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Like renegotiating the decades old and outdated NAFTA agreement, which should not be ditched, but certainly should be revisited.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

Granted. 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.

If 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.

Steel and Aluminum Tariffs Right For Jobs

CALL ME A PROTECTIONIST IF YOU LIKE. I am actually okay with that. The truth, if you have kept up with me at all in the past, is that I side more with the idea of free trade than anything. That aside, I strongly support the American worker, and have long held that what we know to be free trade today really isn't free trade at all if those other countries we are competing with are not playing by the same set of rules.

What, in part, leads me to believe the way I do? For one, I think we had the best and the strongest economic times when we were leaders in manufacturing. It used to be that the largest companies were all manufacturers, and those factories employed many millions of workers and provided jobs that paid family supporting wages and offered family supporting benefits as well.

Granted, many of these manufacturing companies WERE unionized, and I am also strongly against unions—but that is for another day.

Nowadays it seems the largest employer in the United States is Walmart. Not that I have anything at all against Walmart, but let's face it. They don't offer the same kinds of job opportunities, wages, and benefits that the large manufacturing firms of the past offered. And many of those jobs aren't even full time.

I want to talk a bit about the recent announcement by the Trump administration that tariffs would be placed on imported steel and aluminum.

The fact is that over the years, and actually over several decades, we have lost untold numbers of jobs due to steel and aluminum imports, the bulk of which has come from China. The other industries notwithstanding, what has been left for the American worker are the REAL CRUMBS Nancy Pelosi

and her democrat cohorts should be talking about.

Taco Bell, McDonald's, convenience stores and the like are the largest employers in this country if you take away small business. And none of them pay a living wage, and I would argue offer little in the way of a career path either. Let's not forget that MANY of those small businesses are actually restaurants which also do not pay high wages.

One of the things Trump talked about during his campaign were the stagnant wages this country has suffered for a very long time, and the plight of the people in jobs that just don't do anything to help lift them up out of the doldrums and off the dole. While protesters marched in the streets demanding $15 an hour jobs flipping hamburgers, then candidate Trump promised the American people that he would fix some of the wrongs over many decades that left American workers no real choice but to trade in their steel toed boots for spatulas. He wanted to put America first, put the American worker first, and bring back manufacturing...

The heart, bread, AND butter that made for a vibrant and robust American middle class.

I have long argued as well that part of the issues that plague the inner cities can be directly tied to the loss of manufacturing jobs—and even probably contributed in a big way to the entire breakdown of those inner cities.

NOT EVERYONE IS COLLEGE BOUND, NOR SHOULD THEY BE.

And that is not to suggest that I think that black people, because I just mentioned the inner cities which have large black populations, are less capable of getting a college degree. But manufacturing was indeed a sector that provided for very strong earnings for people of all colors and all walks of life to get out of high school and go out and make wages that would one day afford them the opportunity to join the ranks of the middle class.

Think of the economy sort of like the ecosystem. Remove one food source and something else dies as a result. When you took out manufacturing from the economy, many people were impacted by this—and it is not necessarily a question of simply getting different jobs. It's a question of what quality of jobs were left in manufacturing's stead.

When you have family supporting wages, and when you feel good about the opportunities and direction in your life, you tend to be more rooted—and thus family values are stronger. The inner cities in particular, and in large part, lost a part of that opportunity and one can easily see the path it has lead us on.

Back in the early days of this country, especially as our economy began to become more and more dominant, of course the people of this country were doing well. When an economy is doing well, the cost of labor rises. Lesser economically developed countries could naturally have an advantage over the American worker since it would have the ability to produce certain goods cheaper by default.

HOW DO YOU FIX THAT?

Tariffs. Duties assigned to imported goods to bring those imported goods on par with domestic goods.

And by the way, to me that's real free trade. Competition. Not only that, but FAIR competition. Let's compete on the quality of the product, not the price. Why should a Chinese manufacturer have an advantage JUST BECAUSE they happen to be able to make the product for less even if, for argument's sake, the two products are exactly the same?

The steel and aluminum coming out of the United States is no different than the steel and aluminum coming out of China. The only difference happens to be the price. And the question I have is, if that is the only difference, why should the American steel worker or aluminum smelter have to suffer and lose his job just because China can make the same product cheaper? Why should that worker be forced to say, take a job at Walmart because not only has the steel and aluminum industry been winked out—but the automakers and the oven makers, and other manufacturers have also left town?

