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Donald Trump's tariffs not great for Australia, but terrible for the US

"For Americans, Trump’s tariffs on imports could be costly"

By business reporter Stephen Letts

Updated about an hour ago

Key points:

* Donald Trump proposes a 25pc tax on imported steel and 10pc tax on imported aluminium

* Canada and the EU are the biggest exporters of steel and aluminium to the US. Australia and China are much smaller players

* Manufacturers, farmers and the military oppose the tariffs, Mr Trump says they will boost "national security & jobs"

[...]

The US Commerce Department plugged the plans for a 25 per cent tariff on steel imports and 10 per cent on aluminium into its modelling and found, just for starters, the idea was bad for national security because it weakens domestic manufacturers who supply among other things, the US military.

"In plain language, these tariffs are a terrible idea," said Tom Porcelli, US chief economist with the investment bank RBC.

"In fact it is such a terrible idea that there was talk amongst the GOP [Republican Party] today about pulling some of the President's unilateral trade authority."

As Kansas-based Republican chairman of the House Agriculture Committee Pat Roberts said: "Every time you do this you get retaliation [and] agriculture is the number one target."

"I think this is terribly counterproductive for the agriculture economy."

Watch out soybean and other croppers who rely on exports to China and the EU for a large part of their livelihoods. Revenge can be served with pulses and grain too.

http://www.abc.net.au/news/2018-03-02/donald-trump-tariffs-not-great-for-australia-but-terrible-for-us/9502118

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GWB's 2002 steel tariff lasted about 20 months.

What kind of victory can he claim? In the 20 months since the tariffs were imposed, the steel industry has consolidated. Some ailing steel firms, such as National Steel and Bethlehem Steel, have been gobbled up by larger competitors. The industry's largest union, the United Steel Workers of America, has agreed to more flexible work practices, profit-sharing and even some redundancies in order to give its remaining members a fighting chance of saving their jobs. Just as important, demand for steel is picking up: the world may face a supply shortage and a price spike next year, predicts World Steel Dynamics, a research firm.

All of this has happened since the tariffs were introduced, but did any of it happen because they were introduced? Gary Clyde Hufbauer of the Institute for International Economics (IIE), a Washington think-tank, warns against the post hoc ergo propter hoc fallacy. That won't bother Mr Bush, who is not known for his command of Latin. He is claiming full credit for the changes wrought in the steel industry since his tariffs were imposed. But if anything, the tariffs simply delayed the inevitable. By artificially raising the price of steel, they added to the profits of ailing firms, making them more expensive to acquire. Europe went through a similar round of mergers a decade or more ago without the help of tariffs.

The trade barriers Mr Bush repealed on Thursday were a comfort blanket, not a spur,
https://www.economist.com/node/2261621

That article is linked in

Here's what happened the last time the US was dumb enough to try a steel tariff
Linette Lopez Jul 8, 2017, 5:35 AM
https://www.businessinsider.com.au/bush-steel-tariff-impact-2017-7?r=US&IR=T

See also:

Trump’s Trade Pullout Roils Rural America
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