The steel industry and steel stocks both cheer today’s news that Trump will take action against Chinese steel dumping.
Bloomberg exaggerates the near-term effect, without bothering to consider the long-term effect in its report Trump’s Antidumping Promise Ignites World-Beating Steel Rally.
West Chester, Ohio-based AK Steel jumped 6.7 percent at 12:26 p.m. in New York, while Pittsburgh-based U.S. Steel rose 5.7 percent. They were the two best performers in the Bloomberg World Iron/Steel Index, which gained 0.4 percent.
On Wednesday, President Donald Trump said his administration will take measures “very soon” to stop foreign firms from selling steel in the U.S. at artificially low prices. A day later, his Commerce Secretary Wilbur Ross said that if an investigation finds imports represent a security risk, recommendations could include higher tariffs, quotas or a quota-tariff hybrid for “particular products from particular countries.”
The administration is looking into whether an influx of foreign steel and aluminum is damaging U.S. manufacturers severely enough to threaten national security.
The intent of such policies is widely seen as addressing excess steel capacity from China. However, it has raised concern from other American trade partners, including Canada which exports aluminum to the U.S. Chicago-based Century Aluminum Co. surged 9.3 percent.
China has defended its growing presence in overseas steel markets, with Premier Li Keqiang saying overcapacity isn’t the fault of one single country. The nation — which has argued that volume of Chinese steel shipments to the U.S. has fallen since 2015 — will use the WTO’s dispute-settlement mechanism to protect its interests.
Steel is Everywhere
The report Uses of Steel Materials in America: A History by Mid City Steel sums things up nicely: “Steel is everywhere”.
- Steel is used as a major component in tools, machines, appliances, weapons, automobiles, buildings, ships, infrastructure, appliances and much more.
- Most modern structures, such as skyscrapers, stadiums, airports and bridges, are created with a durable steel skeleton. Even structures that use concrete also use steel as a reinforcing material.
- Steel is used in many different types of vehicles and appliances.
- Steel is used in basic construction materials, due to its durability and strength. Some of those materials include screws, nails and bolts.
- Steel is used in industries, such as mining, pipeline transport, aerospace, shipbuilding and heavy equipment design.
- Steel is also found in other common materials, such as basic tools, steel wool and personal armored vests for security and law enforcement.
- In addition to practical uses, steel is also employed in artistic uses, such as sculptures, framing and display structures.
Expect Job Losses
Steel companies cheer the news. Everyone else loses. It is a damn foolish tradeoff to raise prices everywhere in a desperate attempt to save steel jobs.
Trump will not save a single job with this action. Automakers are already struggling. Houses are already overpriced and unaffordable. Toll road charges are high enough already.
Whatever jobs the tariffs or quotas “save”, many more jobs will be lost in industries that use steel.
Trump does not care, either because he cannot think or because he is beholden to the rust belt that got him elected.
I lean more heavily toward the idea that Trump cannot think. It’s highly likely Trump is not beholden to anyone or anything but his own ego.
Mike “Mish” Shedlock
Conscience of a Conservative said:
After the U.S. auto industry complains that higher steel prices hurt them, Trump will simply attempt to limit foreign auto imports. Simple problem as far as Trump is concerned. To a hammer every problem looks like a nail
I support what Trump did. Action was necessary to turn the ship around. At the very least we’ll see for certain what placing restrictions on foreign imports has on our economy. At present no one really knows. So I view this as an experiment. It may very well bring many jobs back to America. And we need those manufacturing jobs badly. Manufacturing made us the superpower that we are. And since millions of our jobs have been off-shored – I believe our economy has suffered greatly as a result.
The jury is out. Be patient. Give it some time. This may be one of the best things a President has done for America in decades.
Victor Adam Smith said:
From what I know, Chinese steel is crap.
Besides today’s autos use less steel than evah.
Insanity: To repeat the same thing over and over again and expect a different result. This has been tried before and always ended badly. Smoot Harley during the depression.
