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The Trade Wars Begin: U.S. Imposes 256% Tarriff On Chinese Steel Imports
Two weeks ago, when looking at the latest import price index data, we showed something disturbing: China has become an all out exporter of deflation. As the chart below shows, In November, import prices from China decreased 1.5% over the past 12 months, the largest year-over-year drop since the index declined 1.7% for the year ended in January 2010.
Howdid this happen? As we explained, with all of its domestic markets fully saturated, China has had no choice but to export its soaring commodity production as we explained in "Behold The Deflationary Wave: How China Is Flooding The World With Its Unwanted Commodities."
As we noted then, shipments of steel, oil products and aluminum are reaching for new highs, according to trade data from the General Administration of Customs. That’s because mills, smelters and refiners are producing more than they need amid slowing domestic demand, and shipping the excess overseas.
Logically, the less domestic demand for steel, and the greater China's steel exports, the lower the price continues to tumble, now at a 10 year low.
That’s
because mills, smelters and refiners are producing more than they need
amid slowing domestic demand, and shipping the excess overseas.
The flood of Chinese supplies is roiling manufacturers around the world and exacerbating trade frictions. The steel market is being overwhelmed with metal from China’s government-owned and state-supported producers, a collection of industry associations have said. The nine groups, including Eurofer and the American Iron and Steel Institute, said there is almost 700 million tons of excess capacity around the world, with the Asian nation contributing as much as 425 million tons.
According to Macquarie's Colin Hamilton, head of commodities research, it is about to get even worse: the price of hot-rolled coil, used in everything from fridges to freight containers, may decline about 13 percent next year. The nation’s steel exports, which have ballooned to more than 100 million metric tons this year, may stay at those levels for the rest of the decade as infrastructure and construction demand continues to falter.
A worker walks on stacks of steel pipes at a storage yard in Shanghai.
China's metals industry is facing the same problem that OPEC has had to deal with over the past year: a huge supply glut faced with declining global demand, only unlike OPEC there is no "efficient, rational" producer cartel that can (or in the case of OPEC could) implement production limits.
While falling steel prices are partly driven by the collapse in raw materials and lower output costs, “it’s just more to do with the fact the industry was built for demand growth that hasn’t come through,” Hamilton said last week. “We’re past peak steel demand. I think provided there is overcapacity in the Chinese system and given where demand is, it’s going to be like this for some time.”
Well, maybe not: there is one thing that could dramatically slow down China's metal exports - tariffs, anti-dumping duties and other forms of protectionism.
“What may slow down the exports is anti-dumping and protectionist measures that several countries have taken against cheap imports,” said Ernst & Young’s Agrawal. “We’re going to see an impact. More and more countries are raising their objections.”
In other words, a trade war.
To be sure India has already done just that:
India plans to step up its protection for debt-laden domestic steelmakers by imposing a minimum price on steel imports among other measures, Steel Secretary Aruna Sundararajan said in an interview this week. The import curbs are necessary to ensure a “level-playing field” for Indian companies after restrictions imposed in September failed to stop a decline in prices, she said.
And now it's America's turn.
According to a report released Tuesday by the US Department Of Commerce, corrosion-resistant steel imports from China were sold at unfairly low prices and will be taxed at 256 percent.
The measure is clearly aimed exclusively at China's dumping of steel on the US market, and its relentess exports of deflation.
According to Bloomberg, imports from India, South Korea and Italy will be taxed at lower rates. Imports from Taiwan and Italy’s Marcegaglia SpA will not face anti-dumping tariffs. The government found dumping margins of 3.25 percent for most South Korean steel imports, with Hyundai Steel Co.’s shipments subject to duties of 3.5 percent. Imports from Italian companies excluding Marcegaglia will be taxed at 3.1 percent. Indian imports are subject to duties from 6.6 percent to 6.9 percent.
Which means that the biggest "beneficiary" of this dramatic import price surge will be none other than Beijing.
“We’re concerned that the dumping that’s occurring is at higher levels than these determinations reflect,” Tim Brightbill, a partner at Wiley Rein LLP, a law firm representing U.S. steelmaker Nucor Corp., said Tuesday in an interview. “We have serious concerns that these preliminary duties are not enough at a time when unfairly priced imports continue to surge into the U.S. market at unprecedented rates.”
According to some the US foray into trade wars was long overdue:
U.S. producers including Nucor, U.S. Steel Corp. and Steel Dynamics Inc. filed cases in June alleging that some products from China, India, Italy, South Korea and Taiwan had been dumped in the U.S., harming domestic companies. In November, the government found that all those countries, except Taiwan, subsidized their domestic production by as much as 236 percent of its price.
The tarfiff hike comes on the heels of a previous announcement from November 3, which saw countervailing duties as high as 236%. Together these create a barrier to imports of these steel products from China, said Caitlin Webber, an analyst at Bloomberg Intelligence in Washington.
