Voices
in
Japan

poll

Do you think U.S. President Donald Trump's decision to slap taxes on steel and aluminum imports will result in a global trade war, with other countries imposing tariffs on U.S. imports?

35 Comments
© Japan Today

©2018 GPlusMedia Inc.

35 Comments
Login to comment

Without a doubt it will cause a trade war.

7 ( +9 / -2 )

Other countries already said they would do that so, yes, obviously.

13 ( +13 / -0 )

I voted yes but this is subject to the differing view that Donal Trump may/will take next week.  Because this time next week his very clear statement/tweet may have in fact been misrepresented by the fake news media and he never intended to apply tariffs.

-1 ( +3 / -4 )

That is what Trump wants. It will be a disaster.

4 ( +7 / -3 )

yes. it will cause a trade war. pure and simple.

3 ( +5 / -2 )

A trade war with its allies (Canada being the largest supplier of aluminum and steel to the US). Bullet, meet your foot.

5 ( +7 / -2 )

I’m not sure if ‘trade war’ is the correct term. Yes, it will mean major increases in imported products for the US. However, it will also result in stiffer competition for those vying for a piece of the US markets. Australia did a similar thing in the mid-80’s by putting high import taxes on foreign goods. It had a positive result in promoting domestically manufactured goods in Australia. However, the succeeding Liberal governments dismantled these taxes in favor of imported goods which has resulted in Australia having a very small manufacturing base due many small companies going out of business with markets flooded by imported products.

1 ( +3 / -2 )

I don't think its enough to kick off a trade war. The overwhelming majority of steel used in the U.S is U.S steel. Most imports come from Canada and Brazil. China and the E.U is a long way down the list of exporters.

Its fairly small fry tbh.

-6 ( +2 / -8 )

The US is a sovereign nation as well, and tired of being taken advantage of. The others need the US so there will be no trade war, they will bow

-9 ( +3 / -12 )

Canada being the largest supplier of aluminum and steel to the US

The US does not need Canadian steel, and does Canada import US goods at the same tax rate? No.

-7 ( +4 / -11 )

Japan seems to rely on the fact that they are allies to the USA. But I always remember what Senator Gephardt said 30 years ago during trade disputes with Japan (semi-coductors). "With friends like Japan who needs enemies. What friend would close it's market to it's allies".

0 ( +2 / -2 )

The US is a sovereign nation as well, and tired of being taken advantage of. The others need the US so there will be no trade war, they will bow

They will put equivalent tarriffs on US imports. They have to - while it doesn't benefit their economy to put tarriffs on imports, it is the only sensible response, in a prisoners' type way.

It won't be a trade war, but it will be something of equivalent economic value.

2 ( +3 / -1 )

The others need the US

None of us need the US. Things are easier now if we work with the US, but we don't need it. And we're creating trade deals to bypass the US so that we don't even need to deal with them anymore.

Trump is quickly blustering the country into insignificance.

8 ( +9 / -1 )

Interesting comments from retail mindset perspectives here. For most individuals, which I like to call the retail space perspective, such as employees who depend getting paid from their bosses, others who are self-employed that own their position, as well as small cap business operators/owners might view this as a global trade war.

But as a full time personal, private institutional macro fundamental investor and technical intrinsic value-based trader like me who trades and invest 7-8 figure voluminous transactions through forex futures & spot, options, bonds, stock indexes, ETFs, commodities, precious metals, cryptocurrencies and real estate, IMO there is more to this than just steel tariffs from an institutional mentality point of view.

MSM which I call the propaganda centers, briskly swoops in to discredit the announcement, blaming the stock markets bearish moves and rages on with trade war synopsis. Media is showing their true colors of how intellectually deceptive, oblivious or unsophisticated they really are in assessing the tariff matters as if there is no historical framework behind this strategic arrangement.

Big part of the distortion of info, besides the darling know-it-all media, is Google's controlled, censored search algos that spits out left over scrap of expurgated information that's accessed by the retail masses. Institutional avenue of information distribution is much more prominent for better understanding of the long term, big picture of how this relates to global inter-market correlation of forces and dynamics connectivity.

The question that needs to be answer for the media pundits as well as so called experts is, where the heck have they been in the last 20+ years or so? The trade imbalance issues don't have much to do with protectionism elements. This is all about the Chinese Yuan or Renminbi, nothing more nothing less. Period. You see, in the last 25 years or so, China cut-rate currency policy has been used to manipulate the global markets by pegging down their currency enabling them to corner the global export market.