Conscience of a Conservative said:
manufacturing consumes steel. it does not produce steel. raising the price of steel in the u.s. will not bring back manufacturing jobs. in fact it will do the complete opposite by making it more expensive to produce in the u.s.
But he has that thing with Steel, so don’t worry.
Automakers are already struggling – Due to a taxpayer bailout that destroyed generations of contract law, protection of insane unions contracts and cheap and easy obama credit in which anyone who could fog a mirror could get an auto loan.
Houses are already overpriced and unaffordable. – Housing is in a bubble. Easy and cheap obama money and a near nationalizing of the mortgage market. The obama appointment of Mel Watts is all you need to google.
Toll road charges are high enough already. To pay for out of control public union pensions.
How is ANY of this the fault of Trump??
None of it is.
“I lean more heavily toward the idea that Trump cannot think. It’s highly likely Trump is not beholden to anyone or anything but his own ego.”
Really? He won what is probably the toughest primary in the history of the republic. Then went on to beat the fake news endorsed candidate against all odds and being outspent 4:1. But he can’t think.
And then went to actually keep his campaign promises. I guess that is ego to you. Much better to have a candidate lie to you and then break every campaign promise (close GITMO, you like your doctor, you can keep your doctor, each family will save $2500/year in health care costs, etc.)
Trump thinks all right. And he is going to win in another landslide in 2020.
With democrats screaming every step of the way.
Maybe Mish needs to think and do some math before writing an article. Steel isn’t the cost that drives manufacturing out of the US.
Steel cost is a small amount of the cost of a car and the incremental increase is minimal.
a major portion of steel in the US is recycled and the biggest driver of cost is scrap prices. Scrap prices were high as the Chinese were buying scarp for export and inflating the cost of scrap and therefore raw steel.
Let’s see what steel pricing is without Chinese intervention.
Chinese steel mills are on average newer
Chinese wages lower
Chinese pollution higher
Does not matter
If China wanted to give us steel for free we should take it. Prices of everything would drop, standards of living would go up. Of course, China cannot and would not give away free steel to the world for long. Its economy would inflate, then crash. So people come up with this mythical dumping bull sh*t which in reality means inability to compete with the rest of the world.
And some of what you right is beyond stupid. China is buying scrap steel so prices are high. Then dumping it so prices are low. Get real.
Finally, no one should give a damn about Chinese “intervention”. Who cares? Why? All that matters is the final price. Everyone who uses steel benefits from lower prices do they not?
Are you one of the fools who likes to get less for his money? That’s what it comes down to doesn’t it? People want more for THEIR money, but they want everyone else to get less.
Mish, I agree with you that everyone benefits from lower prices given a fixed amount of purchasing power. However, a country cannot pass laws mandating minimum work standards, pollution standards, etc., and be completely numb to the loss of production as everything moves overseas where labor is cheap and environmental standards are lax. Long term, the end result is a loss of purchasing power and wealth for the country with higher living standards. That progression might not be noticed while debts are first racked up, but eventually the imbalance causes problems that cannot be ignored as everyone in the country with high wages becomes unemployed, yes? If a sovereign country has minimum standards that add costs then that country is cutting its own throat long term if it does not also regulate trade in some way with others that do not follow the same standards. Don’t get me wrong. I want low prices. All I am saying is that local business regulations and foreign trade policies need to be matched.
Jarhead John said:
Mish..We currently …all of us…are fools getting less for our money…Corporate America now survives with planned obsolescence on steroids…I hope you don’t need me to provide copious examples…
I buy steel everyday. To hear from someone that sits behind a desk and couldn’t build anything tell me how I benefit is pretty funny. I won’t spend time telling you how your job or “what’s good for you”.
The new US mills were designed with scrap as the input. Look up Nucor if you wish to learn something.
A country cannot be prosperous if it can’t build anything. We can’t have a service economy and expect to have a vibrant middle class.
Also you said “And some of what you right is beyond stupid”. I didn’t say they do these at the same time. Look at a chart of steel pricing. The volatility in the market has been very high for the last 10 -15 years. At times when China was building, they were purchasing scrap here and driving up prices. That hurts our industries as most US based business relationships can’t sustain price adjustments at that speed. Then things reverse and they dump.Sorry to have confused you with timing.
