The layoffs have stunned these steelworkers who, just a year ago, greeted President Trump’s election as a new dawn for their industry. Mr. Trump pledged to build roads and bridges, strengthen “Buy America” provisions, protect factories from unfair imports and revive industry, especially steel.
.. Foreign steel makers have rushed to get their product into the United States before tariffs start. According to the American Iron and Steel Institute, which tracks shipments, steel imports were 19.4 percent higher in the first 10 months of 2017 than in the same period last year.
.. When ArcelorMittal announced the layoffs in Conshohocken, it blamed those imports, as well as low demand for steel for bridges and military equipment.
.. Earlier this year, tariffs seemed imminent. Wilbur Ross, the commerce secretary, said in late May that he expected to conclude the steel investigation by the end of June.
And in early June, Mr. Trump told a crowd in Cincinnati, “Wait till you see what I’m going to do for steel and your steel companies,” vowing that he would “stop the dumping” of products at superlow prices by other countries.
“We’ll be seeing that very soon. The steel folks are going to be very happy,” he said.
.. Some officials, like Mr. Ross — a former steel executive who was on ArcelorMittal’s board until he was confirmed in February — wanted to push ahead with tariffs. But others, including economic and national security advisers, worried about repercussions, trade advisers say.
.. The tariffs had plenty of opponents. Automakers, food processors and companies in other industries that use steel and aluminum in their products complained that tariffs would drive up costs and make them less competitive, ultimately sacrificing more American jobs than they would save.
.. “The president’s own words and lack of action have actually put the industry in a worse position than if he had done nothing at all,”
Lawrence Summers on the Wrong Way to Think About Trade
They’re wrong because each of those were good deals. If you looked at how much trade barriers in the U.S. were reduced, and at how much trade barriers in the other countries were reduced, in every case they were reduced two, three, four, five times as much in the other countries as in the U.S.
.. The main thing these trade agreements have done is to open other markets to our businesses and to our exports. You don’t have to get into abstractions of free trade. If you just look at it as mercantilism, we’re tearing down their barriers lots more than we’re reducing any of our barriers, mostly because we didn’t have any barriers to start with.
.. if we repeal them, other countries’ trade barriers are going to go up much more than any kind of protection we’re going to be in a position to impose, and so it’s going to hurt our economy.
.. Bilateral trade deficits as a concept don’t make any sense. I run a huge bilateral trade surplus with Harvard [where he is president emeritus and a professor]. I run a huge bilateral trade deficit with my golf club. It makes sense to think about whether I’m selling more to the rest of the economy than I’m buying from the rest of the economy. It makes no sense to think about that entity by entity.
.. The clearest example is China. In the agreement that let China into the WTO, we did not reduce a single tariff in the U.S. We kept them at the same level that they had been for the previous 10 years. The reason there was a trade surge was changes that were taking place in China, not changes in our trade policies.
.. MR. IP: What happens to our growth and our trade balances if we exit these agreements?
MR. SUMMERS: Probably our trade deficits go up a little bit because of the reduced capacity to export to those countries.
.. MR. IP: What happens to our growth and our trade balances if we exit these agreements?
MR. SUMMERS: Probably our trade deficits go up a little bit because of the reduced capacity to export to those countries.
.. MR. IP: Treasury Secretary Steven Mnuchin said the tax cut being planned in the House and the Senate will pay for itself. He said even if we only get 30 or 40 basis points more of economic growth, this will pay for itself. Is he right?
MR. SUMMERS: Could it turn out that growth accelerated? Yes. If you were about [to roll] a die and I predicted that it was going to come up 12, I could turn out to be right, but it would be a crazy prediction.
I don’t think there is any rational basis for the judgment that the tax cut will pay for itself. There is nothing in the experience of past tax cuts, nor in the experience of a large number of modeling exercises that suggest that this tax cut would pay for itself.
I read carefully what the secretary said here last night and he said the Treasury had published a study that demonstrated this. We have sought to receive that publication, and there is no publication.
And I would make this judgment: I am still familiar with the kind of models and analysis that the career professionals at the Treasury do, and their career professional analysis, I am 99% certain, will not support the judgment that this tax cut will raise revenue.
But there’s a profound responsibility for people in positions of responsibility who are making factual claims about the economy to have a basis for those factual claims, when they indicate that they’re based on publications, to be prepared to come forward with those publications. And I’m afraid I haven’t seen that from the Treasury Department.
Oh! What a Lovely Trade War
Trump, supported by his inner circle of America Firsters, is “hell-bent” on imposing punitive tariffs on imports of steel and possibly other products, despite opposition from most of his cabinet. After all, claims that other countries are taking advantage of America were a central theme of his campaign.
And Axios reports that the White House believes that Trump’s base “likes the idea” of a trade war, and “will love the fight.”
Yep, that’s a great way to make policy.
.. a lot of modern trade is in intermediate goods — stuff that is used to make other stuff. A tariff on steel helps steel producers, but it hurts downstream steel consumers like the auto industry. So even the direct impact of protectionism on jobs is unclear.
.. Normally, in fact, trade and trade policy have little if any effect on total employment. They affect what kinds of jobs we have; but the total number, not so much.
.. There’s an old joke about a motorist who runs over a pedestrian, then tries to fix the damage by backing up — running over the victim a second time. Trumpist trade policy would be like that.
.. the tariffs now being proposed would boost capital-intensive industries that employ relatively few workers per dollar of sales; these tariffs would, if anything, further tilt the distribution of income against labor.
.. Trump’s promises on trade, while unorthodox, were just as fraudulent as his promises on health care.
Trudeau Says He Will Consider Retaliating Against U.S. Over Tariff
The Pacific Coast province wants the federal government to ban the shipment of U.S. thermal coal bound for customers in Asia.
.. U.S. producers have shipped thermal coal, used by power plants to produce electricity, to British Columbia export terminals due to a lack of U.S. capacity in U.S. ports. The British Columbia government estimates that last year the Port of Vancouver handled 6.2 million metric tons of U.S. thermal coal.
.. Cloud Lake Energy Inc., a Gillette, Wyoming coal producer which ships thermal coal to foreign customers via Westshore’s Vancouver terminal, didn’t immediately respond to a request for comment.