Free Trade

Utah Metalworking Company Cancels Expansion Plans Because Tariffs

The unseen costs of the Trump administration's bellicose trade policy matter too.

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Ingram Publishing/Newscom

Business had been good at Jack's Ornamental Iron. So good, in fact, that co-owners Greg Schow and Tina Pardue were planning to expand into a larger workspace and hire 25 percent more employees.

But those plans have been canceled, they told a local Salt Lake City television station this week, because President Donald Trump's tariffs have imposed huge new costs on the metalworking company's supplies of steel and aluminum. Schow says the business purchases roughly $1 million worth of steel every year, so the 25 percent import tax on imported steel means Jack's Ornamental Iron will face about $200,000 in new overhead costs.

Jack's Ornamental Iron does a wide range of metalworking, buying raw steel and turning it into everything from boat propellers to railings and metal staircases for apartment buildings. The sudden increase in the price of steel has created big problems for Jack's because the company has several contracts that were signed before the tariffs were announced.

"So once they give us that contract at the very beginning, we're locked in and we can't change your pricing," Pardue told KUTV. "On our current jobs we have right now, we're just having to eat it."

That's why the expansion and new hiring are on hold.

Sen. Orrin Hatch (R-Utah) highlighted the Salt Lake City company's plight at Wednesday's hearing of the Senate Finance Committee, where a number of senators sharply criticized Commerce Secretary Wilbur Ross for the administration's tariff policies.

"These companies are small, Mr. Secretary, but they are important," Hatch said, referring to Jack's Ornamental Iron and another Utah-based metalworking firm. "They are important sources of jobs in our communities, and they are particularly vulnerable to the consequences of tariffs."

Even after being mentioned in a Senate hearing, it's unlikely that stories about businesses like Jack's Ornamental Iron will get the sort of coverage that, for example, Harley-Davidson received this week when the iconic American motorcycle manufacturer announced that it would be moving some production jobs overseas to avoid tariffs. It's unlikely that Jack's Ornamental Iron will get trashed by the president on Twitter—as Harley-Davidson did—for canceling plans to hire more workers.

The decisions made by each of these businesses illustrate the consequences of the White House's bellicose trade policy. Steel prices have spiked since the tariffs were announced (just like how prices for lumber and washing machines spiked after earlier Trump tariffs went into effect), increasing production costs for myriad American businesses while leaving those same businesses at a competitive disadvantage against foreign competitors. Ultimately, consumers pay the price.

But what's happening at Jack's Ornamental Iron also speaks to the difficulty of assessing the real economic impact of the tariffs. When companies lay off workers as a way to offset the higher costs of their materials, it's possible to count those job losses. The same is true when a company like Harley-Davidson says it is going to move some jobs overseas to avoid the tariffs. Schow's and Pardue's decision to cancel plans to hire more workers won't get included in those counts, but it's still a loss—both for the economy as a whole and for the individuals who would have gotten those jobs that now won't exist.

There are plenty of seen, measurable consequences for tariffs. The unseen costs matter too.

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  1. Something something omelette broken eggs.

  2. WHY WON’T REASON POST A STORY ABOUT ALL THE AMERICAN JOBS THAT THE TARIFFS ARE CREATING?

    1. You mean jobs like tariff collectors?

    2. Economy is booming in Georgia!

      Not where Reason writers hail from though.

    3. Maybe becsuse you never find what you don’t want to look for.

    4. They are. You think those jobs just disappeared? They went somewhere else.

  3. Keep up the good work Eric.

    1. This is just TDS but about more tariffs than the tariffs that were already in place.

      I am sure Eric would complain that Trump could not get the trade restrictions lowered fast enough after he gets trade restrictions lowered among trading partners.

      1. Quick! To arms! To arms! Somebody isn’t supporting Donald Trump hard enough!

        1. Quick! To Arms! To Arms! Somebody is not TDS on Reason.

          1. Among lefties!

            1. Quick! To Arms! To Arms! Among $parkY.

              1. You do know that it’s not a Y at the end, right?

                1. Quick! To Arms! To Arms! sparky is more concerned about a Yen symbol than anything Libertarian.

      2. Trump may get foreign trade restrictions reduced. He may start a disastrous trade war.

        Whether he is a great genius or one of history’s greatest fools will be determined after the outcome.

        1. There has a been a trade war for decades. US Politicians just are too scared to fight until Trump.

          You’re right about genius or fool but one thing is for sure, Reason will NEVER admit they were wrong to risk it for a big reward of lower/zero trade restrictions. NEVER.