You have a very short term view. Competitors decide that If we drive your basic industries out (manufacturing), we own you and hollow out your country.That is a very sensible position for them to take..
When the Fed intervenes in markets, you seem to think that is bad? Why? If the price of money goes down, everyone benefits? If the gave away money, we would be even richer! (sarc)
I am one of the “fools” that thinks that the volatility in prices for basic commodities puts producers at a great disadvantage and allows for financial manipulators to prosper.
I guess stable prices are the wish of fools. Better to have prices moving up and down by factors of 2. Much easier that way to speculate and create wealth rather than build a cohesive society.
Just so Mish does not think me a complete idiot, I should point out that I was suggesting local business policies need to be matched with foreign trade policies overall. It is one thing to illustrate that benefit outweighs cost if a foreign country provides cheap steel to all comers in perpetuity. It is quite another for a country to systematically enact policies that make local production more expensive relative to other jurisdictions without thoughtful adjustments that encourage productive businesses to stay local and not become foreign businesses.
Victor Adam Smith said:
Mathew isn’t labor the biggest cost – for auto production in the U.S.?
I would doubt that labor is. Mostly parts from suppliers although for GM and Ford, it may be retiree healthcare premiums!
And when restrictions go global , commerce comes to a screeching halt. PS manufacturing jobs are not coming back. World events favored greatly US at the end of world war 2, but that is over.
China, Germany and Japan has massive restrictions on trade that could harm their manufacturing sector.
Didn’t seem to slow them down…
Jon Sellers said:
I don’t understand the desire for manufacturing. It’s dull, repetitive work. The only reason it pays better than retail is because it’s easy to unionize factories (lots of people in a small area).
If retail were union, everyone would be bitching about Amazon taking away those good retail jobs. It doesn’t matter if manufacturing comes back. The unions aren’t. Most manufacturing jobs these days pay $9.00/hour.
You might want to know something about a subject or at least spend 2 minutes of research before you post.
“Wages in Manufacturing in the United States increased to 20.78 USD/Hour in May from 20.76 USD/Hour in April of 2017.”
Jon Sellers said:
Those numbers are wildly inflated due to historic manufacturing union jobs in the Steel, Auto and defense industries.
Go look up non-union manufacturing job salaries.
Alex Spencer said:
I’ve been waiting to get my hands on some so called dumped steel for some home repairs. Steel roofing panels haven’t dropped to super low price yet. I guess now they will not any time soon. Maybe I’ll use some wood siding instead.
Sure. However by importing iron/steel you are putting @ 40 to 50 bn yearly ( pls. correct if wrong) into foreign hands that will compete with you, for what you own . You are also building dependency on foreign supply and exporting quality control.
Is that what you want?
If you double the domestic price and have no imports, an extra 50 bn gets put into the hands of Americans, and the consumer pays for that. However the readjustment is such that that 50 bn extra will go back into the economy via more US steelworkers spending.
Is that what you want?
‘All else being equal’ it is political and social readjustment.
For what it isn’t worth, that extra 50 bn is 0.003 of GDP, if I typed in all those 00000000000000000000000000000000000000 correctly.
Jarhead John said:
Mish…How about some production numbers in your missive…Total global crude steel production in 2016 was 1,630 million tons…of which China produced 808.4 million tons(World Steel .Org…World Steel Association). The United States was fourth in production behind China, Japan and India at 78.5 million tons…It is imperative to maintain a prosperous indigenous steel industry to maintain our national security…The Chinese, with 50 percent of global steel production sure look like spoilers to me…
Victor Adam Smith said:
Barry Rose said:
Mish – Iâm surprised at your knee-jerk reaction. You typically think these things through.
