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Thursday, March 8, 2018

If You Think Steel Tariffs Are About Steel Tariffs...You Are Missing The Point

THE TRUTH IS, THERE IS MORE TO THIS STEEL AND ALUMINUM TARIFF THAN WHAT MEETS THE EYE, and it is clear that those who are strongly opposed to the tariffs, citing historical examples that even I cannot disagree with, it is the dynamics of the tariffs that everyone is missing the point on.

When I found myself to be a proponent of the tariffs, which admittedly does go against my grain a bit, it was only after I looked at what Trump was really proposing. What he was really saying. And what his true intent of the tariffs happen to be. His signing of the executive order today only serves to confirm the message I was getting when he first talked about it.

It is not an across the board tariff. There is a ton of flexibility built into it. And the tariff is not the intended target. Nor are importing countries. ONLY the bad players. AND he has a larger interest in mind.

Like renegotiating the decades old and outdated NAFTA agreement, which should not be ditched, but certainly should be revisited.

The executive order is clear that at least one of our primary suppliers of steel, which happens to be Canada, is not currently included. Neither is Mexico, although they do not supply much, if any of our steel. So really, what is the real impact of the tariffs? I would argue it is actually nominal.

BUT, that does not mean that steel suppliers and producers of products that use it to make their products are not going to miss the bigger picture, jump on the train, and use it as an opportunity and as an excuse to raise their prices. And they are doing it already even though the tariffs do not even go into effect until sometime next month.

What does this ultimately equate to? It's a money grab, folks. It is gouging the end user on the premise that prices will be negatively impacted on a broad scale when it is clear that will not be the case at all.

Just read the wording of the executive order instead of taking in the talking points of all of the naysayers.

First time buyer SPECIAL - Free Shipping + Free GiftsGranted. Yes. You do have to deal with the impact of the tariffs, even if they may be largely inflated and fake. Sellers set the prices and buyers have to simply pay the prices set. That's the nature of the game. But at the end of the day the price increases, at least for now, have nothing at all to do with the tariffs, and have everything to do with what the sellers either anticipate, or want the perceived outcome of the tariffs to be.

The fact is that right now what we see happening is more reactionary in the price of steel since the tariffs have not even gone into effect yet. Steel producers and manufacturers who use steel are honestly pulling price increases out of the air almost as badly as callers of the $15 an hour minimum wage did. There is no market data to support the increases. There is no added cost to the market right now. It's all just anticipatory. In other words, what is driving up the cost of steel and aluminum right now has nothing at all to do with the tariffs, only the anticipation of the tariffs and the perceived idea as to what those tariffs will mean at the end of the day.

The light at the end of the tunnel is that if you actually read what is in the executive order what you find is that nothing in the executive order is in stone. The executive order, when you dig a little deeper into it, is nothing more than a tool to negotiate. That is what Trump does, and he is good at it. The executive order is a conversation opener.
Here is what you want. Here is what we want. How do we find common ground to get there? If you give us a little of what we want, we can negotiate what you want—including on these tariffs—and we can meet somewhere in the middle, and we all win.
That is what these tariffs do. That is what these tariffs hope to achieve. To open a dialogue. Trump has been very clear that the percentages can go up or down depending on the country, and depending on what else we all may want to talk about when it comes to trade.

The difference between tariffs and the impacts of them of the past and the ones we are looking at now are the dynamics and the real intent of what they hope to achieve.

Sunfood Yacon SyrupIf you do not understand what these tariffs actually mean, I suggest you read the book by Donald Trump called The Art of the Deal. You cannot take these tariffs on the surface. You have to open your mind a bit and read into what he is really trying to do here. If you do that, you'll see that what Trump has in mind actually has nothing at all to do with steel and aluminum imports. There is a much bigger and broader picture here. It's the macro. Not the micro.

Keep an open mind and give this a little time and what you will see is that steel and aluminum prices will stabilize, and what we will wind up with at the end of the day is a much better situation when it comes to all trade for America and American workers. Mark my words.

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