          Reason never addresses that European and Chinese economies are leveraged to the hilt. If you are deep into investments you will know that bonds out of Europe are high risk. They have been borrowing money like crazy. Trump has some of the best economists in the World giving him info. Some of that info is that the US economy is far more flexible to handle a trade war than Europe.

          China’s economy can be flexible but the Communist Party of China is not flexible.

          Another thought is that the media, lefties, Europe, and all sorts of other people are ganging up on the USA to break us. When European economies crack they fight among themselves. Trump is working “n”th D chess on the Lefties and the media.

          “We will see”, says the Zen Master.

          1. “We will see”, says the Zen Master.

            One of my favorite scenes.

            1. Great movie too.

              The listening device on Scotch scene always cracks me up.

              If only Congress had listened to Charlie Wilson/Gust Avrakotos about rebuilding the sheep herds in Afghanistan and steering clear of the crazies (Saudis like Osama Bin Laden), things in South Asia and the ME might have been far better for the USA.

          2. the US economy is far more flexible to handle a trade war than Europe.

            That’s clearly true, and it seems to me that it’s true of China, as well.

            But I would go less “”n”th D chess” in favor of Ken’s “big bet on a blackjack hand” metaphor below. I might even say more like roulette.

            1. One hand to win big but Trump has not bet everything.

              The USA should never agree to higher trade restrictions even if a trade was does not result in a big win for the USA. We can buy more chips over and over and over until our trading partners lower their trade restrictions.

          3. So the small businesses like the one in the story just have to eat it until better tariffs/trade/restrictions/etc. (potentially) come into being? Perhaps Trump will get a better deal, perhaps not. Regardless, we shouldn’t forget the individuals that are getting shafted because a government wants to determine how people do business.

            1. The small businesses have been eating it. All this time.

              Sometimes you have to fight. Trump wants to fight for America.

              1. I agree. If the Chinese know we won’t hit back on unfair trade practices no matter what, then they know they are free to put the screws to any of our industries and drive them out of business. That cannot be. The commentariat here are acting like we should do nothing to defend ourselves, because they might save a few bucks.

        2. Whether he is a great genius or one of history’s greatest fools will be determined after the outcome.

          Even if he starts a trade war that flat out collapses both the US and China’s economies, he’s still a few names ahead of him on the list of ‘history’s greatest fools’ even just among presidents and/or just American presidents.

          Also, still not convinced we’d do better with ole ‘reset button’ herself, Benghazi Clinton.

          1. We’ve definitely had bigger fools for president. I’m talking more about the rhetoric that will circulate about him. He’s neither a great fool nor a great genius – he’s just some guy from Brooklyn.

          2. still not convinced we’d do better with ole ‘reset button’ herself, Benghazi Clinton

            I think that would have been a continuation of the Obama Stagnation, maybe with a large-scale war thrown in.

            Whether the country will judge the trade-off as good or bad in retrospect will depend on whether Trump implodes the economy or not. But I don’t think Trump is on a path to go down in history as a “meh” president, which is what HRC would have been. He’ll either be FDR or Hoover.

      3. Tariffs are price manipulation by government. Like all central planning ideas , it is a bad one. I like your posts defending the 2A , but on tariffs you are way off.

        1. I wish the USA had no tariffs and our trading partners had zero tariffs. We are not at that point and clearly our trading partners are mostly socialist douches who would never embrace free market.

          We either keep the status quo or nudge other nations to lower their trade restrictions.

        2. So Turco, how them do you reign in abusers like China?

  4. Keep your eye on July 6.

    “WASHINGTON (AP) ? President Donald Trump de-escalated a confrontation with China on Wednesday, dropping plans to impose strict limits on Chinese investment in U.S. technology companies and instead urging Congress to strengthen existing laws that apply to all foreign countries.

    The administration’s more conciliatory stance raised at least the possibility that the two sides could work toward a negotiated end to the punishing tariffs they’re set to impose on each other’s goods beginning July 6. And it fueled a temporary rally in financial markets, which had been reeling on fears of an escalating trade war.”

    http://apnews.com/6cb59b7a2f4c435b9c23280f335ade9e

    Why would Trump suddenly soften his stance on China?

    Chances are, there are ongoing negotiations to head off Trump’s tariffs ahead of July 6, and Trump made a concession to Chinese demands in a show of good faith. Yeah, there’s a certain amount of speculation, there, but the suggestion that there are no ongoing negotiations with the Chinese over the July 6 tariffs seems more far-fetched.

    I remain cautiously optimistic.

    I also remain convinced that calling out Trump’s concessions as such isn’t in the best political best interests of free trade. If Trump goes back on his word, free trade capitalists everywhere should congratulate him and celebrate.

