[Newfie]

For or against?

Democrat PA Govoner Casey is behind Trump.
Republican PA Senator Toomey calls it a Big Mistake.

So how about it, Trump Hero or zero?

[KaiserJeep]

I take the libertarian view that all Trade Protections are in the end harmfull to the economy of the "protected" nation, causing ripples of price escalations that harm all, especially young families struggling to care for kids, and older folks on fixed incomes. The working adults, not so much.

But what I actually believe is happening here, is that Trump is catering to the Blue Collar vote. Which doesn't make him like any other politician, Republican or Democrat.

If he keeps this up, he will easily win a second term. He might even (control your revulsion) become a beloved POTUS. Because you see, Trump's campaign is the very definition of the new Populism.

[rockdoc123]

I think this is just a big negotiation ploy. He threatens the world with tarriffs and then comes back with a....well we could see our way to backing off on that but we want such and such. This has already happened with regard to the North American Free Trade Agreement...indicating to Canada and MX that if he gets a good deal on NAFTA he won't impose new steel and aluminum sanctions on the US. He is after all a negotiator so he is doing what he thinks he is the best at.

The problem is if Europe and other countries call his bluff suddenly there is a trade war where there are really no winners. The US will not be better off given it already has had problems decreasing the trade deficit. If Europe imposes sanctions on a group of commodities and products that the US actively exports then that gap just increases. According to the steel and aluminum consuming industries in the US there is not enough capacity in the US to supply their needs and as a consequence, they will have to import more expensive steel/aluminum and hence their product prices will have to rise fruther destroying their competitiveness internationally.

I suppose he is also being driven by the need to show progress on his election promises coming into mid-terms. That has the potential, however, to blow up in his face. Making America Great Again doesn't mean it always has to go it alone, there are advantages to trade which is why free trade agreements were contemplated in the first place. Hopefully cooler heads will prevail.

[onlooker]

I am in favor of it not just from an economic vantage but geo-political. It is time for less expansionist imperialistic intentions and more a inward looking thrust to bolster our domestic industries and develop more self sufficiency.
Globalization is not tenable in a world of less energy. And also they're are formidable anti US cartels intent on wrestling economic power from the US. However, total disengagement is also not advisable nor feasible

[KaiserJeep]

Speaking from the perspective of a Silicon Valley career, there is simply no doubt - none whatsoever - that China has not been "dumping" products at or below cost to takeover electronic, appliance, and modile device manufacturing. They have just about completed the takeover of Solar PV manufacturing, for example. Other problem countries exist, but the lion's share of the foriegn government meddling is in China.

So the true perspective is that there is not now and never has been a truly level playing field with regard to trade. If Trump can correct any of this, he has done a good thing IMHO. But it pains my libertarian soul that such tactics are required.

[Newfie]

I believe it’s been pretty well documented that China has over developed its steel manufacturing capacity. IIRC I heard their capacity is sufficient for the entire world.

The UK steel industry is just about gone. They had an Indian company take over one of their last major producers, and that deal was in rough shape last I heard.

And how do you define “dumping”? If they can produce and sell for less than our production coasts is that dumping? Or is it only dumping if they subsidize the production?

On another thought, does the USA even export enough anymore to worry about reprisals? Of course we export food, but are there reliable alternative sources?

If we don’t export sufficient steel products then what is the worry?

[rockdoc123]

If we don’t export sufficient steel products then what is the worry?

retaliatory tariffs on products/goods the US does export. Europe is talking about all sorts of foods that would have tariffs imposed.
Nobody wins.

[Subjectivist]

For or against?

Democrat PA Govoner Casey is behind Trump.
Republican PA Senator Toomey calls it a Big Mistake.

So how about it, Trump Hero or zero?

About bloody time the government looked out for its labor class instead of constantly throwing them under the bus. If President Trump actually carries through he will be reelected in a landslide.

[KaiserJeep]

Newfie, the explicit definition of "dumping" is to export products at a loss, in order to replace the domestic production or manufacturing in the targeted country. This is a deliberate form of economic warfare supported by and instigated by the government of the country dumping said products. The objective over the long term is to create a monopoly in production or manufacturing.