How many times has Trump said he was going to do something, well-advertised in the media, and gotten people stirred up? Then he does just the opposite. Look at NAFTA, look at N Korea (to name just 2) and the Wall that will never be built. He will end up having this issue negotiated away – thatâs how he operates. He thrives on encouraging his voter base & pissing off his opposition publically. In the end, all will be well again: his voter base will have the âwarm & fuzziesâ and his opposition will still be pissed off, whether or not anything gets done.
I personally think he loves to jerk everyoneâs chain while standing in the spotlight.
Barry Rose, CBF
Diamond Plastics Corporation
âWe are what we repeatedly do. Excellence, then, is not an act but a habit.â ~ Aristotle
Randall Garlington said:
That quote tagline is not from Aristotle. The quote is from Will Durant
Steel is steel is steel, until it isn’t. Any machinist, any metal fabricator, any structural engineer will tell you that not all steel is the same. Yet how many economists and financial annalists are convinced that there is not an ounce worth of difference? Ever hear of counterfeit parts? Something as simple as a steel bolt with a certain tensile strength, with a certain sheer factor, with a certain heat treatment, a bolt that must withstand certain stresses, the lives of which many people may depend upon can be and has been counterfeited and sold as the higher price good. Where have so many of these simple bolts come from? I will give you one guess. My god, people, different steels have different properties and uses. Yet here it is, someone declares that American workers will lose as a result of import duties on various steels. I don’t expect financial annalists to know the difference between various grades of steel, it is not their expertise. But to rail against tariffs in ignorance of the quality of the products that are imported is about as stupid as one can get. If a builder used poorly made steel cement re-enforcing rods for high rise construction what is the likely effect when it is discovered that proper care was not taken to insure that the specified steel was not used because cheap inferior imports were used in the name of free trade? Just as making the assumption that all apples are the same, making the assumption all steels are the same is the same asinine lack of logic. Will Trump’s curb of Chinese steel really hurt the country? That is doubtful because what we receive is not always the specified quality. and no customs inspector at dockside has the knowledge nor the equipment to test the imported steel. this problem has been a factor going on ten years when I first heard of the quality problem. If your need is low quality low carbon steel, then China is your supplier and can cut your cost. But beyond that, well, you get what you pay for. This is a piss poor example of the greatness of free trade.
Medex Man said:
I was also surprised that Mish completely ignored the quality problems in Chinese steel (actually a lot of Chinese products).
This is not an example of free trade. Its an example of selling a defective product at a 5% discount, while telling the buyer its not defective.
False advertising? Or just poor quality control? Not sure, but its definitely not free trade
Undoubtedly we will all be richer when we no longer have jobs.
Look at our limited job growth. It is NOT either full time or well paid. We can continue to repeat to ourselves of how we are “winning” by duping other nations into accepting our dollars and debt in payment for their very real production, but only an IDIOT would think this either sustainable or will end well.
We will wait (as always) until things are unavoidably obvious and once we are universally assured of our inevitable destruction, only then will the TRUTH be accepted….too late.
We know what is dangerous even though we can always defy those odds in our minds, convinced that WE are special, that WE are different. We can smoke while driving at excessive speed, drunk on our ass, fully convinced of our invincibility, and when the inevitable happens (and it WILL) it will STILL be called an “accident”.
We are not this stupid. We know in any real world life is only sustained by productivity…..or theft. We also know that there are consequences. What Mish professes is modern economic lunacy, the extol of more “something for nothing” that while feeling damn good in the short run will have horrible overhang that could last many decades.
The economy is about perception, most specifically perceptions of CONFIDENCE, and while Mish’s theories support this confidence that we can have it all for free, for virtually nothing, (even a small child knows EVERYTHING has a cost) it is a confidence based upon NOTHING, like every failed economic scheme that has come before it. It is the very definition of fraud, of a scam, of any number of acts of deception to gain.
“Commerce Secretary Wilbur Ross said that if an investigation finds imports represent a security risk, recommendations could include higher tariffs, quotas or a quota-tariff hybrid for “particular products from particular countries.”