“A 500 percent duty is obviously prohibitive,” Webber said in an interview. “The lower ones are much less prohibitive and would probably have a lower impact on imports.”
This means that suddenly China's steel exporters will have to scramble to find a comparably large market in which to sell their wares as now exporting to the US is prohibitively expensive and would result in massive losses to domestic producers.
According to Bloomberg calls to the spokesman’s office at China’s Ministry of Commerce in Beijing weren’t answered. An official who answered a call to the China Iron & Steel Association couldn’t immediately comment. Not like they would have much to say.
The problem for China is that as we have explained previously, unless local commodity producers can keep generating some cash flow, even if it is negligible, China will be swept in a default wave that will sweep away all the overlevered producers of steel and other commodities, leading to social unrest or worse. We already know that at current prices more than half of China's commodity producers can't even make one coupon payment. What happens now when the rush to the bottom enters the final laps and the bottom falls out of prices?

Which also means that now that the US has fired the first trade war shot, it will be up to China to retaliate. It will do so either by further devaluing its currency or by reciprocating with its own protectionist measures against the US, or perhaps by accelerating the selling of US Treasurys. To be sure, it has several choices, clearly none of which are optimal from a game theory perspective, but now that the US has openly "defected" from the "prisoner's dilemma" game, all bets are off.
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Dumping or Price Discovery.. you decide
China is so over supplied with raw materials, and credit is becoming so tight that steel sales are going no bid.
Day late dollar short! The industry will die now. Instead of proper tariffs and dealing with suppliers like China as our leaders should have, the price bust will wipe everyone off the map. Is it me, or does the US lack any leaders these days? Morons!!
When is ZH going to blow the lid off on how USA/CIA inlfated the Azerbaijani currency for working with Russia? Who's the global terrorist?
USSA vs Russia & China.
Shows how desperate the USSA's protection of the petrodollar has become.
Free trade is dead...Expect Protectionism to continue followed w/ WW #3
"Currency wars, trade wars, world wars"
-Gerald Celente
How about protecting America's middle class, Barry, and passing a 25% tax on the flood on money laundered in the United States by foreigners, including the Chinese? Too bad the DroneMaster is the NAR's bitch.
"We don't need no stinkin' middle class." - Barry
All part of the fundamental transformation of the USA.
Look up the word "fundament" and there you go. Right up the butt.
Way to go, 30 years too late- typical.....
30 years from now -the day China and Saudi won't accept USD for payment- trade war will really start.
"chinese steel"
Shit they make is anything but steel.
yeah, like the current paradigm of trade policy will last that long, it barely hold on now. Thus the difficulty the globalists have in getting countries to get on board with their bs trade policy objectives.
Did you forget how this Obamunism really works?
how about the US dumping treasury debt onto the world debt market. Maybe people across the oceans will finally get fed up with that and start taxing it.
First, currency wars. Check
Second, trade wars. Check
Third, hot wars. half a Check
Why does the main stream media in the US only focus on declining economies in other nations while still touting the weak recovery is caused by the slowdown abroad?? Never a word about how the US consumer had reached peak credit ten years ago and slowed purchases of goods made in other countries.
Slightly off topic--Local NPR station owner was saying how north east heat wave is alarming and shows how ridiculous global warming deniers are. I suppose in his statist sycophant rant he forgot to check on the rapidly expanding ice cap to the north and a local report of -51 degrees in Colorado yesterday. I'm beginning to think he knows he is spouting propaganda and finds it good for his bottom line in raising funds for his network of stations.
yes, the NPR fuck knows it's a scam. NPR = National Propagandist Radio. NPR receives hundreds of millions in tax payer dollars directly from the Gov-Scum every year, so of course those assholes are going to say whatever they're told to say to the sheeple.
Don't donate to NPR...they're already highly subsidized as I said above. Everything else the sheep-tards willingly donate to NPR is probably used as a slush fund for child sacrifice parties. (and I'm not even really sure if I'm joking about that last part or not) ;-)
*points and screams* Blood libel!
The USA produces FAR better steal than China. Micro steel mills are HIGHTLY competitive, but CANNOT compete against GROSS enviromental and worker disregard.
This tarriff will be messy, but it's a push in the right direction.
The whole "Global Economy" meme is bullshit and has run it's course...time to "Make America First"..and with that I throw my hat into the presidential ring!
Please send donations to: tiredoffeatingchineseshitandchinesesteelsucks@nomailserverexists.com
< Genuine
< TOTALLY Scripted
Vote on Hillary's "touching moment" with that little girl that was bullied.
I say scripted...little girl was genuine, but Hillary is a fake and shameless; using a little girls pain for political gain.
Hillary is a corrrupted lush.
Not to long ago had a drinking problem, but is still a liar and unethical.
What happened to Vince Foster? This bitch would put a dagger in your back if she could get more power.
