Remember a while back when Section 232 and tariffs were all the rage? It seemed almost inevitable that something was going to happen. The market heated up. People started stockpiling their import material and getting out the sandbags waiting for the storm to come…… And then nothing came of all talk… Are the supposed tariffs dead? Or, are they still bubbling just beneath the surface? Was this just tough talk coming out of the gate? Or did the administration wise up somewhat to the reality of what happens when strong arm action is taken (as we learned back when the Bush administration implemented Section 201 tariffs in 2002)?
Based on this piece, it seems like President Trump is still set to impose some form of action to make clear that the cheaters and manipulators are at least held in check. The problem with this approach is that the other side can retaliate. The law of unintended consequences can be quite brutal. This is a very delicate matter and needs to be address with shrewdness and balance.
There is absolutely no question that countries like China and others play by one set of rules only: THEIRS! 🙂 This needs to be dealt with. No question about it BUT the pain and instability that comes about from retaliation is something that needs to be considered as well. So, what is the solution? Maybe individual trade agreements with every country is the way to go? this might just create an environment where there is incentive to want to play by the rules in order win the U.S. consumer’s business. The big convoluted trade agreements with a myriad of countries are a way to muddy things and tie the hands of those countries with better purchasing power.
On the flip side of the White house being committed to taking action – I saw this piece:
Does this mean that the mills have given up hope that any action and relief is not forthcoming? Or is it simply that Mexico has that much more domestic potential in its pipeline? Who knows? I guess time will tell and we will keep our ears and eyes open.
What are your thoughts on how to address this very complex question?