In the case of China, for example, the targeted industries have been electronics, computers, small and large appliances, and most recently both solar and wind energy systems. The Chinese manufacturers are exempted from taxation and given low pricing on raw materials to encourage specific products to be produced.

In the 1980s when I started practicing EE here in Silicon Valley, our small computer company was surrounded by electronic component manufacturers, printed circuit board fabs, assembly operations, and so forth. We designed and manufactured everything from domestic sources, including final test and integration. In subsequent years, we moved major subassembly fabs to Texas and Georgia to take advantage of lower labor costs. Later under NAFTA we had assembly operations in Mexico. By the time I retired in 2015, all that remained here in the USA was product design and prototyping shops. Every product line we put out for bid was answered by Chinese bids for contract manufacturing in China. Software deverlopment and testing was 100% in India, a long time English-speaking country.

For me, as a white collar engineer, it was misery, attempting to get quality hardware product production from people who did not speak English. For each engineer, there were at least a hundred blue collar jobs in assembly, logistics, and so forth, by then gone entirely.

Product margins shrank, but our product line was unique, we stayed profitable, which made us a prime takeover prospect. So Tandem Computers was swallowed by Compaq, which then tried to swallow Digital, and choked on it. Then HP swallowed Compaq, and all of a sudden, I was working for one of the top 4 high tech companies, very different from being #3000 or so.

But HP no longer manufactures in the USA either. I ended up attempting to get our highly specialized NonStop fault tolerent product line produced by a contract manufacturer in Hong Kong, because unlike the other product divisions of HP, we didn't have the volume to interest the mainland Chinese any longer. Then they started producing and selling unauthorized clones of our computer hardware designs to our customer base.

China and in fact the whole Far East has incredibly unfair trade practices. About time we fought back somehow. I don't know if import tariffs are the answer, but I am 100% certain that some answer is needed.

[Tanada]

If we don’t export sufficient steel products then what is the worry?

retaliatory tariffs on products/goods the US does export. Europe is talking about all sorts of foods that would have tariffs imposed.
Nobody wins.

On the contrary, the working poor win and the elites win less. So Europe puts tariffs on American imports to support their own agriculture. Seems like a sound idea because cheap transport is never a guarantee and any country foolish enough to depend on food imports is writing their own script for disaster. Free trade is a great principal, but when you take into account the fact that Europeans have greatly subsidized economies due to things like socialized medical care which American farmers have to pay for out of pocket and which the decent American companies in agriculture pay a large share of for their employees. Just because the money paying for health care is coming from every taxpayer does not mean it is not a subsidy of massive proportion for European (or other regions) agricultural or manufacturing sector. This was a huge bone of contention back in the 1980's when Japanese imports could be sold cheaper than domestic vehicles of the same category because the Japanese manufacturers did not have to pay for employee healthcare while the American manufacturers most certainly did under the union contracts.

Things have grown considerably worse over the last 30 years as the Globalist spouting politicians have been racing to the bottom and offshoring every gram of manufacturing capacity they could manage which has effectively gutted the middle class in the USA. Then they threw in the visa programs designed to import college educated immigrants who work for lower wages than locally educated employees and took a big chunk out of the upper middle class groups like the IT workers. Kaiser is fortunate his company didn't do away with all the USA educated software workers like they did with the local manufacturing, but in a lot of companies the lower wage immigrants holding green cards were by far the preferred workers. It even carries through to fields like medical care, a large percentage of American medical doctors are foreign born individuals. Of my last four general practitioners three were foreign born, as are two of the three specialists i see now for my medical care.

[Newfie]

KJ
By your definition it’s only “dumping” if the government subsidizes the product. It’s not dumping if they just do it cheaper. And to Tamada’s point how do you define a subsidy?

A bit ago I read a book called Tropic or Chaos that changed my views on globalization and trade protections. I think globalization has been a great preventative of major wars. But it’s rotting the core of our economy.

How much of the work supply of steel is produced in the USA? How much is exported as raw or finished product?

