We also need a manufacturing base, which has steadily been eroded for the last 30-40 years. Enough is enough.

 

One of the things that happened with the 1988 NAFTA, was the that the US agreed to participate in trade tribunals and courts. Think softwood lumber, beef production. Eventually US trade representives were rotated out as their administrations changed. Today the US is much more protectionist because it sees Canada as not much different than the rest of the world. The special friend status is gone.

With this current administration, the usual bureacratic Canadian "rule following" act doesn't work anymore. You can't puff your chest out and invoke article this or paragraph that anymore. Canada is an economic, military and even a cultural dependancy of the United States. That is not going to change any time soon. The history of Canada is that: Washington issues the order, and Ottawa clicks its heels and salutes. History has shown that for decades. The noises from Canadian think tanks or politicians are kinda irrelevant, since they're meant for domestic political consumption. This is all happening as even more NAFTA talks are ongoing.

 

And Trump thinks the solution to this problem is to benefit and/or increase the pool of 140,000 steelworkers, at the cost of raising prices for US manufacturers that heavily use steel, who themselves employ 2.5 million workers, and making it more attractive for them to address the global market by moving production elsewhere.. This is not robbing Peter to pay Paul. It's robbing Peter's entire extended family and all of his friends to pay Paul.

 

 

Nevertheless, Paul has been going without his paycheck for over 30 years. It's time to settle some accounts.

I dont totally agree that Peter's family is going to suffer...at least here in the U.S. Higher steel prices are only one of (many) factors that go into vehicle production, and, besides, the average new vehicle uses a lot less steel than it once did. Just press on typical fender or trunk-lid today with your thumb, and watch it buckle, and you will see just what I mean.

To be honest, it will probably affect prices of large kitchen appliances like refrigerators, washers/dryers, range-ovens, etc.....more than cars. They haven't switched to as many sheet-steel substitutes as the auto industry.

 

It is not like the trade deals were fair to start and Trump is just doing this to give the US a big advantage, the trade deals are very unfair for the US and Trump is just trying to make them more even and fair to the US. It would not be smart for a country to counter act a move that is just trying to make the deal more fair when they know full well the current deals are totally one sided as it will hurt them worse. If it brings them to the negotiating table really quick and they can hammer out a deal that will be fair to both countries then that will be the best solution.

 

 

Not just the steel workers themselves. How about the people who service and maintain the plants? Or the ones that are going to get the plants back in shape for production? Or who order and/or supply the materials that keep the plants running...coal, coke, iron ore, etc...? Or the trucking and railroad companies that transport those supplies (and the finished steel products) to and from the plants? This could be a significant boost to the country's economy, just as the recent corporate tax-cut was.

 

 

I honestly don't think he understands the basic concept of trade/economics.. Tariffs that have been made in the past have done way more harm than good and is only short term - in the long run it'll fall apart. If he thinks that bringing back jobs for just one industry at the expense of all these other industries that rely on steel, he's crazy. There's much more to lose than there is to gain, not to mention that countries around the world have made it clear that they will retaliate if this goes through.

 

 

I agree. I don't believe that he understands international trade, economics or manufacturing.

President George W. Bush (Junior) imposed similar tariffs back in 2002. Although not an economic disaster (like some said they were), the outcome seemed to be more negative for the USA than positive. The tariffs were cancelled much earlier than planned, after only 21 months.

Source: Toronto Star


I agree. I believe this is about playing to his base -- blaming foreigners for taking away middle-class American jobs -- more than it is about bringing back jobs to the Rust Belt (or the Coal Belt, or ...).

 

Probably none of us (or, at most, very few of us) are professional economists, but, in general, It doesn't take an advanced degree to see that trade-imbalance and job-exportation is what turned the U.S from a manufacturing economy into a service economy. We didn't protect our industries like some other countries did. That's not terribly difficult to understand. Simple math. But I'm not going to keep harping on the subject because IMO it is more fitting for the debate forum, not car chat. Let's get back to Toyota prices, which was the original topic. My own opinion is that they won't be able to rise much and make it stick, regardless of where the steel comes from, because of potential consumer resistance and competitive pressure.

 

Yes, it's a very complicated trade relationship between countries and yes the President is a ham-fisted WH CEO who listens selectively. But you can bet that as a NYC businessman who learned some tough lessons growing up at the feet of Fred Trump and Brooklyn politics, he knows how to bluff and work that bluff.

Canadian officials scurried to the negotiating table immediately and were all completely in a panic the minute he started talking about NAFTA and the ripping up of the same. That's how he operates. And this will be the same with Mexico and Japan. Toyota has likely found out how much they have to price given the proposed tariffs that the administration had already signalled months ago. Now they'll have to figure out if they pass it on to consumers. But you can bet, this was the original goal of the administration in the first place. To get the trading partners to the table and see who blinks first. Canada certainly did, despite some tough talk, and Mexico likely will too. Japan? Maybe.

 

I think discussion on all sides about tariffs is more about Trump than tariffs. Reality is that left side should be proposing tariffs and not right side. Hence Bernie Sanders economics plan was pretty similar to Trump - end of NAFTA and other trade agreements, tariffs on imported goods.

Reality is that many countries do the same. For instance lets talk about cars - it is true that EU has 10% tariff on all imported vehicles and that China has 25% tariff. US manufacturers virtually do not export from US factories but everyone imports to the US, even manufacturers with larger NA presence like Toyota, still import 30% of their vehicles.

So how exactly is US profiting in this case without tariffs when rest of the world places high tariffs on US goods, so essentially there is no exports?

EU is now talking with Japan to end 10% tariff on imported cars, with Japan going away on some agricultural tariffs (cheese, etc). On the other hand, why would EU negotiate with US on ending car importing tariffs when there is nothing to gain, ie their tariffs are already 4x bigger so why would they lower them without anything to trade with?