Gee I wonder why no one tried that any sooner…
O wait never mind:
“In an era supposedly defined by growing belief in the sanctity of the free market, the US government proved pragmatic. In 1977 and again in 1979 President Jimmy Carter’s administration established minimum prices at which foreign-produced steel could be sold. In 1984, when it seemed as if the whole industry was on the brink of extinction the Reagan administration tightened America’s trade policies further by negotiating quotas with foreign countries.”
And yet the big mills continued to close, mostly because demand dried up. The big skyscrapers, interstates and airports were for the most part completed by the 70s. Cars got smaller. Vietnam was over and the military was scraping not buying. Consumer goods were made of plastic instead of metal. What little new construction that was happening was in the ‘burbs with smaller buildings and retail spaces (malls) that were very open and extremely lightweight construction. Even the sports stadiums were done by then (although many of them were knocked down in the 1990s and 2000s).
The factory worker needed a visible scapegoat, and that was Japan. Far harder to come to the realization that your job, that you’ve put your whole life and identity into, isn’t necessary. Something I’m quickly coming to terms with myself. My industry (cable TV/Internet) is going through a major shift and I’ll probably be unnecessary sometime in the next 5 years, at least I hope I’m around that long. It hurts, and I could try to blame someone, but Moore’s law is really the root cause of the shift. I hope I’m able to get into another career, but it will be difficult at my age.
Nice realistic comment
I suspect you will land on your feet because you are thinking, not whining.
Good Luck to you.
What will be swell is when as parents we discover that foreign children are smarter and simply better behaved than their own and consequently decide to abandon our own children for these far better foreign ones.
What? You mean we are supposed to CARE?
We apparently don’t care about our families and neighbors because the ONLY thing important is the best deal. The fact that our jobs are being eliminated because of our OWN choices, forcing many to accept significant loss of income and living standards, is, I suppose, all good and fine because it’s progress, right? And better still, while many are losing out, some, the few at the top of the financial pyramid, are actually profiting from this handsomely.
One question though.
If our government STOPPED wealth transfer, ENDED all entitlements provided to the non working and low wage part time workers, what would our economy look like then? Would our old timey notion of actually working for a living hold any more sway? Would we be so accepting of our transition to the “new world order” of buying increasingly more stuff from foreign sources with debt and baseless currency, if we found that wecould afford less and less. Maybe next up will be wage AND price controls. We can destroy our financial foundations and then jump to the next stage of progressivism, complete government control. We already see this in healthcare, where continual interventions in anything even vaguely looking like “markets” has created a demand for even more government intervention (control). Make no mistake. What we see RIGHT NOW is not free markets, it is the result of government intervention. The ONLY government intervention that they are unwilling to impose are those that might actually work.
Is there any wonderment WHY with so many in government willing to impose virtually infinite means of control, even price and wage controls, that virtually NONE want protectionism? Not only not want it, but object to even its mention, and a disparagement that until Trump was unmatched.
Just a question.
Somewhat off topic, although discusses jobs and factory work:
The Rise of the Machines – Why Automation is Different this Time
So they have the ability to produce animation that would have taken Walt Disney an army of animators months to produce with a dozen people and they’re worried about the future. The funny thing about this video is at the end they make the pitch for contributing to keep them fed. Huh. Sounds more like they should be worried about YouTube’s monetization policy and how it just changed without warning (and on a pretty flimsy justification) than robots taking away jobs.
None of OUR jobs are under threat, it’s only everyone else, you know, those worthless unskilled types doing jobs that ANYBODY could do and no one really wants to do. And the LUCKY thing is, that those few of us worthy of employment, the SMART ONES, will have to subsidize ALL of those worthless redundant types from our income.
Unless, of course you are assuming that the couple of dozen or so mega corporations who end up owning all technology, are simply going to give it away from the goodness of their hearts. I’m sure they will be happy to feed us and house us and provide us the latest cool gadget to occupy our time so we wont WANT for anything. Utopia, right?