1 ( +3 / -2 )

China became the 2nd largest economy behind America as the aftermath of their cheap currency policies. As byproduct, their foreign currency accumulation became the biggest reserve war chest in the world today. With these amassment of foreign currency reserves, China then uses it to furrow into the global credit markets especially with US treasury bonds. This incitement of low-cost credit is one of the main reasons that fundamentally drive the global credit bubble and bust in regards to the global financial crisis.

In layman's term, basically it's like an endless cycle where Americans buy cheap things from China, then China takes the dollars to buy treasury bonds in order to stockpile more credit for the Americans as well as to the rest of the world to purchase more of their low-priced products and services.

1 ( +3 / -2 )

Most people know that China is dominantly the globe's manufacturer and tons of factory related jobs had been lost. Logic thinking might say that Chinese labor is so damn cheap but most are unaware how China really did it in the process of economic ascension. There is more to it than just cheap labor... way more.

You see, China's go to economic weapon of choice, and pretty damn potent, has always been its currency because of the way they structure their economic model of deep levels of manufacturing while other sectors are shallow. Pegging their currency at overly, marked down levels and at the same time weightily devaluing it was the main reason for their ascension to 2nd biggest economy as evidenced on the chart below.

https://framapic.org/AlDTxH8zJl22/lkxqU803XPiB.png

Forex chart represents a strong dollar and weak Yuan and shows how China ravaged its currency. More than 80%+ or so histrionic decline against US dollar from early 80's to around mid 90's. Guess what, this was a huge deal because it gave them the upper hand in reference to their augmented growth. It was such under the radar to the rest of the world while at same time, stealth-fully effective.

-1 ( +1 / -2 )

When the orange dotard says that China is robbing the US, he is insinuating about the Chinese economy bursting exponentially when they fixed their currency through 2005 after their decade of imposing depreciation of the Yuan around 80s-90s. As a result, China's able to extract from other developing countries foreign currency and jobs as well as cornering the global export market.

With the monumental devaluing of their currency, China in 2005ish became the 3rd biggest in economy rankings by raking in 350 billion USD to 3.5 trillion USD. See chart below from Word Bank...

https://framapic.org/9qCSaMOfkFIn/Qw19WDzVOGQr.png

Compare to America GDP about same interval during China's enormous Yuan manipulation, it pretty darn eye opening to see the inconceivable ground attained by China against the US.

https://framapic.org/uNJlKnP3Dbzy/6wLjYhyBkF5V.png

Can't think of any other countries in the last 2-3 decades with this kind of aggressive, wanton economic growth. Exponential growth such as this can only be achieved through currency manipulation or in the legal term that Chinese officials calls it ''managed float'' which is total BS.

0 ( +2 / -2 )

So further on China has become the seller to everybody or the globe's Wal-Mart per se. This allowed them to further more acquire abundance of foreign currency and as result they are able to undercut prices around the world.

Being the holder of about 3 trillion USD worth of currency reserves give them multiple, flexible options. One their tactics is buying massive amounts of US Treasury bonds to manipulatively anchor rates on the low end so the American and world consumers can borrow cheap and then purchase more of their low-cost products. This is a strategic move to add more stockpile to their currency reserves via withdrawing US wealth and depositing back to stockpile their own luxury. An then the cycles goes on...

Somehow America got a slap in the face and woke up around 2005ish. China was threatened with tariffs unless they discontinue with its damaging currency policies. China kind of relinquished and agreed to repudiate the fix to the dollar in order to start raising the value of its currency. This is where the BS manage float system was established by Chinese officials.

China can still directly or indirectly interfere and manipulate with this system. They allow it to gradually step up less the 5% or so during 2005ish - 2013ish. Logically this might sound alright but compared to the double digit pacing of Chinese growth throughout most of that interval, this was just a drop in the bucket.

America passively cries about along the way but somehow never did enough and allowed it to continue.

-1 ( +1 / -2 )

As a result, presently China is now on pace to overtake the gold medal for economic growth, though it still has just about 1/8 of the per capita GDP as America. The big picture here is not about China's ascension the economic power, that's US least worry. At the moment, the bigger threat is manipulation of currency which also worried the G-20 as their top of the long list of concerns.

Basically Chinese Yuan or Renminbi manipulation is the heart of the present world trade imbalances which is a contributor to the underlying cause of the world financial crisis. This is a type of prescription or ingredient for more economic cycles of booms and busts but this time with even more larger recurrence. Restoration of imbalances by disproportional economies that are too reliant on either imports/exports will never exist until the Chinese currency is fairly valued.