When this whole thing got started, and this is not a new argument for me either, the fact that we could get goods cheaper was a novelty. In the beginning people were still going to work everyday making a Ford, or making a Frigidaire, and it was neat that they could walk into a Kmart and buy something for less, stretching their already good wages even farther.

What actually happened is those Ford jobs went to Mexico, and those Frigidaire jobs went to China, and when they walked into a Kmart store to buy cheaper goods it was not because it was neat. It was because it was all they could afford. Because after the good jobs left, as they stood in line waiting to check out at Kmart, they found themselves in a position to also ask for a job application.

Do I like the fact that because of the tariffs the price of goods containing steel and aluminum will likely be higher? Of course not. At the same time, I do think we are long overdue in this country to get away from the bulk of American jobs being reduced to retail and fast food—if we can get Americans back to work in factories, making better wages, I think we all benefit from that. Even the companies we work for. I think the world benefits from it as well because honestly there will never be a time when there will not be a need for, nor a demand for imported goods. If Americans have better jobs, and make better money, that just means Americans will also buy more goods.

NO MATTER WHAT, WE ARE STILL A CONSUMER DRIVEN SOCIETY.

What the real outcome of this global market has been is to slow down what is the real potential of the American consumer to consume at the rate that they might otherwise consume. What is even worse, and again is for another day, is that we have also created an enormous problem in this country with consumer debt which now surpasses $1 trillion. It is safe to say that with all of that debt out there, and if we continued on the path of low paying service economy jobs—a huge portion of that $1 trillion debt might be subject to default.

THINK BACK TO THE SUBPRIME CRASH. THIS COULD VERY WELL HAPPEN TO THE ENTIRE CREDIT CARD INDUSTRY.

You can take an old adage here into account, if you will indulge me, that you cannot get blood out of a stone. If American workers are not making money to buy goods and services, and ring up huge debts just trying to keep up, there will be no money for anyone at the end of the day to collect. And what's more, the amounts you can collect will become smaller, and smaller, and smaller.

Part of the reason we have come to a place that even welfare rolls are so high is because people have been left with less choices to find meaningful jobs. Letting the Mexicans and the Chinese, and whoever else, to win just leaves everyone behind, including the Mexicans and the Chinese.

Let me get to one last point here. One thing Trump is proving is that America can compete. What has largely held us back, besides all of the initiatives of past presidents to allow for things like NAFTA and MFN status—and unions by the way—are regulations stacked on regulations and high corporate taxes. Those things, even more than wages I contest, have more to do with why American workers lost out, and continue to lose out to foreign competition in the jobs market.

WHAT'S MORE, it is also a large part of the reason many of those foreign manufacturers even have not operated in the United States. Taxes and regulations.

If Trump can continue to succeed in getting rid of burdensome regulation, can continue to exceed in lowering the corporate tax rates, and can continue to succeed in boosting the American economy as a whole, it will only make sense that Chinese and Mexican companies may decide to start building more things in the homeland.

Like Foxconn, for example, which is starting up a massive operation in Wisconsin.

What we need in this country is a return the good old days of old where the middle class is vibrant and abundant. We need to return to a time when people have money to spend and have money to save.

When you live in the most economically rich and successful country in the world, half the population should not simply be left to have to get by. The people of the country should have the opportunity to get ahead.

There are over 300 million people in this country, and that number continues to grow. Based on just simple math as to what that relates to in terms of consumption rates, the truth is that there is, and will be plenty of money to go around—you can support both strong American labor forces and you will still need plenty of imports just to keep up.

We have to right this ship. We have to restore manufacturing. We have to restore wages. We will have less people on the dole, and the government will actually take in more money, and so will the rest of the world as a whole.

The tariffs on steel and aluminum are a great place to start. Personally I want to see more of this. I want to see more deals renegotiated when it comes to trade. I want a level playing field. I want more Americans to have more choices when they decide what they want to do when they enter the work force. I want to see less Americans relying on the government and more American workers making family supporting wages. I want to see family values return. And even some of that may be possible if we can get back to a time when a single income household was more than enough and children had solid support and role models to guide their future lives, which only made the country better and stronger, and safer for that matter.

In the end it won't matter if my can of beer might cost a few cents more. I'll be making dollars more that will more than make up the difference and pick up the tab.

.@SecretaryRoss: "We're talking about a total of $9 billion of tariffs. That's about one half of one percent of the economy. So this business that 'the sky is falling' is just silly." #SundayFutures @MariaBartiromo pic.twitter.com/zHx3P49fKR

— Fox News (@FoxNews) March 4, 2018