. I’ll let Bloomberg do the explaining:

    According to EU data, in 2016, the U.S. imported some 5 billion euros ($5.55 billion at that year’s average exchange rate) worth of European steel. The reverse flow was worth about 1 billion euros. U.S. aluminum imports from Europe amounted to about $500 million. These are tiny numbers given the scale of EU-U.S. trade in goods, worth about 600 billion euros in 2016. If Trump decides to hit cars with tariffs too, that would be more important: The EU’s surplus from trading in “automotive products” with the U.S. is a whopping 35.9 billion euros […]

    According to the U.S. Census Bureau, the goods trade deficit with the EU reached $146.7 billion in 2016. According to the EU, its surplus with the U.S. that year reached 112.9 billion euros. At the average exchange rate for 2016, 1.11 euros to the dollar, that’s $125.3 billion. There’s a $21.4 billion “asymmetry” in the data, enough to cover the U.S. steel and aluminum trade deficit four times over

    https://www.bloomberg.com/view/articles/2018-03-06/trump-s-trade-war-ignores-basic-eu-us-trade-statistics

    Patty, you should maybe have a read of the above too.

  3. The EU got its reyaliation in previously, when it imposed tariffs on US steel. This move just matches them.

    The UK would be unaffected if we weren’t in the EU. I’m pretty sure that British steel would have a decent deal with the US. Alas, for the time being we get swept up in the crap of Brussels’ making.

  4. Bloomberg is the conventional wisdom supporting the status quo – the globalist POV, Paul.

    I am urging Mahons (and you) to research the American First position. Research NAFTA and the China loophole that mexico and canada exploit to understand the tariffs.

  5. I’m pretty sure that British steel would have a decent deal with the US.

    You are? The UK trying to negotiate a trade deal with Trump will be like a mouse wrestling a gorilla.

  6. The last time tariffs were officially tried by the USA was in the 1930s, hardly a good omen. The steel tariffs will put up the costs for US manufacturers and it will be US consumers who ultimately pay. And US manufacturers will find it harder to export their more expensive products. All reputable economists (Mises Institute, David Stockman etc) believe this, so they must be wrong because Trump says differently and he is always right about absolutely everything.

  7. Bloomberg is the conventional wisdom supporting the status quo – the globalist POV, Paul.

    Partisan unlike the Conservative Treehouse you mean Patty? Surely someone that has a clothing business that has his product produced in a different continent where production costs are cheaper to sell them in his home continent where profit margins are higher is the very epitome of a globalist?

    Anyhow, don’t shoot the Bloomberg messeger. If yoU want to argue the content concentrate on the trade surplus the EU has with the US.

  8. Here are the real world consequences for US manufacturers who rely on steel/aluminum….

    My family started a tool and die company in Michigan in 2002 in a tiny garage with rented equipment. Today they employ roughly 40 people.

    Today, trade policies are compounding against the auto industry and their down supplies (like this company). So much so that I’ve been told “there is no work…it’s like everyone is scared the market might go under again.

    Steel prices that could be quoted for 30 days or more, can now only be guaranteed for a week. The market is so volatile that some manufacturers aren’t bidding new work for fear they might lose money on the job.

    What are the consequences?

    Steel and aluminum users, like my father’s company, are facing tough decisions.

    If they don’t get new work soon, layoffs will be the first move.

  9. //The EU got its reyaliation in previously, when it imposed tariffs on US steel. This move just matches them.//

    But wait, aren’t you the same Pete Moore who for years was telling us that tariffs hurt the country imposing them?

    So why would your hero Trump want to hurt the US just because the EU hurt its own people?

  10. More…

    I work for a food service equipment and design company, everything we use is stainless steel. Five manufacturers announced a 4% to 7% price increase last month, more are sure to follow now.

  11. Noel, he doesn’t give a rat’s ass about Libertarian First Principles anymore – he’s on the white ethno-nationalist train now. White Britain standing alone supersedes all.

  12. Hi Fews. Yes conservatives are opposed to increased beaurocracy and higher taxes. Regrettably it’s been many years since the UK has any conservatives in office.
    Our electoral choices there test are only varying shades of Red. Still one lives in hope.

  13. Canada announced $16.6 Billion in tariffs (25% & 10%) on a wide variety of US imports that will take effect July 1.

    Mexico has a list per the AP – no numbers yet. The EU will probably hit us back within the next few days.

    Oh, and the US aluminum industry hates this tariff.

  14. Despite pleading from car manufacturers not to do this, a Trump proposal to allow more tailpipe car pollution proceeds. Just what the MAGA voters in Wisconsin and Michigan wanted.

    Sounds like a total win on top of his proposed 25% foreign car tariff.

  15. It’s going to hit Canada hardest, as it accounts for the highest portion of steel imports from the US p.o.v.

    Europe is not going to be affected much. Germany is by far the biggest steel exporter in the world (exports twice the amount that China and the US do), but accounts for only around 3 pc of US steel imports.

    The EU is nevertheless set to hit back with tariffs on US textiles and booze etc.

    There’s still time and opportunity to stop this before it gets out of hand.
    There should be an alignment of tariffs between the US and the EU – or at least try to get them as close as possible. I’m no expert, but a lot of the EU tariffs on US goods do look unfair and are significantly higher than US tariffs in the same products from the EU.

  16. Trump has just made the many US manufacturers, including exporters who use steel that much less competitive

    But the Trumper’s don’t know this

  17. First, the Paris Climate Agreement goes up in smoke. Now, America seeks some fair trade deals.

    what’s next? stopping China from intellectual property theft?

    Globalists must be so unhappy.

  18. Globalist = Alex Jones talk

    Next you can talk about the “ tax exempt mega banks “

  19. This day couldn’t get more stupid. Bad for America, bad for our friends and allies.

    Doesn’t hurt China at all.

