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How Trump’s steel tariffs have backfired spectacularly

By anonymous follow anonymous   2019 Jan 19, 11:40am 950 views   15 comments   watch   nsfw   quote   share    


White House trade team's crusade to help special interests has hurt not just the US economy as a whole but also industries they hoped to serve.

From the day he was confirmed by the Senate, the Trump administration’s top trade official has championed the cause of America’s steel industry.

But US Trade Representative Robert Lighthizer, who spent much of the past three decades at one Washington, DC law firm representing private sector interests in trade negotiations, has failed marvelously in his quixotic quest to revive crumbling US heavy industry.

Beyond the damage the protectionist trade policy has caused to the steel industry itself, which can be seen in plunging share prices, the metals duties have been a clear drag on the US economy as a whole. This was predicted by economists at the outset, and recent data suggests the forecasts were correct.

‘Embodiment of conflicts of interest’

So why did the administration’s cadre of protectionists, led by Lighthizer, pursue what were seen by many, including a reported majority of administration officials, as misguided policies?

“Robert Lighthizer is the embodiment of conflicts of interest,” Craig Holman, a specialist on government ethics at watchdog group Public Citizen wrote in an email to Asia Times.

“Thoroughly embedded in the interests of companies that are seeking trade deals, especially the steel industry, [Lighthizer] has now spun through the revolving door once again as Trump’s trade representative and is working on trade tariff policies that directly affect his former clients,” Holman said.

As economists at the Council on Foreign Relations write on Friday, despite steep tariffs slapped on imported metals, the US steel industry is not thriving. “It is reeling.”

“Steel prices have fallen back to pre-tariff levels. Employment is stagnant. The clearest sign that tariffs are not working, however, is the stock market,” Benn Steil and Benjamin Della Roca point out.

Shares of steelmakers have fallen by a whopping 22%, versus the modest 3% of the S&P 500 index.

The main reason for the decline, the economists conclude, was the downstream effects of tariffs slapped on Chinese goods. The tariffs on intermediate goods would push up prices for US-made consumer goods, and businesses would in turn produce less and buy less US steel, markets predicted.

Cash for US steel came at huge cost

US steel firms did gain a short-term benefit thanks to Trump’s policy, but it came at a huge cost to the US economy as a whole, an analysis from the Peterson Institute of International Economics (see below for link) published last month showed.

More: http://www.atimes.com/article/how-trumps-steel-tariffs-have-backfired-spectacularly/

Related: Analysis from the Peterson Institute - https://piie.com/blogs/trade-investment-policy-watch/steel-profits-gain-steel-users-pay-under-trumps-protectionism

#Tariffs #Steel #Economics


1   TrumpingTits   ignore (3)   2019 Jan 19, 12:38pm     ↓ dislike (0)   quote   flag        

Seems like the tariffs are working to me.

They were about screwing over China in the short term to get better trade terms in the long term. Or, failing that, just screwing over China.
2   HEYYOU   ignore (46)   2019 Jan 19, 2:15pm     ↓ dislike (0)   quote   flag        

Do I remember someone saying 35% tariffs?
Did Trump pocket all the pesos from Mexico?

"STOOPID! FUCKING! CUNTS!!!!"
Enough of the compliments.
3   NoCoupForYou   ignore (5)   2019 Jan 19, 2:41pm     ↓ dislike (0)   quote   flag        

China massively overproduced steel, Europe threw up huge trade barriers to prevent China dumping there, and wanted the US to be the sucker bagholder.

Thanks Trump!

If you really want to help America, unionize Amazon's slave warehouses.
5   marcus   ignore (12)   2019 Jan 19, 2:55pm     ↓ dislike (0)   quote   flag        

That looks like another lie to me. But I get it, you guys don't believe in facts.

Or maybe it's not a total lie. Just a assholish misuse of data. We had an epic crash and reset. If you start in 2010, the number of manufacturing jobs created under Obama far exceed those created the last couple years (supposedly attributable to Trump).



https://fred.stlouisfed.org/series/PRS30006013
6   marcus   ignore (12)   2019 Jan 19, 3:13pm     ↓ dislike (0)   quote   flag        

There are still more than 1 million less manufacturing jobs than there were at the end of 2007. By the way, that Fred chart uses an index with 100 (on index) tied to 2012.

It's the most accurate visual representation you will find of what's happened to manufacturing employment in the U.S. in the past 30 years.
7   marcus   ignore (12)   2019 Jan 19, 3:15pm     ↓ dislike (0)   quote   flag        

What's it like to use lies to sell your political viewpoint ? Do you know they are lies when you spread them ? I've never been able to imagine what that would be like.

Are right winger memes by definition always dishonest ? I guess it's a gullible base, and whatever it takes to get them to vote for politicians that will deliver what your overlords want?
8   NoCoupForYou   ignore (5)   2019 Jan 19, 3:19pm     ↓ dislike (0)   quote   flag        

marcus says
Or maybe it's not a total lie. Just a assholish misuse of data. We had an epic crash and reset. If you start in 2010, the number of manufacturing jobs created under Obama far exceed those created the last couple years (supposedly attributable to Trump).


Obama became President January 2009. Not 2010.

"B-b-but, it was Bush's economy until 2014! And it's still Obama's Economy right now!"
9   marcus   ignore (12)   2019 Jan 19, 3:33pm     ↓ dislike (0)   quote   flag        

TwoScoopsOfSpaceForce says
Obama became President January 2009. Not 2010.

"B-b-but, it was Bush's economy until 2014! And it's still Obama's Economy right now!"


I repeat:

marcus says
What's it like to use lies to sell your political viewpoint ? Do you know they are lies when you spread them ?


