9 ms·

I know probably as little about tariffs and international trade as you, but my guess is that it might, but only if there's no viable customers left to export th

I know probably as little about tariffs and international trade as you, but my guess is that it might, but only if there's no viable customers left to export their steel to. My guess is that Canada's action here, along with the EU, will be pretty influential, as China won't just be able to dump all their US-bound steel on those markets. I don't necessarily disagree with the Trump administration's moves against Chinese economic behaviour here, but I do think that exemptions should have been made for Mexico, Canada and the EU at a minimum. If this had been about getting China to play fair, and co-ordinated well with other major economies, I think this could have worked out pretty well. But it seems Trump's main goal here is domestic protectionism at any cost.

adventured 8y ago
To that point, the EU (along with the US obviously) has taken note of China's 2025/2050 type plans to accumulate technology in a roach motel style (tech goes in, they try to buy up the world, but you can't buy their companies or get level access to their market). China has noticed: they've ordered Xinhua to entirely stop talking about 2025 [1]. After 140 mentions of 2025 in the first five months of the year, there have been zero since June 5th. Having violated Deng's hide your strength (and bide your time) premise, they're clearly looking to be more clever about their plans again. Trump's trade war with China would work extraordinarily well, if he'd just coordinate properly with allies on it. As you say, he's pursuing a broad brush trade conflict with numerous fronts simultaneously, difficult to manage to say the least. The overall positive of what's going on, is China's scheme is over. There's no going back to the free ride approach that has allowed China to play by entirely different rules than every other major economy. [1] https://ca.reuters.com/article/businessNews/idCAKBN1JL12U-OCABS https://ca.reuters.com/article/businessNews/idCAKBN1JL12U-OC...
- jessaustin 8y ago
  Trump would say he doesn't need coordination; he has "leadership".
  - influx 8y ago
    Is he wrong, now that Canada is following his lead? Effective leader, that remains to be seen, certainly his allies aren’t happy with him about this.
    - soundwave106 8y ago
      From my perspective, he is not completely wrong on China for sure. But I'm honestly not sure why his administration seems to also be targeting allies such as the EU, Canada, and Mexico. I'm sure there are "quibbles" with trade on trade with these countries, but my impression was there were no major problems there. The other problem with Trump's tariffs IMHO is what you point out: there is a lack of coordination with allies, and a general chaotic nature. Overall, uncertainty on this front probably isn't the best for business planning, given that the tariffs have more of a whiff of generic isolationism than punishing any misdeed.
      - influx 8y ago
        "The United States currently imposes a 2.5 percent tariff on imported passenger cars from the EU and a 25 percent tariff on imported pickup trucks. The EU imposes a 10 percent tariff on imported U.S. cars." Seems like this should be more fair all the way around. What we have with this isn't free trade.
        soundwave106 8y ago
        Yes, as I said, you can cherry-pick various trade issues. Heck I can even find long-running trade disputes on certain products -- one that immediately comes to mind is the long-running dispute between Canada and the US over lumber (https://en.wikipedia.org/wiki/Canada%E2%80%93United_States_softwood_lumber_dispute https://en.wikipedia.org/wiki/Canada%E2%80%93United_States_s...). What's "fair" in these type of disputes of course depends on which side you are on, of course. I just wasn't aware of any major outstanding issue that required a "trade war" type scenario with these countries (EU/Canada/Mexico) now. The issue with trade wars is that the tariffs that result can end up lasting far longer than one might expect, and from what I see most economists consider the overall impact negative. The 25 percent tariff on light trucks in the US for instance comes as a direct result of a minor "trade war" between West Germany and France on chickens from approx. 1961-1964. (https://en.wikipedia.org/wiki/Chicken_tax https://en.wikipedia.org/wiki/Chicken_tax) Generally speaking, if a tariff another nation imposes is bothersome, removing tariffs in a negotiated deal is what has tended to work over the last several decades. That 10 percent auto tariff was recently negotiated away in Japan, for instance, with Japan likewise removing some tariffs they applied on EU products. (http://europe.autonews.com/article/20171208/ANE/171209797/eu-will-scrap-tariffs-on-japan-built-cars-in-trade-deal http://europe.autonews.com/article/20171208/ANE/171209797/eu...) In the case of China, where they are more prone to violating WTO rules, that approach might not work, and a more aggressive stance might be justified. But the EU, Mexico, and Canada? Not so sure there.