  20. Remember when Howard Dean couldn’t be president because he yelled.

    I’m sure the Midwest MAGA farmers are cheering today. Their export products are going to take a major hit.

  21. Hello – where is congress???

    Texas is going to get hit hard in this trade war. Nafta is a major financial plus for our state.

  22. Yep

    And the EU and China will try to aim their retaliation at the Trump states

  23. And as said before, aiming punitive tariffs at Canadian steel Is particularly stupid

    One, Canada is not an unfair trade partner

    Two, the Canadian and US steel and auto industries are entwined in a mutually beneficial way. You can’t punish the Canadians without punishing their US partners.

  24. Took a look at Patty’s recommended expert site.

    A tree house is built to indulge childish fantasies.

    Makes sense she likes it.

  25. Conservative Treehouse -the great website that gave us the fake News about the nonexistent Puerto Rico truckers strike

    That site is my favorite

  26. Mine too.

    I’m old enough to remember when Republicans criticized Democrats for being small-minded protectionists.

  27. American trade has been since WWII weighted to support the rest of the world at our expense.

    Every nation slams the US with heavy tariffs that will no longer be the case.

    Now is this going to cause problems?

    YES

    But in the long run who is going to WIN ?….. We are.

    If these tariffs are going to hurt us oh well then we will suffer won’t we?

    The truth is on a level playing field which none of our trading partners have ever had to deal with we win, we win every time.

    The EU was formed to create a trading block that could compete with us it has not succeed even with the heavy tariffs against us. Add to that Greece is collapsing again, Italy is in a freefall do you honestly believe that socialist failure can compete? Lol I don’t.

    Oh China is going to crush us…. really your going to bank on the Chicoms beating us at capitalism…. oh ok.

    None of you have faith in the US, none of you even understand the US. Especially the other Americans on this site.

    We are in the process of retooling, and rebuilding. Add to that the one factor that none of you have…. a completely independent overabundance of FUEL.

    Sure things will be screwy for a few years, but 5-10yrs from now our economy will be at the beginning of it’s second industrial wave while the rest of the world will be struggling.

    So kvetch all you want, nay say all you want. It makes no difference…. we win.

  28. the magic ingredient and why we will win because they finally listened….

  29. A completely independent overabundance of FUEL.

    Pat, what does that even mean?

    Sure, maybe the US can be completely self sufficient on fuel. That doesn’t mean a lot though when you have enough fuel to make your factories work and high trade tariffs internationally mean that there are no export orders for workers to produce who then in turn can’t buy that oil as they have no jobs.

    Steel prices that could be quoted for 30 days or more, can now only be guaranteed for a week. The market is so volatile that some manufacturers aren’t bidding new work for fear they might lose money on the job.

    What are the consequences?

    Steel and aluminum users, like my father’s company, are facing tough decisions.

    If they don’t get new work soon, layoffs will be the first move.

    Meanwhile, for the various oil producing countries it’s business as usual with the EU, China, Russia etc

    The EU was formed to create a trading block that could compete with us it has not succeed even with the heavy tariffs against us. Add to that Greece is collapsing again, Italy is in a freefall do you honestly believe that socialist failure can compete? Lol I don’t.

    The biggest economy and largest market in the western world?

    According to the U.S. Census Bureau, the goods trade deficit with the EU reached $146.7 billion in 2016. According to the EU, its surplus with the U.S. that year reached 112.9 billion euros. At the average exchange rate for 2016, 1.11 euros to the dollar, that’s $125.3 billion. There’s a $21.4 billion “asymmetry” in the data, enough to cover the U.S. steel and aluminum trade deficit four times over

    You understand the difference between trade defecit and trade surplus don’t you?

    You don’t believe it because you seem to have a profound misunderstanding of very basic economics. Believe what you will, it won’t change reality.

  30. It appears some Republicans do recognise reality after all:

    Opposition to the tariffs was also voiced by prominent Republicans. House Speaker Paul Ryan, the most influential Republican in Congress, said the move “targets America’s allies when we should be working with them to address the unfair trading practices of countries like China”.

    Remember you said that the UK shouldn’t worry?

    UK International Trade Secretary Liam Fox said the 25% levy on steel was “patently absurd”, adding: “It would be a great pity if we ended up in a tit-for-tat trade dispute with our closest allies.”

    http://www.bbc.com/news/business-44324565

  31. Every nation slams the US with heavy tariffs that will no longer be the case.

    No

    Canada is on balance a fair trade partner to the US, and the EU pretty much is also

    Its the Asians ( Japan, now China ) who have always played games, but you don’t fix Asia by attacking a friend ( Canada ) This isn’t properly thought out at all

  32. The Houston-based Petroleum Equipment and Services Association, comprised of more than 200 companies with 1.3 million employees, condemned the tariffs Thursday.

    The association, whose members include steel and aluminum producers, said it shared the concerns of 107 Republican House members who sent Trump a letter on Wednesday, warning him that the tariffs will undermine the benefits of the huge tax cuts enacted in December, cutting the top corporate tax rate from 35 percent to 21 percent.

    “As the Trump administration moves forward with implementing the tariffs, trade experts expect retaliatory actions will be taken by U.S. trading partners and this would mean lower sales for American business abroad and could impact millions of U.S. jobs, many of those in the oilfield service and supply sector,” the association said in a statement.

    But they’re the energy industry. What do they know?

  33. U.S. crude oil production jumped 215,000 barrels per day (bbl/d) to 10.47 million bbl/d in March, the highest on record, the Energy Information Administration (EIA) said in a monthly report on May 31.

    Production in Texas rose by 4% to almost 4.2 million bbl/d, a record high based on the data going back to 2005. The Permian Basin, which stretches across West Texas and eastern New Mexico, is the largest U.S. oil field.

    Output from North Dakota held around 1.2 million bbl/d, while output in the federal Gulf of Mexico declined 1.1% to 1.7 million bbl/d.