You can read graphs right ? Are the 2 numbers Booger posted misleading or not ? Have you tried honesty ?

Here is the exact time frame we're talking about.

10   anonymous   ignore (null)   2019 Feb 8, 7:57am     ↓ dislike (0)   quote   flag        

From the who didn't see this one coming ?

In steel heartland, no sign of tariff-driven renaissance - Gary, Indiana harbored hopes for a revival after President Trump imposed tariffs on steel imports and United States Steel planned a $750 million investment.

But it’s now clear those hopes will not translate into new steel jobs. (go figure huh?)

Last year, the city harbored hopes for a revival after President Donald Trump imposed tariffs on steel imports and the company planned a $750 million investment to modernize Gary Works, its largest North American plant.

But it’s now clear those hopes will not translate into new steel jobs, even after the city and state offered the firm a $47 million tax break package.

The whole point of the investment is to make the plant more efficient, so the incentives will help finance a project that city and company officials concede could ultimately result in job losses, not gains.

Gary’s dimmed hopes for a tariff-driven renaissance underscore how the policy has so far provided a windfall for U.S. steel firms but only a marginal benefit to workers and struggling steel towns.

Steel industry employment nationwide increased by 1,000 jobs to 83,400 between March, when tariffs where imposed, and November, according to the latest available data from the U.S. Bureau of Labor Statistics.

In a statement to Reuters, Trump’s Commerce Department called the 1.2 percent increase a “welcome change from decades of decline and layoffs” and said “many more” jobs would be created as planned industry investments and expansions are completed, without specifying how many.

“Improving efficiency is important and was one of the goals of the tariffs,” a department spokesman said of the Gary investment. “We are glad to see the American industry is making investments that will protect their long-term viability and ensure a strong domestic supply.”

The state of Indiana’s investment of $10 million in tax credits, along with $2 million in worker training grants, comes with the condition that U.S. Steel retain at least 3,875 jobs at Gary Works. But a state spokesperson declined comment on whether the company could still collect part of the incentives if the number of jobs falls below that threshold.

The city would get no guarantees of job retention for its bigger and longer-term commitment of property tax breaks, a benefit estimated at $35 million over 25 years. The details of both deals are still being finalized, officials said.

U.S. Steel Vice President Douglas Matthews acknowledged the modernization would cut costs and reliance on manual labor.

Productivity improvements would likely results in a “decreasing headcount over time,” he said.

But without the investment, “then the business is at risk, and then you put all the jobs at risk,” Matthews said in an interview.

U.S. Steel declined to comment about why it needed tax breaks to make its investment viable and declined to provide details about its negotiations with the city.

Gary’s deal with U.S. Steel is more like the 2016 deal Indiana cut with United Technologies Corp with the help of public pressure on the company from Trump. The firm agreed to retain at least 1,069 workers at its Carrier unit in Indianapolis instead of moving the jobs to Mexico, a deal that also included no new hires.

But the proposed Gary deal is much more expensive: While the state gave $7 million in tax breaks to United Technologies compared to the $47 the city and state have offered U.S. Steel.

Carrier has since laid off about 550 workers in two rounds of cuts, but has said it would maintain 1,100 workers.

Michael Hicks, a professor of Economics at Indiana’s Ball State University, has examined the impact of such tax breaks on the state’s public finances in the last decade. His study found that state incentives costing about $30,000 per job provided little benefit to Indiana’s economy or tax base.

More: 8 minute read - https://www.reuters.com/article/us-steel-gary-insight/u-s-steel-wins-tax-breaks-from-one-of-americas-poorest-cities-idUSKCN1PX17D
11   cunt   ignore (0)   2019 Feb 8, 8:25am     ↓ dislike (0)   quote   flag        

STOOPID! FUCKINHG! CUNTS!
12   APOCALYPSEFUCKisShostikovitch   ignore (49)   2019 Feb 8, 8:44am     ↓ dislike (0)   quote   flag        

By his tongue-lolling senescence and petulant cuntiness you will know him!
13   The_Weeping_Ayatollah   ignore (5)   2019 Feb 8, 9:08am     ↓ dislike (0)   quote   flag        

First they were screaming "tariffs are bad because steel prices will skyrocket". Now they scream "tariffs are bad because prices didn't rise".

#stupidcunts
14   anonymous   ignore (null)   2019 Feb 8, 9:29am     ↓ dislike (0)   quote   flag        

Hugolas_Madurez says
First they were screaming "tariffs are bad because steel prices will skyrocket". Now they scream "tariffs are bad because prices didn't rise


Was never screaming here myself.

Told everyone over and over U.S. Steel is one of the most mismanaged companies in the world, they are stuck with non competitive legacy plants and work contracts and those jobs aren't coming back.

Any productivity improvement will end up in job losses, not gains as the CEO finally admitted and which by the way Carrier acknowledged

As for the Granite City workers recalled - they are more or less safe until the next downturn and then all bets are off for the future of them as well as the facility.

Think Sparrows Point, Lehigh Valley etc. - gone, not coming back regardless of how much the base screams MAGA and Winning

If you think it's bad now - wait until the next downturn.

The steel industry will not be alone in the pain and suffering category and the jobs not coming back to plants that will not reopen again.

It was fun while it lasted though huh ?

Now say hello 3rd world, here we come because greedy fucks wouldn't invest to upgrade when they had the time to do so. We can safely eat everyone's else dust including in the tech sector.
15   The_Weeping_Ayatollah   ignore (5)   2019 Feb 8, 10:19am     ↓ dislike (0)   quote   flag        

Kakistocracy says
Was never screaming here myself.


There is a Russian proverb for this exact kind of situation: "the thief has a burning hat". Should be very familiar to you, our Russian friend.

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