China urges more trade talks as tariffs on US goods begin

[Jacque67 7,328]

That followed a statement Sunday from the Customs Tariffs Commission saying that previously announced tariffs on 128 kinds of imported goods originating in the U.S. would take effect from Monday. The reciprocal tariffs are valued at about $3 billion, which represents a tiny fraction of its U.S. imports. 

Those are in response to the U.S. tariffs on metal that President Donald Trump announced in March on national security grounds. Beijing said the move violated World Trade Organization rules. The U.S. has since announced some exceptions for allies, including Australia and Canada. China said Sunday the tariffs “caused serious damage” to its interests.

Items on Beijing’s original hit-list, issued on March 23, included fresh and dried fruits, ginseng, nuts, wine, and pork, as well as certain steel products, and its value matches its exports of steel and aluminum to the U.S. So far, high-volume agricultural exports to China, such as soybeans, haven’t been swept into the mix.

[Jacque67 7,328]

https://www.bloombergquint.com/global-economics/2018/04/01/china-s-response-to-u-s-metals-tariffs-goes-into-effect-monday

 

Iowa and the ag states nervous.

once they go for corn and soybeans...kaboom.

not the art of the deal.

[jg121783 3,921]

Meanwhile steel mills that have been closed for years are reopening and ones that were already open are hiring more people and asking their emoloyees to work overtime. As a machinist and metal fabricator I know all about poor quality steel imported from China. The only reason any steel mills remained open at all is because while they couldn't compete on price they could compete on quality. This left manufacturers with a tough choice. Maintain quality and raise prices in a stagnant Obama economy or lower quality standards and remain competitive on prices. Sadly many manufacturers were forced to lower quality standards or go out of business. In the decade or so I have been a metal worker I have seen steel quality steadily decrease to the point where parts that are rejected in the manufacturing process are at unacceptable levels. These tarrifs are going to have a huge positive impact on manufacturing and the economy in general in the US. Anyone who says otherwise is clueless when it comes to the steel of metal fabrication industry. Most people aren't aware that for decaded the US was known worldwide for having the highest quality metal fabrication in the world. Recently countries like Germany have been catching up and even surpassing us in some areas. These tarrifs will help give us a competitive edge not only on cost but more importantly quality.

[Amica Nostra 4,803]

48 minutes ago, jg121783 said:

Meanwhile steel mills that have been closed for years are reopening and ones that were already open are hiring more people and asking their emoloyees to work overtime. As a machinist and metal fabricator I know all about poor quality steel imported from China. The only reason any steel mills remained open at all is because while they couldn't compete on price they could compete on quality. This left manufacturers with a tough choice. Maintain quality and raise prices in a stagnant Obama economy or lower quality standards and remain competitive on prices. Sadly many manufacturers were forced to lower quality standards or go out of business. In the decade or so I have been a metal worker I have seen steel quality steadily decrease to the point where parts that are rejected in the manufacturing process are at unacceptable levels. These tarrifs are going to have a huge positive impact on manufacturing and the economy in general in the US. Anyone who says otherwise is clueless when it comes to the steel of metal fabrication industry. Most people aren't aware that for decaded the US was known worldwide for having the highest quality metal fabrication in the world. Recently countries like Germany have been catching up and even surpassing us in some areas. These tarrifs will help give us a competitive edge not only on cost but more importantly quality.

Most of our steel is coming from Canada and Brazil, this is not going to put a dent in China's exports.

As a fabricator you are going to see higher material costs, which is going to suppress the demand for your product. 

 

These tariffs are going drive more retaliation and affect agriculture, areospace, pharmaceuticals and energy where our country enjoys high profit margins and profitable employment.

 

I am not saying that there is not dumping going on that needs to be remediated, just that tarrifs are a proven way to not get the results you want.

 

No one wins a trade war.

[jg121783 3,921]

28 minutes ago, Il Mango Dulce said:

Most of our steel is coming from Canada and Brazil, this is not going to put a dent in China's exports.

As a fabricator you are going to see higher material costs, which is going to suppress the demand for your product. 

While that may be true where do they get their steel from? In many cases China. Also there will be exemptions for some countries including Canada.

 

Contrary to your opinion on the matter the steel cost will go down not up as more steel mills are being reopened and there will be a bigger supply within the US. You also have to consider the cost of shipping steel from long distances versus across the US. Not to mention the increase in quality.

 

42 minutes ago, Il Mango Dulce said:

No one wins a trade war.

Agreed. Unfortunately this trade war started decades ago and we can't go on letting China walk all over us with slave labor. There is a point where something has to be done.