    The agency also revised February oil production down by 5,000 bbl/d to 10.26 million bbl/d.

    U.S. natural gas production in the Lower 48 states rose to an all-time high of 88.8 billion cubic feet per day (Bcf/d) in March, up from the prior record of 87.7 Bcf/d in February, according to EIA’s 914 production report.

    Output in Texas, the nation’s largest gas producer, increased 1.3% in March to 22.7 Bcf/d, the most since April 2016.

    In Pennsylvania, the second biggest gas producing state, production dipped to 16.4 Bcf/d in March, down 0.6% from February’s record high of 16.5 Bcf/d. That compares with output of 14.8 Bcf/d in March 2017.

    Yeah that industry is suffering Phantom….

    and what it means Paul is that factories and industry can be developed and restarted with the largest cost cheaper than any other nation… the other factor is Labor. And as long as we keep our foot on the throat of the unions that cost will be manageable.

    We import steel and aluminum because those two factors pushed the manufactures in this country out of business. that is no longer the case.

    The US is entering it’s second industrial period.

  34. And what it means Paul is that factories and industry can be developed and restarted with the largest cost cheaper than any other nation

    Pat, read this again:

    That doesn’t mean a lot though when you have enough fuel to make your factories work and high trade tariffs internationally mean that there are no export orders for workers to produce who then in turn can’t buy that oil as they have no jobs.

    How do you create employment for a demand that doesn’t exist?

  35. with the largest cost cheaper than any other nation

    Again, massive, massive, error

    The cost of energy is important, but for most manufacturing, especially advanced manufacturing ( airplanes, computers ) , energy is not the largest cost. It might not be in the top five cost categories for many of them. Wages would likely be the largest cost, esp in any advanced nation.

    If the cost of energy was the most important thing then Saudi Arabia would have been Germany a long time ago.

    You need to read up on some of this stuff, you can’t keep making things up.

  36. Yes Phantom Obama was GOD he is the Ideal President that every President should try to live up to ad the cost of Fuel means nothing….

    Let us know when they come to put you in the home…..

  37. Increased US energy output is the result of advanced technology.

    Not presidents.

  38. Well played, Phantom.

    Besides, I thought this was all about job creation. The petroleum industry is massive, but AFAIK it’s relatively low labour-intensive. In any successful developed country, the manufacturing industry is the big job creator (and does a lot of other very good things too). There’s no point trying to save jobs in one area (steel) when the same measure will destroy them in many other areas.

  39. Paul the Tariffs are in direct response to tariffs that are on our goods that are already causing us not to be able to sell what we could…. payback is a bitch….

    Overall our economy is growing and will continue to grow no matter what the euroweenies do. We will be hurt on the fringes that’s it.

    6mths from now this will be a nothing burger, 6yrs from now our GDP will be at 5%.

  40. Yes the Canadians and Europeans are so vicious towards the EU.

    There isn’t one US product in those places, not one American company is allowed to do business there.

    Just as Patrick Trump.

  41. Patrick

    I am sure that you have been studying the matter for years.

    How has Canada been unfair to the US steel industry, or to other US manufacturing?

    Please be as detailed as you can. This is important.

  42. At this stage, there isn’t a dime’s worth of difference between Patrick and Donald.

    All I hear is open adoration and rapid response.

  43. Sometimes you have to destroy a few country’s economies in order to save them. I love the smell of Liberals fuming in the morning. Or anytime for that matter.

  44. This is an area and not very knowledgeable on.
    To have an opinion on it, I’d need to know what tariffs are imposed by the EU for instance, against America?

  45. It’s a complex matter, but AFAIK the EU / US have a rough fairness to their overall trade relationship, esp in manufactured goods.

    The EU is probably more protectionist than it should be in agriculture, but the US plays that game too, via farm subsidies, and by high tariffs on sugar imports.

    The EU, like the US, has a very good record at protecting intellectual property, and neither forces investors to take on local joint venture partners, the way that China and India do, neither forces transfer of technology to hometown boys the way that China does.

    I see no good reason at all for punitive tariffs on Canada / EU, other than it keeps the unilateral US tariffs from being aimed at only Asian nations.

    I’m all for punishing enemies when needed, but there’s no need to attack friends at the same time.

  46. Government interference in the sugar market hurts consumers and food manufacturers by driving up the price of sugar, threatening competitive farmers and ranchers by jeopardizing export growth, and weakening the U.S. economy by diverting resources from more competitive uses. This Depression-era program, which was supposed to end in 1940, has outlived its intended lifespan by 72 years.[1] It should be abolished.

    https://www.heritage.org/agriculture/report/the-us-sugar-program-bad-consumers-bad-agriculture-and-bad-america

    The US Sugar Tariff market cannot possibly be justified. It doesn’t even provide US jobs, since migrant workers from places like Jamaica do the work. But the US sugar growers are politically powerful in places like Florida, and those guys are big Trump supporters.

    Guess what? Trump doesn’t want to get rid of this protectionism.

  47. “We’ve all had just about enough of Donald Trump,” Ontario Premier Kathleen Wynne, a Trudeau ally, told reporters before the retaliatory tariffs were announced.

    “The reality is that our federal government has moved heaven and earth. They’ve cajoled Trump, they have soothed his ego, they’ve played to his apparently inexhaustible vanity,” she said. “The time for talk is done. Donald Trump is a bully and the only way to deal with a bully is to stand up and push back and we have to do that.”

    It takes a lot to make Canadians this angry. The Tyrant has done it.

    The Canadian tariffs are exceptional in their incompetence.