Unfortunately, protectionism has exactly the opposite effect. Rather than protecting national industries, it kills them. How is that US sugar industry doing?
This is just moar fascism 101.
"protectionism" occurs when you go too far; correcting one-sided trade deals is not protectionism.
If ANY barriers to foreign products is "protectionism"; then fuck it...we're finished...just put everyone on welfare and let's get this shit show on the road.
Welfare during times like that means being consripted.
"The USA produces FAR better steal than China."
steal lol
Beautiful Freaudian slip..
More goast cities and Treasury Bond redemptions to pay for it all. Either that, or the unemployed natives go wild.
What exactly is a goast? Perhaps the undead spirit of a goat?
Our leaders shouldn't have any gd thing to do with the economy, period. All of the many things that people have thought of for the gov to do to help the economy is how we got here.
You act as if it is just obvious what to do, how could we doubt it?
Tell you what : if it is so obvious to you, bet. If you know the future well enough to write an intelligent policy, you know enough to predict the future. I will be pleased to help you monitize your insight, should it not be clear to you. If you can predict any small element of the future consistently, there is a futures market that we can do well in.
Well, used to be, but you got the point?
https://thinkpatriot.wordpress.com/2015/10/02/warning-ideas-are-dangerous/
It is real easy to tear off a 'solution', not so hard to convince a lot of people that is IT. But so far, nobody has found a solution to the problem of managing an economy. Governments who try to do that fail in proportion to the size and duration of their efforts, from my reading of history.
As we are learning yet again. Believe traders when they tell you about the market, but never mere advisors. Dime a dozen and all so persuasive. Otherwise they wouldn't be advisors, would have to lay bricks or something real.
Don't you have to have a manufacturing sector to need steel?
Yes, fortunately for the supplier, those factories are also in China.
Here's 3 major USSA bridge projects totalling $8 billion awarded to the ChiComs
http://amac.us/u-s-bridges-built-by-chinese-with-our-tax-dollars/
Recycling the WTC steel. Greens applaud!
Thankfully America kept GM and Dodge alive with our money so they would not go out of business and keep the jobs in Amerika.
http://www.autonews.com/article/20130420/GLOBAL03/130429994/gm-plans-to-...
Dodge was German before it became Italian. I put a tri-star emblem over the pentastar on my old Intrepid and tried convincing my wife we owned a Mercedes. Later I painted it red and put on a prancing horse emblem. I always wanted a Ferrari. (Actually it was a Mustang emblem rotated to make it look like a prancing horse; a real Ferrari emblem could not be cost-justified.)
I used to buy Plymouths before I was forced to switch to a Dodge. Most all of them said "Made in Canada". Well, it is part of America, if not Amerika proper.
Yes, I have a Chrysler but it is all Mercedes underneath.
My Mercedes is a glorified Chrysler. Same front end problems in it too.
"corrosion-resistant steel" - Based on this, I'm assuming it has more to do with finished products reather than raw steel used in manufacturing.. Like the electrical thin-wall conduit as pictured in the article. But don't you have to have a building industry to need conduit?
@Vince...... Thank You for that incredible comment. +1
I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... www.wallstreet34.com
I wish someone would cut the cord on this 'bot.
So, what is 256% of 0?
China is dumping right now and the world knows this. Will other countries move to protect their domestic manufacturing base against mercantilist policies?
Now is the time, Harbor Frieght was humming the other day, you can buy Chinese stuff at 20% below other suppliers ... for a while at least.
sschu
Price controls don't lead to prosperity.
Price controls don't lead to prosperity.
But they often lead to war or political unrest. Such is the devil's deal we have entered into with the idea of fiat currency and central banks.
What is the response the USA should have against the mercantilism of China?
The answer is not get to there in the first place, but that decision has already been made. What do we do now?
sschu
Nothing like a world-wide economic gunfight to make things interesting. Nothing anybody can do to make things better, but there's a lot of things they can do to make things worse, and in this case, much worse....
There will be a rush for the exit in the new year as it has just been discovered that the German Chancellor Angela Merkel is allegedly ‘Hitler’s Daughter’ and therefore we will witness the rise of the 4th Reich......
http://beforeitsnews.com/conspiracy-theories/2015/12/the-fix-is-in-franc...
Please be satire...please!
MrNosey = Moongod = Happymeal
there will be a flush of idiots coming to zero hedge beacause in the new year 2016, all of the paranoics and schizophrenics form beforeitsmoon.com will be spamming their links and nonsese under every single of your comments twice......
http://beforeitsmoon.com/conspiracy-theories/2015/12/the-fix-is-in-franc...