0 ( +2 / -2 )

The current administration's team of economic, commerce and trade advisors understands that in order to forfend global trade imbalances and financial bubbles from developing, the logical equilibrium mechanism are currencies. One of China's economic models, the government has to babysit and manipulate to make their currency as cheap as possible.

On the other hand, if the Chinese yuan in an open economy is traded through the free floating system, the market demand for China currency would be much higher. The value of their currency would skyrocket in terms of supply and demand economics due to the reflection of China's exponentially, domineering growth.

This would be a huge problem for China because of the restricted economic infrastructure. China economic model is only deep in the manufacturing and export sector but every else is shallow. If their currency is too strong, it would make their exports less attractive which will significantly affect their headlong growth and accumulation of wealth as well as their facilitation of global credit.

-1 ( +1 / -2 )

Trump's tariff fulminations deceivingly only focuses on metals, but most are unaware that currency's essential role is the real game that being played here behind this curtain of complexities. Actually from a political standpoint, Mr. Trump is not the first one to engineer this strategy. In fact, Charles Schumer, a stalwart Democratic senator, back in around 2005ish wanted to push a Congress bill to impose tariffs on China of somewhere around 35% or so. Somehow China allowed their currency to insignificantly weaken somewhat around that time with this reconciliation. So for those who are uneasy about reprisals which historically is a response to protectionism, well I must say this is clearly some kind of retribution for couple decades of luxury transposition.

This also connects with NAFTA renegotiation. China as well as other exporting countries uses Canada and Mexico as a broker for parts shipments and manufacturing the products. China and others uses this loophole in the fatally flawed agreement as a backdoor to export their finished goods to US consumers via under the NAFTA rules. This exploitative backdoor approach is one of the major leading causes of the global trade imbalances especially with US manufacturers moving their operations to Mexico. With Canada and Mexico as the brokers, TPP nations as well as some EU companies to some extent can now also have the option to exploit this backdoor loophole by assembling their products in Canada and Mexico and export their finished products to the biggest consumer market in the world, the US.

-1 ( +1 / -2 )

Not sure why most are surprised by this. EU and the UK slap tariffs on China's steel about less than a couple years ago or so to save their own butt. We've been in trade wars with China for couple decades or so. The media just didn't cover it much because it doesn't fit their narrative or agenda for better ratings. Also the three previous administrations before didn't develop effective policies regarding China's currency manipulation. They stood by and the world let it happen, while China was laughing all the way to the bank. Big part of the problem was also due to the heavy influence of the Wall Street parasites, bought and paid for Uniparty consist of both Democrats and Repubs, Chamber of Commerce and greedy business lobbyist such as Tom Donohue and Richard Trumka.

I personally do not care forTrump. I'm aware that he is not a perfect human being, let alone the POTUS. But what a deeply capitalized trader and high net worth investor like me care about is what kind of optimal solutions, not perfect but optimal, can he offer in reference to his policies. It must challenging I were in his position where you have to deal with domestic and international affairs especially with this China situation.

-1 ( +1 / -2 )

It would be interesting to see if Trump does get impeach, who will actually have any cahones to stand up against China's currency manipulation. On the Republican side, Pence nahhh too religious, Ryan no way he's bought, McConnell not a chance, Cruz? Rubio? Bush? Romney? On the Democrat side, Schumer already tried it, Polosi don't think so, Bernie? Warren? Harris? Booker? Biden? Holder? Mrs. Obama? Oprah? Doesn't seem like any of those people both sides of the political spectrum can outwit China. If previous administrations in the last 2-3 decades couldn't effectively do anything about it, I wonder who can?

Institutional mindset has to be objective and be able to navigate through the emotional, roller coaster, of unprofitable noise from the media and mostly worthless inequitable opinions from self-proclaimed, retail mentality, intellectual individuals. Global money and institutional order flows by deep pocketed big boy players will give clues and footprints in how this is going to play out in the big picture in reference to the global inter-market correlated dynamics especially in the Forex capital markets. After all, like most people say, it's all about the money.

0 ( +1 / -1 )

Actually Fake45 will huff and puff and blow his chest up and Impress his Base (but no one else) and then do the opposite. His Base will be Impressed even as their income sinks, their jobs disappear, and Fake45’s gun laws rip their guns from their cold no-due-process hands.