    Trump will attend the G-7 conference in Quebec next week, where he may not get the reception that he wants.

    https://www.bloomberg.com/news/articles/2018-06-01/trump-appeasement-fails-so-trudeau-takes-the-gloves-off

  48. Dave,

    At just under 2%, average customs
    duties between the EU and the US are
    generally low. But the average hides a
    different situation for individual
    products:
    • Over half of EU-US trade is not
    subject to customs duties.
    • Most of the rest faces widely
    differing duties, ranging from 1-
    3% for basic goods, such as raw
    materials, and 30% for goods
    like clothes and shoes.
    • Some customs duties are so
    prohibitively high they
    effectively cut off any trade; for instance, the US duty on raw tobacco is 350% and over 130% for peanuts […]

    http://trade.ec.europa.eu/doclib/docs/2015/january/tradoc_152998.1%20Trade%20in%20goods%20and%20customs%20tariffs.pdf

  49. //The EU is probably more protectionist than it should be in agriculture, but the US plays that game too, via farm subsidies, and by high tariffs on sugar imports.//

    The US also distorts competition in other areas – like steel – through subsidies of all kinds. Certain EU countries – like Spain and Italy – are also very heavy into subsidising steel. I was worked with delegations from the US Dept of Trade doing anti-dumping audits here in Germany several times, and learned a bit about it (all very intelligent and dedicated and patriotic government employees, despite their political difference. As always when you meet Yanks like that here, you have to ask yourself why their political system lets so much crap rise to the top when there’s so much talent around).

    European steel producers blame their woes on a glut of cheap Chinese steel and put pressure on their governemnts to save the local industries. The UK has lost very much of its production and very many jobs due to dumping.
    Don’t tell this to Harry, but the EU Commission is very much against the member states protecting their industries in this way, and has forced a lot of subsidies to end.
    Instead, it introduced around 30 anti-dumping measures against foreign steel, primarily from China.

    //The truth is on a level playing field which none of our trading partners have ever had to deal with we win, we win every time//

    …. must be the dumbest comment written here in a long time. If there had been no tariffs anywhere on, say, cars between the US and Asian or S. American manufacturers over the past decades, and no govt subsidies, where do you think the US auto industry would be?

    I don’t know either, but it wouldn’t be in the US. Western countries can’t compete in terms of production costs with emerging countries in a whole range of products.
    There can be no level playing field. Certain protections aren’t necessarily a bad idea.

  50. And one of the built in benefits that Canadian and European manufacturers have is that they don’t need to worry about employee health care so much.

    The satanic communist pedophile globalists in the Euro and Canadian government have long ago lifted that health care burden from them. Those guys only need to worry about making good cars and selling them for a profit.

  51. It’s obvious that Trump wants to pull the USA out of the World Trade Organisation. That will give him a free hand to erect tariff walls against the rest of the world, which is clearly his objective.

  52. Noel –

    But wait, aren’t you the same Pete Moore who for years was telling us that tariffs hurt the country imposing them?

    I still am. Explaining something is not necessarily to endorse it. Such explanation is needed because the media has done such an awful job, portraying Trump as the instigator of tariffs. This is BS.

    In the end this about domestic US politics, not economics. Understanding Trump here is impossible if judging simply by economic reason.

  53. Pete Moore, on June 1st, 2018 at 7:16 PM Said:

    Sweet.

    ATW’s resident commies are suddenly free market ultras!

    We’ve not changed.

    The Trumpers have changed, swiveling left and right as their master does, in perfect sync.

  54. In the end this about domestic US politics

    Yes, Trump reckons that a trade war will help the GOP in the mid-term elections in October. So he will double-down after the other states (China, Mexico, Canada and the EU) retaliate in the next few weeks. This means that the EU can expect 25% tariffs on all vehicle exports to the USA.

  55. This means that the EU can expect 25% tariffs on all vehicle exports to the USA.

    I caught something on the wireless about that. Something about EU car exports being hit next.

    If there’s one country which desperately needs decent motors it’s America.

  56. On the radio this morning I heard a pundit say that Trump will ignore any retaliatory tariffs. LOL. He has made his political career by doubling down when attacked, see his campaign for the GOP nomination and the White House.

    So he will have no qualms about escalating this into a full-scale trade war, including US withdrawal from the WTO.

  57. He already has. Those tariffs could kill what’s left of the UK steel industry.

  58. “What’s left of the UK steel industry” after trade unions, government regulations, environmental taxes and Chinese over-production have already killed off most of it.

  59. Yes Pete, Chinese dumping of many products including steel has been a problem for 20 years or so. But the answer is not to penalise UK and other EU steel producers. And of course Trump knows this. As you have pointed out, this is a political agenda, not an economic one.

  60. Paul, (and everybody else), thanks for the info.

    I’m currently reading up on this whole trade, tariffs and other stuff.
    One thing of discovered, China certainly does some dodgy things when it comes to trading with other countries and intellectual property rights.

  61. Phantom,

    US cars are good now.

    They were atrocious a few decades ago.

    Us cars don’t do great in reliability surveys in the UK. But maybe that’s because they are up against some pretty stiff competition from the Japanese and Korean models.

  62. The US has been losing the trade war for decades and it’s about time that real efforts were made not only by the US but also by the UK to end this de-industrialisation which leaves only two classes – the underclass, and consumers.

    Let’s look at the US trade figures…….

    https://www.statista.com/statistics/220041/total-value-of-us-trade-balance-since-2000/

    These figures are just horrendous yet nobody other than Trump, or those who voted for Trump, is prepared to do anything about it. Trade, generally, should be balanced.

    Peter, on June 1st, 2018 at 8:41 PM Said:

    He already has. Those tariffs could kill what’s left of the UK steel industry.

    Why should unemployed steel workers in Pittsburg be less favoured in the US over Hartlepool? I see orders for pipe which should have gone to a UK mill going to Germany and Italy instead so there is plenty could be done about ensuring that steel needed in the UK is actually made in the UK

  63. Trade, generally, should be balanced.

    And how could that ever be managed except by a world government organisation with thousands of quotas and rules and burocrats by the tens of millions to run it? And a world currency would be needed to prevent hidden tariffs via devaluations.

    As Churchill nearly said, free trade is the worst possible system, except for all the others.

