Published: Wed, March 14, 2018
Worldwide | By Gretchen Simon

'US steel & aluminum tariffs are penny wise, pound foolish'

'US steel & aluminum tariffs are penny wise, pound foolish'

"In some places, trade has been blamed for the pains of globalization, others use it as a scapegoat and insist that we can hide behind walls and borders", EU Trade Commissioner Cecilia Malmstrom said at a conference in Brussels on Monday. Both are essential to make everyday goods, from cars to planes, to food and drink containers.

The latest move to put 25 per cent on steel and 10 per cent levies on aluminium imports has come after specific measures against imports of Chinese solar panels and washing machines earlier in the year, suggesting that Trump is getting serious about trade protectionism. McKinsey & Company explain that most producers "lack the cash for investments needed to remain viable in the long run". Faced with higher input costs, they become less competitive on the world market.

A meeting in Brussels between Malmstrom and her US counterpart Robert Lighthizer on Saturday ended without a breakthrough, as the European Union didn't receive assurances that it will be exempted from the metal tariffs.

We urge the administration to reconsider this action and continue investigating the impact of steel and aluminum tariffs on the USA economy and steel-consuming sectors downstream. Should our nation's victory in war hinge on them?

In the face of those threatening noises, there is no need for Canada to cower or to make any major concessions at the NAFTA bargaining table.

Increased domestic production will come at a cost. For example, companies such as John Deere may respond to higher steel prices by purchasing their parts in the worldwide market rather than in the United States.

Steel tariffs, however, don't follow this pattern. Steel industry employment peaked at 650,000 in 1953. Don't believe it. American workers are being stung by sucker trade - not free trade. Based on current import penetration, eliminating all imports - which these tariffs will not do - might in time create 50,000 additional jobs.

In a recent analysis, Bown notes that the World Trade Organization allows for retaliatory tariffs that are equal in value, if the tariffs imposed by the country that started the trade war are found to be unjustified. He wants to make access to US markets contingent on foreigners' playing by the rules (e.g., paying full price for the research costs of our technologies).

Steadily rising Chinese production increases pressure for mills to export, putting downward pressure on prices and undercutting exports from American, European, Japanese and Korean mills. Making steel that way is like using the oven to bake a couple of cupcakes instead of a full batch.

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The post served as a joint statement of sorts, and - despite the sad nature of the news - was nothing but respectful and loving. Sources close to the couple assure that the break up was mutual and there is no hard feelings or resentment between them.

But are Trump's new tariffs good, bad or just ugly?

Once the building boom cooled, suppliers left with vast stockpiles of unsold goods resorted to price-cutting wars that threatened many with bankruptcy. As a result, steel consumers are more likely to balk at the higher prices that would result from tariffs.

The other bonus: jobs.

Steel producing countries worry not just about lost sales in the US, but also that steel from other exporting nations will flood in. And the industry added almost 8,000 jobs. There's no concrete evidence that would happen.

One big concern, according to some USA industry officials, is that Europe will counter Trump's tariffs with its own tariffs on US products.

There's already a trade war, and it's being waged by Beijing. This free trade rhetoric is disguised anti-Americanism.

The European Union's trade chief dismissed U.S. President Donald Trump's threat to impose tariffs on vehicle imports, and vowed to "stand up to bullies", adding to signs that a widening transatlantic rift over protectionism could escalate into an all-out trade war. He can't have both - and you can be sure China knows which option it prefers.

Kim says he is "committed to denuclearization", although there is the valid concern that Trump will fall into a trap-North Korea may agree to throw out their nuclear weapons for now, but who will hold them accountable if they change their mind later, or lose patience, or believe that the American end of the deal has not been upheld?

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