    1. What about the steel and aluminum tariffs already in place Ken?

      1. There have hundreds if not thousands of tariffs in place for decades.

        Trump tries a new strategy to get other countries to lower their trade restrictions and its SKY IS FALLING!

        1. Places like Jack’s are just sacrificial lambs in the eyes of the central trade planners. They’re as bad as those Kulaks at Harley Davidson I suppose.

          Trump has a big beautiful plan for trade. Who cares about the victims along the way. US Steel and the steelworkers unions are happy.

          1. Maybe if there were lower trade restrictions Jack’s would be fine and expanding away.

            I guess we can only know that any trade restrictions that impact business in the USA are Trump’s fault.

            The status quo of trade restrictions hurt business before Trump, ya know.

            Some people are okay with fighting a bit to get those trade restrictions lowered.

            Government before Trump got most of the trade restrictions on there and government is the only body that can get them off or lowered.

            1. Trump has the right brand of central planning. It’ll work better this time.

              1. Only government can lower trade restrictions.

                So central planning on this one government issue will just be fine for the USA.

            2. They WERE expanding. Until the reality of the tariffs reared its ugly head.

              1. They could have expanded more without the pre-Trump trade restrictions.

          2. “Trump has a big beautiful plan for trade. Who cares about the victims along the way.”

            Because we don’t like Trump’s strategy or philosophy doesn’t mean that it won’t work.

            Betting our whole life savings on one hand of blackjack is a stupid thing to do, but if that’s what he’s done, then I certainly hope he wins the hand.

            Don’t think I’ve ever said I approve of what Trump is doing.

            If you think everyone who calls what’s going on the way they see it is on Trump’s side because it isn’t condemning Trump personally all the time, then that’s your problem.

            If Hillary Clinton had done the same, I’d be saying the same things I am now: The July 6 date is the one to watch. The closer we get to July 6, the more pressure there is on both parties to negotiate a settlement. I remain hopeful they will do so, and that all the tariffs that can be averted or taken down are averted or taken down.

            If the truth isn’t enough for you, too bad.

            1. Simple question Ken. Do you consider this a form of central economic planning?

              1. Leo’s tired of playing wait and see on getting trade restrictions lowered, so he’s playing the compare Communist Central Panning to a sole function of government.

                Apples and bowling balls really.

                1. Explain why it’s different? Whether it’s a function of the govt or not doesn’t make it freedom or a good idea.

                  Explain how a tax on imported steel to favor the steel industry is different than giving them tax money directly. It’s not fundamentally different.

                  1. I did explain it.

                    Central planning as you were trying to compare it to is about TOP MEN planning everything about socialist society and the economy.

                    This about an elected Executive trying to get trading partners to lower their trade restrictions.

                    1. Instead this is the TOP MAN setting the price of steel and aluminum. Oh and washing machines, maybe cars, and who knows what else. Even if his intentions are noble, so were the other central planners throughout history.

                      I’m not equivocating this to the USSR, but in the spectrum of freedom to authoritarianism, this absolutely moves the needle towards the latter.

                  2. Ok Leo, how is it a good thing to allow foreign govts. to unilaterally abuse our markets the way Xhina does because “central planning” or something? It’s beej a big problem for a long time. Even if you disagree with his strategy, at least Trump is trying to improve the situation.

              2. Any attempt to interfere in the market is a bad idea–with exceptions allowed for legitimate military concerns like the private trade of nuclear weapons.

                I oppose Trump using tariffs to entice China to open their market further, and I’ve said so a dozen times. I also hope it works.

                I oppose Trump using trade policy to pressure China into putting pressure on North Korea to abandon their nuclear weapons program–and I hope the strategy works.

                Just because I don’t like the president’s strategy doesn’t mean it won’t work–or that I need to hope he fails. I’d have hoped that President Hillary were just as successful in opening up trade–if that’s what she were trying to do. For the sake of the country, the economy, and our security, I hope Trump is wildly successful–in opening up trade–without a trade war.

                The downside of a trade war won’t be that it makes Trump look bad; it’ll be how it hurts the quality of life of average Americans. The upside of averting a trade war before July 6 won’t be that it makes Trump look good either. Can you guess what I think the upside will be?

      2. “What about the steel and aluminum tariffs already in place Ken?”

        Hopefully, they’re in play in the negotiations to head off the tariffs on July 6. Why wouldn’t they be?

      3. What about the steel and aluminum tariffs already in place Ken?

        You say “It sucks that you’re taxing your companies. That sucks for you. Why would we increase taxes on our people?”

        1. The trade restrictions prior to Trump becoming president were also raising costs for businesses.

          Trump wants to try and change that by nudging our trading partners to lower their trade restrictions. I hope it works but it might not.