[onlooker]

Guys, I recommend a book "When Corporations Rule the World" by David Korten as well as the "The Case against Globalization". What we are seeing with Globalization is the superceding and domination of the Economic matters of this world by Corporations. Via Free Trade and Globalization, Corporations are reducing the planet and its people to the lowest common denominator. They are pitting localities and people against each other in bidding for economic vitality and business activty. The Corporations have attained control of the levers of power in first world governments who in turn have actively pursued the interests of Corporations. You have institutions like the IMF, the World Bank, the World Trade Organization and others who have been tasked with setting the conditions for a planet where all countries must abide by the economic bylaws of Free Trade and Globalization. So that the situation as it stands is one of Corporations having free reign to roam the planet physically and digitally to access markets, to set up factories, to trade and in general pursue their interests in making money.
The problem is that this unrestricted freedom is allowing Corporations to put pressure on localities and people around the world to reduce wages, relax environmental laws, reduce corporate taxes and penalties and in general cave in to any and all demands they have. Because of the market share and economic strength they have, places and people will concede to their demands just so they can be chosen as a place to do business and so introduce vitality into areas otherwise economically stagnant.
The rich countries are in complicity as they have by far the most Corporations and the strongest. So, this is simply allowing the Economic interests of the world to bestride the planet with little impediment to bolster their bottom line at the expense of the workers and the environments of this planet.

[KaiserJeep]

Newfie, I doubt that much US steel production is left. Not all of it was lost to unfair trade practices, however. I remember when we drove cross-country with my daughter looking for her undergraduate college. One of the places we stopped at was Duquesne university, a private Catholic school in Pittsburgh, Pennsylvania.

Pittsburgh, Pennsylvania WAS ONCE a steel town, just about the premier steel town in the USA, ever since the US automobile industry grew along the Great Lakes, along with the pig iron/steel industry and the coal/coke production that supported it. To understand what is left, you must distinguish the pig iron production from iron ore and coal/coke (which is GONE completely in the USA) from the multitude of raw steel fabrications and specialized stainless alloy production (SOME of which remains). Today we export iron and steel scrap to China, India, and Korea. Today we buy finished cars, ships and appliances from these countries. Here is when this happened:


...which means that most such jobs were exported during the working careers of those who are still alive and still voting. In fact in Pittsburgh, you can still see the skeletons of the massive steel mills in the city and along the river:


...while throughout the US MidWest, you can see the bones of the former automobile industry, also lost. Here in Silicon Valley, I remember the GE plant in San Jose, the last GE plant that made small appliances such as toasters and hand irons, closed in the 1980s when they moved those jobs to Mexico, part of Ross Perot's infamous NAFTA "sucking sound".


...which is today a shopping mall called "The Plant", with a Best Buy and a Home Depot and other icons of today's US retail, selling imported goods and materials from China/India/Korea/Mexico/etc.

Without belaboring the point too much, these jobs were lost from the US and from Europe's EU for two reasons:

1) The lower cost of human labor in the Far East and other Second World nations.

2) The tightening environmental regulations from the USA and Europe, which made such domestic production of both "Heavy Industry" (iron/steel/automobiles/etc.) and "Light Industry" (the fabrication of appliances and electronics and petrochemical plastics into finished goods) uncompetitive in the USA.

These facts are known to the US Middle Class to whoom it happened, because it happend in the last 40 years. This is why Donald Trump is in office today. It is also why China, India, and to a lesser extent Korea and Mexico and South American nations are hellholes of pollution.

Because the USA and Europe exported that pollution along with Middle Class jobs. That is why those places are so unhealthful and why the Olympic athletes to both Beijing (2008) and Rio (2012) were laid low by respiratory distress.

I'm saying we had both benefits and harm from losing the jobs and the great shrinking Middle Class in the USA and Europe. I was in one sense incredibly lucky to see this happen, while remaining employed in Low/Middle Management. But I also saw perhaps an estimated 100 blue collar jobs lost while people like me kept our white collar positions and the nature of Silicon Valley changed greatly. This is no longer the same sort of place I relocated to in the 1980s. Nor is most of Europe or the USA, nor are China/India/Korea/South America.