So....your telling me we DO charge a tariff? It must be .00000000001 per ton. So now we charge .0000000000256 WOW...this ought to bring all of the jobs back here. Sounds to me that people that make decisions are listening to TRUMP. In Costa Rica, the government puts a 100% tariff at wholesale on many imported items as WE SHOULD. So for instance a Toyota that sells for $25,000 here in the USA, sells for $50,000 in Costa Rica. It is that simple. It is not fair to have all of this plastic crap from China made using labor that pays slave wages. The plastic cup at Walmart that costs wholesale $1.00....fuck it...tax it 100%. So now it is $2.00 wholesale cost....and then mark it up and sell it. You want $15 an hour....then you need to understand this....Oh ...how many dindos are on this site? ZERO P.S. Was just in Panera Bread in Miami and they were just installing 6 touch screen self service stations. And I sat down at a restauraunt in New York Airport and had the ordering screen with the credit card reader right at my table. It was a little clunky (The user interface was not really as friendly as I would expect..) getting my ordering in.....The tablet even took a photo of my face and printed on the ticket so the waitier knew which person to bring it to and what I looked like. Service sector jobs will be vaporizing by the thousands. If you have a kid in school...guide them to do something that will last.....Merry Christmas ZH
Talk to companies like Cargill then. They're all pinching pennies to make those profits available for drawing. Projects are being sent out for bids with crazy caps on them. Profits are razor thin in mining construction as an example and Chinese pipe is a given since both the American and Canadian product would put the project over before it even started.
I hear you loud and clear. I just want a fair playing field. I already think it is far too late. We are sooooooooo fucked. It is so hard for a dumb ass $15 an hour screamer to wrap their head about what I am about to say...but you need to PLANT this sentance in your head of why we are so fucked....
"Everybody wants to make $100 an hour or more, yet all of us are not willing to pay for goods or services where that employee earns that wage.."
This is the conundrum. The cat is out of the bag. We have already been spoiled. The genie is out of the bottle. We can't go back.
Then add on top of the above statement...where as in the United States you can have lots of kids and get paid for it....another statement I always make is this...
"We are the only country that rewards bad decisions, and punishes those who do right.."
I see these fucks at Costco in front of me with 2 carts full of steaks, ect on their iPhone paying with their EBT card. How long can all of this shit keep going....
I honestly thought that this entire system would be collapsed by now. One final thought that I think I read here on ZH that sticks with me...and that is that maybe we DO NOT want a reset or for this shit show to stop. The comment I remember went something like this..
"Look at your over taxation, Welfare, EBT card funding, etc. as a BRIBE. This bribe is to keep these animals in their cages and keep them from wandering the streets. "
This statement echoes in my head as 100% true. Even though I get pounded with taxes, and I "Think" I am ready for an economic collapse, I now consider what this country will look like even if the EBT card is shut down for a month. Once an event like that happens, we may not be able to turn back. So in closing...I guess all of us here are very blessed as we understand so much more than most, yet most of us think we are ready...but are we? It may be better that we just keep stacking, keep living like this...and pray that it stays just like this...and those of us who work hard, accept the fact that we have to pay the "BRIBE" tax to keep the animals away. Hope I made sense.
"Everybody wants to make $100 an hour or more, yet all of us are not willing to pay for goods or services where that employee earns that wage.."
^^^THIS IS A LIE.^^^
FACT: It 'costs' more to produce any given amount of goods than there can ever be enough money in the economy to pay for from wages and/or profits from producing those same goods..
It is NOT a matter of 'willingness', the funds to buy what is finished simply DO NOT EXIST.
The Laws Of Thermodynamics state that there is inherent waste in ALL production. Waste, no matter how insignificant, cannot be recovered for profit; and thus ALL proudction costs more than can be extracted from a market that only contains the wages and profits left over from the production of those same goods. PERIOD.
ANY & ALL discussions on the matter of costs/profit accounting that do not start with this reality as their basis are fraudulent to begin with and cannot procede to any conclusion which is not also fraudulent and false.
This is WHY credit consumer credit has grown exponentially as the US economy moved from merchantilism to consumption: the emission of credit was shifted from producers to consumers along with off-shoring of production. This is also WHY the securitization of finance evolved from commercial bonds into the securitization of consumer debt...
Merchantilism and debt ponzi economics are both doomed. Globalism can never function econoimcally without oppression and resource plundering of weak currency/regulation/productivity nations/regions/peoples/entitites.
Please educate yourself to some small degree before spouting off about trade and debt dynamics.
Start here:
http://www.socred.org/index.php/pages/the-douglas-internet-archive
http://www.tara.tcd.ie/xmlui/bitstream/handle/2262/4337/jssisiVolXIV34_4...
Downvoting cannot alter facts.
Your feelings and/or opinions cannot change the laws of thermodynamics or mathematics...
> "Everybody wants to make $100 an hour or more, yet all of us are not willing to pay for goods or services where that employee earns that wage.." <
Maybe the problem is that the vast majority do not "make" $100/hr; it is not a case of "unwillingness", more a case of frank inability, irrespective of the hours worked (numerous part-time positions), since once all those "mandatory" contributions have been siphoned off, the "hourly accumulation" of truly discretionary income is going to be very low indeed, certainly for the "bottom" 50% of the population.