Whoever in his so-called “administration” has a 5-year-old child prone to tantrums will manipulate the OrangeP*Grabber to do what they want and the Cheeto-in-Command will “think” he made a decision.

1 ( +2 / -1 )

It is now starting to look like a pump and dump scheme. No real changes in regulations or laws, just a lot of bluster and noise scaring the herd.

1 ( +1 / -0 )

@ Dango bong

The others need the US so there will be no trade war, they will bow

Thanks for sharing your great insight on this issue. Always good to know that there are individuals capable to summarize a problem into a oneliner.

Yesterday I was discussing the issue with my 5 yr old neighbour girl and when her 3 yr old sister joined in we reached into a high level conservation. But I've to admit that your level was out of reach :)

-3 ( +0 / -3 )

Conversation ***

-3 ( +0 / -3 )

@ UnknownPlayer

n layman's term, basically it's like an endless cycle where Americans buy cheap things from China, then China takes the dollars to buy treasury bonds in order to stockpile more credit for the Americans as well as to the rest of the world to purchase more of their low-priced products and services.

An iPhone, Samsung, Asics sneakers and many other high-end products Made in China by Taiwanese, Korean, Japanese, Chinese and Western manufacturers are definitely not cheap.

The labour costs are low: $ 25 for an approx. $ 800 till $ 1000 iPhone. And with total of

$ 250 for the parts and labour, where do the profits go to?

The production of 'cheap' products like the XXXL T-shirts for WalMart already moved to countries like Vietnam or Bangladesh.

The US debt to China is with $ 1.2 trillion in november 2017 just 19% of the $ 6.3 trillion of notes, treasury bills and bonds held by foreign nation. Japan holds $ 1.1 trillion btw.

The rest of the $ 20 trillion national debt is held by the American People and the US government. The Social Security Trust Fund is the mayor player.

It may be so that these $ 1.2 trillion helps China to keep the yuan relatively cheap but the debt held by China and other foreign nations keeps also the interest rate and consumer prices for Americans low. As a trader you should know that.

-3 ( +0 / -3 )

No, What have the USA got to export. The only commodity the USA exports is it citizens. People like you with no prospect of ever returning.

I have stated that I myself have not purchase any items made in the USA ever. Yes I buy USA quality Item Made in Asia.

I might use air transport made in USA but I Fly with JAL.

I am determent to use green power and the USA are years behind in reusable energy. So I see no future for a country that refuse to promote green energy like the USA is doing. Even if they got fully behind green energy. They are 10 years behind Europe and China to produce the materials

This tariff will only hurt the USA. If they do go down this path. It will take 10 years or more to get up to speed in making good quality steel for they own market.

The Tax brake the USA have given they Company is now no help to company wanting to expand.

No Company is going to invest in the USA with mantra about imposing Tariffs.

China is keeping very quit on commenting about these proposed tariffs.

They must see the same way I do. This will only hurt the USA in the long term.

Trump has no foresight and has shown he that lacks any management skills. Just look at the revolving door of the White House.

He want yes man and will end up with nothing but Sara Sanderson Hucklebee clones on his staff.

Trump Is a JOKE but I do not find trump funny at all.

-3 ( +0 / -3 )

I find it kind of hilarious that the "lower tax" "let the market decide" "lower regulations" "less bureaucracy" camp are responsible for something totally the opposite.

1 ( +2 / -1 )

I think that you will find that this isn't an ultra liberal forum from a worldwide perspective.

I don't think anyone said that people shouldn't trade with the US, just that this may hurt rather than help those US industries if other sources are found.

1 ( +2 / -1 )

Too funny to watch everyone comment on this ultra liberal blog.

This comment shows that you do not have credibility when evaluating things. This is not a blog, nor is it ultra-liberal. After making such a ridiculous statement, it just shows that none of your other comments can be taken seriously:

Although NONE of you are economist, and since I am, I can tell you that most trading partners need the US a whole more than the US needs them!

Says the guy who thinks this is a blog, and that it's ultra liberal. Which is to say, says no one with any credibility.

0 ( +2 / -2 )

So on top of discrediting yourself earlier, now you’re also showing an inability to realize when you are wrong, and to work with that.

At least we know the type of person you are.

Also, if you want to bump chests about salaries, I’m the wrong person. I haven’t depended upon another entity for my money for years. I hire people like you, not work for them.

-1 ( +2 / -3 )

I don't think its enough to kick off a trade war. The overwhelming majority of steel used in the U.S is U.S steel. Most imports come from Canada and Brazil. China and the E.U is a long way down the list of exporters.