  64. Yep

    And you note that those who complain about US job losses caused by trade ( a very real thing ) never complain about US job losses caused by automation, which is actually the larger cause.

  65. “A final set of arguments, or rather alarms, center on the mysteries of the balance of payments. Protectionists focus on the horrors of imports being greater than exports, implying that if market forces continued unchecked, Americans might wind up buying everything from abroad, while selling foreigners nothing, so that American consumers will have engorged themselves to the permanent ruin of American business firms. But if the exports really fell to somewhere near zero, where in the world would Americans still find the money to purchase foreign products? The balance of payments, as we said earlier, is a pseudoproblem created by the existence of customs statistics…”

    https://mises.org/wire/nonproblem-trade-deficit

  66. “In short, the so-called trade deficit is exactly equal in dollar terms to net foreign investment in US-based business firms (plus net investment income received by US residents from their foreign asset holdings). The flow of spending in the US economy is not diminished one cent by a negative trade balance but merely re-routed. Accordingly, the “real” effect on the US economy of a trade deficit is a redirection of labor and capital out of its export industries into industries producing consumer and capital goods for domestic use, with no net loss of jobs.”

    https://mises.org/library/neo-mercantilist-hysteria-over-us-trade-deficits

  67. As I have posted before, I run a “trade deficit” with my local supermarket which grows every week because they never buy anything from me. But I am not impoverished by this, any more than the USA is impoverished by buying BMWs from Germany.

  68. It was only international competition that made the US auto industry start making reliable cars once more.

    Toyota / Datsun-Nissan / Honda made unsexy but reliable cars at a time when the US and British industry were turning out junkyards on wheels.

    In this country, it was the Japanese who raised the bar.

  69. In this country, it was the Japanese who raised the bar.

    It was the same in the UK. The car industry was dying until big chunks of it were taken over by the Japanese (Nissan) and the Germans (Mini) and the Indians (Jaguar-Land Rover). The reasons for this and whether it could or should have been avoided can be debated, but auto-manufacturing in the UK looked like it was finished 40 years ago. And now it’s thriving.

  70. The US and UK auto industry suffered from similar diseases.

    Unreliable and strike-happy workforce and bad management. Not the best combination.

  71. As I have posted before, I run a “trade deficit” with my local supermarket which grows every week because they never buy anything from me.

    We’re much better off for being in such trade deficits. The alternative is to produce and make everything for ourselves, which would be vastly more time-consuming and costly than trading with supermarkets, and the quality would be dreadful.

    This is why everyone was poor in the past. The common presumption is that technology hadn’t advanced so much. The primary reason is that until trade liberalisation, most people were growing and making stuff for themselves, so there was very little stuff in existence.

    It’s trade which fuels technology and, most important, comparative advantage. Comparative advantage is so little understood, but one of the necessary economic lessons. In the end it doesn’t matter who produces steel, as long as markets are free to sort it out.

  72. Yes and chronic under-investment due to the short-term business culture. It was always about maximising this year’s profit, never mind about investing for five years from now. And unfortunately that culture is still prevalent in many of our industries, encouraged by executive bonus schemes.

  73. Allan believes in a highly regulated, centrally planned economy.

    If he had his way, there never would have been an Uber, a Google and Iphone. Because the central committee for allocation of capital never would have seen the need for any of these things.

    Who needs an iphone when this still works perfectly well?

  74. And how could that ever be managed except by a world government organisation with thousands of quotas and rules and burocrats by the tens of millions to run it?

    Absolute nonsense – how many people are in the WTO? National governments would be tasked with ensuring that trade is reasonably balanced as a national interest. Huge trade deficits are not a good idea for if they were, the Japanese, Germans, Koreans and Chinese would be wanting them. When money leaves a country as a trade deficit, it goes into the bank of a foreigner. If that foreigner chooses to reinvest that money in the deficitary country, the assets are still the property of the foreigner.

    The Chinese are attempting to buy large chunks of American business with dollars which originated in the US as trade deficit. When entire industries within a country are foreign-owned, any attempt at a national policy pertaining to that sector becomes ridiculous.

  75. As I have posted before, I run a “trade deficit” with my local supermarket which grows every week because they never buy anything from me

    Because you don’t make anything for them to buy. Besides, you have a surplus in the shape of your pay in your bank account so your trade is balanced, unless you have huge debts: that’s not a very good idea

  76. Yes Pete, but the problem with steel is that the Chinese government does not run anything resembling a free market economy. Instead it follows a shamelessly crony-capitalist mercantilist policy of subsidising its producers which leads to dumping on world markets. Ask any steel producer in the EU or the USA. This has been happening for at least 20 years and it also applies to many other industries, such as vehicle tyres. In Northern Ireland we lost a major tyre factory last year due to Chinese dumping.

    Trump is right to challenge this. But his blanket tariff response is wrong, as he knows.

  77. Yes Allan, and your point is?

    I assume you read my other posts. Trade is not a zero-sum game as Trump pretends. If it was, we would all grow our own food and spin our own wool and make our own clothes and furniture, just as our ancestors did until about 300 years ago. But you seem to think that was a better world?

  78. “04/04/2017
    From Ryan McMaken: The Wall Street Journal reports today that the US trade gap shrunk during the first two months of this year. Matt Drudge presented this report as evidence that the United States is “great again” with the headline in the usual Drudge fashion announcing “GREAT AGAIN: Trade Gap Shrinks as Exports Rise.”

    The problem with this assertion is that the so-called trade gap is not simply a measure of how much US firms export to other countries. It’s a measure of relative consumption and foreign investment in the United States. So, if if increasing exports were evidence of the US being “great again” a decline in the trade deficit proves no such thing…”

    https://mises.org/wire/nonproblem-trade-deficit

  79. If it was, we would all grow our own food and spin our own wool and make our own clothes and furniture, just as our ancestors did until about 300 years ago.

