Economics Thread
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acesfull86
Well-known member
https://www.washingtonpost.com/opinions/2024/01/26/vance-rubio-hawley-protest-steel-deal/
The crisis du jour, according to some febrile senators, is a Japanese corporation’s intention to buy America’s 573rd largest U.S. corporation (as this is written, its market capitalization is smaller than that of Casey’s General Stores). The U.S. corporation for sale has fewer employees (22,470) than Dave & Buster’s (a chain of restaurants with games).
Three excitable Republican senators, all self-described conservatives, have temporarily suspended their vigilance against socialism to exhort the Biden administration to prevent this market-directed efficiency in capital allocation. The senators — Ohio’s J.D. Vance, Missouri’s Josh Hawley and Florida’s Marco Rubio — say that if Nippon Steel, the world’s fourth-largest steelmaker, purchases U.S. Steel, the 27th-largest, U.S. national security will be imperiled.
Vance says U.S. Steel is a “critical piece” of the U.S. “defense industrial base.” But this corporation, which is just thefourth-largest U.S. steel producer, will still produce steel, but more efficiently. And Defense Secretary Jim Mattis said in 2017 that just 3 percent of domestic steel production is required for defense purposes. And Japan, one of the most important U.S. allies, will become more so as a collaborative producer of an important commodity. And, by the way, Nippon vows to keep U.S. Steel’s headquarters in Pittsburgh.
Rubio, whose campaign donors include domestic sugar producers, and who says sugar import quotas protect America’s “food security,” says the sale of U.S. Steel is a “poignant metaphor” for America’s “deindustrialization.” Nippon, however, intends to modernize, not liquidate, U.S. Steel.
...
Pennsylvania Sen. John Fetterman, a Democrat, calls it “outrageous” that U.S. Steel is selling itself to a “foreign nation.” But Nippon is not a nation. Like U.S. Steel, it is a publicly traded private corporation, some of whose shares probably are owned by U.S. individuals and pension funds. As Reason’s Eric Boehm notes, Nippon, which has been operating in America for 40 years, already owns two U.S.-based steelmakers, Standard Steel and Wheeling-Nippon Steel.
...
Economic illiteracy, mixed with foggy nostalgia and unseemly xenophobia, is a familiar populist cocktail served by demagogues to the gullible.
The crisis du jour, according to some febrile senators, is a Japanese corporation’s intention to buy America’s 573rd largest U.S. corporation (as this is written, its market capitalization is smaller than that of Casey’s General Stores). The U.S. corporation for sale has fewer employees (22,470) than Dave & Buster’s (a chain of restaurants with games).
Three excitable Republican senators, all self-described conservatives, have temporarily suspended their vigilance against socialism to exhort the Biden administration to prevent this market-directed efficiency in capital allocation. The senators — Ohio’s J.D. Vance, Missouri’s Josh Hawley and Florida’s Marco Rubio — say that if Nippon Steel, the world’s fourth-largest steelmaker, purchases U.S. Steel, the 27th-largest, U.S. national security will be imperiled.
Vance says U.S. Steel is a “critical piece” of the U.S. “defense industrial base.” But this corporation, which is just thefourth-largest U.S. steel producer, will still produce steel, but more efficiently. And Defense Secretary Jim Mattis said in 2017 that just 3 percent of domestic steel production is required for defense purposes. And Japan, one of the most important U.S. allies, will become more so as a collaborative producer of an important commodity. And, by the way, Nippon vows to keep U.S. Steel’s headquarters in Pittsburgh.
Rubio, whose campaign donors include domestic sugar producers, and who says sugar import quotas protect America’s “food security,” says the sale of U.S. Steel is a “poignant metaphor” for America’s “deindustrialization.” Nippon, however, intends to modernize, not liquidate, U.S. Steel.
...
Pennsylvania Sen. John Fetterman, a Democrat, calls it “outrageous” that U.S. Steel is selling itself to a “foreign nation.” But Nippon is not a nation. Like U.S. Steel, it is a publicly traded private corporation, some of whose shares probably are owned by U.S. individuals and pension funds. As Reason’s Eric Boehm notes, Nippon, which has been operating in America for 40 years, already owns two U.S.-based steelmakers, Standard Steel and Wheeling-Nippon Steel.
...
Economic illiteracy, mixed with foggy nostalgia and unseemly xenophobia, is a familiar populist cocktail served by demagogues to the gullible.
nsacpi
Expects Yuge Games
I think what those senators are all trying to avoid is the incongruity of having to lobby for protectionist measures to protect a business owned by Nippon Steel. Pennsylvania does happen to be a swing state with 20 electoral votes. It is not surprising to see that protectionism has a bipartisan flavor.
Thank God for this investment and consulting firms that tell these companies to close their domestic production and move it offshore.
So happy for the high GDP figures!
Selfishness and short sightedness runs rampant around these parts.
acesfull86
Well-known member
If foreign investment in a company operating in America is the difference between it staying open or shutting down, I wouldn't call the non-protectionists the one's being selfish...
I think there are situations it makes sense. Never been a proponent of shutting the doors completely (aside from a communist dictatorship).
