President Trump announced today that he will impose 25% duties on steel imports and 10% duties on aluminum imports starting next week. Basing his decision on a Commerce Department study which concluded that steel and aluminum imports are affecting domestic production, Trump invoked a little-used law to curb imports seen as threats to national security.

The tariffs will likely affect negatively the United States’ trade relationships with China, the European Union, and other key trading nations. Some US industries, including agriculture, could suffer consequences from retaliatory actions.

The following three AEI economists are available to comment.

Resident Scholar Claude Barfield:
“No matter how the steel/aluminum tariff story ends, the past 24 hours have witnessed an administration in chaos. Against the advice and warnings of top Republican congressional leaders, virtually the entire US business community, and his own national security appointees, the president decided to go ahead with a counterproductive set of tariffs…What is now exposed for all the world to see is a willfully ignorant president pulled and hauled back and forth by destructive infighting within a hopelessly divided Executive Office staff.”

Resident Scholar Derek Scissors:
“The Section 232 action isn’t going to reduce the US trade deficit or create jobs on a net basis. Steel and aluminum are no longer vital to national security. The action invites retaliation against US farm goods and [the] aircraft [sector], among other goods and services. The administration is [also] considering justified and important trade steps, such as sanctioning China for coercive technology practices. This one is neither justified nor important.”

http://www.aei.org/press/trump-announces-tariffs-on-steel-and-aluminum-imports/

Add trade tensions and the threat they pose to economic growth to the list of worries already dogging stock-market investors in 2018.

President Donald Trump’s announcement Thursday that he was set to impose tariffs on aluminum and steel imports sent stocks tumbling, with the Dow DJIA, -1.68% ending the day down 420.22 points, or 1.7%, while the S&P 500 SPX, -1.33% plunged 1.3%. Implied volatility, as measured by the Cboe Volatility Index VIX, +13.20% or VIX, jumped Thursday afternoon, ending the day around 13% higher at 22.47, after pushing above 25.

It’s the economy
The broad-based nature of the tariffs — and the broad-based market reaction — indicate that “investors are not only concerned about this particular action, but also how that’s going to affect the economy in the U.S.,” said James Norman, president of QS Investors, in a phone interview.

Read: These Dow and S&P 500 stocks took the biggest hits on fears of a Trump trade war

After all, not only did the news hit heavy users of steel and aluminum, like Boeing Co.BA, -3.46% and Ford Motor Co. F, -3.02% , he noted, but other cyclically-sensitive areas, such as tech stocks, health care and consumer cyclicals.

Domestic U.S. steel prices were already up 20% since the beginning of the year in anticipation of possible tariffs, said Andrew Hunter, U.S. economist at Capital Economics, in a note. That’s a big potential drag on steel consumers in the machinery, motor vehicle and construction industries, he said, observing that the tariffs could, ironically, raise the incentive for those manufactures to move production offshore to avoid the tariffs.


More uncertainty means…
The threat of retaliation by trade partners is also a concern, potentially creating a spiral that could undercut global economic growth, widely seen as a key ingredient in the stock market’s 2017 rally.

See: Trump steel tariffs to hit these 8 countries the hardest (China is not one of them)

That was part of the “Goldilocks” backdrop for equities, along with subdued inflation pressures and confidence in the monetary policy outlook.

Over the past month, that’s been eroded by worries over a potential pickup in inflation and uncertainty over monetary policy.

…more volatility
“If you throw into that uncertainty about trade policy and how that might impact economic growth, then that increases uncertainty. And that’s why I think you’re seeing this volatility uptick,” Norman said.

Read: Here’s how stock market investors lost their ‘security blanket’

Meanwhile, there’s uncertainty over the fate of Gary Cohn, Trump’s top economic adviser. Politico reported that the tariff decision came after a frantic 24 hours in which Cohn and others tried to talk Trump out of taking action.

Stocks temporarily dipped in August amid speculation that Cohn would leave the White House in reaction to Trump’s remarks following deadly violence at a white-supremacist rally in Charlottesville, Va. Cohn’s potential departure could underline fears that economic policy would be dictated by nationalist advisers, economists said at the time.[/I]

https://www.marketwatch.com/story/h...-trump-tariff-announcement-so-hard-2018-03-01


This used to be the Republican party's strong point, they were the party for freer markets. It was a talking point in which the Republicans were winning the intellectual debate, as nations from all around the world found greater prosperity in eliminating market restrictions. Not anymore, the current Republican president is all for creating government guided markets. One reason why the president is calling the issue a national security threat is because a Republican majority congress would likely not approve of the new tariffs. If he declares the decision a national security issue, he can use his executive powers to undercut having to go through congress.

This post was edited by TCassa89 on Mar 1 2018 10:44pm

Hes just banning gun materials, this is what you wanted?

need more topics

People need to stop using DOW Points

Only thing that Matters is DOW % and its less than 2%

Good. Fuck the corporations, support American unions. Mill American, Buy American.

This post was edited by inkanddagger on Mar 1 2018 11:44pm

i dont mind if coca cola or mc donald shits are taxed at 500%
edit; iphones too

This post was edited by Saucisson6000 on Mar 2 2018 04:46am

yeah i hate the successful

ofc you do, that's why you slap random tariffs on them, to protect your market...

You know that if we'd accepted TTIP this would probably allow companies to sew the US.. That might still be the case now btw, I can imagine this going against made international trade agreements.

It should probably be illegal for any country to attach tariffs. But if some countries ARE gonna do it, then it would be silly... not to do it also.
I think that's what this is all about.

It's like Trump has said all along. In a lot of treaties and deals etc., that we are involved in, we HAVE been getting the short end of the stick.