    2. So he’s partially deescalating the crisis that he singlehandedly started? He should get congratulated for that? It’s like someone setting five houses on fire and putting one of those out.

      Maybe Jack (wait, Jack’s is owned by Greg and Tina?) should have bought memberships at Mar a Lago.

      1. Trade restrictions not recently added where on before Trump.

        1. *were on

      2. “So he’s partially deescalating the crisis that he singlehandedly started? He should get congratulated for that?

        Why respond to someone who can’t even understand the first comment I wrote?

      3. Happy Chandler|6.29.18 @ 3:41PM|#
        “So he’s partially deescalating the crisis that he singlehandedly started? He should get congratulated for that? It’s like someone setting five houses on fire and putting one of those out.”

        Here’s our resident expert on negotiations to tell us exactly how they should be conducted, since (s)he’s the genius.
        Who somehow can’t figure out what a “cite” means…

        1. Cite means that you’re too lazy to read the news.

          1. “Cite means that you’re too lazy to read the news.”

            Lack of cite means you have nothing to say, shitbag.

            1. I gave you a fucking video, original sourcing.
              I gave you a search where all you had to do was click a link. The sources were there, all you needed to do was click. Did you look at them?

              I asked what was wrong with my post. I posted 100% true facts, backed up with evidence. Pompeo testified to Congress that no remains have been returned. The link to the video is there. There’s your cite.

              I sent you a google search for the Fox News report about the Yongbyon reactor work. Did you click the first link to the ARTICLE THAT BACKS WHAT I SAID?

              Should I in the future use APA or MLA references to meet your needs?

              1. “I sent you a google search for the Fox News report about the Yongbyon reactor work. Did you click the first link to the ARTICLE THAT BACKS WHAT I SAID?”

                Oh, goodie. An adolescent who does not know what “a cite” means; (s)he thinks it’s a link to google so you can find the one article that supports his/her bullshit and ignore all the others.
                Here, dipshit, this is “a cite”:

                SCOTUS tells unions they can’t require people to pay to support lefty causes:

                “Top court: Unions can’t force government workers to pay fees”
                […]
                “The Supreme Court ruled Wednesday that government workers can’t be forced to contribute to labor unions that represent them in collective bargaining, dealing a serious financial blow to Democratic-leaning organized labor.”
                https://www.sfgate.com/news/politics/article/
                Supreme-Court-deals-big-setback-to-
                labor-unions-13030226.php

                See that? Even a cave man can do it, so there is some hope for (s)he who shovels happy horse shit.

                1. 1) Nice try at posting a link. Fail.
                  2) The article doesn’t support your statement. Fail.
                  3) Uhhh, that was big news. Why the fuck would you need to post an article for it?

                  Did you click the link to the video I posted?

      4. SomHalpy, you were perfectly content with all the trade restrictions, tariffs, etc. in place before January 2017? Do you also consider it good trade policy t just bend over and take it when China or whomever unilaterally decides to abuse our markets, as they have done for decades?

        1. To these people with TDS, zero trade restrictions is not the baseline, January 20, 2017 is.

          1. I hate Obama, but when he occasionally did the right thing, I always gave him credit for it. Most progressives are incapable of that. I refuse to be that way.

            I also admit when Trump is wrong. He may be miscalculating here. At last he’s trying to make things better.

  5. Every Trump supporter or voter who loses a job or a business consequent to tariffs is a small blessing, and a blow for accountability and justice.

    I hope their Trump hats are nutritious and tasty.

    1. How’s your portfolio, annoying asshole?

      1. Thanks to Obama, my portfolio is happy.

        How’s that Trump hat taste, goober?

        1. Actually, you owe much of your imagined success to Trump. The ,Aries loves his policies and pro America agenda.

          1. Edit: ‘the market loves his policies’.

    2. “Carry on clingers” he said to a group of construction workers who were laying cement. “What did you say?” One of the construction workers asked as he approached the pencil mustached Reverend. “I was just saying: enjoy being my inferior”. He was trying to stand his ground, but the way he gripped at his ascot betrayed his underlying fear. The construction workers were broad shouldered and did not appear to have been raised on a daily dose of soy and cowardice, unlike the good Reverend. “Nice ascot, shithead”, one of the construction workers remarked. The Reverend tried to back away as the workers stepped closer to him. “I…I…read the New York Times” the Reverend began “do you even know where the New York Times is published?”. He thought his joke was good, but in reality it was only as funny as the ridiculous character who spoke it. “Come here, shithead,” one of the construction workers said as he moved closer. Before the construction workers could reach him the Reverend’s pompous attitude became all the more surreal as he crapped himself in fear.