Actually, the US is the world’s largest steel importer and imports now 33% and that number is up over 200% over the last 8 years.

These tarriffs are a bad political stunt used to please his base, but has driven off his top economic advisor, Cohn, which has most of us in the finance world nervous as hell.

-1 ( +0 / -1 )

NetgrumpMar. 7 10:09 pm JST

@ UnknownPlayer

n layman's term, basically it's like an endless cycle where Americans buy cheap things from China, then China takes the dollars to buy treasury bonds in order to stockpile more credit for the Americans as well as to the rest of the world to purchase more of their low-priced products and services.

An iPhone, Samsung, Asics sneakers and many other high-end products Made in China by Taiwanese, Korean, Japanese, Chinese and Western manufacturers are definitely not cheap.

People have all kinds of different POV of what is cheap or what is expensive. Depends on individuals perceive of value, affordability, financial status, budget, etc. As a trader, I agree the high-end ones are overvalued in terms of their cost. But as a high net worth individual such as I, personally I can purchase abundance of those with no financial worries depending on distinguishing my wants and needs of course.

The labour costs are low: $ 25 for an approx. $ 800 till $ 1000 iPhone. And with total of

$ 250 for the parts and labour, where do the profits go to?

I can speculate but you tell me.

The production of 'cheap' products like the XXXL T-shirts for WalMart already moved to countries like Vietnam or Bangladesh.

Agree but Vietnam and Bangladesh barely move the needle in terms market share in global manufacturing and exports. I'm aware who are other minor players in these arenas but I rarely invest or trade in the emerging market sectors due to preferential liquidity reasons unless I see a favorable, asymmetrical risk-reward ratio trade setup that is worth investing short to medium term horizon.

The US debt to China is with $ 1.2 trillion in november 2017 just 19% of the $ 6.3 trillion of notes, treasury bills and bonds held by foreign nation. Japan holds $ 1.1 trillion btw.

The rest of the $ 20 trillion national debt is held by the American People and the US government. The Social Security Trust Fund is the mayor player.

It may be so that these $ 1.2 trillion helps China to keep the yuan relatively cheap but the debt held by China and other foreign nations keeps also the interest rate and consumer prices for Americans low. As a trader you should know that.

Thank you for sharing your valuable insight. I'm aware of this info and have similar data that I have taken into account on my investment and trade strategies. I just didn't go into nitty gritty details on the breakdown of the China situation. General overall opinionated summation of trade imbalance is what I wrote on GPlusMedia Inc website.

Interesting sources but not new to me where you got the statistics from. Are you also a trader yourself Mr/Ms/Mrs Netgrump? Are you privy to institutional info or do you get retail knowledge and data from Google algos? If you are retail trader/investor or especially if you are an institutional trader/investor, I hope for your sake, do not rely on retail platform of information distribution.

Google search algos leans a bit more to the left political spectrum enable to control, censor and spits out mostly left over, bowdlerized information for the retail herds access. Fact checking sites such as slopes.com, factcheck.org, wikipedia, etc. are comical in my view especially for the institutional traders/investors.

I take their view with a grain of salt and at best probably 50/50. Their retail sources which they give opinion to are incomplete, only a few pieces for the big picture jig saw puzzle elements and been debunked numerous times. They are late to the party and only look good on 20/20 hindsight perspective. Those type of sites as well Google search bots and other retail platform for information distribution is not an optimal choice for consistent profitable PnL.

Getting institutional information from global financial entities such as Deutsche Bank, UBS, Citi, Morgan Stanley, Bank of America, HSBC, Barclays, RBS, HSBC, Goldman Sachs, JP Morgan, Credit Suisse, RBC, etc. Also other relevant players such world's central bank and sovereign wealth funds related reports as well as some major hedge funds valuable data are much more preferred especially if you privately trading/investing personal account in the 8-9 USD figures (or beyond) realm.

Again I appreciate your input but not sure how do I proceed with this fragmented, fractional and insufficient response in order for me to make this an overall conducive, profitable trade/investment strategy. Cheers ;-D

1 ( +1 / -0 )

Login to leave a comment

Facebook users

Use your Facebook account to login or register with JapanToday. By doing so, you will also receive an email inviting you to receive our news alerts.

Facebook Connect

Login with your JapanToday account

User registration

Articles, Offers & Useful Resources

A mix of what's trending on our other sites