Tariffs: Saving American Jobs Since...Wait, What?

[dennishoddy]

This is a great book to read before engaging in any intelligent discussion regarding trade and tariffs. It's short, easy to follow, and based on sound economic principles, not political sound bites. The author is a small government, anti-Keynesian economist.

http://russroberts.info/books/the-choice/

I have no doubt that there is a "long game" aspect to Trump's recent trade war, and I'm willing to see that play out, but anyone who thinks the U.S. steel industry is "back" simply because of the short term increase in production and price brought about by artificial and unsustainable tariffs is ignorant and getting played. Real sustainable growth in U.S steel can/will only come from making better steel more efficiently than 'the other guy'.

Of course it’s a long game. It can’t be anything else. You can’t build a factory in a day.
Sure it’s going to hurt manufacturers that rely on foreign built products or steel which in turn is going to have an effect on the American consumer, but it will hurt a lot less than seeing child labor in foreign countries making pennies a day to make the cheapest product your talking about.
Automation and the steel workers union objection to accept it caused steel to go overseas.

There are hundreds if not thousands of things that have to be engineered and approved before construction even starts, although guess who has streamlined that process?
Obama said the jobs going overseas would never come back, and unless Trump had a magic wand, it was impossible to do so.
Guess what, President Trump didn’t wave a magic wand, he applied conservative principles into the economy and the economy responded in kind.
Steel needs to rebuilt in right to work states like auto manufacturers have done.

 

[Dave70968]

http://reason.com/blog/2018/07/25/pipeline-company-hit-with-40-million-ret

Pipeline Company Hit With $40 Million Retroactive Tax After Applying for Tariff Exemption
Unsurprisingly, the bureaucratic, cronyist process for getting an exemption is not in fact protecting American steel jobs.
Eric Boehm|Jul. 25, 2018 3:15 pm

After being denied a special exemption from President Donald Trump's tariff on steel, a Texas-based pipeline company will have to pay what the company's chief operating officer calls an "unjust retroactive tax" of $40 million.

When Trump ordered his 25 percent steel tariffs in early March, Plains All American GP applied for an exemption because it had placed a major order for steel pipes in December 2017—part of the company's ongoing construction of a 550-mile crude oil pipeline system across New Mexico and western Texas. The Commerce Department has been slowly reviewing more than 20,000 applications for tariff exemptions filed by more than 1,200 American businesses trying to avoid the new import taxes; so far, the department has approved only a few. On July 13, the department ruled against Plains All American, citing evidence that American steel manufacturers could supply the same pipe ordered in December for the project.

But the order placed in December was already being filled by a Greek steelmaker. In fact, deliveries of the pipe started earlier this month. Because the company did not get an exemption from the Commerce Department, it will end up having to pay $40 million in tariffs on an order placed three months before the tariffs existed.

"We are now dealing with a major unexpected, unjust retroactive tax that affects the project's economics," the pipeline company's chief operating officer, Willie Chiang, told the House Ways and Means Committee on Tuesday. "Ironically, the denial of our exclusion request provides no relief to the U.S. steel industry. We have already begun to receive shipments of the steel, so even if we were able to substitute product specifications, it is too late to cancel our order from Greece and shift it to a U.S. mill without incurring substantial economic loss and major delays in the schedule."

Trump's steel tariffs were imposed under Section 232 of the Trade Expansion Act of 1962, which gives the president broad authority to order tariffs on "national security" grounds. The Trump administration has claimed that steel protectionism is necessary to ensure American steel mills can supply raw materials in the event of an armed conflict that cuts off global trade, but industry analysts have cast doubt on that argument. Even Trump himself has suggested the tariffs are not grounded in national security concerns.

The exemption process set up by the Commerce Department is similarly flawed—and it grants the department virtually unchecked power to pick winners and losers. As Chiang pointed out Tuesday, there is no mechanism for companies to appeal the department's decisions, and there is limited opportunity to communicate with the bureaucrats deciding which exemptions will be granted.

"A petitioner's ability to state its case is limited to the submission of a standardized form and supporting electronic documentation," Chiang said. "No forum is provided for interaction with those determining the merits of either the petitioners' or the objectors' arguments. In addition, there is no opportunity to respond to objections—even if the objections contain incorrect information."

That's exactly what happened to Plains All American. Several American steel mills responded to their exemption application by telling the Commerce Department that the mills could step in to fill the pipeline company's order. But Chiang says his company never had a chance to rebut those claims, something it could have done by simply pointing out that the order was already in progress.

That's another problem with this mess: It opens the door to serious cronyism. As CNN reported last month, large companies such as U.S. Steel are actively trying to block many exemption requests made by smaller business—because, of course, U.S. Steel is better able to absorb the added cost of tariffs than, say, a small metal fabrication business with 20 employees.