      1. Then the constructions workers laughed and ripped their shirts off. As their muscled chests, glistening with their blue collar sweat, pulsed and rippled, they tipped their hard hats to Just Sayin’, who was quietly watching from the bushes. The big muscled one in the front winked at Just Sayin’, took a sip from his jumbo-sized bubble tea, and said “This one is for you.” All five bare-chested men lined up and broke into a choreographed chorus line dance, while singing “Imagine” by John Lennon.

        1. That’s hot

        2. YMCA probably worked better here. For that reason I’m dropping you to an A-

    3. Every Trump supporter or voter who loses a job or a business consequent to tariffs is a small blessing, and a blow for accountability and justice.

      Says our resident Champion of the Working Class.

      1. I noticed that too.

        Bill Maheresque.

        They don’t give a shit about anyone.

        1. In fairness, they voted the wrong way, so they deserve whatever happens to them, stupid dirty hicks.

          1. In double fairness, in Artie’s mind Trump voters aren’t human. Those untermenschen can be sent to the gas chambers for quick liquidation.

            Meanwhile, the poor, uneducated, Bible-thumping Hillary voters of American inner cities, the ones Artie (ironically?) calls rich, educated, non-Bible thumpers, will be able to enjoy all the additional lebensraum the removal of Trump voters bestowed.

        2. I envision a future event, where Bill Maher is ironically rescued from a savage beating from a crowd of ‘woke’ college students who have deemed Maher ‘unwike’, by a Trump supporter.

          I also envision Maher going on to shit all over his rescuer in a shocking display of ingratitude on his pathetic HBO program the following week.

          1. People like Bill Maher hate it more when they are ignored.

  6. So no articles on business expansion in spite of tariffs and the in spite trade restrictions that have been in place for decades, huh?

    1. Do you believe tariffs are a net positive for the country that imposes them? A simple yes or no would suffice.

      1. Zero tariffs would be optimum.

        Zero trade restrictions would be optimum.

        Low tariffs to pay for a tiny federal government would be reasonable and is what the Founders had in place.

        Pushing trading partners to lower their trade restrictions is a strategy worth trying. It might not work.

        The status quo will assuredly never get trading partners to lower trade restrictions.

        1. Trade barriers have been coming down for decades. Typically, other countries lower their barriers when we do.

          Bush put tariffs on steel. Jobs were lost.
          Obama put tariffs on tires. Jobs were lost.

          We’ve played this game before.

          1. Boosh and Obama are and were morons. Two of the worse presidents of all time.

        2. Ideal: No trade restrictions.
          Next best: They have restrictions, but we don’t
          Third best: We have restrictions, but they don’t.
          Worst: Everybody has restrictions and we Smoot Hawley our way into another depression.

          1. FYI: tariffs did not cause the Great Depression.

            Additionally, FDR did not get America out the Great Depression.

            Obama did not get the USA out of the Great Recession in 2 years.

          2. Happy, after ideal, the rest depends on specifics.

  7. If unilateral free trade, or minimal and sparse tariffs, is so bad, how do Singapore and Hong Kong do so well?
    How does hurting ourselves just because they hurt themselves help us?

    Nor does history provide robust support for tariff threats as tools for causing other countries to lower their trade barriers. Meanwhile, the problems caused by the threats are very real, discount them though you may. The seen and the unseen.

    1. Freedom isn’t free.

      Sometimes you have to fight for your right to lower trade restrictions (and to party).

      1. Freedom isn’t free. Tell that to the people at Jack’s or In-sink-erator. Omelettes require broken eggs guys. US Steel is just loving this big omelette.

        1. Tell that to all the businesses that Obama, Booosh, Clinton, Bush, Reagan, Carter, etc. made it rough for.

          This is where we are. Trade restrictions before Trump became President. Trump thinks he can man-handle trading partners into lowering their trade restrictions.

          1. If he gets support here at home he will get much of what he wants for the US but if all you hear on the news is how badly it will hurt the US these other nations (as we have seen from what China has done) will just apply more restriction in areas that will hurt the US the most. They will suffer a hurt for a little while just to get the US to back down and maybe to retreat a little further and to be in a worse condition than before. If that happens the US will no longer be the economic power house but will become a nation that depends on the other nations just stay in control of the continental US. We will not have any thing outside of continental US.

            1. The media and other people who have TDS or just want the USA to not be strong will undermine any strategy to be united against Communist China and against Socialist Europe.

              These people are picking Communists and Socialists over Americans. Trump voters were sick of that which is why trump was elected.

            2. So if we don’t do what China wants, they will tax their own citizens. We can’t allow that.

          2. Who cares if they lower their trade restrictions? Who fucking cares? You’re complaining because someone is offering you below market goods.

