Trump’s tariffs are already backfiring


mentalfloss
#1
Trump’s tariffs are already backfiring

Before steel and aluminum tariffs alienated our allies, before President Trump suggested car imports threatened our “national security,” before that 1,000-plus-item list of Chinese goods targeted for new tariffs, there were washing machines.

Yes, washing machines.

It seems almost quaint today, but the U.S. washer industry was one of the first sectors that Trump decided to rescue through an aggressive, no-holds-barred tariff. And now that a few months have passed, the industry offers a useful preview for how Trump’s tough-on-trade strategy can backfire for many of the U.S. companies, consumers and workers he wants to help.

Curiously, foreign washing machines weren’t always seen as the enemy. Once upon a time, the U.S. government believed rising washer imports were a good thing for the economy.

At least, that’s what U.S. antitrust authorities suggested back in 2006, when they let American companies Whirlpool and Maytag merge. At the time, the combined company controlled about half the domestic washer market, according to market research firm TraQline.

Normally, this level of market concentration would be a red flag. But the Justice Department said it wasn’t worried in part because Whirlpool’s newer South Korean rivals, LG and Samsung , “have quickly established themselves in recent years.” These imports, Justice officials said, would help keep Whirlpool’s U.S. market power in check.

That is, in fact, what happened, much to Whirlpool’s dismay. Over the next dozen years, Whirlpool’s market share shrank faster than a cotton T-shirt. It’s now down to a little more than a third.

Samsung and LG said they’ve gained ground because they’re giving consumers what they want, with their focus on high-efficiency front-loaders with fancy new features, such as the ability to wash two loads simultaneously.

Whirlpool, which runs the world’s largest washing machine factory here in Clyde, strongly disagrees. It accused the Korean companies of playing dirty, “dumping” their machines below cost in the U.S. market and receiving unfair subsidies from the Korean government.

Then-President Barack Obama’s Commerce Department took Whirlpool’s side. In 2013, the administration issued anti-dumping and countervailing tariffs on imported washers from South Korea and Mexico.

Both companies subsequently moved production to China. So Whirlpool filed another complaint, and the U.S. government announced another round of tariffs, this time on Chinese washers. LG and Samsung moved production again, this time to Thailand and Vietnam.

Then came Trump, who looked exactly like the kind of uncompromising “fair trade” champion Whirlpool had been yearning for. Clyde’s surrounding county voted for Trump by 23 points in 2016.

And at first, it seemed their electoral choice paid off.

In January, Trump announced steep worldwide tariffs on washers (and solar panels, which got a lot more attention). He did this by invoking a rarely used trade provision that didn’t require proof that Samsung and LG had done anything wrong, just that domestic producers were suffering.

Perhaps seeing the writing on the wall, a few months before this, both Korean companies announced plans to open washer factories in the United States. States and counties desperate for new manufacturing jobs have showered them with tax credits, grants and other goodies.

You know, the same kinds of generous government subsidies Whirlpool had accused them of receiving back in South Korea.

Nonetheless, Whirlpool and the Trump administration declared victory: for American firms, American workers and even American consumers.

“We hope that the tariffs and the order in full effect will ensure the highest level of innovation, and more choices for consumers,” Aaron Spira, Whirlpool’s chief legal officer, told me in an interview for “PBS NewsHour.”

But so far, the data suggest consumers have been hung out to dry.

This spring, laundry equipment prices skyrocketed 17 percent, the biggest increase on record. It’s hard to see how higher prices expand shoppers’ choices.

https://www.washingtonpost.com/opini...=.95e143cc8e62
 
Danbones
Free Thinker
#2
Subscribe to the FT to read:
Financial Times, US third quarter growth rate revised up to quickest in three years
https://www.ft.com/content/72ad1db3-...2-3c77576e9a7e
 
IdRatherBeSkiing
+3
#3  Top Rated Post
With production in Canada or the USA, and not some children slave camp, prices will increase. If this is the desired model, we should expect to pay more for everything.
 
Danbones
Free Thinker
#4
MF likes the communist suicide net slave child political financial model.( hiya Mr Weiner!)

it pays the bills.
 
taxslave
Free Thinker
+1
#5
Quote: Originally Posted by mentalfloss View Post

Trump’s tariffs are already backfiring

Before steel and aluminum tariffs alienated our allies, before President Trump suggested car imports threatened our “national security,” before that 1,000-plus-item list of Chinese goods targeted for new tariffs, there were washing machines.

Yes, washing machines.

It seems almost quaint today, but the U.S. washer industry was one of the first sectors that Trump decided to rescue through an aggressive, no-holds-barred tariff. And now that a few months have passed, the industry offers a useful preview for how Trump’s tough-on-trade strategy can backfire for many of the U.S. companies, consumers and workers he wants to help.

Curiously, foreign washing machines weren’t always seen as the enemy. Once upon a time, the U.S. government believed rising washer imports were a good thing for the economy.

At least, that’s what U.S. antitrust authorities suggested back in 2006, when they let American companies Whirlpool and Maytag merge. At the time, the combined company controlled about half the domestic washer market, according to market research firm TraQline.

Normally, this level of market concentration would be a red flag. But the Justice Department said it wasn’t worried in part because Whirlpool’s newer South Korean rivals, LG and Samsung , “have quickly established themselves in recent years.” These imports, Justice officials said, would help keep Whirlpool’s U.S. market power in check.

