The Real Reason for Trump’s Steel and Aluminum Tariffs

[expat_panama]

Mar 15, 2018 Martin Feldstein

The Trump administration's proposed tariffs on steel and aluminum imports will target China, but not the way most observers believe. For the US, the most important bilateral trade issue has nothing to do with the Chinese authorities' failure to reduce excess steel capacity, as promised, and stop subsidizing exports.

CAMBRIDGE – Like almost all economists and most policy analysts, I prefer low trade tariffs or no tariffs at all. How, then, can US President Donald Trump’s decision to impose substantial tariffs on imports of steel and aluminum be justified?

Trump no doubt sees potential political gains in steel- and aluminum-producing districts and in increasing the pressure on Canada and Mexico as his administration renegotiates the North American Free Trade Agreement. The European Union has announced plans to retaliate against US exports, but in the end the EU may negotiate – and agree to reduce current tariffs on US products that exceed US tariffs on European products.

But the real target of the steel and aluminum tariffs is China. The Chinese government has promised for years to reduce excess steel capacity, thereby cutting the surplus output that is sold to the United States at subsidized prices. Chinese policymakers have postponed doing so as a result of domestic pressure to protect China’s own steel and aluminum jobs. The US tariffs will balance those domestic pressures and increase the likelihood that China will accelerate the reduction in subsidized excess capacity.

Because the tariffs are being levied under a provision of US trade law that applies to national security, rather than dumping or import surges, it will be possible to exempt imports from military allies in NATO, as well as Japan and South Korea, focusing the tariffs on China...

more at https://www.project-syndicate.org/co...dstein-2018-03

fwiw, U.S. domestic steel price has seen much of a change because of the tariffs, but Chinese commodities are in chaos.

 

[william the wie]

Yeah, tariffs are the lesser evil in this case.

 

[MarathonMike]

The Tariff plan also includes penalties to combat China's blatant stealing of American Intellectual Property. I'm actually more interested in seeing how that aspect of the Tariffs play out.

 

[william the wie]

The protection of IP is the big one.

 

[Muhammed]

The Tariff plan also includes penalties to combat China's blatant stealing of American Intellectual Property. I'm actually more interested in seeing how that aspect of the Tariffs play out.

There's not much the USA can do about that without drastically reducing the number of student and work visas issued to the Chinese.

 

[Supposn]

The Tariff plan also includes penalties to combat China's blatant stealing of American Intellectual Property. I'm actually more interested in seeing how that aspect of the Tariffs play out.

There's not much the USA can do about that without drastically reducing the number of student and work visas issued to the Chinese.

Muhammed, I suppose MarathonMike, is referring to copyright or patent infringement; that's not espionage. Reducing the number of student and work visas issued to the Chinese would not significantly remedy or reduce incidences of such that thefts.

Respectfully, Supposn

 

[MarathonMike]

The Tariff plan also includes penalties to combat China's blatant stealing of American Intellectual Property. I'm actually more interested in seeing how that aspect of the Tariffs play out.

There's not much the USA can do about that without drastically reducing the number of student and work visas issued to the Chinese.

Muhammed, I suppose MarathonMike, is referring to copyright or patent infringement; that's not espionage. Reducing the number of student and work visas issued to the Chinese would not significantly remedy or reduce incidences of such that thefts.

Respectfully, Supposn

What Muhammed might be saying is that some number of Chinese here under work visa ARE engaged in espionage on behalf of the State. I believe that is true and it wouldn't take many of them to have a significant impact.

The Tariff plan also includes penalties to combat China's blatant stealing of American Intellectual Property. I'm actually more interested in seeing how that aspect of the Tariffs play out.

There's not much the USA can do about that without drastically reducing the number of student and work visas issued to the Chinese.

Muhammed, I suppose MarathonMike, is referring to copyright or patent infringement; that's not espionage. Reducing the number of student and work visas issued to the Chinese would not significantly remedy or reduce incidences of such that thefts.

Respectfully, Supposn

That's a good point, I think Muhammed might be saying that some the Chinese here under work visa ARE engaged in espionage for the government of China.

 

[expat_panama]

The Tariff plan also includes penalties to combat China's blatant stealing of American Intellectual Property. I'm actually more interested in seeing how that aspect of the Tariffs play out.

We've been hearing that quite a bit lately. China's already lowered a number of their taxes on U.S. goods before these steel/aluminum taxes so it'll be interesting to see if IntProp talks start up.

 

[william the wie]

Let's look at the other side of the hill

Limited exceptions to the one child policy

Mandatory retirement 55 for women, 60 for men

No friendly neighbors

Subject to both Typhoons and Earthquakes reducing damage from one increases damage from the other

Based on China's history the current Communist/Legalist dynasty is past its best if used by date.

Turning from China will be seen as turning towards either India or Japan.