2018 Trump Tariff

There is worry about this starting a trade war and to those folks I would suggest taking a valium. Anyone choosing to start a trade war with the US would lose. The US imports too much stuff and spends way too much money to lose as a trade partner. This is a case where being the 800 pound gorilla is a good thing.

I am willing to pay 1 cent more on a can of soda if that means more US aluminum is being used. Are you?

In the case of the Bush tariffs, the WTO ultimately decided they did not conform with global rules. Facing retaliation from the EU and others, Bush removed the tariffs after just 18 months, instead of having them in place for three years as he wanted.

For Dave Arndt, president and CEO of Pentaflex, an auto-parts manufacturer based in Springfield, Ohio, those days are a painful memory.

At the time, he was working for another supplier that had a contract with one of the Big Three automakers. The company’s situation deteriorated rapidly when Bush imposed the steel tariffs and its customer balked at absorbing the higher cost. From this article:

“That was one of the key reasons that pushed us into Chapter 11,” Arndt said. “We were a three-quarter of a billion dollar company with a couple thousand workers that went out of business. So we had a very bad experience.”

There are a lot of little players employing a lot of people who will find themselves uncompetitive with foreign companies that have access to cheap raw materials, and remember that more expensive steel in the US results in less expensive steel abroad, it is a double whammy. There are no economists that predict that a steel/aluminum tariff will result in more net US jobs, no models that show an overall win for the US. There will be winners and losers, but there will be more losers than winners in the US. That should outweigh any political calculations.

There is worry about this starting a trade war ... Anyone choosing to start a trade war with the US would lose.

Trump hasn't indicated a dispute with any one bloc or nation, he's targeted the rest of the World.

Mainly, this tariff only effects a very small small percentage of steel and aluminum imports. I believe the goal of this is to re-negotiate the terms of NAFTA and once that is done, this tariff will be lifted. The US economy has grown tremendously with Trump in office. His pro-business administration has demonstrated time and again that Making America Great Again is Priority One. Encouraging some companies to switch to US steel and aluminum will not be a giant catastrophe and it certainly won't start a trade war.

Secondly, the economy is vastly different than when Bush was in office and the world was in a different state of mind.

Lastly, do you feel that something has to be done about US trade deficits? What do you have in mind?

As America threatens to close its agricultural export door, it has damaged Mexico’s confidence in the reliability of its major supplier — perhaps permanently. In a January 2017 Washington Post opinion piece, former Mexican president Ernesto Zedillo wrote that it was a “waste of time” to play “Nafta tweaking games with the Trump administration”.

Though Mexico currently has free trade agreements with 45 countries (more than any other country in the world), agriculture has consistently been the most sensitive issue in Mexico’s free trade agreements. Trump has changed that.

Today, the country is accelerating its search for new partners to meet its national agricultural needs. Sensing long-term opportunities, Brazil and Argentina — both major exporters of beef, wheat, soybeans and other prized U.S. agricultural products — are elbowing their way to the front of the queue. Neither currently has a free trade agreement with Mexico.

Mexico Deputy Economy Minister Juan Carlos Baker has said that the country is “pretty far advanced with Brazil. Argentina is a few steps behind”, confirming that Mexico could offer South American producers terms similar to those currently enjoyed by American farmers “if it suits us”.

Brazil Agriculture Minister Blairo Maggi has announced that the country is “back in the game”.

Engage and trade with every country on Earth. The US has a huge advantage in infrastructure, financing and wealth compared with many places. The optimum thing to do would be to open foreign markets to US goods.