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What The Trade War Means For Regular Americans

Mac Slavo
October 1st, 2018
SHTFplan.com
Comments (30)
Read by 1,344 people

What does the trade war mean for the average everyday working American?  It means higher prices on goods, lost jobs, and economic downturns if the tariffs continue.

President Donald Trump’s steel and aluminum tariffs are particularly concerning for the public. They are bad news for the much bigger sector of the US economy that buys those metals to use them in the goods they produce, according to Quartz.

Take steel, for instance, which is used to make cars, cans, trains, and planes. The pillars of American infrastructure are made of steel, from office buildings to bridges; so are the cranes, excavators, and other machines that build those things reported Quartz. Steel equipment extracts the oil and gas needed to produce all of this stuff. Steel also forms the pipes through which oil and gas flow. US steel-consuming manufacturers dwarf the US steel industry, with more than 6.5 million workers.  Facing higher prices for foreign steel under the Trump tariffs, steel consumers have three terrible options. They can absorb the cost and fire workers, they can absorb the cost and lower their profit margin, or they can pass on the cost to customers.

Most companies aren’t going to lower their own profit margin, so the other two options, which affect the American public the most, are the ones that will have the greatest impact and be most likely.

Wilbur Ross, the US secretary of commerce, is trying to convince the American consumer that they won’t be affected by the trade wars all that much. (Tell that to the guy who lost his job…) Ross is using that argument in an attempt to clam the fears of American people.  The direct effect of the tax is that most likely that prices will go up only marginally, so he’s right it won’t hit that hard.  Unless you already have no disposable income. And Ross forgets something else too.

According to Quartz, Ross’ calculations ignore all the possible indirect effects of a tariff. For example, imagine American companies want to switch from using foreign steel to US steel (which is either the same price or cheaper now and the point of these tariffs in the first place). Can the US steel industry handle the surge in demand? A trade sanction on steel from one of Trump’s predecessors offers some intriguing clues:

In 2002, the Bush Administration hastily slapped a tax on foreign steel, ranging from a 30% tariff on sheets to a 15% tariff on bars and rods. At the time, most steel-consuming manufacturers were small businesses, with less than 500 workers. They were what economists call “price takers”—companies too small to demand that customers pay more, for fear of losing out to the competition. These firms rushed to cancel foreign steel orders and buy up American steel.

By April, a month after the tax went into effect, some producers were rationing sheet steel to buyers because their main plants were near capacity and their rolling mills, booked full through June. The US steel industry went from running at 70% capacity to near 100% in just under two years, supplying over 90% of the market when 80%- 85% was more standard. Ultimately, US steel producers couldn’t meet the demand.

The end result of all that demand-side pressure? Steel prices soared—spot prices for steel were up more than 60% four months later. A producer price index for steel and iron rose 11% over the next year; by the end of 2004, the index had climbed more than 60%. -Quartz

The evidence that tariffs hugely affect the US economy and consumers is there, but it’s still being willfully ignored.

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Author: Mac Slavo
Views: Read by 1,344 people
Date: October 1st, 2018
Website: www.SHTFplan.com

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30 Comments...

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  1. Mac,
    The article on the pot stocks you posted earlier today by Ian Jenkins. Is Ian the same one that wrote the article that has since disappeared on Cool Holdings? It would of been around the 19th of September and was about the store that sells Apple products and their stock (AWSM) Cool Holdings.

    Thanks.

    DurangoKidd….do you have a junk email you wouldn’t mind posting here that I can communicate with you at?

    Thanks,

    BJ

    • Hey BJ – that Cool Holdings article was written by James Burgess. I hope that helps.

    • durangokidd says:

      “What does the trade war mean for the average everyday working American? It means higher prices on goods, lost jobs, and economic downturns if the tariffs continue.”

      FALSE. Economic downturns are already baked into the cake, They are called the “BUSINESS CYCLE”. And the end of the business cycle sees job losses on a regular, cyclical basis.

      Initially there will be some price increases but two things will happen. First, Walmart, Target, and Others will source their products from other nations where low prices can still be achieved, like Ukraine, Greece, Spain, etc as I have mentioned in previous posts. In a word: ALLIES. That is the economic PRINCIPLE of Substitution in action.

      Second, the end of the business cycle in America will suffocate demand for goods & services, and jobs will be loss as a lack of demand triggers a recession.

      Third, the Chinese currency will DECLINE in value in an attempt to maintain their export volume as they continue this ADVERSARIAL relationship with the US and eventually the Yuan become confetti.

      Fourth, if China REVERSES its current policies (which will only lead to financial disaster for the Chinese people and social unrest), then the Yuan will RISE in value as China accepts its role as a PARTNER and will eventually stabilize on a par with the dollar.