            Scratch that – you’re complaining because someone over *one line* is offering you these goods while someone over a different line? That’s just competition.

            Why the fuck should I be penalized for trading with some dude in Mexico in order to protect some dude in Maine?

            You guys can never answer that except to say ‘but ‘Merica!’ (FUCK YEAH! *awesome guitar riff*)

            1. Who cares? I care.

              I refuse to throw my money away for products that cost more than marke price.

              Furthermore, I refuse to sit idly by why governments pick winners and losers via high trade restrictions.

              1. The only people selling you stuff that costs more than market price are, dun dun dun, the people that have the power of the government being used to exclude competitors and thus lessening market discipline.

                IOW – a politically connected minority of *American* businesses.

                1. Everytime you buy a chinese good, the chinese government is charging you more momey than market price for that item.

                  The chinese communist party runs china and sets price deals.

                  iphones would be cheaper if china lowered trade restrictions.

            2. “Scratch that – you’re complaining because someone over *one line* is offering you these goods while someone over a different line? That’s just competition.”

              No, it isn’t ‘just competition’ when a foreign government subsidizes a captive business entity so it can effectively drive American companies out of business. If you think that sort of thing is ok, then I hope you are the one to lose your livelihood and anything you ever worked for to such practices.

              Then you can come here and be sneered and laughed at by the commentariat with snarky lines about how they ‘took yer jerbs’.

      2. Yet your solution is to reduce freedom in the name of increasing freedom?

        1. The gamble is to risk some short term pain for long term economic prosperity.

          There were already massive trade restrictions before Trump. The reward is less trade restrictions so everyone involved gets richer.

          1. No, the gamble is for *me* to endure some short term pain so that *someone else* can make some short term money.

            If Trump was working for long term economic prosperity then he’d just end US trade restrictions completely and damn everyone else.

            1. Your enduring long term pain already. You evidenlty dont even realize it.

              Even if trump ended all trade retrictions, you would still be paying more than market price for items from trade restriction states.

      3. LC, from the comments I read here, a large number of the commentariat really believe they will never have to bleed or sacrifice for their freedom.

        1. It looks that way. They think the pre-Trump trade restrictiions “only taxed their citizens” and had no bearing on costs for products and services they buy.

          Of coirse China was just going to spontaneously lower trade restrictions….because reasons. China is literally run by one big trade restriction- the Chinese Communist Party.

    2. Nor does history provide robust support for tariff threats as tools for causing other countries to lower their trade barriers.

      Quite the opposite, really.

      But in fairness, I’m not entirely pessimistic since in the current state of things, the balance is so one-sided that most of our trading partners have much more at stake than we do. The Chinese economy is already feeling the pinch (although the yuan has been dropping, which isn’t going to help the trade deficit situation, if that’s important to you).

      Trump is playing a very dangerous game of economic chicken. If somebody doesn’t swerve out of the way in time, this will get very ugly (but overseas more than here). If we don’t crash and burn, the outcome may be a net positive.

      1. Trump always has a backup by offering a tiny decrease in trade restrictions in return for ending the trade war.

        Trump is then the tiniest bit successful and foreign economies dont implode.

      2. But the more that people and companies side with other nations higher tariffs against US products than we charge them the more likely they will prevail.
        Back Trump in his attempt to make trade a level playing field and if he fails he will be the one who pays the most for he will be out of office and the democrats will be in the ascendancy. When they again have the congress and the presidency which would happen in the 2020 election we will watch the tax reform go, the reduction in business rules go. In fact the reversal of these two would be would be more than offset. You would see much greater restriction on oil and gas production and exploration and that would reduce the US to a net importer of these products instead of being an exporter of them.

        1. . . .if he fails he*we* will be the one who pays the most . . .

          1. If Trump’s plan fails, we just go back to the trade restrictions than we had before Trump became prez.

            1. Sounds good. Because that’s still less than we have now.

              1. If Trump’s successful, then we get lower trade restrictions than when Trump became president.

                1. He should have at least limited success. Most of,our trading partners need us more than we need them. China certainly does.

                  1. Any lowered trade restrictions are a success for Trump. Some people will try to prevent that until their dying TDS breath.

                    The EU is leveraged to the hilt. EU bonds are drowning them in debt.

                    China needs to maintain growth and a trade war will hamper their growth.

              2. Yeah, I guess you don’t le the idea that he’s will gtprobably risk an extra beating in order to reduce the total number of beatings we receive daily. Because sitting back and taking beatings from a bully is a winning strategy.

