Tariffs: Saving American Jobs Since...Wait, What?

[JD8]

http://fortune.com/2018/08/07/trump...victim-south-carolina-tv-manufacturing-plant/

These little anecdotal stories that keep popping up are akin to the stories about the Turkish Lira. The MSM is relaying a financial crisis where.... cooler heads prevail. From Jim Cramer this morning on Twitter...

"Lotta good scare stories about how the big Turkish companies borrowed in dollars and could take us down. I added up the top ten companies together-they are smaller than $JNJ. I be shaken now boss."

Rather, people have trouble seeing the bigger picture.

 

[Hobbes]

https://linustechtips.com/main/topic/958783-caselabs-is-shutting-down/

 

[JD8]

https://linustechtips.com/main/topic/958783-caselabs-is-shutting-down/

Hold the Tariffs boys! Gamers need their pc cases and Walmart needs another bottom of the barrel TV company!!

 

[Dave70968]

I wonder just how many of the negative effects of the tariffs are really an effect of the tariffs? How many are due to other causes, including poor management?

There's definitely some of that (see the CaseLabs example above), but--as in CaseLabs--often times, tariffs seem to be the straw that breaks the camel's back.

Consumer products tend to be sold at very thin margins; that's one of the effects of a free and competitive market (for better or worse). A company that's struggling, but making a go at it, suddenly faced with a tariff situation might not be able to survive. And do keep in mind that tariffs don't just raise the cost of imports; they also produce an increase in the cost of domestic goods by virtue of shifting the demand curve.

Tariffs tend to produce disproportionate effects on small business, too, benefiting larger businesses. There's actually a process for businesses to seek an exemption from the steel and aluminum tariffs...and despite thousands of applications, not a single waiver has been granted. US Steel has seen to that, despite not even being able to meet demand (and not having ramped up production in even its current facilities, let alone trying to expand).

 

[Hobbes]

It's no big deal Dave if these companies go under and workers lose their jobs.
We can get all that stuff from over seas.

 

[JD8]

It's no big deal Dave if these companies go under and workers lose their jobs.
We can get all that stuff from over seas.

Excellent Strawman argument as you would say.

Seems Jim's point is missed.

 

[Dave70968]

Excellent Strawman argument as you would say.

Seems Jim's point is missed.

I'm sure the people losing their jobs will take comfort in that.

Meanwhile, US Steel still hasn't even ramped up current production, let alone moved to expand. The promised benefits, therefore, remain as vaporware.

 

[Glocktogo]

I'm sure the people losing their jobs will take comfort in that.

Meanwhile, US Steel still hasn't even ramped up current production, let alone moved to expand. The promised benefits, therefore, remain as vaporware.

We can discuss the butterfly effect till the cows come home. The only valid question is whether the desired changes are worth the short term impacts. We don't (or at least shouldn't) make national policy on the effects to one industry, much less one company.

Will this policy substantially damage, or improve our long term trade?

 

[JD8]

I'm sure the people losing their jobs will take comfort in that.

Meanwhile, US Steel still hasn't even ramped up current production, let alone moved to expand. The promised benefits, therefore, remain as vaporware.

It sucks. Much in the manner when the ACA came out, many small insurance pools blew up and mom and pop businesses lost a LOT of quality labor. Funny, I didn't see Hobbes posting his ticky tack stuff every time some small business hurt under the Obama administration....... it would've been a full time job.
So yes, we know that policy will have it's victims. The metrics of china putting people out of jobs through tariffs and practices on their side would be an interesting project. That doesn't appeal to emotion now days though eh?

YOU DO hopefully realize that US Steel (X) isn't the only Steel producer out there? I know Nucor is expanding(only because I'm a stockholder) but I honestly don't know if that's related directly to the tariffs. Much like the reasons you see in these cherry picked examples.

 

[Dave70968]

US Steel and Nucor are the two biggest. And yes, I know I'm highlighting one industry, but it's the one that was supposed to benefit most.

A lot of small businesses are having trouble, if not outright going under. A few big businesses are seeing benefits. This was not unforeseeable, and I have long maintained that foreseeable consequences are not unintended.

Fundamentally, this is fed.gov picking winners and losers...the the biggest players can afford the most lobbyists.