      This is not likely in my view, but many financial institutions are moving to accept larger Yuan reserves; which may indicate that they think that the Yuan has gone as low as it is going to go.

      Some of you will remember that I suggested years ago that before the Yuan became a world currency, the major banks would load up with Yuan to profit from the appreciation as it moves to a fungible relationship with the dollar. These global banks have been wrong before and way too many times. I think they are wrong now and will take the hit.

      China has proven itself to be an ADVERSARY, stealing defense secrets and other intellectual property. It has NO INTENTION of being a PARTNER with the US. It wants to be the Top Dog because it has the largest number of people: not the best Civilization.

      The Trade War with China is about more than the return of factories & jobs to the USA. This is a war over SUPREMACY; who is going to be Top Dog and what ideology is going to control the direction of World and Off World development. I do not believe that China will relent as it clearly wants to dominate the world like the USA has since WWII.

      Extended Trade Wars always erupt into shooting wars if history is any guide at all. And it is. The biggest problem China has now is its impatience, not unlike the NWO LEFT, it has pushed too far, too fast and is anxious to dominate, but their aggressive actions have only triggered moderate & reactionary political forces.

      In the end there can be only one which is why I believe that war is coming sooner rather than later. 🙁

    • durangokidd says:

      Here’s an article to read, My Peeps:

      https://www.cnbc.com/2018/09/25/with-trumps-250-billion-in-china-tariffs-heres-what-will-cost-more.html?recirc=taboolainternal

      Tariffs are taxes so increased prices will drop demand (ELASTICITY) for Chinese products …like a rock, crushing Chinese jobs. BTW how many big screen TVs were going to buy anyway ???

      With the USA heading into a recession next year at the end of the longest expansion in history as a natural phenomena anyway, companies will start relocating their factories back to America or securing new sources for the products American consumers want during the market lull.

      Xi will capitulate or Chinese workers will be pissing into the wind by 2020. 🙂

  2. southside says:

    Where should I start with this? We have a new trade agreement with Canada and Mexico which replaces NAFTA. Which by the way,caused me to be laid off from a job I held for almost 10 years.NAFTA was never good for the country. All presidents knew this and did nothing. And don’t get me started on China…….

    • Stan Roberts says:

      We got these moronic trade deals (including China) from squishy republican’s and Lib democrat’s who believe we needed to be nice to other countries by giving away our strength and power. As China emerged into the modern world from their strict communistic commerce, we had American presidents allowing China to steal our intellectual property and set up unfair trade deals. Flash forward decades later, some presidents griped about it, but did NOTHING until Trump.

    • TharSheBlows says:

      Wilbur Ross, the US secretary of commerce, is trying to convince the American consumer that they won’t be affected by the trade wars all that much. (Tell that to the guy who lost his job…) Ross is using that argument in an attempt to clam the fears of American people.

      FACT: Wilber ROSS is a Deep State Player, who’s real name is ROTHCHILD and who lent Donald Trump money back when his casino’s were in bankruptcy. So now “The DON” is now paying back Wilber Ross / Rothchild for his services that saved Donald Trump. And put Wilber Ross / Rothchild in charge of commerce secretary.

      I would not believe a single think Wilber Ross / Rothchild says about anything. He is a DEEP State Character. You have Lies, More Lies, Damn Lies and then the Rothchilds.

      • Mad Dog says:

        Ross was born Wilbur Louis Ross, Jr. His father was Wilbur Louis Ross and his mother was Agnes O’Neill. He was never named Rothschild.

      • TharSheBlows says:

        Check out these Headlines:

        “Meet Wilbur Ross, who once bailed out Trump in Atlantic City and is now his pick for Commerce secretary”

        Wilbur Ross | Investopedia

        Wilbur L. Ross, Jr. is a millionaire investor who spent a quarter century working as a bankruptcy restructuring advisor for Rothschild Investments. In the early 1990s, he helped a struggling casino magnate—Donald Trump, whose Atlantic City properties were bankrupt and whose net worth was estimated at negative $1.4 billion (Trump held that it was positive $1.5 billion)—to hold onto his stake in the Taj Mahal and keep his name on the sign. “The Trump name added value to the casino,” Ross, then senior managing director at Rothschild, told Bloomberg in 1992.

        On November 30, 2016, Trump’s transition team confirmed reports that Ross, 79, had been tapped for secretary of commerce. He was confirmed by the Senate on February 27. Ross took on a dizzying array of responsibilities at the Commerce Department, including running the Census Bureau, the National Weather Service and the Bureau of Economic Analysis.