        2. What you’re describing here is that Trump may, if he fails, utterly fuck over the American people. And if he wins, then . . . what? Foreign economies are strengthened by removing tariffs on their own people?

          I’m not seeing any potential upside for me that’s worth the potential downside.

          1. We all have less trade restrictions. It can make all parties wealthier because the people get to keep more of their money to spend as they like.

            1. The only people stopping me from keeping more of my money is my own government – on the flimsy premise that other nations offering me goods cheaply is bad for some other American.

              My own government is the problem – yet you want to let them ‘fix’ this problem by continuing to do the same things. Basically, ‘reduced trade restrictions’ simply means that the USG is going to beat us a little less. And if they do, you’re telling me I should be grateful for their generosity.

              1. You’re paying more for Chinese because of the Chinese government.

                You’re paying more for European good because of the EU.

                1. I’m not sure why the others here can’t grasp that. As if only our government can be the bad guys

                  1. When you’re a cosmo reason writer looking for a better gig, goong easy on the EU socialists and Chinese Communists opens doors for you.

                2. But if the same product is more expensive when made in America…

                  You aren’t making sense.

                  1. It defintwas Elvy is when the foreign competition is in some way a partner or captive of their government and is subsidized so that they can offer goods at prices our private businesses can’t match.

                    But feel free to support foreign socialist governments and their command economies, in the name of libertarianism.

  8. OK, I favor free trade even when it’s unilateral. But grasping at straws like this means those who write about it have no case.
    Don’t waste my time with ‘human interest’ stories regarding 25 children who are now going to starve to death, ’cause TRUMP!!!
    If I want People magazine, I’ll go sit in the waiting room at the dentist.

  9. The question is just how much will that $200,000 additional cost add to their final product cost? That is the only way will we be able to judge the effect of the tariff battle that is going on now.
    Something that all the people here in the US should remember is (if) the rest of the world have been putting it to the US for all these years and does not want it to change complaining beforehand the tariffs are in effect will only strengthen these other nations’ hand. If these nations will make more money with the higher tariffs than with what they do now then they should not complain. If they will make less money then maybe they should negotiate a different number or some other way to make the trade more equatable.

    1. Buying imported goods is a free market exchange. We want goods. They want money. We give them money, we get goods. Nobody is taking advantage of the others. If they want to tax our imports to them, that’s their choice. It still doesn’t change the fact that it’s all a market value.

      Our trade deficit only means that other countries want to give us capital. That’s a good thing! It means we get more stuff than we otherwise could have. We could have chosen to take the gain we have gotten from people giving us money to make everyone better off, but since Reagan, the choice has been to let it accumulate amongst a few people. That’s a choice we made. Trade makes us as a whole richer, and it was our choice to let the gains concentrate to the few rather than spreading it around.

      Choosing the preferred industry to protect and taxing the other, much more numerous companies is just dumb. Telling the people losing their jobs, the people paying more for goods, and the small businesses losing what they’ve built to not complain about being poorer is real chutzpah.

      1. Completely naive assessment.

    2. I am not sure how delivering products to me at below market prices is ‘putting it to me’ as you say. Sounds like I’m getting a good deal.

      1. You’re already paying more for goods and services because of status quo trade restrictions.

        I want to keep more of my money and get the goods that I want to buy.

        1. So we’re going to pay *even more now* in the hope that people who, literally, do not understand what ‘free trade’ is and who have careers dependent upon managing the managed trade are going to let the ratchet a little loose?

          No thank you.

        2. Oh, and I’m only paying more for goods and services because *the United States* is forcing me to.

          If the US just stopped – then I wouldn’t.

          1. Oh, and you ARE paying more for goods and services from China and the EU and any other nation you buy things from because of their trade restrictions.

            If the USA dropped all trade restrictions, you would still be paying more than you should because of foreign trade restrictions.

            1. LC, he just won’t have it. It’s more important for him to save an extra few hundred dollars a year upfront at the expense of countries like a China hollowing out our industry and hurting our economy. He doesn’t see any of that as his problem and doesn’t care about anyone other than himself.

              He’s that sort of libertarian, and part of why the party rarely gets any traction.

      2. That’s what they want you to think.

        Putting steelworkers out of business here at home has an effect on the national economy and thus your income. Small, probably, but so is the cost savings from cheap foreign-subsidized steel. Not to mention that dependence on foreign steel, especially steel produced by enemies like the PRC, endangers our ability to defend our country in the event that the cold war goes hot.

      3. It isn’t a good deal for the domestic market that is ground down because they may not be able t compete with the foreign subsidized company. Although my observation is that would be preferable than laying a little more for a level playing field.

        And also very hypocritical to be a cheerleader for government subsidized prices.

