
Canada Is Preparing Steel Quotas, Tariffs on China and Others - dhruvarora013
https://www.bloomberg.com/news/articles/2018-06-26/canada-said-to-prepare-steel-quotas-tariffs-on-china-others
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Simulacra
Fascinating. I've always wanted something to be done about China's trade
abuses, particularly dumping, but also the human rights issues. I really don't
know enough about trading tariffs but I am very curious: do these tariffs have
any chance of improving China's behavior?

~~~
gotdangloch
Xi Jing Ping is running scared. The stock market has fallen 25% this year.
Yuan has fallen 10%. There's a 400 billion tariff coming his way, and because
of 'saving face', there's no way he will back down. He has to also unwind
China's 12-18T shadow banking, China's version of subprime loans similar to
2008 crisis (but way bigger). He has to figure out how to steal IP to move up
the chain when US and the rest of the world has upped their defense,
restricting Chinese tech investments and resisting hacking attempts. He also
needs to deal with the tariffs encouraging manufacturers to leave China and go
to southeast asia or back home via reshoring or automation. There is also the
matter of a lack of consumer market in China, after it gets shut out of US and
europe. Not much Chinese consumers can buy after $800/month income, after
paying most of it to mortgage and inflated food prices.

He also has to prop up the real estate bubble:

"price rose 31 percent to nearly $202 per square foot. That's 38 percent
higher than the median price per square foot in the U.S., where per-capita
income is more than 700 percent higher than in China."
[https://www.bloomberg.com/view/articles/2018-06-24/why-
china...](https://www.bloomberg.com/view/articles/2018-06-24/why-china-can-t-
fix-its-housing-bubble)

~~~
api
Maybe when the Chinese bubble crashes the present crop of neo-totalitarians
and anti-democracy reactionaries will shut up. I am referring to those
elements of both the alt-right and the totalitarian left who look to China
(and similarly to Singapore) and pine for the miraculous efficiency of central
planning and authoritarian rule by strong men. If only we had a king (or a
one-party state or similar) we too could build infrastructure at breakneck
speed and prop up the economy forever instead of dealing with the messy
inefficiencies of democracy and consensus.

People were just as psyched out by the USSR. It looked miraculous until the
1980s. The Nazis psyched people out too. We didn't get to see how that one
would have turned out long term because they blew themselves off the map with
an insane war on two fronts but my guess would be similar to the USSR: a
little period of apparently miraculous progress followed by rapid stagnation,
being eaten alive by cancerous corruption, and collapse transitioning to
something like Russia's present-day mafia state.

It's easier to go from zero to one than from one to N. Totalitarian regimes
are very good at copying and rapidly implementing things they already know how
to do, so they tend to go from zero to one with breathtaking speed. Then they
hit a wall because their totalitarianism prohibits innovation (either cultural
or technological) and is very fragile. The economic miracle ends when they run
out of stuff to copy and usually their politics goes to hell when the Great
Leader and/or revolutionary generation dies.

Social democracy sucks at rapid execution on the known. I get frustrated with
it just like the next person. But it's the only system with a demonstrated
track record of continuously marching into the unknown and of defending itself
for long periods of time against extreme corruption.

~~~
taherchhabra
Wow, I can use your comment during my debates on democracy Vs Dictatorship.

~~~
api
There is perhaps a pragmatic argument for being a dictatorship if your goal is
to climb from backwater to "developed" nation very quickly and then to
transition to a democracy, but the authoritarians in charge have a history of
nixing the second part of that plan.

We thought this was what China was going to do until their new emperor emerged
and made himself president for life.

------
stuaxo
This all seems like the runup to the great depression :/

~~~
danieltillett
In fairness trade protection was an exacibation, not a cause of the Great
Depression [1].

1\.
[https://en.m.wikipedia.org/wiki/Smoot–Hawley_Tariff_Act](https://en.m.wikipedia.org/wiki/Smoot–Hawley_Tariff_Act)

~~~
xymor
So, you're saying the 1930 introduced tarrifs didn't create the 1929
depression? I hope you can provide a source for such a bold statement.

~~~
danmaz74
1929 was the year of the market crash. The depression lasted 12 years, most of
them during the 1930s.

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Consultant32452
This is all very complex and I'm having a hard time seeing the big picture.
There's trade wars, US foreign policy on North Korea (China plays a
significant role), and over the last few years a ramping up of discussions on
how to avoid the Thucydides trap. It's worth noting here that China and
Russia, and potentially Iran are allies. All these things are connected in
complex ways and while it's important to look at an issue like the trade war
in isolation, I think it's also important to view it in context. And that big
picture context is something I'm having a very hard time pulling together. Can
anyone recommend some reading that would illuminate this?

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m23khan
If anything as a Canadian I rather see Canada openly and aggressive court
China, Russia, EU and Mexico+Brazil as trading partners to significantly
reduce dependence on US.

Canada needs to understand need of the hour is not to engage in moral-
schooling with China and not to support ire-invoking causes in China -- our
priority is Canada, Canadian economy and Canadians.

For too long our courting of USA and India has resulted in both US and India
becoming arrogant towards us when it comes to foreign policy and diplomatic
protocols.

Finally, as a clear signal, Canada should step up border patrol and
aggressively stop any intake of folks fleeing to Canada from USA - US needs to
understand Canada is not a dumping ground for their unwanted folks.