[KaiserJeep]

onlooker, I read your post immediately after submitting mine.

There is no great "conspiracy" by corporations or governments, unless you think that the environmental movement is part of it. Because those environmental regulations grew steadily in both Europe and the USA and other First World countries since the 1970s.

Environmental protections never existed in the Third World, or in China/India/Korea/etc. It is unlikely that they ever will under the present circumstances, as these places today face the unpleasent alternatives of reversing their climb to Middle Class status, or protecting the environment. The USA and Europe are examples of why you can't have both a strong Middle Class and a clean environment, as long as other places exist without environmental protections.

I tend to think that the new Middle Class jobs in what were once Third World nations, and are today new Second World nations, will also be lost to automation as the governments of these places respond to rapid environmental damage and introduce environmental protections.

OTOH, those places are not the same as the Western First World nations of the USA and Europe. They will evolve differently.

As to whether Donald Trump's 25% steel import tariff, or his 10% aluminum import tariff, plus whatever he does with regard to trade protections going forward, will benefit or harm this nation - I could not begin to guess.

However, it is interesting that Trump, a lifelong Liberal NYC Democrat, chose Republican vestments and completely gutted the Democratic Party of the Labor Union constituencies that were once a major part of that party, and will no longer be for the forseeable future. It is as sweeping a political change as were the "Camelot" reforms of the Kennedy/Shriver clan in the 1960s. Most people have not yet recognized this, and will feel resistence to this concept because of their contempt for Trump the man. But that does not make it any less true.

[onlooker]

Kaiser, by citing those places that do not have any environmental laws or very lax ones, you make my case. The mecca for Manufacturing did not become China by accident. In addition to human labor being dirt cheap, China has not protected its environment and thus could woe Corporations to set up factories and such there.

As for a grand conspiracy. Well, without getting into the Cabal or Illuminanti haha, I do believe people in high places knew exactly what they were doing. Witness right after WWII, the Council on foreign relations, the Bildernberg Group, Project for a New American Century. All these and other groups and meetings do seem to have been intended to map out the contours of Globalization. Then of course were the institutions I mentioned like the World Bank etc. which do seem like a deliberate attempt to hold sway over the planet to the benefit of the rich countries and especially the Corporations.
What is striking to me now, is we are beginning to see a rupture in all that and a general descent in how USA and Europe are faring. This is due to the relative strengthening of the BRICS vis-a-vis the Western countries especially the US and other factors as well. And in general it seems that policies by our own govt and our business community are at the very least weaking the American Middle Class if not outright gutting it. If these moves by Trump are true perhaps this administration is attempting to stem this downward tide and fortify American jobs and prospects.

[KaiserJeep]

Sorry, I read your second paragraph three times, and I cannot tell whether you meant to say "descent" or "dissent" from the context. It changes the meaning of what you said.

[onlooker]

Sorry, I read your second paragraph three times, and I cannot tell whether you meant to say "descent" or "dissent" from the context. It changes the meaning of what you said.

Descent ie. going down

[Outcast_Searcher]

Guys, I recommend a book "When Corporations Rule the World" by David Korten as well as the "The Case against Globalization".

Look at the Amazon reviews of this book. It's not surprising onlooker is for far left wing "magical solutions" to problems, but they have little to do with solving real world economic problems, unless making everybody poorer is a solution. (i.e. Bernie Sanders type solutions with nonsensical economics will fix everything.) At least this is consistent with your other economic claims of fast crash doom, re accuracy.

[Newfie]

Outcast,
Please be more specific, what exactly is wrong with that point of view?

[Outcast_Searcher]

Outcast,
Please be more specific, what exactly is wrong with that point of view?

Taking wealth from earner X and giving it to non-earner Y doesn't create wealth.

It disincentivizes work and creates inefficiency. It's been quite good for buying votes, but it doesn't produce needed products or wealth, it just redistributes wealth.

Note that this is true regardless of intentions (good or bad).

Arguing endlessly for more and more of that (the general position of the far left) is just an argument to make it worse.

Now, it may be the easiest or most convenient solution. But it doesn't make it a GOOD solution.