    Peter – large countries the size of the US can make their own steel, their own cars, their own everything including wool, clothes, furniture. There is no reason why the US should not do so. There is no reason for the US to be in debt to every major country in the world.

    We’re much better off for being in such trade deficits.

    pete – are you arguing that trade deficits are better than trade surpluses?

  80. I spotted this, whilst reading on another matter……

    https://uk.reuters.com/article/uk-italy-politics/italys-anti-establishment-leaders-near-deal-to-resurrect-coalition-idUKKCN1IW0Z4

    The parties’ new economics minister-designate, Tria, has been critical of the EU’s economic governance, but unlike Savona he has not advocated a “plan B” for possibly exiting the euro.

    In recent articles, Tria has called for a change in the EU’s fiscal rules to allow public investments to help growth and, like many mainstream economists, has criticised Germany’s persistently large current account surplus.

    Why does Germany want an enduring trade surplus and why does Italy want rid of its chronic indebtedness?

  81. large countries the size of the US can make their own steel, their own cars, their own everything including wool, clothes, furniture. There is no reason why the US should not do so.

    Even if they can buy those things cheaper from other countries? So should they subsidise their car-makers by tariffs? And would they be richer as a result?

    Suppose their car-makers can produce a standard family car at a cost of $20,000 but they can import a similar car from Japan at a cost of $15,000. Should they impose a tariff of $5,000 on the Japanese car to protect their home producer?

  82. Why does Germany want an enduring trade surplus and why does Italy want rid of its chronic indebtedness?

    The Euro has been a disaster for Italy, no argument there. Italy cannot compete with Germany in the same currency and of course the Euro is the Deutchmark-Lite.

    But the Italians should have known this from their own history. When Italy was united in 1860, the southern states adopted the currency of the northern states. Within ten years they had lost all of their industries, because manufacturers in Naples could not compete with manufacturers in Milan. And the same lesson is being learnt again, but this time it’s Naples trying to compete in the same currency as Munich. And the result is youth unemployment of 40% and the mafia on a roll.

  83. Even if they can buy those things cheaper from other countries? So should they subsidise their car-makers by tariffs? And would they be richer as a result?

    Suppose their car-makers can produce a standard family car at a cost of $20,000 but they can import a similar car from Japan at a cost of $15,000. Should they impose a tariff of $5,000 on the Japanese car to protect their home producer?

    Yes. There is the showroom cost, and there is the total cost. US workers pay tax, as does the employer. If they are made unemployed and unprofitable respectively, the tax base is reduced, and there is less money for the townsfolk near the factory. There is the wider cost of societal breakdown when workers are laid off and factories close. This is never taken into account

  84. When Italy was united in 1860, the southern states adopted the currency of the northern states. Within ten years they had lost all of their industries, because manufacturers in Naples could not compete with manufacturers in Milan.

    Strange parallels with the US.

  85. In NYC, Fresh pineapple used to be something brought in from Hawaii, a distance of 5000 miles

    Now, pineapples are brought in typically from Costa Rica, a distance of 2200 miles

    They are just as good as the Hawaiian ones, and they are fresher and cheaper too

    On balance, this is a pretty good thing for the mainland American consumer

    I don’t dismiss protectionist arguments out of hand, the way the former Pete Moore used to. But much of the trade competition that we see is a very good thing

  86. In NYC, Fresh pineapple used to be something brought in from Hawaii, a distance of 5000 miles

    But in Oregon, pineapples are brought in from Hawaii – and Oregon is in the US. The US cannot be used as a comparison with the UK for the US could be independent in everything. Bananas could be grown in the US but it would be absurd to attempt to do so in the UK for there could never be any economic case for doing so. Cars and steel can be made in the UK to the level of balanced trade, and there is no reason why not. After all, it used to be so and in Germany, it is still so.

  87. Haven’t gone through the whole thread…but has anyone noticed this story?

    Trump administration officials are making plans to order grid operators to buy electricity from struggling coal and nuclear plants in an effort to extend their life, a move that would represent an unprecedented intervention into U.S. energy markets.

  88. Worth a look on the topic.

    This has got to be one for the record books. Oil industry joins with solar and wind industry to condemn Trump admin plan to prop up coal industry by forcing electric grid to buy coal power. Oil/wind/solar as allies? Fascinating times.

    I wonder if the usual suspects will condemn Trump’s meddling in the energy market (“picking winners and losers”) as they did Obama?

    Suspect not, tied as they are to their ideological horse and buggies.

  89. By the way, the US had a trade surplus with Canada of $8.4 Billion in 2017 according Trump’s own USTR.

    How do these tariffs retaliate against China?

  90. Daphne

    Forcing energy companies to buy from old plants using dirty out of date technology would be of course harmful to the economy and against all the principles of free enterprise

    So of course the fakes phonies and frauds will say that it’s brilliant, just what the founding fathers wanted. It’s a little late for them to grow a pair now

  91. Phantom, on June 1st, 2018 at 3:07 PM Said:
    Increased US energy output is the result of advanced technology.

    Not presidents.

    BULLSHIT!

    How old is Fracking?

    How long have the Pipelines and Drilling permits been held up ?

    Once again when you speak you reveal your ignorance.

  92. The rest of the world has had an advantage in trade since WWII. It was our way of bringing the rest of the world into the modern age.

    They are now there and no longer need to be given the “free gift” of unfair trade agreements. The playing field is being made more level…. get over it, and keep up.

  93. as for the fools last remark…. the US has the cleanest industrial base in the world. We are not part the stupid Paris Redistribution of wealth scheme…. yet we are the only nation that has long ago achieved the cleanest emissions…..

    We lead the world in clean everything.

