INFLATION--FED Rebuffs Trump; Tariffs; Dumping Steel, etc.

[Monahorns]

Then you'll remain ignorant of the economic history of the 1970s and 1980s. Dumping and anti-dumping was a big thing in the international steel industry. Nippon Steel was heavily subsidized back then.

I can't spend much time on this, but looked into it a little. As expected the statements vary. There is no direct way to prove that Japanese companies were selling below their production costs. There are some calculations economists do, but I also don't trust most economists. I think what can be demonstrated is that Japanese steel was sold in the US below prices they sold it for in other countries and below the US mfr prices.

It's dirty, but there is a much better way to compete with dirty tricks. Instead of crying to the government, the US mfrs should have bought up all that cheap Japanese steel and sold it at nice profit. If Japan was selling below their costs they go out of business quickly or cause an economic slowdown in Japan due to higher tax burden or high inflation. Fact is the US mfrs could do that indefinitely until they broke the Japanese scheme. But instead they cried to the government and kept steel prices in America elevated.

 

[Chop]

October 1977, The New York Times -- at the time, the paper of record for the civilized World. (the mighty have since fallen)

U.S. Rules 5 Japanese Exporters Dump Steel on American Market (Published 1977)

www.nytimes.com

"WASHINGTON, Oct. 3—The Treasury Department, in its first anti‐dumping ruling against the Japanese steel industry in memory, issued a finding today that five exporters of carbon steel plate were selling in the American market at prices substantially below their costs."

 

[Chop]

I thought I heard Trump made a new deal with Japan that cut tariffs on steel somewhat.

Today's Japan is kind of like us: highly skilled, hi-tech, high productivity, high wages. As long as they're not dumping (selling below production price--which can happen with gov't subsidies), then they're a very good trading partner, a good friend, an outpost in Asia, and somebody we want on our side in the next really big war. (if such war were to occur)

Our youth seem to really like their entertainment.

 

[Chop]

From the National Security Archive:

October 3, 1977:

The Treasury Department rules that five major Japanese steel producers, Nippon Steel Corp., Nippon Kokan K.K., Sumitomo Metal Industries Ltd., Kawasaki Steel Corp. and Kobe Steel Ltd., are dumping carbon steel plate on the U.S. market at below-cost prices and that the companies should pay a 32 percent penalty duty. The government used outside estimates to calculate Japanese producers' costs, and found that instead of charging a "fair value" price of about $285 a ton, the Japanese were selling the carbon plates at around $215 a ton. The ruling will retroactively come into effect after the Treasury makes a final determination on the dumping charges. After the announcement, Japanese and European producers indicate they will accept orderly market agreements in an effort to head off a trade war. (Facts on File 10/15/77 774B3)

Japan and the United States: Diplomatic, Security, and Economic Relations, Part II, 1977-1992 | National Security Archive

January 13, 1977: President Jimmy Carter invites Prime Minister Takeo Fukuda to the U.S., and stresses the need for U.S.-Japanese cooperation to overcome the world's economic difficulties. (New York Times 1/14/77) January 21, 1977:

nsarchive.gwu.edu

 

[Chop]

There is a balancing act to walk:

1. fighting inflation

vs

2. re-sourcing manufacturing to America and away from the CCP

 

[Chop]

There is a balancing act to walk:

1. fighting inflation

vs

2. re-sourcing manufacturing to America and away from the CCP

Perhaps phased in penalties and tariffs until we hit 50% or whatever he's after.

Ultimately, we could end up with a huge tariff on China, minor or no tariffs on our allies (unless they start dumping below their cost of production), and moderate tariffs on Neutral countries--subject to downward adjustment if they become more friendly towards us.

Another possibility is "set your own tariff." For any given country, the highest tariff you apply on any of our goods--that's our tariff on all of your goods. .

 

[Chop]

A long time ago, there was no income tax and the federal government was funded mostly by tariffs and duties. This continued through the time we surpassed the UK and become the #1 Nation on Earth.