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A history of the Trump slump

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jouris

Pretty much an unsurprising action from a man who sees every interaction as "one person wins and the other necessarily loses." The concept of "win-win", which is the entire basis of trade, seems utterly foreign to him.

Hedgefundguy in reply to jouris

See who signed on to this statement.
The Europeans Steel Association, The Latin American Steel Association.....
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“Estimates from the OECD Steel Committee indicate that there is almost 700 million metric tons of excess steel capacity globally today. China’s overwhelmingly state-owned and state-supported steel industry has an overcapacity ranging from 336 to 425 million metric tons and it is expected to grow in the coming years. This situation, together with a declining steel consumption, has resulted in record levels of steel exports from China to the rest of the world in 2014 – and which are on track to exceed 100 million metric tons this year.
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http://www.steel.org/~/media/Files/AISI/Press%20Releases/2015/China-MES-...
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BTW, the US uses about 95 metric tons per year.
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NSFTL
Regards

jouris in reply to Hedgefundguy

Steel (and aluminum) are prone to alternating gluts and shortages. Building a refinery takes a long time, and once you've built it it can't really be converted to other uses. Which means that, having built it, you might as well run it and get what return you can on your investment. This will be true, regardless of whether you have a market economy or not.
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In the case of China, they definitely overbuilt -- and failed to realize that their economy would change in ways that would drop their demand for steel. But they aren't the first; and likely won't be the last. The rest of the industry would, of course, like the excess capacity taken out of the market. But apparently they, at least those who signed the statement, don't figure that they can take the OPEC approach. Which is probably just as well.
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BTW, of that US usage, we import a fair amount. Mostly from Canada. China barely ranks 10th among our sources of imports.

Hedgefundguy in reply to jouris

Who's demonizing?
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You offer no links.
Otherwise you are creating demons.
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Certainly not the report.
It states:
1) China is responsible for 400 of the 700 million metric ton oversupply.
2) Why China should not be treated as market economy.
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If a politician points out either of these facts, are they demonizing?
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NSFTL
Regards

Hedgefundguy

Unfortunately, the president had also enthusiastically passed a tax-cutting programme which resulted in demand sucking more imports into the country.
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Only if Consumer Credit continues to expand.
There may have been some "wealth effect" spending,
but it was knocked down by the markets dropping.
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Tax cut scoreboard: Workers $6 billion; Shareholders $171 billion
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http://money.cnn.com/2018/02/16/investing/stock-buybacks-tax-law-bonuses...
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But with his popularity in decline, President Trump, in search of an easy foreign-policy win, launched a pre-emptive strike on North Korea in the autumn of 2018.
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Not going to happen.
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So in late 2018, just before the mid-term Congressional elections, an enraged President passed a general tariff along the lines of the Smoot-Hawley tariff of 1930.
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Actually, the President only signs what Congress puts on his desk.
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The Tariff-Makers
Monday, Mar. 04, 1929
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The Ways & Means Committee last week completed its public hearings on recommendations for changes in the tariff law. Now the Committee will go into a brown study and emerge with a tariff bill that will try to satisfy the people back home - and Mr. Hoover. Some final recommendations, mostly upward, by the people back home, included the following:
Jewels...
Handkerchiefs. New Jersey manufacturers asked a higher duty....
Machine-made Laces. 90% to 200% duties asked.
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http://www.time.com/time/magazine/article/0,9171,737461-1,00.html
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Bill Out
Monday, May. 20, 1929
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After four months of mulling, the Ways & Means Committee last week delivered to the House a ponderous Bill to revise the tariff for the benefit of the farmer—and others. Farmers, through their Congressional representatives, surveyed the measure suspiciously,
expressed strong disappointment, began to kick dirt. Great was their surprise when other interests affected by this 85,000-word measure were, for different reasons, no more pleased than they.
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For Manufacturers. Chairman Hawley explained that, when the base rates on raw materials were revised upwards, it was necessary to give a higher "compensatory" rate to manufacturers using the raw material in their production to keep the proper balance of protection.
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From Pennsylvania had come the loudest demands for added protection for industry. Joseph R. Grundy, president of the Pennsylvania Manufacturers' Association and G. O. P. campaign cash-collector extraordinary, had been in the forefront of an old-style
drive for higher rates (TIME, March 25). He had secured duties on brick and cement, had permanently pegged pig iron at $1.12½ per ton.
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http://www.time.com/time/magazine/article/0,9171,723622-1,00.html
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Back in the day when Time magazine was worth reading.
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NSFTL
Regards