  94. You lead the world in everything pat but you are world record holders in denial, hyperbole and dementia

  95. Donald J. Trump

    Verified account

    @realDonaldTrump
    42m42 minutes ago
    More
    The United States must, at long last, be treated fairly on Trade. If we charge a country ZERO to sell their goods, and they charge us 25, 50 or even 100 percent to sell ours, it is UNFAIR and can no longer be tolerated. That is not Free or Fair Trade, it is Stupid Trade!

  96. //If we charge a country ZERO to sell their goods, and they charge us 25, 50 or even 100 percent to sell ours,//

    He clearly doesn’t know what he’s talking about – yet again!

  97. The US is no innocent victim, And Canada is not an unfair trader as respects the US

    Trump is indeed clueless

  98. wrong you two are not only clueless but sadly ignorant on everything motivated purely by your personal hate.

    The atlanta Fed projected the GDP to rise by 4.53% this year, now I think it’s to soon for those numbers, but by the end of his FIRST term we’ll be at 5% growth.

  99. Yes

    The economy is fantastic because Trump the dreamboat apprentice waved his magic wand

    But

    The economy is so terrible that we need to pick economic fights with allies and friends Canada and EU

    These are diametrically opposed views.

    Trump doesn’t know what he is doing, and his flock will follow him anywhere. Because his appeal has nothing to do with any issue

  100. Yes. There is the showroom cost, and there is the total cost. US workers pay tax, as does the employer. If they are made unemployed and unprofitable respectively, the tax base is reduced, and there is less money for the townsfolk near the factory. There is the wider cost of societal breakdown when workers are laid off and factories close. This is never taken into account

    Ok Allan, so you are in favour of protectionism, even though it always means that consumers pay more. The logic of your view is that if even if a Japanese car costs 50% of its American equivalent, the USA should protect its home manufacturer with a tariff of 50%. This will protect the jobs of a few thousand car workers at the expense of hundreds of thousands of car buyers who will have less to spend on other goods and services as a result.

    This is economically illiterate, but you have your man in the White House and he will deliver this for you. We saw what happened in the 1930s when this policy was applied, but it looks like we need to learn this lesson again.

  101. At least Allan was always in favor of a Brezhnev style planned economy

    The rest of the Trumpers only came to that view recently, doing a 180 degree change on their supposed principles two years ago

  102. Peter – whom is an economy supposed to serve? The economy is supposed to serve the people of the nation and so the interests of the people should prevail in any economic policy, and that includes employment. I would prefer to pay more for a car in order to be in a job. As you haven’t read from my post at 11.20pm, a country is more than its economy and the price of TVs and cars.

    The logic of your view is that if even if a Japanese car costs 50% of its American equivalent, the USA should protect its home manufacturer with a tariff of 50%.

    Where did you get that “50%” from? Your original was…….

    Suppose their car-makers can produce a standard family car at a cost of $20,000 but they can import a similar car from Japan at a cost of $15,000. Should they impose a tariff of $5,000 on the Japanese car to protect their home producer?

    Your next attempt will be…….

    Suppose Japanese cars are free – would you impose tariffs of 100%?

  103. The economy is supposed to serve the people of the nation and so the interests of the people should prevail in any economic policy, and that includes employment.

    Allan

    The welfare of the people in any nation state means not elevating the interests of the producers above those of the consumers. In the UK we do this by subsidising farmers to despoil the land with millions of (Mesopotanian) sheep. This causes vast ecological damage and creates eco-deserts which are totally free of native birds and mammals, but it protects the employment of a few thousand sheep farmers, so I assume that you are totally cool with it as a price worth paying?

  104. Peter – getting rid of sheep would free up land for better uses for the land will still be there regardless of the economic policy. In the case of man-made products, every nation should pursue a policy of self-interest above anything else. Trade means huge movements of goods, which means fuel consumption and marine pollution, and you are OK with that.

  105. So Ireland should have its own car industry to serve its domestic needs, and Greece should have its own tablet computer factories, etc?

  106. I’m not at all sure that the transport of goods costs more in fuel and pollution than universal autarchy would entail

  107. In the case of man-made products, every nation should pursue a policy of self-interest above anything else.

    You mean no trade except in oil and other primary resources which we do not posess? I will miss wine from Italy, but I suppose I will just have to get used to English wine, even though it costs five times as much. I will be poorer, but it will be for the best.

  108. Global warming might come to the rescue.

    Oh wait, that’s a commie scam, those glaciers are advancing, not melting.

  109. Phantom, Peter – as I wrote previously:

    Bananas could be grown in the US but it would be absurd to attempt to do so in the UK for there could never be any economic case for doing so

    So, for example, England would never be able to produce wine to the quality of Italy because there is not the climate, but England could certainly produce cars to the quality of Italy, as with steel, ships and other industrial products.

  110. England would never be able to produce wine to the quality of Italy because there is not the climate, but England could certainly produce cars to the quality of Italy,

    Yes Allan. Italian wine is better than English wine and English cars are at least as good as Italian cars, if not better. My Mini Paceman is an example, but Mini is owned by BMW. It’s a complicated world. If BMW had not bought Mini about 20 years ago, there would be no Mini now for me to drive.

  111. Hawaii does grow a small amount of quantity of bananas commercially, on small family farms. They’re good, but they are few.

  112. Peter, on June 2nd, 2018 at 11:11 PM Said:
    Global warming might come to the rescue.

    Oh wait, that’s a commie scam, those glaciers are advancing, not melting.

    No they are melting because the earth’s climate changes…. the archeological findings being uncovered where the glaciers have retreated prove that in the past there was NO ICE there… but I guess the Earth and it’s rotation around the SUN the activity of the SUN that caused the ice to expand 1000s of years ago was caused by man….

    can you explain how?

    I mean if the “permanent ice level and size of the glaciers” is what it was 50yrs ago now that they have been retreating and are reveling these old habitats villages and farms from over 1000 years ago…. how did Humans cause global warming 2000 years ago to allow humans to have those villages and farms that are being revealed now as the ice retreats?