Try shipping stuff to Brazil!
IF the postal workers between here and there don't steal it....
IF the customs workers don't steal it...
IF your buyer hasn't "greased" the local post office....
Your buyer will get nailed with an insane customs/bribe duty.
Why do you want price controls? So you can pay more?
How do I answer this?? Everything is price controlled now! You think it is not? As TRUMP says...The USA gets FUCKED on every deal. Try buying a FORD in China, or any other country...like Costa Rica...100% Tariff. The US always looses...as TRUMP says...it is time we win again.
You need to read a little more my friend....Most countries just FUCK US....Here.... I used that GOOGLE thing...
http://business.time.com/2011/12/14/u-s-very-disappointed-by-chinas-new-...
Because they don't represent us. It's brilliant if you think about it, kill off all domestic foundries with regulation and a cheaper option in China. Then jack up the import tax and make a killing in the long game. Go USA!
I agree with import duties but it should have been higher back in 1996.
I was in Costa Rica several years ago. I thought the 100% tax on new and nearly new cars was pretty smart. The taxes were used to subsidize the bus transportation which was efficient, low cost, and went just about anywhere with a population above 50 people.
Here in my rural county with the smallest town around 200 there are only a few main bus routes that miss 80% of the towns. Because of the frequent stops and circuitous routes it can take one and a half hours for a ride that takes 40 minutes by car. The buses also stop running around 6PM so using them to get to and from work can be dicey.
That is what I thought too.....It also made people take care of their cars. In Costa Rica you can find 1970's Toyotas that look like they are showroom new. Cars are NOT disposable. THey keep them SUPER NICE.
US: I'll bet 256% in new tarrifs
China: I'll see your 256% in new tarrifs and raise you $1.3T in dumped treasuries
Russia: I'll see your new tarrifs, dumped treasuries I'll raise you $66.5B in dumped treasuries and oil at $25
Saudis: Holding a pair of 2's Folds
US: (bluffing) Ah ..........................
"We tarriffed some stuff"
yeah... China's fucked, but we knew that...
The path to chaos was set when we were convinced to give the gov the power to touch the economy. That was the key to our purses, and gov has grown ever since, teaching us about how good our government is to us and why the taxes are so reasonable and ignore the pople getting rich because politicians like them because they give the politicians money, etc.
Systems implemented by humans can only work in certain ways. Small and social, works very well, humans do community very well, given a reasonable start.
But large and impersonal doesn't work, that is where we are and we are failing in too many ways. In fact, using 9/11 as a measure, the only element of our society that is functioning to keep civilization alive as opposted to helping the emporer ignore his nakedness is us citizens. Everything else is dishonest, covering up the criminal deep-state kleptocracy or carefully ignoring it.
Scholars will fight about how much of this was planned, and trace the lines of influence that produce particular policies forever. The next generation of scholars, this one is so completely discredited we shouldn't trust them in our civilization any longer. Our elites are all bought off ore made afraid and so are carefully ignorant. If a prominent person has not signed a 9/11 Truth statement or petition by this time, they do not have the moral stature to lead a civilization of honest people. I hereby eject them from my politite society, and now measure moral worth by when you publically stated 9/11 was a FF and how loudly you said it and how much you risked when you did so.
Rosie O'Donnel went up in my estimation a lot. (Wouldn't be hard, I knew nothing about any of the celebrities, but I was impressed with her video blog. Clear thinking and clear speaking and real conviction. Didn't have her makeup on, so I knew she wasn't acting.)
Bullish.
Bullishit.
Bull gored.
Al-Gored.
(Pretty much the same as bullshit.)
tipper gore ---- ooze seeping from my infected throbbing member
Long Bethlehem steel. And maybe Johnstown will make a big comeback and start playing hockey again. RIP P. Newman!
I don't think Blue Star has bottomed out yet. Still room to go.
Ogilthorpe?
Slapshot
Who own da Chiefs?
"showed something disturbing: China has become an all out exporter of deflation"
Weird, for USA has become an all out exporter of inflation.... Inflated dollars!
Which force will win? Deflation, or inflation?
Question, what in the fuck is wrong with cheaper priced products.... Isnt that good for consumers?
OG, do you have a disposable email you can post here?>
Absolutely.... (all emails are disposable as far as i am concerned)
......no shame in my game.....
Dennis@CannaKing.com
Deadwood! Florence! Dille.
Cheers! Bandon! potato......
Grandpa, is that you?
Deflation when all of those crappy loans are defaulted upon on both sides of the Pacific. Companies will start dying like flies left and right.
Yes, but here's the thing: China has cleverly taken advantage of the credit boom to build an industrial base. After the bankruptcies, all of that industrial capacity will remain in China, in the hands of some other Chinese company, at firesale prices, making it very very competitive again.