[Jacque67 7,328]

 

now down 570

[Unidentified 2,930]

What I don't get is (and economic stuff is far down the list of stuff I am knowledgeable about and probably should know more about...) why is the US Canada's biggest import AND export customer? What's the point of importing and exporting back and forth to each other?

 

https://www.trade.gov/steel/countries/pdfs/2016/q3/exports-canada.pdf

 

https://www.trade.gov/steel/countries/pdfs/imports-Canada.pdf

[Amica Nostra 4,803]

1 hour ago, Unidentified said:

What I don't get is (and economic stuff is far down the list of stuff I am knowledgeable about and probably should know more about...) why is the US Canada's biggest import AND export customer? What's the point of importing and exporting back and forth to each other?

 

https://www.trade.gov/steel/countries/pdfs/2016/q3/exports-canada.pdf

 

https://www.trade.gov/steel/countries/pdfs/imports-Canada.pdf

Several reasons: 

 

1. NAFTA provides preferential trade agreements between the US, Mexico and Canada making it effectively one marketplace with relatively low barriers in entering each others markets
2. Geographic proximity
3. A large chunk of volume is the movement of raw materials into processed parts into finished products back and forth across the border.  Car manufacturing is a good example.  Cars from Detroit made from  Parts made by GM in Ontario made from parts in Indiana made from steel from Ontario made from Ore from Minnesota
4. Its profitable for both sides

[Sonea 138]

I'm just going to throw this out here. 

 

1. US announces 10 -25% tariffs on 50 billion dollars worth of Chinese goods.

 

2. China retaliates by slapping 10-25% tariffs on 3 billion worth of US goods.

 

So.................what if the US turns around and uses the funds gathered from the Chinese tariffs to subsidize businesses affected by the retaliation? 

 

Seems like the US is ahead in that case.

[Unidentified 2,930]

1 hour ago, Il Mango Dulce said:

Several reasons: 

 

1. NAFTA provides preferential trade agreements between the US, Mexico and Canada making it effectively one marketplace with relatively low barriers in entering each others markets
2. Geographic proximity
3. A large chunk of volume is the movement of raw materials into processed parts into finished products back and forth across the border.  Car manufacturing is a good example.  Cars from Detroit made from  Parts made by GM in Ontario made from parts in Indiana made from steel from Ontario made from Ore from Minnesota
4. Its profitable for both sides

I get that you ship a car back and forth and all over (like with Tesla and their parts and batteries and #######). But why import and export an item (in this case steel) back and forth? "Hey, I'll buy some steel from you if you buy some steel from me". Weird.

[Sonea 138]

3 hours ago, jg121783 said:

While that may be true where do they get their steel from? In many cases China. Also there will be exemptions for some countries including Canada.

 

 

Canada creates its steel from its own vast iron ore deposits.

[Sonea 138]

3 hours ago, jg121783 said:

Contrary to your opinion on the matter the steel cost will go down not up as more steel mills are being reopened and there will be a bigger supply within the US. You also have to consider the cost of shipping steel from long distances versus across the US. Not to mention the increase in quality.

 

 

From what I've read, the steel industry doesn't have much room to expand. Sure they can probably increase capacity by 5-10% but had Canada been cut off costs would have spiked.

[Amica Nostra 4,803]

4 minutes ago, Unidentified said:

I get that you ship a car back and forth and all over (like with Tesla and their parts and batteries and #######). But why import and export an item (in this case steel) back and forth? "Hey, I'll buy some steel from you if you buy some steel from me". Weird.

Its not like that. The supply chains are integrated just as they might be across state lines.  There is no conscious agreements between trade representatives and often the trade is between international divisions of the same company.  It just makes business sense to the importers and exporters and it is easier than it has been.

[Unidentified 2,930]

Just now, Il Mango Dulce said:

Its not like that. The supply chains are integrated just as they might be across state lines.  There is no conscious agreements between trade representatives and often the trade is between international divisions of the same company.  It just makes business sense to the importers and exporters and it is easier than it has been.

Ah that makes sense. Thank you! 

[Amica Nostra 4,803]

11 minutes ago, Sonea said:

I'm just going to throw this out here. 

 

1. US announces 10 -25% tariffs on 50 billion dollars worth of Chinese goods.

 

2. China retaliates by slapping 10-25% tariffs on 3 billion worth of US goods.

 

So.................what if the US turns around and uses the funds gathered from the Chinese tariffs to subsidize businesses affected by the retaliation? 

 

Seems like the US is ahead in that case.

The tariffs will make US products less attractive and Chinese consumers will turn to other sources.