Trading wars impact


#1

If trading wars erupt, how does it affect the stock market and housing market? Will it cause runaway inflation?

Was there a trading war against Japan may years ago? I know US won. This time I guess US will still win the trade war. How did inflation, economy, stock and real estate fare during the trading war against Japan?


#2

The GOP used to claim they wanted reduce regulations and let the free market do its thing. Now they are okay with tariffs which will cause other countries to put tariffs on American goods. The US economy is going to become another Trump Airlines, Trump University, Trump Steaks etc etc etc.


#3

Trump seems to be doing exactly what he said during the campaign.

What else is left from his campaign promises?


#4

My BA (Boeing) went down straight after this news, they import lot of these it seems !


#5

Trump is a POS. He surrounds himself with nutjobs with no knowledge of economics. Tariffs on steel and aluminum makes inflation worse as it’s an ingredient to so many products. China can retaliate too. Do people think only Boeing makes jets? Only Apple makes smartphones?


#6

Inflation can be good for housing appreciation. Time to restart buying.

Will this cause the super inflation worldwide? Tariff can cause inflation very quickly and a worldwide trading war can make things as expensive as in Korea


#7

Not only China, but entire world may retaliate. IMO, Trump and others are aware of that.

Whatever Trump doing is protecting the locals (USA) from external influences.

This will help US workers, esp at low wage earners, blue collar workers.

I do not think it is a major issue for USA, but some industries will suffer until they find local sources to get steel and aluminum.

He wants imports to be reduced and local manufacturing to grow by discouraging imports.

He has reduced taxes for local companies, raising import taxes means faster local (US) economic growth !

IMO, Trump is bold and doing right steps for his country men !


#8

What kind of inflation are you talking about?
Trade wars lead to inflation in commodities and natural resources which lead to manufactured goods become more expensive. But… what about production volume and demand? What about wage, would it follow quick enough? Would mortgage rise too fast?

Gradual inflation is good, not sure about hyperinflation. In hyperinflation, profit would be declining and wages can’t catch up with faster rising mortgage :slight_smile: lead to decreased demand rather than increased demand as for gradual inflation.


#9

This isn’t what people think. We barely import <2% of steel from China. Mexico is actually #4 at 9%, so maybe this is making Mexico pay for the wall :slight_smile:

Top 5 are:
Canada
Brazil
S Korea
Mexico
Russia

Yeah, we get more than 4x as much steel from Russia as China. 88% of Canada’s steel exports are to the US, and 73% of Mexico’s exports are to the US.

It’s funny how this is headlined as a trade war with China. The data says BS on that headline.


#10

The way the news is reported is based on Trump’s claim that the US had been treated unfairly by other countries for too long in “bad” trade deals (and bringing up a talk with Xi wrt this topic) and now he is going to get US jobs back by imposing tariffs. As a result international trade relations are being agitated for the sake of his personal need to appear tough… if he knew what he was talking about he would see how US companies use steel at a far greater rate than it is produced, and that steel-using industries employ 80 times as many people as steel-producing industries. Ford and GM stocks were down 3-4% on the news.


#11

Exactly. Far more Americans are employed by steel and aluminum consuming companies than producing ones. It’s not even close. Also by raising the input’s price all American consumers will pay a higher price. It’s a tax on American consumers if you will.


#12

Imports are only 18% of steel used? It seems like this won’t be nearly as big of deal as headlines suggest. The data on jobs using steel is awesome. It seems we should embrace cheap steel and focus on creating jobs that add value to it.


#13

Trump AIM is for jobs !

If you see labor cost is very less in Mexico, China, India…etc developing nations. In US labor cost (Jobs) is high that results higher production cost. By increasing import tariff, local production cost will be attractive and companies will start producing locally.

This is exactly like increasing the minimum wage $110k for H1B. US companies will employ local persons for this kind of pay instead of hiring outside.


#14

Tariff is mainly a political issue to please voters in midwest. Trump has announced for re-election so this tariff threat could be just part of his re-election campaign. Media will help his re-election by sensationizing trading wars to please midwest voters, at the same time, strong oppositions from business community and democrats can serve as an excuse if the tariff and trading war does not materialize.

If China doesn’t care much about steel tariff, a world trading war may not happen at all.


#15

China and worldwide retaliation inevitable.

Media is always like this, Trump often tells media and how they behave !

Trump action, be it H1B issue, tax reduction or Import tariff, everything focused on local jobs. He is determined to do it and, IMO, he is doing a right job being a president.

The focus of american people, bringing back jobs must be driven from TOP and he is doing right.


#16

If the aim is to create jobs, history (during Bush years) has shown that import tariffs actually had a negative impact. More jobs were lost than saved as a result of cost increases, not to mention the damage done to US companies dealing with the reduced competitiveness associated with their export business.

Other countries have already indicated they will take action in response to tariffs if they are implemented as Trump suggested. He continues to create unnecessary waves by blurting out whatever he feels like, leaving out many parts of the equation.


#17

IMO, You can not compare Bush era, worst time of US Economy as he went on Marathon war…War swallowed entire nations’ wealth. Obama has recovered from it and now Trump is moving further.


#18

I was taking my info from the article I posted above, about Bush years 2002.

“Estimates of job losses in steel-using industries as a consequence of the safeguard tariffs imposed in the early 2000s are few but range from 26,000 to 200,000 jobs. It is difficult to know how many steel-producing jobs were saved, but a Peterson Institute report assessing various policy proposals floated before the Bush safeguards went into force suggests that it was between 3,000 and 10,000 jobs.”


#19

And ultimately the Bush tariffs were ruled illegal by the WTO.

The 2018 midterm can’t come fast enough.


#20

The whole China dumping steel narrative is odd. They are literally less than 2% of steel used in the US. It’s similar to the Amazon destroying retail narrative despite Amazon being 4% of retail sales. Can one competitor with a tiny market share really determine the pricing of an entire industry? That’s not possible unless that competitor would very quickly scale to steal material volume from other competitors.

I wonder if this is part of a broader strategy to get move favorable trade terms for different US industries. Most people don’t realize Mexico has tariffs on certain US products. Canada has tariffs on US products too. This could be more about renegotiating NAFTA than anything else.

Also, don’t pretend China is a fair trade partner. They impose all sorts of rules and restrictions on foreign trade and investment. We might have to play some offense on tariffs to get them to agree to more fair trade.