Archives for May 2018

Canada is the largest supplier of both steel and aluminum to the United States, and the supply chains for many products snake back and forth across the border. The United Steelworkers union, which represents members in Canada as well as the United States, said the decision called “into serious question” the design and direction of the administration’s trade strategy.

“The regular chaos surrounding our flawed trade policies is undermining the ability to project a reasoned course and ensure that we can improve domestic production and employment,” the union said in a statement.

The Aluminum Association, the industry trade group, also said it was disappointed. Heidi Brock, the group’s president, said the tariffs would do little to address the larger issue of overcapacity in China “while potentially alienating allies and disrupting supply chains that more than 97 percent of U.S. aluminum industry jobs rely upon.”

The steel and aluminum tariffs already appear to be hurting construction companies, retailers and manufacturers — by raising their costs and injecting uncertainty into the price and availability of the metals going forward.

The Federal Reserve’s latest Beige Book, a collection of anecdotes about the health of regional economies, contains more than two dozen references to business fears that the administration’s trade policies, and the steel and aluminum tariffs in particular, would hurt sales and profits.

“These tariffs are hitting the wrong target,” said Representative Kevin Brady, Republican of Texas. “When it comes to unfairly traded steel and aluminum, Mexico, Canada and Europe are not the problem — China is.”

In a more pointed statement, Senator Ben Sasse, Republican of Nebraska, called the tariffs “dumb.”

“Europe, Canada and Mexico are not China, and you don’t treat allies the same way you treat opponents,” he said.

Article source: https://www.nytimes.com/2018/05/31/us/politics/trump-aluminum-steel-tariffs.html?partner=rss&emc=rss

Canada is the largest supplier of both steel and aluminum to the United States, and the supply chains for many products snake back and forth across the border. The United Steelworkers union, which represents members in Canada as well as the United States, said the decision called “into serious question” the design and direction of the administration’s trade strategy.

“The regular chaos surrounding our flawed trade policies is undermining the ability to project a reasoned course and ensure that we can improve domestic production and employment,” the union said in a statement.

The Aluminum Association, the industry trade group, also said it was disappointed. Heidi Brock, the group’s president, said the tariffs would do little to address the larger issue of overcapacity in China “while potentially alienating allies and disrupting supply chains that more than 97 percent of U.S. aluminum industry jobs rely upon.”

The steel and aluminum tariffs already appear to be hurting construction companies, retailers and manufacturers — by raising their costs and injecting uncertainty into the price and availability of the metals going forward.

The Federal Reserve’s latest Beige Book, a collection of anecdotes about the health of regional economies, contains more than two dozen references to business fears that the administration’s trade policies, and the steel and aluminum tariffs in particular, would hurt sales and profits.

“These tariffs are hitting the wrong target,” said Representative Kevin Brady, Republican of Texas. “When it comes to unfairly traded steel and aluminum, Mexico, Canada and Europe are not the problem — China is.”

In a more pointed statement, Senator Ben Sasse, Republican of Nebraska, called the tariffs “dumb.”

“Europe, Canada and Mexico are not China, and you don’t treat allies the same way you treat opponents,” he said.

Article source: https://www.nytimes.com/2018/05/31/us/politics/trump-aluminum-steel-tariffs.html?partner=rss&emc=rss

The administration first announced the tariffs back in early March, portraying them as an aggressive effort to fight the perfidious behavior of China and other countries to subsidize their domestic metals industries, undermining American national security.

Then, soon after they were announced, the administration gave exemptions to most major American allies, including the European Union, Canada and Mexico. It extended them by 30 days at the start of May, though that was a down-to-the-wire moment.

With those 30 days now elapsed, the administration has this time gone the other direction and removed the exemptions. It’s now tariffs for everybody, including the United States’ closest military allies. And even that is subject to change as the Trump administration continues to dangle relief on steel and aluminum tariffs in exchange for other concessions.

There has been extensive behind-the-scenes jockeying over those exemptions for the last three months, but there has been no real public accounting of what criteria led to those exemptions in the first place, or what led to their removal. And it is not at all clear how taxing imports of Canadian and European steel and aluminum is going to get China to cut subsidies for its producers.

The imposition of the tariffs on Canada and Mexico added another layer of complexity to the sluggish renegotiation of the North American Free Trade Agreement.

American negotiations with China over its trade practices have been even more erratic. One day, tariffs on $150 billion of imports from China appeared imminent, the next they were put on pause amid infighting by the president’s trade negotiation team.

Even more remarkable is that the Trump administration is willing to make threats against all the nation’s major trading partners at the same time. A trade war with China would be a big deal; a trade war with Europe would be a big deal; a trade war with Canada and Mexico would be a big deal. The United States is flirting with all three at once.

Article source: https://www.nytimes.com/2018/05/31/upshot/-us-tariffs-real-economic-risk-is-unpredictability.html?partner=rss&emc=rss