So thanks to the roundeyes for all the help building China into an industrial power.
So thanks to the roundeyes for all the help building China into an industrial power.
China refuses to build any sort of consumer base. The rest of the world is broke. Who is China going to sell products?
Frank.
All that industry will be quite helpful come WWIII
...and in the inevitable aftermath of WWIII. The lesson is how American industial might during and after the war enabled the American postwar consumer boom, and along with it the rise of American consumerism. Cheap products made and sold at home.
When the USD blows up, and the gold bullion cards are played, the stage will be set for the creation of a middle class in China (as well as in India). These are the ultimate results of the Western debt-binge: the Chinese built industry and infrastructure, while the Americans bought useless conumerist junk, on money borrowed from China. The endgame is the transfer of real wealth that is taking place wright now, and which American Exceptionalists, neocons and other oligarchs and warmongers, and their buttboys in Congress, are trying to stop.
+1 but don't you mean "not trying to stop" in your last sentence?
Eventually they would be smart to allow their own people to consume. Or maybe they will keep working for soon to be worthless paper forever?
They are and have been at (economic) war with U.S. this whole time. They are not looking to elevate or appease their own people until they have broken and replaced the U.S.
most of the 'USSA' crowd here is struggling with the fact that a) it's a buyer's market, and b) the only buyer generating any demand worth having is the 'USSA' and Eurozone...
Who is China going to sell products?
See my above
"After the bankruptcies, all of that industrial capacity will remain in China"
Who's going broke (bankrupt)... "Enthrall me with your acumen"../
To answer your question... Yes lower prices are good for consumers as long as they have a job that pays enough to buy the goods.
In fact consumer goods inflation has been kept benign because of the China, Bangladeshi, Sri Lankan, etc. manufacturing discount the US has enjoyed for 20 years. This has come full circle as the good paying jobs in manufacturing here have been disappearing for 20 years. The rampant inflation here has come from what can't be imported like health care, teaching, insurance, construction, which take up an increasing proportion of income.
I hate 'deflation' used in this context. Pure propaganda, Keynesian economics, and you can't get anyone to change, it is fixed. The language degrades and none can think.
We blame people for not knowing much, at the same time as they make it very hard to know anyting because of the proliferation of nonsense words everything is expressed in.
What a good excuse for not giving a damn and voting emotionally, it isn't possible to be rational.
That should help world growth accelerate in 2016.
Besides, economic wars often lead to military wars.
Always, when both sides are of equal size.
Meanwhile the US wants to export their shit (what's left of it) using the TTIP agreement. Just amazing on how many levels the US are such incredible hypocrites.
Yes, Americans with their liberalism are a bunch of hypocrite: telling to other countries (usually weaker than USA) we want "liberalism" and "free trade" and when this same liberalism and free trade is against US interest they pull out the good old protectionism and costums taxes, what a joke !
China should retaliate fast and strongly !
PS: Keep your TIPP, your hormone cows and transgenic chicken for you, thanks from Europe :)
We'll import 90% of our goods including pig assholes masquerading as calamari, but the U.S. draws the line at Chinese steel? Makes sense.
rofl!
Epic post...lmfao
If it doesn't deflate after 4 hours seek medical help.
As if the US government doesn't subsidize the steel industry? Yeah, they do get subsidies, dating back to the 70's
no trickle down of steel prices around here.........prices have actually gone up.........one a side note: property taxes are up 37% over the last four years in Kansas...
the question that you have to ask - what exactly are these local governments doing with ALL the extra property tax money. All of these towns and county offices seem to feel that they are entitled to a guaranteed lifestyle. They aren't!
With the government being the employer of last resort, There is an increase in retirement and pensions they have to pay, all in an effort to tell YOU, the person that actually works and produces something HOW you WILL do business, or tell you how much your home is worth!
Now be a good american and pay your property taxes without asking any quesions..... Or face foreclosure..... Wash, Rinse, Repeat!
80% of all property taxes goes to the CROWN corp as payment against the national debt , go ask your local Govt to give you a break down of where all the money goes , good luck with that.
Hep! Spot on. The Criminal Fraud UNITED STATES, CORP. INC. Bankrupted via The Banking Emergency Act of 1933 run by The City of London & owned by The Varican Assassins
PrimalScream: the question that you have to ask - what exactly are these local governments doing with ALL the extra property tax money.
Same as always, hire more potted plants to sit around town hall and fund their retirement pensions.
I don't know about KS, but in WI that is broken down somewhat on the bill. The rest is public record. Biggest increases are always schools and cops - two things more money won't fix.
(and a big FUCK YOU to all the "for the kids" spending referendums)
Are your roads not 37% more paved and your garbage not 37% more picked up?
I guess no one in Washington has studied the Great Depression of the 1930s....tarrifs and protectionism....not good in the long run
Smoot Coot.Its different this time, don't you know..