- seanmcdirmid 8y ago
  China has a thing for 5 year plans, they’ll talk up the next deadline and talk about how great it will be. For example, a few years ago, 2020 was all the rage (see http://reddit.com/r/china2020 http://reddit.com/r/china2020). Then 2025, but I guess we are getting too close to those year deadlines and they stop talking about the promises they will obviously not be able to deliver on. So maybe now we are in 2030 territory?
mc32 8y ago
I’m under the understanding the steel tariffs against Mexico and Canada are to avoid having China dump their steel via those countries where a co imports into MX and CA and turns around and exports same to the US.
- seanmcdirmid 8y ago
  That is already disallowed and policed well enough. For example, there was that Chinese aluminum company that was stockpiling in Mexico with the idea of importing into the USA tariff free. They were found out easily enough. See http://www.businessinsider.com/a-chinese-billionaire-may-have-hidden-6-of-the-worlds-aluminum-in-the-mexican-desert-2016-9 http://www.businessinsider.com/a-chinese-billionaire-may-hav....
makomk 8y ago
"Co-ordinated well with other major economies" was almost certainly not going to happen. The EU can't even come to agreement internally on this; that's the whole reason they hadn't imposed similar steel tariffs on China themselves.
- alfredallan1 8y ago
  They will now that the US has taken the lead.
  - moorhosj 8y ago
    Taken the lead on what? What is their plan? Here is the Sec. of Agriculture Sonny Perdue talking about soybean tariffs [1] yesterday. Q: You said the president has a plan. Even in broad strokes, what is that plan? A: That’s in the president’s mind and in his negotiating strategy. He is a different type of negotiator. I don’t think any foreign country has ever gone up against a president like President Trump before. That’s his style. Frankly, it’s been pretty effective so far in other areas. I think he and President Xi (Jinping) in China have a great relationship. I think it will be dealt with on a personal basis. The goal is, obviously, to get China to change its ways so we can resume trade between our countries. The president, however, does not intend to tolerate a $350 billion to $400 billion trade deficit going forward. [1] http://www.chicagotribune.com/business/ct-biz-sonny-perdue-qa-tariffs-20180625-story.html http://www.chicagotribune.com/business/ct-biz-sonny-perdue-q...
    - 52-6F-62 8y ago
      That's a terribly flagrant non-answer. If they could seriously form a coherent and rational explanation for what they're doing, people just might understand better. As it stands, everyone just projects their current thinking onto the circumstances to find some explanation all because they won't answer a simple question. The reasons why are what I think you've pointed out— there really isn't much of a plan on their part. It's just reactionary and rabble-rousing (with a hefty price tag for those who get hit by the outcomes).
- 8y ago
JPKab 8y ago
I agree with you, but the EU needs to be fair. US imposes a 2.5 percent tariff on European autos. The EU imposes a 10 percent tariff on US autos. How is that fair? Why should the US not impose tariffs and just accept that?
- dghughes 8y ago
  Then there is the so-called Chicken Tax. https://en.m.wikipedia.org/wiki/C https://en.m.wikipedia.org/wiki/C
- moorhosj 8y ago
  Solving disputes like this is the reason the WTO was created.
  - whatyoucantsay 8y ago
    And it has failed spectacularly in the case of China... for decades.
- jcranmer 8y ago
  And the US charges 88% tariffs on sugar imports over quota, while the EU has no sugar quota. It's very easy to cherry-pick particular tariffs, but the truth of the matter is that maximum tariffs are generally constrained by international agreements that have lots and lots of horse-trading over what is accepted. When you look at all products, the US doesn't look particularly generous compared to the EU. Source: https://www.economist.com/finance-and-economics/2018/06/14/how-open-is-america https://www.economist.com/finance-and-economics/2018/06/14/h...
  - JPKab 8y ago
    I've seen aggregate value measures which clearly demonstrate the EU as more protectionist. It should also be pointed out that the EU has sugar tariffs which is why beet sugar is big in Europe.
- JohnSully 8y ago

