CDZ Canada and Mexico will be hit Hardest by the Tariffs

[william the wie]

They are the biggest steel exporters to the US by a large margin. What will they put of the table to get tariff reductions? China is the 11th biggest steel exporter to the US so they don't much care. How hard will Trump squeeze our NAFTA partners?

 

[Mikeoxenormous]

They are the biggest steel exporters to the US by a large margin. What will they put of the table to get tariff reductions? China is the 11th biggest steel exporter to the US so they don't much care. How hard will Trump squeeze our NAFTA partners?

Maybe we can squeeze the shit out of Mexico to the point they don't send their shithole citizens here anymore?

 

[william the wie]

They are the biggest steel exporters to the US by a large margin. What will they put of the table to get tariff reductions? China is the 11th biggest steel exporter to the US so they don't much care. How hard will Trump squeeze our NAFTA partners?

Maybe we can squeeze the shit out of Mexico to the point they don't send their shithole citizens here anymore?

Dream on. The casualties in Mexico's wars on the cartels and their own flood of illegals are sky-rocketing. Mexico is not using hyperbole when it describes these conflicts as wars, low intensity wars, but still sure enough wars.

 

[usmbguest5318]

With Mexico, the U.S. has a trade surplus in steel. Yet another reason not to implement the announced tariff.

Be that as it may, the tariff ignores not only the basic economics of tariffs, but also the significance of what it means for an economy to be a mature one and a developing one. In the former economy, demand for raw materials like steel is relatively constant whereas in a developing one, the demand for such things is on the upswing.

Because the U.S. is a mature economy, while there may be incidental bumps in total demand for steel, barring some major new innovation that uses steel and of which developed economies are better positioned to avail themselves of it, non-domestic buyers of steel, particularly developing nations, will avail themselves of a U.S. steel tariff's price impacts to hasten their advance. Insofar as China is a developing economy, that's a terrible thing as goes the status of economic competition between China and the U.S. The tariff all but begs China to hasten its economic expansion, one that's powered by over 1.5B people, and do so without suffering any of the consequences of the tariff due to the fact that only about 2% of U.S. steel imports come from China.

Then there's the matter of the tariff having the greatest impact on Canada. Canada is the U.S.' largest buyer of U.S.-produced goods, dwarfing by huge margins all other nation's except Mexico, which is the second largest consumer of U.S. goods. Who deliberately implements a policy that adversely affects the two largest buyers of one's own products and the prices paid by consumers in one's own nation? Oh, Donald Trump does that. It's flat-out stupid to do so; even disregarding the mature vs. developing economy aspects, it's stupid.

Effects of a Tariff: Large Country

When a large importing country implements a tariff it will cause an increase in the price of the good on the domestic market and a decrease in the price in the rest of the world. But since Trump wants to impose the tariff on raw materials, it'll raise not only the price of steel and aluminum in the U.S., but also the price of everything made from that steel and aluminum.

As for who will bear the incidence of the tax/tariff, well, that depends on the elasticity of demand and the elasticity of supply for each given product class, and in some instances, each differentiable product.

 

[Toronado3800]

With Mexico, the U.S. has a trade surplus in steel. Yet another reason not to implement the announced tariff.

Be that as it may, the tariff ignores not only the basic economics of tariffs, but also the significance of what it means for an economy to be a mature one and a developing one. In the former economy, demand for raw materials like steel is relatively constant whereas in a developing one, the demand for such things is on the upswing.

Because the U.S. is a mature economy, while there may be incidental bumps in total demand for steel, barring some major new innovation that uses steel and of which developed economies are better positioned to avail themselves of it, non-domestic buyers of steel, particularly developing nations, will avail themselves of a U.S. steel tariff's price impacts to hasten their advance. Insofar as China is a developing economy, that's a terrible thing as goes the status of economic competition between China and the U.S. The tariff all but begs China to hasten its economic expansion, one that's powered by over 1.5B people, and do so without suffering any of the consequences of the tariff due to the fact that only about 2% of U.S. steel imports come from China.