  10. Bitch, bitch, bitch – all you can do is complain. Look, relax, go watch a Military Parade or something…

  11. Oldie but goodie

    The trade deficit really doesn’t have anything to do with trade. It’s an accounting identity. Trade deficit = total income – total consumption. If the country consumes more than it makes, it has a deficit. This is often the case for growing economies. If we wanted to reduce the trade deficit, we could increase taxes to reduce our consumption. Government debt is a driver of the trade deficit, as is a low individual savings rate. We wouldn’t be any richer, however.

    Raising tariffs would strengthen the dollar, worsening the trade deficit. Interrupting the global supply chain makes everybody poorer and raises the price of all goods.

  12. GDP growth and trade deficit are positively correlated.

    You want to reduce the trade deficit, that’s easy. Reduce GDP growth. A recession is great for reducing the trade deficit.

    1. All economists should quit. Our resident dumb dumb has earned himself a Nobel prize for economics.

  13. Regardless of your position on tariffs, highlight BS stories like this is just sad and pathetic.
    He contracted pricing of the finished goods without securing the raw material supply beforehand? BS
    His output is so ungodly slow, he couldnt respond to the tariffs before they went into effect? BS
    He makes ornamental ironwork, but his margins are so thin that tariffs are impactful enough to kill his business? BS

    Either his is an idiot, or the story is complete BS.

    1. Nothing is easier to do than the things you don’t know how to do.

      1. So your standard is that unless you know how to create ornamental metal products, you can’t comment on this story? Fine. I’d be curious to know how much you or Eric Boehm or anybody who works for Reason knows about creating ornamental metal products.

    2. I had a great uncle who was a highly skilled wrought iron fence craftsman. He saw the writing on the wall and retired when that market was high but on its way down. Most people didn’t want to pay the price for that type of fence at the price set by costs of employees and regulation. Only super rich people could afford that type of high end fence. It’s why Home depot sells cheap steel fence segments now.

  14. But hey, I am assured that these tariffs saved one steelworkers job in exchange. I am assured that steel-makers are more important than people who make things out of steel. I am assured that it will all be worth it in the end because Trump is, despite showing no aptitude for it, winning a game of 4d chess against the Chinese .

    I am assured of this.

    1. Sometimes you have to abandon free markets in order to save free markets. Didn’t Bush teach you anything?

      1. The USA does not have free markets. We have managed markets.

        Sometimes you have to abandon managed markets for less managed markets or even reach free markets.

        1. So, yes, you are saying that slavery leads to freedom.

          1. You are already a slave then according to your definition of slave.

            Trump is trying to get you more free time from your chains.

            1. They can’t see it LC. It’s more important for them to babble about slavers and save a nichpkel off some widget while foreign subsidies are crushing our debt mystic markets.

              1. ‘Our domestic markets’

  15. Like it or not, tariffs are popular in areas of the country that the GOP needs to win in to keep the leftists out of power. Any economic damage caused by tariffs is far smaller than the national economic, social, cultural, and moral damage that would be caused by allowing leftists to have more power.

  16. A lot of it is just supply shock. If the tariffs go through and become long-term, US steel production will increase and the price will go down. Maybe not as low as it was before with PRC-subsidized steel flooding the market, but it will go down.

    One would think libertarians would know about how the market adjusts to supply shocks to keep prices low.

  17. Let’s assemble a list of things ostensible libertarians support and defend:

    Bigoted, authoritarian immigration policies and practices.

    Tariffs and other protectionism.

    Micromanagement of wombs and health care facilities.

    Pre-emptive invasions (of the wrong country).

    Government discrimination against gays.

    Compelled anthem-saluting.

    Carry on, clingers.

    1. Boring.

    2. Is that it? Disappointing. I suppose that’s the best one can expect from a dull mind and no ideas.

  18. The odd coincidence in all these Reason sob-stories about companies who have been crushed under the iron heel of Trump’s tariff boot is that they are always planning to expand and hire new employees, but they never bothered doing it or telling anyone about their plans until they lost their favorable trade position.

    Then suddenly they remember all those new products they were going to produce and new jobs they were going to create, if only that big meanie Trump hadn’t ruined their business.

    It’s kind of like the stereotypical gang member who is always in the process of “turning his life around” when he gets gunned down during a drug deal or armed robbery.

    In reality, this company likely had no intention of assuming large amounts of debt and bringing on new employees; they would have done it months ago had their business been that good. Instead, this is their way of getting back at Trump for depriving them of their subsidized steel supply.

    And Reason is more than happy to help promote their alternate reality.

    1. That is an excellent observation, my mirror universe friend.

    2. Its the daily routine at reason these days.

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