adventured 8y ago

To that point, the EU (along with the US obviously) has taken note of China's 2025/2050 type plans to accumulate technology in a roach motel style (tech goes in, they try to buy up the world, but you can't buy their companies or get level access to their market). China has noticed: they've ordered Xinhua to entirely stop talking about 2025 [1]. After 140 mentions of 2025 in the first five months of the year, there have been zero since June 5th. Having violated Deng's hide your strength (and bide your time) premise, they're clearly looking to be more clever about their plans again. Trump's trade war with China would work extraordinarily well, if he'd just coordinate properly with allies on it. As you say, he's pursuing a broad brush trade conflict with numerous fronts simultaneously, difficult to manage to say the least. The overall positive of what's going on, is China's scheme is over. There's no going back to the free ride approach that has allowed China to play by entirely different rules than every other major economy. [1] https://ca.reuters.com/article/businessNews/idCAKBN1JL12U-OCABS https://ca.reuters.com/article/businessNews/idCAKBN1JL12U-OC...

jessaustin 8y ago
Trump would say he doesn't need coordination; he has "leadership".
- influx 8y ago
  Is he wrong, now that Canada is following his lead? Effective leader, that remains to be seen, certainly his allies aren’t happy with him about this.
  - soundwave106 8y ago
    From my perspective, he is not completely wrong on China for sure. But I'm honestly not sure why his administration seems to also be targeting allies such as the EU, Canada, and Mexico. I'm sure there are "quibbles" with trade on trade with these countries, but my impression was there were no major problems there. The other problem with Trump's tariffs IMHO is what you point out: there is a lack of coordination with allies, and a general chaotic nature. Overall, uncertainty on this front probably isn't the best for business planning, given that the tariffs have more of a whiff of generic isolationism than punishing any misdeed.
    - influx 8y ago
      "The United States currently imposes a 2.5 percent tariff on imported passenger cars from the EU and a 25 percent tariff on imported pickup trucks. The EU imposes a 10 percent tariff on imported U.S. cars." Seems like this should be more fair all the way around. What we have with this isn't free trade.
      - soundwave106 8y ago
        Yes, as I said, you can cherry-pick various trade issues. Heck I can even find long-running trade disputes on certain products -- one that immediately comes to mind is the long-running dispute between Canada and the US over lumber (https://en.wikipedia.org/wiki/Canada%E2%80%93United_States_softwood_lumber_dispute https://en.wikipedia.org/wiki/Canada%E2%80%93United_States_s...). What's "fair" in these type of disputes of course depends on which side you are on, of course. I just wasn't aware of any major outstanding issue that required a "trade war" type scenario with these countries (EU/Canada/Mexico) now. The issue with trade wars is that the tariffs that result can end up lasting far longer than one might expect, and from what I see most economists consider the overall impact negative. The 25 percent tariff on light trucks in the US for instance comes as a direct result of a minor "trade war" between West Germany and France on chickens from approx. 1961-1964. (https://en.wikipedia.org/wiki/Chicken_tax https://en.wikipedia.org/wiki/Chicken_tax) Generally speaking, if a tariff another nation imposes is bothersome, removing tariffs in a negotiated deal is what has tended to work over the last several decades. That 10 percent auto tariff was recently negotiated away in Japan, for instance, with Japan likewise removing some tariffs they applied on EU products. (http://europe.autonews.com/article/20171208/ANE/171209797/eu-will-scrap-tariffs-on-japan-built-cars-in-trade-deal http://europe.autonews.com/article/20171208/ANE/171209797/eu...) In the case of China, where they are more prone to violating WTO rules, that approach might not work, and a more aggressive stance might be justified. But the EU, Mexico, and Canada? Not so sure there.
seanmcdirmid 8y ago
China has a thing for 5 year plans, they’ll talk up the next deadline and talk about how great it will be. For example, a few years ago, 2020 was all the rage (see http://reddit.com/r/china2020 http://reddit.com/r/china2020). Then 2025, but I guess we are getting too close to those year deadlines and they stop talking about the promises they will obviously not be able to deliver on. So maybe now we are in 2030 territory?