        Oh the weather service. Like NOAA and the weaponizing of weather. Firestorms, floods, suspicious fires in northern California. That Wilber Ross Rothchild family of Satan.

        • Mike in Maine says:

          Trump has had a long time involvement and connection to these crooks and thugs. I voted for Trump but have since given up on him. You can tell a lot about a man’s character by the company he keeps.

        • Mike in Maine says:

          Almost every single one of those many deadly CA fires were in Democrat controlled areas; Hillary voters and people who did not vote for Trump. I don’t believe Trump wasn’t in on it in some way or at least had knowledge and went along with it. He’s just like the rest of them. Meet your new boss, same as the old boss.

      • Beaumont says:

        There was never once any conventional explanation, to cede intellectual property, the means of production, and physical resources, to a national rival, like communist China, then, say you can’t exist without them, for some reason.

        There is no reason for an opportunist to derail the gravy train.

        As for Jews and master conspirator Jews —
        Israel experiences the same social rot, for instance, relinquishing an important port. You have white guilt. Jews have self haters, as well as conservatives, who cry for sovereignty.

        There is no effective difference between Hitler’s ‘eternal Jew’, a cronyist, and the bourgeoisie. They come in all skin colors, religions, and political parties.

  3. Stan Roberts says:

    This is a pessimistic article and speaks nothing concerning today’s win with USMCA.I don’t believe this so called war will be going on for very long.

  4. The Deplorable Renegade says:

    Our economy was heading toward collapse even without the ‘trade war’. Might speed up the process?

  5. The Deplorable Renegade says:

    This ‘trade war’ just might speed up the collapse of the economy? We’re heading for catastrophe regardless.

  6. Bee Liberty says:

    What a train wreck. Stupid is as stupid does America. You got what you asked for, more oligarchy, more shrinking middle class, more poverty. What did you think the Republicans and the Orange Pig were going to bring you, prosperity? Ha! Laughable! Now the joke’s on you, dummies. You can still redeem yourselves in November by voting for the Dems, if you’re not too far gone down the road of delusions.

  7. Anonymous says:

    All those things Obama told us about trade, jobs, and the future of American industry and the economy ………..

    Trump proves him wrong on a daily basis.

  8. Do you want a job that pays $40/hr including benefits but $10 T-shirts, or minimum wage with NO benefits but $5 T-shirts?

    You SELL your labor so want the highest price for that – and you can wait for a bit more displacement. You BUY consumer goods so you want the lowest price for those.

    The correct calculation is how much consumer goods (or savings) you can obtain with your labor, not what one price for one good is.

    Many economists are knaves or fools it appears.

  9. Anonymous says:

    They’re are ALL crooks!! I will never vote again! Like Celente said, we have a choice between the Crips and the Hoods (or something like that– basically, they are all gang members– the Mafia Elite).

    Did you’ll see the picture of the Bush’s? They had the elder Bush, the young, moron Bush, the Obamas, the Clintons, etc… Just one big group of gangsters– and they were all laughing! Family photo!! The joke is on us!

  10. Donkey cheese is the most expensive cheese in the world at just under $650.00 per pound.

    An Italian scientist, using camel rennet, discovered a way to make cheese from horse’s milk. Mare’s milk, ie horse’s milk is said to cure skin conditions and liver and gut/digestive problems. These claims have not been evaluated by the FDA.

    Invest in horses and donkeys. They have many other uses besides producing milk. Healthy as a horse. Strong and sleek. Horse milk is a staple in some Countries such as parts of the Middle East and China. It is supposed to improve energy, and is close to human milk. Good for those with allergies, it is used to feed infants.

    _

    • The Dali Lama claims that using a low alcohol drink made from Mare’s milk, he has cured Tibet of alcoholism. This claim has not been confirmed by the FDA.

      In Europe and in high class restaurants around the world, Mare’s milk and donkey cheese has been on the menu for years and gaining in popularity.

      A sports star is/has been buying up all available donkey cheese to get it off the market, making it harder to obtain. This donkey cheese is made with part donkey milk and part goat’s milk.

      But I thought donkeys were sterile. How do they then get them to produce milk ??

      _

  11. Old Guy says:

    What does the trade war mean for the average everyday working American? It means higher prices on goods, lost jobs, and economic downturns if the tariffs continue. That higher prices and lost jobs was happening long before Trump put on the Tariffs. Those Tariffs will help the making producers who have been been under cut by slave wage inports.

  12. 10mm says:

    Trade wars lead to shooting wars.

  13. Old Guy says:

    Yes indeed try and Trade oil for something other than the USA Petro Dollar and the USA military will not only shoot at you. They will arm your adversaries, Destroy your economy. Make Refugees of your citizens and bomb the bejabbers out of your homes.

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