Why are we pretending that technology is some natural evolution when we KNOW that all of this is funded by money created from nothing that is ultimately backed by YOU and ME. They are creating MASSIVE debt…hundreds of trillions of dollars that is used to develop and market this job killing technology….and once it has fully soaked in, there will be not nearly enough people working…EARNING to pay for any of it. They are loaning us our own money (money that is created by our government is a promissory note with OUR name on it) to buy their production, to build their factories and develop the technology to make us absolutely redundant, and THAT my friends, is NOT sustainable, thus will NOT be.
It is absurd to believe technology is NOT natural evolution.
History proves it is.
That Government is artificially boosting it now due to monetary creation is another matter.
Yes, governments artificially create winners and losers too.
But advancement always marches on. The government cannot stop it.
How can it be natural evolution if you admit that the government is artificially “boosting” the economy. Further, is it natural evolution that provides markets for imported consumables through income redistribution….creating millions of “consumers” who in a free and natural market would be starving in the streets potentially? And debt. Seriously, is there anything natural about this huge level of debt that funds consumption as well as very cheap funding for corporate development of job eliminating technology?
This is an evolutionary house of cards.
The government is propping up prices in a deflationary world. They also appoint FED governors who are in favor of loose monetary policy and artificially low interest rates. Notice that most inflation happens in high regulation industries, like housing and automotive (the exception might be telecommunications, but even there more consumer choice means lower prices over time even as the product becomes more of a commodity). Yes, there are people using revolving credit for day to day living. But far more people are forced into extremely long mortgages and automobile loans just because paying cash is not possible. Then they start playing the re-fi game and it just gets worse, dipping into savings today to reduce their monthly payout without realizing they just kicked the can out another decade or so.
Technology isn’t about making stuff for rich people, it’s about making poor people’s lives easier and more productive. Donald Trump had a chauffeur, pilot, secretaries, personal chief and golf pro at his disposal all the time before he moved into the Whitehouse. For him the Whitehouse is probably a step down in lifestyle. While my smartphone isn’t a secretary, it does the basics fairly well. I can watch hours of instructional videos showing me how to improve my hobbies any time day or night. Soon my car-on-demand service will drive me wherever and whenever I want for a fraction of the ownership cost of a vehicle. And there are plenty of appliances that make food prep much simpler than ever, with a far greater chance of success, even with complex dishes (not to mention the Internet has finally made the online cookbook a reality).
A few years ago they had to redefine what it meant to be living in poverty in the US. Apparently having a refrigerator and microwave oven isn’t enough to move you up the ladder. I’m sure a TV and smartphone won’t do it either. The percentage of income spent on food is at an all-time low, so low that eating in restaurants all the time is a viable (but not recommended) option. If I had a choice of being lower middle class in the 1950s and living in “poverty” today I might have to think about it for a minute. These days it is much easier to live well and still below your means.
The downside is that saving money is a joke. But if we are in a hyper-deflation super cycle even the .1% interest on my savings account shouldn’t matter. Except that problem of paying back debt with now deflated currency. Big problem that.
And let’s all recognize that the vast majority of species on this planet have been the victims of evolution. Maybe we shouldn’t be so quick to jump in marching line with it in every case.
Apple’s app store generated $20 billion in revenue in 2016:
Since the opening of the app store $60 billion has been paid out to developers. That’s a pretty big chunk of money, and not all of it was Pokemon Go.
Last week Apple held their annual worldwide developer conference. Most of the tech “press” put out stories about the hardware, because that’s what they seem to be good at. But that’s not what the WWDC is about. It is about getting developers excited about new features and to inform them as to what changes will be in the works for the new version of the operating systems. If Apple doesn’t do this, people will be less inclined to write software for their products, and we all know that software drives hardware.
If someone corners the market on something like 3D printing or small CNC mills, they’ll do it by making it easy for people to develop products using their systems, helping to promote their products, and building a relationship with the designers and developers. Companies like Adafruit and Sparkfun are selling electronics online in a way that includes a lot of education and community when designing a project. Companies like Seeedstudio and expresspcb will take your circuit and do markup and layout, and even build your circuit board for you. Along the way they’ll help you with advice and a community that will help you succeed. The only thing missing is the “app store.”