mc32 8y ago

I’m under the understanding the steel tariffs against Mexico and Canada are to avoid having China dump their steel via those countries where a co imports into MX and CA and turns around and exports same to the US.

seanmcdirmid 8y ago
That is already disallowed and policed well enough. For example, there was that Chinese aluminum company that was stockpiling in Mexico with the idea of importing into the USA tariff free. They were found out easily enough. See http://www.businessinsider.com/a-chinese-billionaire-may-have-hidden-6-of-the-worlds-aluminum-in-the-mexican-desert-2016-9 http://www.businessinsider.com/a-chinese-billionaire-may-hav....

makomk 8y ago

"Co-ordinated well with other major economies" was almost certainly not going to happen. The EU can't even come to agreement internally on this; that's the whole reason they hadn't imposed similar steel tariffs on China themselves.

alfredallan1 8y ago
They will now that the US has taken the lead.
- moorhosj 8y ago
  Taken the lead on what? What is their plan? Here is the Sec. of Agriculture Sonny Perdue talking about soybean tariffs [1] yesterday. Q: You said the president has a plan. Even in broad strokes, what is that plan? A: That’s in the president’s mind and in his negotiating strategy. He is a different type of negotiator. I don’t think any foreign country has ever gone up against a president like President Trump before. That’s his style. Frankly, it’s been pretty effective so far in other areas. I think he and President Xi (Jinping) in China have a great relationship. I think it will be dealt with on a personal basis. The goal is, obviously, to get China to change its ways so we can resume trade between our countries. The president, however, does not intend to tolerate a $350 billion to $400 billion trade deficit going forward. [1] http://www.chicagotribune.com/business/ct-biz-sonny-perdue-qa-tariffs-20180625-story.html http://www.chicagotribune.com/business/ct-biz-sonny-perdue-q...
  - 52-6F-62 8y ago
    That's a terribly flagrant non-answer. If they could seriously form a coherent and rational explanation for what they're doing, people just might understand better. As it stands, everyone just projects their current thinking onto the circumstances to find some explanation all because they won't answer a simple question. The reasons why are what I think you've pointed out— there really isn't much of a plan on their part. It's just reactionary and rabble-rousing (with a hefty price tag for those who get hit by the outcomes).
8y ago

JPKab 8y ago

I agree with you, but the EU needs to be fair. US imposes a 2.5 percent tariff on European autos. The EU imposes a 10 percent tariff on US autos. How is that fair? Why should the US not impose tariffs and just accept that?

dghughes 8y ago
Then there is the so-called Chicken Tax. https://en.m.wikipedia.org/wiki/C https://en.m.wikipedia.org/wiki/C
moorhosj 8y ago
Solving disputes like this is the reason the WTO was created.
- whatyoucantsay 8y ago
  And it has failed spectacularly in the case of China... for decades.
jcranmer 8y ago
And the US charges 88% tariffs on sugar imports over quota, while the EU has no sugar quota. It's very easy to cherry-pick particular tariffs, but the truth of the matter is that maximum tariffs are generally constrained by international agreements that have lots and lots of horse-trading over what is accepted. When you look at all products, the US doesn't look particularly generous compared to the EU. Source: https://www.economist.com/finance-and-economics/2018/06/14/how-open-is-america https://www.economist.com/finance-and-economics/2018/06/14/h...
- JPKab 8y ago
  I've seen aggregate value measures which clearly demonstrate the EU as more protectionist. It should also be pointed out that the EU has sugar tariffs which is why beet sugar is big in Europe.
JohnSully 8y ago