Then there's the matter of the tariff having the greatest impact on Canada. Canada is the U.S.' largest buyer of U.S.-produced goods, dwarfing by huge margins all other nation's except Mexico, which is the second largest consumer of U.S. goods. Who deliberately implements a policy that adversely affects the two largest buyers of one's own products and the prices paid by consumers in one's own nation? Oh, Donald Trump does that. It's flat-out stupid to do so; even disregarding the mature vs. developing economy aspects, it's stupid.

Effects of a Tariff: Large Country

When a large importing country implements a tariff it will cause an increase in the price of the good on the domestic market and a decrease in the price in the rest of the world. But since Trump wants to impose the tariff on raw materials, it'll raise not only the price of steel and aluminum in the U.S., but also the price of everything made from that steel and aluminum.

As for who will bear the incidence of the tax/tariff, well, that depends on the elasticity of demand and the elasticity of supply for each given product class, and in some instances, each differentiable product.

I'm going to go a little bit into big government / Trump land on this one.

The tariff will probably raise the cost of many items I agree. It will however subsidize the domestic steel industry and should allow it to be more competitive.

For various big paranoia reasons I think it is a necessity to maintain the ability to produce our own planes.

Some random thoughts:

-I like your point about tariffs and mature economies btw. The word mature means a lot there as a rebuilding economy (as many were after WWII) has to do things differently.

-No one can be for the tariff and then pick on big government in general. Its like being for the Homestead Act but against big government.

 

[Picaro]

They are the biggest steel exporters to the US by a large margin. What will they put of the table to get tariff reductions? China is the 11th biggest steel exporter to the US so they don't much care. How hard will Trump squeeze our NAFTA partners?

While true, the bigger picture shows steel from Asia in general to be larger, and thus subject to Chinese interdiction of shipping, and of course the productions of specialty steels is also important strategically. Look up Korea, Japan, Taiwan, and Viet Nam. Depending on what month it is, I think Korea sells more to the U.S. Than Canada in many years.

As I said in another thread, steel companies and those manufacturers who import it at wholesale prices have never passed any cost savings on to consumers anyway, so any claims of 'massive price increases at the retail level will be bogus lies, and should be laughed at. Most companies befitting from the labor racketeering that falls under 'free trade' lies never pass on savings, either, and the same with domestic union busting; the lower labor costs never show up at the retail levels. So much for the 'free trade' mythology. I'm still waiting for all those big giant drops in the prices of meat when Saint Ronald of Reagan busted the meatpacking unions with bus loads of Mexican scabs in the 1980's. all the data I an find show a steady rise in wholesale prices, and a big reduction in the number of meatpacking companies, from something like 12 to 3, also thanks to Reagan's opposition to enforcing the anti-trust laws.

 

[Picaro]

Well, I see our resident pseudo-intellectual is of course clueless about steel as a product, and why steel makers of one line of steel will export their lines to other countries that also make steel and export theirs to us, and thinks it's all the same steel or something, no clue as to the varying ores, grades, quality, applications, etc. Also, Trump just threw out a place to start negotiations from, never said his rates will be permanent. He is spot on to want to renegotiate these lousy 'trade' treaties, of which incidentally few other countries even bother to comply with in the first place. You have to laugh at people who think posting meaningless graphs passes for insights; find a market trader who can't tell the difference between aluminum and orange juice and discussing it with him is a far better way to get a handle on it than some academic hubris.

 

[Picaro]

Off-topic, but has anybody ever noticed how Brazil is always under the radar when trade and economic issues come up? they might as well be invisible, despite being one of the global economic powerhouses, and in our own hemisphere. Brazil's imports are almost as large as Canada's.

 

[toobfreak]

They are the biggest steel exporters to the US by a large margin. What will they put of the table to get tariff reductions? China is the 11th biggest steel exporter to the US so they don't much care. How hard will Trump squeeze our NAFTA partners?

Man, you are just making them tariffs look better and better! Get ready to build that wall and watch Mexico pay for it!

 

[william the wie]

I'm a supporter of two walls.