Lisa Bettany (https://en.wikipedia.org/wiki/Lisa_Bettany) is a good example of someone who was able to take advantage of the new way. She was a photographer and model who developed one of the first apps to control the iPhone camera. She’s now an entrepreneur. Her app is used all the time by people who want to take better pictures. I would imagine some realtors use it to take better pictures of lower cost property that doesn’t warrant a professional photographer.
Adam Curry is rolling out the Podcaster Pro (https://www.indiegogo.com/projects/podcaster-pro-by-adam-curry-podcast-audio#/). This is a mixer and controller for running an audio podcast. A team of about 4 people are building it. Still too soon to tell if it will get funded but it wasn’t that long ago that this wouldn’t have been possible only because the scale wasn’t there, even with global distribution. RCA would never build this product. Sony might have built it, but it would be $20,000 and only sold through broadcast sales channels.
Now consider the modern automobiles. Instead of greater customization, cars are becoming static devices, harder and harder to change and adapt. Most manufacturers won’t honor a warranty claim if the owner makes changes to the ECM software. In many states it is illegal to remove parts of the exhaust in order to improve performance. There are regulations for every part of a vehicle, from the door handles (ADA compliance) to the steering wheel, to the strength of the roof. Cars are sold with “packages,” meaning if you want a sunroof, you’ll have to take the bigger wheels and nav system too. And that nav system is locked in by the manufacturer even though it might be running on Android. It’s no wonder kids don’t want to buy them. The exact opposite is the motorcycle, where custom shops can build a complete bike out of off the shelf components and deliver a 100% individualized bike. Even buying a stock bike it is pretty easy to customize. People hate their cars and love their motorcycles, not to hard to understand why.
Mish, Let’s take your position to the extreme. What if the Chinese told us to shut down our factories, our farms, our pharmaceutical industry, our oil and gas production because they would supply all of it to us for free, I guess you would take that deal? Eventually we would all end up as slaves.
What if your mother told you to kill yourself?
Hypothetical and nonsensical questions deserve no answer.
China would not and could not do what you suggest
To that I say BULLSHIT!
What the hell is DUMPING if not exactly that. China would not provide these products for free indefinitely as we all understand predatory trade, the destruction of competition to own 100% market share. We see this daily where we can buy product made in China that we Americans cannot even buy the materials for at their price, much less manufacture it. These people are not fooling around. Their prices are so cheap no one but a suicidal idiot would attempt to compete….and they KNOW this.
And seriously Mish. Look around you. People are fully engaged in self destructive actions every day, and to pretend that for some reason our purchasing and consumption habits are sacrosanct is just stupid. We ARE behaving in a self destructive way in our purchasing practices, and just as with all other destructive actions, it is predicated by short term pleasure and reward. We are killing ourselves in endless ways and buying cheap foreign goods is no different…and those profiting from it are full on pressing the case that it is our RIGHT, our pleasure to do this.
Why is it that we can push the notion of absolute surveillance, wage and price controls, nationalized healthcare and virtually any other government intervention and control, yet PROTECTIONISM is such a dirty world that it shares the same treatment as the “N” word? Does it step on too many interests? It is so verboten we can’t even suggest that it be practiced individually through freedom of choice. It is treated like racism where we as individuals cannot choose as it would be non-progressive, xenophobic, racist, nationalistic (think Nazi) or any number of politically correct “exclusionaries”.
Surrender ourselves to the collective. They will protect us. They will create policies that ALWAYS put our interests above everything else…except corporate profits and their ability to control. Even though humans have existed, and to some level prospered on this planet, it is apparent today, after decades of study, that our ONLY savior is globalism and the unrestricted trade (that for some reason only America cannot tariff imports) spreading OUR prosperity with the world.
What is the mean world individual income again??? Spreading the wealth, one trade deal at a time.