    I guess time travelers beamed back CO2 from the future to a couple thousand years ago so that ancient man could build those farms and villages that are being revealed under the ice…..

  113. pat you are a dolt, there is proof that at one time there was no ice in Antarctica. That does not mean that ice free is its natural condition

  114. EP –

    There is no “natural condition” for Antarctica. The environment is what it is at any point in time. There will be more ices ages and more warm interglacials. That’s the way of the planet.

  115. Peter.

    Global warming might come to the rescue.

    Oh wait, that’s a commie scam, those glaciers are advancing, not melting.

    Yep. One of my favourite pieces of b******* from the climate change denies.

  116. //There is no “natural condition” for Antarctica. //

    By “natural condition” he obviously means the state it would be without the effects of human activity, like greenhouse gases. He’s right.

    Anyone see the temperature last week in Norway? – 33 degres in Oslo. In May!

    These things (and, boy, are there enough of them!) are of course never mentioned by the deniers here and elsewhere. But let it snow in January and then it’s all “Ha Ha” and “global cooling” etc etc.

    Pathetic fools.

  117. To be honest Noel, it’s like dealing with conspiracy theorists. I don’t want to hear the truth, no matter how many times you present it to them.
    I’ve already made up their minds usually because of their political affiliations, and no amount of evidence, will convince them they’re wrong.

  118. Emerald Pimpernel, on June 3rd, 2018 at 5:58 PM Said:
    pat you are a dolt, there is proof that at one time there was no ice in Antarctica. That does not mean that ice free is its natural condition

    EP you still drinking the winter whiskey……?

    I was poking fun at Peter…..

    I understand that the advancement and retreat of ice on the globe is a natural process that occurs unlike Peter who thinks man and cow farts effect it.

    The maps Columbus had showed the antarctic continent in detail and the americas, but that’s a different topic.

  119. Pete Moore,

    Greenhouse gasses are negligible, and the human contribution to them is negligible. Now calm down darlings. Antarctica is gaining ice. Ask NASA.

    Are you ignorant or just thick Pete. I’ve Explained this to you last time with plenty of links to back up what I was saying. It doesn’t matter if greenhouse gases are negligible, it’s the effect they have on the environment that matters.
    It’s the potency of CO2, not just the amount present. Can you not understand this simple concept.

    Antarctica might be temporarily gaining ice, but it’s losing it over a longer time scale. Something you, and Climate Change denies don’t like to admit.
    And while Antarctica might be temporarily gaming ice, Greenland and other places are losing it at an alarming rate.
    More lies from The Lying liar of ATW.

    https://www.theguardian.com/environment/2012/nov/29/greenland-antarctica-4-trillion-tonnes-ice

  120. Well said Dave, all comments.

    But Antarctica is shedding huge icebergs into the southern Pacific:

    “Hidden underwater melt-off in the Antarctic is doubling every 20 years and could soon overtake Greenland to become the biggest source of sea-level rise, according to the first complete underwater map of the world’s largest body of ice. Warming waters have caused the base of ice near the ocean floor around the south pole to shrink by 1,463 square kilometres – an area the size of Greater London – between 2010 and 2016, according to the new study published in Nature Geoscience.”

    https://www.theguardian.com/environment/2018/apr/02/underwater-melting-of-antarctic-ice-far-greater-than-thought-study-finds

  121. Dave Alton –

    Are you ignorant or just thick Pete … It doesn’t matter if greenhouse gases are negligible, it’s the effect they have on the environment that matters.

    You’re the thicko. You think that negligible means little. It means insignificant.

    Antarctica might be temporarily gaining ice …

    NASA is attributing the ice gain to snowfall over 10,000 years. That’s not a negligible period.

  122. Pete Moore

    You’re the thicko. You think that negligible means little. It means insignificant.

    In certain circumstances, negligible can also mean little, but that’s beside the point.
    I asked you last time and you didn’t give me a response. What do you mean by insignificant? As it pointed out last time dumbass, it takes an ‘insignificant’ amount of ricin to kill a person. But that quantity is still very potent.
    That’s how CO2 works in the atmosphere and if you bothered to do any research you’d understand that.

    NASA is attributing the ice gain to snowfall over 10,000 years. That’s not a negligible period.

    And one again Pete Moore demonstrates his total lack of understanding about climate change. As a result of an increase in global temperatures, melting glaciers are depositing fresh water into the southern Ocean, which has a lower freezing point than saltwater, which accounts for the increase in sea ice. This was predicted by scientists decades ago, And as I’ve already pointing out, which you’ve chosen to ignore, the overall ice trend worldwide, is more loss than gain, by quite a large amount. And for the umpteenth time of telling you, Antarctica is a whole is still losing ice.

  123. Dave –

    By definition, an insignificant amount of ricin cannot kill someone.

    You’ve been abusive in your last two comments. That’s uncalled for.

  124. Pete.

    No more abusive than you are, with some of your nasty Lefty posts.
    And as you’ve already told me several times, you consider me a lefty.

  125. Patrick

    My link was from this year, so go figure.

    But I’m surprised that you are even debating evidence, since you reject the temperature records as being faked and the whole “global warming thing” as a commie conspiracy. So why bother?

  126. The American ambassador in Germany has just implied that he would like to unseat the current German government.

    When you take a guy like Grenell and make him an ambassador, this is what happens. Which is what President Trump and his trolls wanted.

  127. This public comment is diplomatic malpractice, and can only diminish US influence

  128. Yes Daphne, it seems that “regime change” is now official US policy for any state whose government it disapproves of, even a Nato ally. But Putin gets a bye-ball and many hereabouts will applaud as usual.

  129. But Trump told the Trumpers that regime change was exactly what he would not do, that these were the ways of the Washington GOP establishment

    Trump is George W Bush, with a worse haircut

  130. Peter – you are advocating that NATO or US/UK try ‘regime change’ in Russia? Have you any idea how much ice would be melted by nuclear war?

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