It's "doncha". Doncha know? lol
Half of Americans are out of the labor force, can't find a reasonable yob, most of the rest have to have some government assistance because American Corporations were allowed to build new factories overseas then import without fear of tariffs.
Gee, How much more anti-tariff and anti protection do we need?
For countries with a positive trade balance, I believe that is likely the case.
For countries with a positive trade balance that already ruthlessly protect their own home markets, that is definitely the case.
For countries with a negative trade balance and no domestic protections, that is probably not the case.
In many ways, we have tremendous leverage against China, since they cannot live without access to the vast US market and have no substitute-- hard as they try to develop one. We should start by making them choose between building up their nuclear arsenal and challenging the US Navy at sea or selling stuff to America. Letting them do both is an act of national insanity.
Will TPP have any effect on the ability to impose tariffs?
WTO does.
THE start of the real Trade War between China and the USA - is also the start of the breakup of the Sino-American economic "umbilical cord". The trade war will get a lot uglier. And the umbilical cord will be cut. This is the beginning of the US dollar finding a free price in world currency markets ... but it's a slow transition.
It's reasonable to think that China doesn't need to be holding all of those US Treasury Bonds. You know what happens afterwards.
Better to offload them before the US defaults - that Ukraine Russian default being a "template" for how not to honour your debts.
How about on ICRAP?
"The Trade Wars Begin: U.S. Imposes 256% Tarriff On Chinese Steel Imports"
Smoot Hawley lives.
The trade war began with the government easy credit and the ongoing currency devaluations. US is responiding to China's subsidies and currency policies.
Good, most of that pipe is garbage anyway. Even the Chinese use US pipe for many critical power plant applications and people sometimes refer to Chinese pipe as "fake pipe" because it will be labeled and certified US steel.
I had a friend that was involved in a Bechtel China investigation trying to figure out how they ended up with "fake pipe" which led to a critical failure, last I heard they hadn't been able to track it down due to all of the agents, brokers and mills involved. I am guessing the government got involved and cut somebodies balls off but that probably wont help much if their are nuke plant failures waiting to happen down the road.
not good. sub-standard parts are a big problem.
This is a fact. I was on a project that built two identical tanks about 2 years apart. First tank was spec'd with US steel specifically. The second tank used the same spec but procurement substituted Chinese steel with the same spec unbeknown to the project team (cost savings, you know).
About 5 years later, the Chinese steel tank started leaking through pinhole corrosion spots. Long investigation found the problem was the Chinese steel. After lots of testing, the life expectancy of the tank went from 30 years to 10 years. Some cost savings, huh!
You should see the oilfield pumping units the Chinese are building. Especially the ones that are painted with 6 coats of black paint. Spooky stuff.
lol, one of the primary materials rules in play right there... 1) pick a material that doesn't need to be painted, because b) that which doesn't need to be painted doesn't need to be re-painted...
you can damn well bet I won't be buying _any_ Buick that GM brings in from China for this very reason... the Salt Belt is guaranteed to kill those cars like slugs in a garden...
How about 480v primary electric lines in a computer fab joined together with huge wire nuts? Yes, I have an eyewitness source for that observation.
China can make 10 times more tanks for the same price...
In WWII German had small "weaker" tanks but fast and numerous , but France had strong huge tanks but slow and a little of them, guess who won ?
One thing is for sure ... you can kiss the Spratly Islands goodbye.
Considering post-war US miitary history, the Spratleys would probably be a stretch to overcome...
Where's the great Bernanke when you need him? You know, the guy who is an EXPERT on the Great Depression.
Why do we need the Bernank now? Because, his expertise would prevail on our glorious government goofballs that protectionism is exactly what made the Great Depression so great.
You take depressed markets overfull of inventory, tack on tariffs and you get exactly what the Fed wants to hide its horrible policies: velocity of money at zero, falling wages, layoffs and now, the kicker, goods too expensive for anybody to buy.
This is just the beginning. Expect to see more trade protectionism going forward and more countries falling into recession. Add it all up and you have Great Depression 2.0.
China makes a great deal of the world's citric acid (preservative/flavoring), potassium sorbate (preservative), ascorbic acid (Vitamin C) and a great many other chemicals we use every day & they're all on anti-dumping as well. These "trade wars" have been going on for years.....they're just adding to it is all.
Historically many of these items are very high priced and were controlled by the big chemical companies and recipes for food and pharma controlled by the FDA and unchangable. The "producers" were caught colluding on pricing also. I used to distribute these a long time ago. USP, Food grade are big consumption. Lots of other "high dollar items", same same. Shut down production here and moved overseas.
After the melamine incident, we tried to source non-GMO based, non-Chinese manufacturers of citric acid, sodium citrate, potassium sorbate, sodium benzoate, sodium acetate, etc, etc.....and it was really, really hard. Most cases, only 1 other manufacturer outside of China. If we had a war with China and they cut us off, we would be in serious issues with the supply chain....