You are making assumptions about trade that are false. If the Chinese dump they are giving us a gift. It will hurt them economically in the long run if they subsidize exports. Industries may be hurt in the short run but the theory of creative destruction takes effect. The jobs lost will be deployed in more economically productive industries. Also you are assuming that if steels mills go bust it would be impossible to resume domestic steel production. Not true. Trade protectionism has never worked and now everyone is saying this time is different. Where have I heard this before.
Wrong on many counts.
Predatory trade is designed to destroy competition and a nation that will use debt and money creation as a tool to break other competitors IS a predator. Its goal is to OWN the market place so that they can RAISE prices once competition is gone, and as I have repeatedly said, our producers cannot easily reconstruct their capacities as the workforce….the skills, experience and MOTIVATION to do these jobs will be gone. There is a reason WHY we have fought monopolistic organizations…they are pernicious and a danger to our freedom.
Further, exactly HOW MANY of these new economically productive jobs have been created? Are you counting baristas in this metric? Look at the jobs that have been created, while simply ignoring that the numbers are fictional from a rational basis as a person who loses one full time job to only find two low pay part time jobs counts as a gain in employment, and those pushed out and subsidized are not even counted as unemployed.
Lastly, your contention that protectionism has never worked ignores history. America, a the turn of the twentieth century, was absolutely protectionist with a strong economy, a positive trade balance and 90% of the federal government funded by this protectionist taxation that taxed FOREIGN PRODUCTION as apposed to taxing ONLY American businesses, American labor and American ASSETS.
There are REASONS why we are seeing what we are seeing and it is NOT evolution, anymore than an antibiotic resistant organism is evolution. We are doing this to ourselves.
The Chinese are using debt as a tool for competitive advantage, the same as many corporations do. They borrow and invest heavily to buy technical advantage as well as simple market share by buying up their competition or just running them out of business by selling below true cost. This is what China is doing, and while we may think that China will fail due to debt default, I believe they know they are not under any such threat because for that to happen, it would call everyone’s debt into question, and the entire world is bankrupt, with only the unwillingness to throw stones at each other glass houses keeping their fake CONFIDENCE afloat.
And besides, there are PLENTY of Americans currently profiting handsomely from the current paradigm.
“he is beholden to the rust belt that got him elected”
Not what you prefer to believe, but probably the truth. Those “irredeemable deplorables,” not the Russians, are what cost Hillary the election. Trump knows how to count. A symbolic action good for a few steel companies (tariff money goes directly to them, not to Treasury), and like with Bush II’s steel tariffs it will win votes and be abandoned when the “side effects” become apparent. Not worth losing sleep over.
Just history repeating itself, and Trump is looking to make it 8 years. With Schumer’s Deep State operatives busy trying to foment a coup, Trump has little choice but to keep ahead of the swamp creatures. As a builder, Trump used Chinese steel, but the ones who will suffer the most are Japan, Taiwan, South Korea, etc. But most people will not get beyond the headlines.
Trump, as a businessman, does what ALL surviving business people do, they use every cost advantage available and grease every wheel they can to get their deals done. Capitalism is an indiscriminate eating machine that only WE can control using our own values. If consumers refuse to consider their nation, neighbors or even their own job in consumption choices, why would we expect business or even government to do any different?
Expecting more from those we reward from our own personal weaknesses than we expect from ourselves is destined failure.
You can’t stop humans from thinking. For hundreds of years, humans have continually invented new and better machinery, equipment, technology, and processes. As Mish says, this is natural. Trying to stop it or turn back the clock is futile. The countries that embrace it will be the winners. The countries that fight it will be the losers.
YOU can’t MAKE them think either. Lets not pretend that our thinking (or not) is evolution, especially POSITIVE evolution. Much if not most of our actions are self destructive, be it our diets, addictions or driving habits, much less our spending. Markets, TECHNOLOGY, exists due to one thing, and that is our spending. We don’t CARE about our nation, our jobs, our neighbors or even families as we will buy the “good deal” every time without once considering any of them. But we WILL blame EVERYONE ELSE when shit goes sideways. It’s always someone else’s job that is lost, and when it is OURS, it is not our fault nor our neighbor’s or countrymen, it is the evil greedy business owner.