Congress has an opportunity to roll back Trump's authority to impose tariffs on national security grounds, and it could follow up on recommendations made by Chiang and other businessmen by requiring the Commerce Department to use a more transparent and fair process for granting tariff exemptions. At the very least, projects that started before the tariffs existed should be exempted from the new trade barriers, as suddenly higher material costs will force contracts to be renegotiated or construction to be halted. So far, though, not enough Republicans have been willing to stand up to the president.​

Just another way Trump's Tariffs are saving American businesses, especially small businesses!

 

[SMS]

Obama said the jobs going overseas would never come back, and unless Trump had a magic wand, it was impossible to do so.
Guess what, President Trump didn’t wave a magic wand, he applied conservative principles into the economy and the economy responded in kind.
Steel needs to rebuilt in right to work states like auto manufacturers have done.

They haven't come back on a permanent basis, yet. That's my point. What we saw this week with steel is a reaction to the tariffs, not a lasting change in the economic playing field. The rest of the game has to be played out before we roll out the victory flags and claim that "Steel is back baby!".

I 100% agree on industries like steel needing to reexamine where they choose to start new production.

Did you buy the book yet? LOL

 

[lee1000]

I don't care what anyone says, we can not continue to export and outsource jobs. The loss of the skill sets alone are a huge problem.

 

[dennishoddy]

They haven't come back on a permanent basis, yet. That's my point. What we saw this week with steel is a reaction to the tariffs, not a lasting change in the economic playing field. The rest of the game has to be played out before we roll out the victory flags and claim that "Steel is back baby!".

I 100% agree on industries like steel needing to reexamine where they choose to start new production.

Did you buy the book yet? LOL

They can't come back overnight is my point in it being the long game. Nobody is doubting the reaction of the steel industry, no different than the reaction from soybean farmers after the EU has in effect decided to buy more from the US.
No, I didn't buy the book. Simple economic measures are pretty easy to understand.
Although I do have a list of liberals you could contact with your book offer. Some are harvard graduates in economics and past presidents that said President Trump's comments about reaching 4% GDP during the campaign was insane and was not possible in today's economy.
Guess what, our outsider didn't use the insane methods of past economists and financial guru's, then went to work the old fashioned way and actually beat his prediction.
He is actually predicting higher numbers that may be at record levels of growth in our economy. Want to bet a cup of coffee he makes it?

 

[Hobbes]

They can't come back overnight is my point in it being the long game. Nobody is doubting the reaction of the steel industry, no different than the reaction from soybean farmers after the EU has in effect decided to buy more from the US.
No, I didn't buy the book. Simple economic measures are pretty easy to understand.
Although I do have a list of liberals you could contact with your book offer. Some are harvard graduates in economics and past presidents that said President Trump's comments about reaching 4% GDP during the campaign was insane and was not possible in today's economy.
Guess what, our outsider didn't use the insane methods of past economists and financial guru's, then went to work the old fashioned way and actually beat his prediction.
He is actually predicting higher numbers that may be at record levels of growth in our economy. Want to bet a cup of coffee he makes it?

Dennis, when those economists talk about 4% GDP growth they are talking about for a year, not a quarter.
GDP expanded by at least 4% multiple quarters during Obama's presidency
4.6%
4.0%
4.6%
5.2%
but he never had an entire year when growth in GDP reached 4%.
It's extremely unlikely that GDP growth will reach 4% this year too since the first quarter of this year came in at only 2.2% and the tariffs are only just beginning to drag on the economy.

Don't misunderstand me, the 2nd quarter numbers were good, they just aren't the "economic miracle" that Trump proclaimed while promoting himself at the WH Friday.

 

[JD8]

Hobbes you left out several subpar GDP quarters...…

https://www.statista.com/statistics...-from-preceding-period-in-real-gdp-in-the-us/

-1.9%
.8%
.1%
.5%
.8%
-.9%
1.6%
.5
.6
1.8%

This is 2011-2016

Obama never had 3% YOY growth.

 

[Hobbes]

Hobbes you left out several subpar GDP quarters...…

https://www.statista.com/statistics...-from-preceding-period-in-real-gdp-in-the-us/

-1.9%
.8%
.1%
.5%
.8%
-.9%
1.6%
.5
.6
1.8%

This is 2011-2016

Obama never had 3% YOY growth.

Nope, subject was GDP growth of 4% or better.

 

[SMS]

It would be quite remarkable to see over 4% Real GDP for an entire year. I hope he pulls it off. We haven't been there since before 9-11.

 

[Hobbes]

As explained earlier, tariffs are taxes paid by consumers.

The real "economic miracle" is that Trump CONvinced millions of "Republicans" that new taxes on consumers will benefit the economy.