To quote trends forecaster Gerald Celente:
"Trade wars, currency wars...world war."
um, aren't you supposed to have cards if you're gonna push?
I saw a headline the other day for a story about AK steel in Middletown, OH. The story said they were laying off workers at one of their mills in Kentucky at the end of the year. I don't recall how many workers; but my sense of the story was that the plant wasn't shutting down; just slowing down.
AK makes a lot of stainless steel that's used in the exhaust systems of automobiles. Maybe these tariffs will help their business at least for a while?
On the other hand, if auto sales are slowing down, it may not matter. If the major auto companies slow production it won't matter what the selling price is for stainless steel. Hmmm...
Tarrifs might help some people, but the average american will pay more, and the US Steel mills will have no incentive to be more efficient or more competitive.
Subsidies are like feeding wild animals, they forget how to hunt and forage and end up walking around begging for food and rummaging through the trash.
Now does anyone think that the US might start imposing import duties on Mexicans coming into the USA illegally?
For every "illegal" granted citizenship there should be a corresponding citizenship, a Dually, granted US Citizens in the offsetting country. No questions asked and for the same $$$$. A nice bolt hole passport from this place of freedom and liberty might be nice to have. Today dual citizenship, if you can get it costs thousand upons thousands of dollars to obtain. That isn't "fair".
Guess we won't be seeing any "Freedom Towers" in our near future with announcements like this one?... Does this mean that Pittsburgh, Bethlehem and Youngstown will be reopening all those mothballed steel plants for retooling and new jobs???...
I know that nearly 350,000 tons of structural steel that was immediately removed from the crime scene at Ground Zero after 9/11 systematically found it's way to China and India but I dare say that after nearly 14 years what was left of all that steel to reinforce the hulls of American warships and "man hole" cover across every Main Street in America ran out long ago!...
Add to this Saudi oil being the cheapest it's ever been and ya gotta recipe going into 2016 that only spells out "one thing"!!!
Flat tarriffs based on country specific wages is the only way to go. Tarriffs + flat taxes personal and corporate = explosive US growth. Brings millions of jobs home. Don't let the pols pick losers and winners. Flat taxes and flat tarriffs. Before 1913 and the Progressive income tax the countries fiscal demands from government were all funded by tarriffs. You can't let the pols play with the numbers, they get bought off. Flat rates no exceptions and we will see who can compete. Now there is no way to compete with $9.00/day labor and un checked currency manipulation.
Why not let China 'subsidize' their industry and utilize their taxes, etc to do so..?? If we had a fair and open system, we would be allowing the lost jobs to be put to use in other productive uses....but since it is bound up with mega corps trying to keep their cashflows in line with expectations then they want to keep these dinosaur indsustries alive. This is simple economics...our government should reduce taxes and regulations on businesses so small entrepreneurs pop up and start utilizign the cheap resources (at other's expense) to increase wealth. Again, non of this is happening due to too much government interferene in the economy....
Every damned .gov worker is overhead and if you learn anything in business it's that high overhead will strangle your business to death.
Having a goverment this big is suffocating to any kind of business climate that would do the one thing the world needs and that's create a lot of small businesses.
I am NOT talking about just the Federal .gov either the most pernicious increase in .gov comes from everyday schools that now need up to 4 and 5 assistant principals for a freaking middle school.
Do the math on that those are 90 to 150k a year jobs that are basically high paid hand shakers.
You could knock that down to 4 admin assistants and knock the crap out of that productivity and save 320k a year in one damn middle school in America and multiply that over and over and over again with their pensions, benefits, it's all freaking bullshit.
They can go back to what they are.
Paid by people who work for a living and so they can learn how to be frugal or get their ass fired.
Every damned .gov work is overhead and if you learn anything in business it's that high overhead will strangle your business to death.
Could have said this 16 years ago...
The "cat" got no more bounce left in it and unfortunately it's crashin by design!
"Every damned .gov worker is overhead and if you learn anything in business it's that high overhead will strangle your business to death.
Having a goverment this big is suffocating to any kind of business climate that would do the one thing the world needs and that's create a lot of small businesses."
Respectfully, that premis is flawed. The US Government is incorporated. It is a business. So in effect it's like you're saying McDonalds are putting my mom and pop burger place out of business.
Sorry ... had to down vote you. Businesses can generate profits. Businesses create something called real wealth. Government does neither.
To equate the US government to a legitimate business is laughable.
the 1000 ton elephant in the room is _property taxes_
cut my property taxes in half and I'll show you so much consumer stimulus your jaw would drop to the floor... it's a HUGE parasitic drag on the economy that not a single candidate is willing to discuss... they never will because it means political suicide at the county support level...
Does this mean that they won't ship back the remnants of the WTC for a belated forensic examination?
When asked to comment, a White House spokesman said: "We'd like very much to get the material back, but it is now cost-prohibitive, unfortunately".