So what are your thoughts on the Steel and aluminum tariffs?

Discussion in 'The Lounge - Off Topic Chat' started by admin, Mar 7, 2018.

  1. FlyingDragon

    FlyingDragon VIP Member

    Nov 4, 2010
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    A trade deficit is a good thing, it means as a nation we are prospering by being able to buy goods. In a recession trade deficits shrink because we are buying less....In addition when we buy imports from someone such as Walmart we are keeping Americans in jobs and the money spent stays in the USA....We have had trade deficits for over 50 years and will continue to as we can not produce everything in the USA, its not practical or economically feasible....A strong global economy is good for all of us....
     
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  2. schultz1

    schultz1 Bangs Raiden's mom VIP

    Jan 3, 2011
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    Wr9ng, it' making the steel market price in the U.S. surge. The large steel mills lobbied this to be passed. We have seen almost 10 percent increase in 3 weeks due to section 232 announcement. Now, we do pay high tariffs to take our goods to other countries but very few pay anything close to import their goods into the U.S. from that standpoi t it makes sense. Hopefully it causes a boom in U.S. based manufacturing, won't hold my breath. The other issue is, the construction market which is just recovering will take an enormous hit, mills not guaranteeing pricing until material ship's etc, all passed to the consumer, thus slowing the market recovery. It also will add millions of dollars that will be passed to the tax payer for infrastructure improvement. Short story long, it's a cluster fuck.
     
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  3. schultz1

    schultz1 Bangs Raiden's mom VIP

    Jan 3, 2011
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    Dbl. Post, no one wants to read my sausage finger phone typing once let alone 2x.
     
    Last edited: Mar 7, 2018
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  4. two_slug

    two_slug VIP Member

    Mar 7, 2012
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    I hope it doesn't make the price of beer go up.:(
     
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  5. schultz1

    schultz1 Bangs Raiden's mom VIP

    Jan 3, 2011
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    It's such an abomination right now.
     
  6. DieYoungStrong

    DieYoungStrong VIP Member

    May 27, 2013
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    Can't hold a price for more then 10 days.

    Last time prices were going this crazy, there was a recession within a year...remember the price fluctuations in 06-07?
     
  7. JR Ewing

    JR Ewing VIP Member

    Nov 9, 2012
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    I don't believe Trump will actually impose tariffs. I think it's a negotiation tactic. He's trying to squeeze China into putting the screws to NK, and I think he's also trying to spank them for their hardball economic policies - such as dumping huge amounts of steel here, imposing unreasonable tariffs and other barriers to entry into China on us, stealing our intellectual property, forcing our companies to give up more to them through other ways such as making them build plants over there to sell anything there, etc, etc.

    I am generally opposed to very much taxes, excessive regulations, etc. And I'm far more worried about things coming out of China such as poisoned baby food or dog food than cheap steel. But if one makes the argument that we must preserve our steel industry for national security reasons, there are better and more sensible ways to do it other than just slapping tariffs on foreign steel - which will only be passed on to consumers.

    As for our trade deficit, that's what ends up happening when you're a superpower. Even when our dollar is relatively weak, we can buy far more of just about everything made just about everywhere else. Having free trade helps keep costs down much the same way keeping costs of labor under control does.

    I do believe it is a good idea to renegotiate old trade deals made in the past when many countries were smaller and weaker - trade deals that often had built in advantages for those other countries and disadvantages for us.
     
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  8. rawdeal

    rawdeal TID Board Of Directors

    Nov 29, 2013
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    Sorry to interrupt this thread, but the WH has since indicated there may be some changes, like less or no tariffs for certain nations. Final version expected (maybe) by end of this week.
     
  9. schultz1

    schultz1 Bangs Raiden's mom VIP

    Jan 3, 2011
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    I do think that the current steel increases are purely a margin grab by vendors and suppliers et al.
     
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  10. schultz1

    schultz1 Bangs Raiden's mom VIP

    Jan 3, 2011
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    Somewhere around there. Mills would quote raw product with the caveat, final price will be based on market price at time of shipment. I may or may not be in the steel industry as well ;)
     
  11. tommyguns2

    tommyguns2 Senior Moderators Staff Member

    Dec 25, 2010
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    Here are my two cents. In general, I think that these tariffs are a bad idea, but can be effective in making China behave better going forward with respect to trade in general.

    As I understand it, China dumps steel and engages in unfair trade practices, in particular with respect to steel and aluminum (among other things). With respect to steel and aluminum imports, China is not the largest importer of such materials into the U.S. In fact, I believe we get more steel and aluminum from Mexico and Canada than we do from China. Right now the tariffs affect all steel and aluminum, and thus the lack of targeted tariffs doesn't seem to be appropriate.

    Further, China doesn't pay for these tariffs. American consumers do. The price gets passed on down the line, and you and I end up paying more when we purchase in a finished product. How is that a punishment directed toward China ends up hitting MY pocketbook?

    These tariffs hurt a lot of US manufacturers who have supply contracts with their large customers. For example, if someone makes steel blower wheels for draft inducers for furnaces, they likely have contracts to sell those wheels for XX cents per unit, based on a contracted yearly volume. Lets say $1.15 per unit for volumes of at least 2,000,000. They may have only a 10% margin on that product. Let's say you inked that deal on January 1, 2018, and steel cost you Y pennies per pound (however it's sold), and now my steel prices just increased by 15% (1.15Y pennies per pound). If you're running on small margins, you're pretty screwed.

    Plus, if that blower wheel manufacturer has his primary competitor in Europe, that competitor is buying steel at a lower price, as it's not affected by the tariffs. If the tariffs don't affect finished goods, but instead only the raw materials for manufacture, the US manufacturer now has an economic incentive to move his production to Mexico, buy the cheaper steel there, manufacture the wheel, and import the finished product w/o the tariff and maintain his profit margin.

    So this looks like a big transfer of money from consumers and other US manufacturers to the US steel industry. Doesn't seem like the right tool to address China's bad behavior.
     
  12. rawdeal

    rawdeal TID Board Of Directors

    Nov 29, 2013
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    To see how all this might work out in the future, we could see how it worked out in the recent past. I'm not real good at all this Intl economic gamesmanship, but those who are can look back to January (2018) when we hit solar panels and washing machines with tariffs. That move was directed at any nations that exported them to us, but it turns out China and South Korea do most of that. Global economics were further complicated by the fact the Chinese and S. Korean companies responsible for this farmed out some of their manufacturing to other nations, sorta like those big "Japanese" cars who have factories right here in the US of A. I wasn't shopping for either product, and I'm not employed by anyone who would be directly affected by this, so I didn't pay much attention at the time.

    I DO have memories of generally negative reaction to this earlier dry run at the tariff game, including from USA consumers, but have things had a lasting effect, or did it all blow over?
     

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