But your one offs pale in comparison to what’s actually happening.
acesfull86
Well-known member
https://taxfoundation.org/blog/trump-china-trade-war-proposal/
The Trump campaign is mulling a massive tax increase on American purchases from China. During his first term, the Trump trade war quadrupled the tariff on imports of Chinese goods from 3 percent to 12 percent on average. If reelected, he might quintuple the tax, imposing tariffs of 60 percent on imports from China. The economic ramifications would be significant and unwelcome, upending businesses’ relationships with suppliers, diverting trade flows to get around the tariffs, imposing immense costs on people in both economies, and likely closing crucial export markets for key American products, including agriculture.
Trump’s first trade war was a failure. Though intended to boost U.S. manufacturing and reduce the trade imbalance, (unsurprisingly) neither occurred. Americans almost exclusively paid the tariffs that the U.S. imposed on nearly $380 billion worth of imports. Businesses faced higher costs, making it harder to compete internationally. Foreign governments retaliated with tariffs on U.S. exports, and China halted its purchases of agricultural products altogether. Lobbying, along with political favoritism, mushroomed.
…
Imports from China would depress significantly. Supply chains would fragment, investment plans would be disrupted, and trade would be diverted to third countries. A prohibitive tariff would create a void in trading opportunities with China that other countries would fill, leaving the U.S. excluded.
In sum, it is not a thoughtful approach to the U.S.-China economic relationship. The economic costs of prohibiting trade with China would undercut the benefits of the tax reforms put into place under the Trump administration, harming business investment and innovation and placing U.S. businesses at a competitive disadvantage.
In the event the U.S. government would again permit a case-by-case exclusion process, some companies could be shielded from the prohibitive tariff. But granting the government the ability to pick winners and losers creates significant opportunities for influence peddling and favoritism, placing large, established firms at an advantage over smaller or newer firms that lack the resources and connections to successfully lobby for exclusions.
Trump’s proposal to return to the Tariff of Abominations is foolish. It would harm U.S. farmers, manufacturers, and consumers (especially those with low incomes); upend supply chains and impose significant costs as businesses deal with resulting fragmentation; and create a world in which the United States is increasingly left behind on the global stage. It would be an abomination.
——————
America first, they say
The Trump campaign is mulling a massive tax increase on American purchases from China. During his first term, the Trump trade war quadrupled the tariff on imports of Chinese goods from 3 percent to 12 percent on average. If reelected, he might quintuple the tax, imposing tariffs of 60 percent on imports from China. The economic ramifications would be significant and unwelcome, upending businesses’ relationships with suppliers, diverting trade flows to get around the tariffs, imposing immense costs on people in both economies, and likely closing crucial export markets for key American products, including agriculture.
Trump’s first trade war was a failure. Though intended to boost U.S. manufacturing and reduce the trade imbalance, (unsurprisingly) neither occurred. Americans almost exclusively paid the tariffs that the U.S. imposed on nearly $380 billion worth of imports. Businesses faced higher costs, making it harder to compete internationally. Foreign governments retaliated with tariffs on U.S. exports, and China halted its purchases of agricultural products altogether. Lobbying, along with political favoritism, mushroomed.
…
Imports from China would depress significantly. Supply chains would fragment, investment plans would be disrupted, and trade would be diverted to third countries. A prohibitive tariff would create a void in trading opportunities with China that other countries would fill, leaving the U.S. excluded.
In sum, it is not a thoughtful approach to the U.S.-China economic relationship. The economic costs of prohibiting trade with China would undercut the benefits of the tax reforms put into place under the Trump administration, harming business investment and innovation and placing U.S. businesses at a competitive disadvantage.
In the event the U.S. government would again permit a case-by-case exclusion process, some companies could be shielded from the prohibitive tariff. But granting the government the ability to pick winners and losers creates significant opportunities for influence peddling and favoritism, placing large, established firms at an advantage over smaller or newer firms that lack the resources and connections to successfully lobby for exclusions.
Trump’s proposal to return to the Tariff of Abominations is foolish. It would harm U.S. farmers, manufacturers, and consumers (especially those with low incomes); upend supply chains and impose significant costs as businesses deal with resulting fragmentation; and create a world in which the United States is increasingly left behind on the global stage. It would be an abomination.
——————
America first, they say
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acesfull86
Well-known member
Why only 60%? Why not 120% or 500%? Or ****, make any and all imports from China illegal?
Does Trump or one of his crackpot “economists” ever show his work, or does he wake up in the morning, pull a number out of his ***, and watch his supporters line up behind it? Reason, facts, logic, consequences be damned.
Does Trump or one of his crackpot “economists” ever show his work, or does he wake up in the morning, pull a number out of his ***, and watch his supporters line up behind it? Reason, facts, logic, consequences be damned.
Its about leveling the playing field to encourage fairer practices.
But I know you're so happy with enrichment of a communist dictatorship lets just do more of it!
Great strategy!
acesfull86
Well-known member
Time for someone in MAGA to show their work.
Time for you to show your work how its good to enrich a communist dictatorship.
I'm sure there won't be any fallout of that 10 years down the road.
chop2chip
Well-known member
I’m sure if you shout louder you’ll make more sense
As will your group that thinks it’s fine to help the ccp.