~~~
UncleEntity
> Finally, as a clear signal, Canada should step up border patrol and
> aggressively stop any intake of folks fleeing to Canada from USA - US needs
> to understand Canada is not a dumping ground for their unwanted folks.

You act as if ICE takes people it finds in the US, drives them to the Canadian
border and tells them to walk north.

~~~
m23khan
Agreed - and that is why I would like Canadian forces to aggressively
block/restrict unwanted folks in USA to enter Canada - let US deal with the
economic costs of handling them.

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hourislate
Canada was dumping cheap Chinese steel into the US for ever. Just look at the
largest seller of Stainless Steel in NA. It's an outfit that brings Chinese
Stainless Steel into Canada and Mexico and then dumps it into the US.

Canada was warned about a year ago that they need to stop this dumping but
chose to continue to the last possible day they could (May 31, 2018). On June
1st the Trump administration went ahead with sanctions. The Canadians acted to
late and worked with the Chinese for too long. When this was brought up to
Canada's foreign minister (Chrystia Freeland) and why they didn't act sooner,
she had no answer.

It could have all been avoided.

~~~
allengeorge
What is the basis for this assertion?

By far the largest source of Canadian steel imports is the US (55%). China
accounts for only 10% of Canadian steel imports. Even if _all_ the Chinese
steel Canada imported (0.8 million metric tons) flowed directly into the US -
highly unlikely - this would account for __2% __of the steel the US imported
(34.6 million metric tons). And this percentage is even smaller considering
the overall US steel market. Hell - US production alone is 81.6 million metric
tons and __increasing __. Somehow a max of 0.8 million metric tons
destabilized a US steel market of approximately 81.6 mmt or more?

All numbers as of 2017 and from the US government:

[1] Canadian steel imports:
[https://www.trade.gov/steel/countries/pdfs/imports-
Canada.pd...](https://www.trade.gov/steel/countries/pdfs/imports-Canada.pdf)

[2] US steel imports: [https://www.trade.gov/steel/countries/pdfs/imports-
us.pdf](https://www.trade.gov/steel/countries/pdfs/imports-us.pdf)

~~~
hourislate
So why all of a sudden is Canada applying tariffs to Chinese steel if it was
never a problem?

[https://www.cnbc.com/2018/06/26/canada-braces-for-
diverted-s...](https://www.cnbc.com/2018/06/26/canada-braces-for-diverted-
steel-imports.html)

I'm not an insider but I certainly know enough people in the industry and
understand cross-border trade shenanigans.

~~~
allengeorge
Because the US applying tariffs has removed avenues for Chinese steel entering
the US. That steel can be diverted to other markets (for example, Europe or
Canada) and thus flood those markets as well, crashing the price there.

There is no mystery here. Europe did the same thing when the US applied their
tariffs. They know the flow is going to go _somewhere_ , and they don't want
it to be dumped on their markets either.

~~~
hourislate
>Because the US applying tariffs has removed avenues for Chinese steel
entering the US.

So you are agreeing that Canada is dumping steel into the USA.

Thanks...

~~~
allengeorge
No. I said that it removed avenues for _Chinese_ steel. Chinese steel is
imported directly to the US too. It accounts for 2% of US imports.

Please read above referenced documents.

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madengr
Try getting moderate and high value MLCC caps on Digikey. Pretty much zero
stock on everything. It’s affecting my electronics production. Why the hell
would Trump put tariffs on parts where there aren’t even domestic
manufacturers?

~~~
Mountain_Skies
Think that's the point. His stated goal is to bring jobs back to the United
States. Domestic production for these items don't exist now but if demand
can't be satisfied through imports due trade restrictions, domestic suppliers
will arise. Of course things aren't quiet that simple as many things have
complex supply chains involved in their production so it would take time for
such domestic producers to come online. Plus they must be assured somehow that
the next administration isn't going to reverse course, opening the market to
imports that will undercut the domestic market. My guess is that Digikey will
get stock again soon, just at a higher price. It's unlikely there will be
anything completely unavailable as this isn't an embargo, just tariffs.

~~~
kevin_thibedeau
They will just shift production to somewhere else in south east Asia. Low
margin manufacturing will never be in-sourced again.

~~~
394549
> They will just shift production to somewhere else in south east Asia.

To be honest, that might not be a bad outcome.

> Low margin manufacturing will never be in-sourced again.

I'm actually kinda surprised by some of the low-margin items that are still
"Made in the USA." I just noticed that the cheapy-cheap molded-plastic laundry
baskets I bought from Wal-Mart were domestically produced.