That is, in fact, what happened, much to Whirlpool’s dismay. Over the next dozen years, Whirlpool’s market share shrank faster than a cotton T-shirt. It’s now down to a little more than a third.

Samsung and LG said they’ve gained ground because they’re giving consumers what they want, with their focus on high-efficiency front-loaders with fancy new features, such as the ability to wash two loads simultaneously.

Whirlpool, which runs the world’s largest washing machine factory here in Clyde, strongly disagrees. It accused the Korean companies of playing dirty, “dumping” their machines below cost in the U.S. market and receiving unfair subsidies from the Korean government.

Then-President Barack Obama’s Commerce Department took Whirlpool’s side. In 2013, the administration issued anti-dumping and countervailing tariffs on imported washers from South Korea and Mexico.

Both companies subsequently moved production to China. So Whirlpool filed another complaint, and the U.S. government announced another round of tariffs, this time on Chinese washers. LG and Samsung moved production again, this time to Thailand and Vietnam.

Then came Trump, who looked exactly like the kind of uncompromising “fair trade” champion Whirlpool had been yearning for. Clyde’s surrounding county voted for Trump by 23 points in 2016.

And at first, it seemed their electoral choice paid off.

In January, Trump announced steep worldwide tariffs on washers (and solar panels, which got a lot more attention). He did this by invoking a rarely used trade provision that didn’t require proof that Samsung and LG had done anything wrong, just that domestic producers were suffering.

Perhaps seeing the writing on the wall, a few months before this, both Korean companies announced plans to open washer factories in the United States. States and counties desperate for new manufacturing jobs have showered them with tax credits, grants and other goodies.

You know, the same kinds of generous government subsidies Whirlpool had accused them of receiving back in South Korea.

Nonetheless, Whirlpool and the Trump administration declared victory: for American firms, American workers and even American consumers.

“We hope that the tariffs and the order in full effect will ensure the highest level of innovation, and more choices for consumers,” Aaron Spira, Whirlpool’s chief legal officer, told me in an interview for “PBS NewsHour.”

But so far, the data suggest consumers have been hung out to dry.

This spring, laundry equipment prices skyrocketed 17 percent, the biggest increase on record. It’s hard to see how higher prices expand shoppers’ choices.

https://www.washingtonpost.com/opini...=.95e143cc8e62

oops bad you don't have a clue about economics. Of course the price would go up when they have to pay USprices and follow environmental laws. No one with a brain expected otherwise. The point is that many AMerican workers have jobs producing machines that are sold domestically with a spin-off effect of about 1 more job for every 5 manufacturing jobs. All of whom will now be able to purchase other American made products.Win Win. When you ship all the jobs overseas just to get cheap labour pretty soon there are no consumers left except rich government employees.
Besides both Samsung and LGhave shitty products that don't work and we'll and die early.
 
petros
+1
#6
Nobody wants an exploding Samsung wash machine made with inferior steel.
 
Hoid
#7
Everything will cost more.

Thats how you pay for the trillion dollars you just gave the 1%
 
petros
+1
#8
Prove it.
 
Twin_Moose
Conservative
#9
Quote: Originally Posted by Hoid View Post

Everything will cost more.

Thats how you pay for the trillion dollars you just gave the 1%

Doesn't the 1% have to pay more to import for manufacturing and sales?
 
Hoid
#10
NO the 1% owns all the companies that are moving elsewhere in order to make cheaper things to sell to Americans

get it?
 
Bar Sinister
No Party Affiliation
+2
#11
People like Trump never learn; perhaps because they are not capable of learning. The same thing happened a few decades ago in the Auto industry. The US slapped large tariffs on automobiles from Japan and the Japanese countered by building automobile plants in the USA, but not before they shopped around and got every state subsidy they could find. The result; Japanese cars made in the US now rival the numbers of the US manufacturers the laws were supposed to protect.
 
IdRatherBeSkiing
#12
Quote: Originally Posted by Bar Sinister View Post

People like Trump never learn; perhaps because they are not capable of learning. The same thing happened a few decades ago in the Auto industry. The US slapped large tariffs on automobiles from Japan and the Japanese countered by building automobile plants in the USA, but not before they shopped around and got every state subsidy they could find. The result; Japanese cars made in the US now rival the numbers of the US manufacturers the laws were supposed to protect.


And you are acting like this is a bad thing.
 
White_Unifier
#13
Quote: Originally Posted by mentalfloss View Post

Trump’s tariffs are already backfiring

Before steel and aluminum tariffs alienated our allies, before President Trump suggested car imports threatened our “national security,” before that 1,000-plus-item list of Chinese goods targeted for new tariffs, there were washing machines.

Yes, washing machines.

It seems almost quaint today, but the U.S. washer industry was one of the first sectors that Trump decided to rescue through an aggressive, no-holds-barred tariff. And now that a few months have passed, the industry offers a useful preview for how Trump’s tough-on-trade strategy can backfire for many of the U.S. companies, consumers and workers he wants to help.

Curiously, foreign washing machines weren’t always seen as the enemy. Once upon a time, the U.S. government believed rising washer imports were a good thing for the economy.

At least, that’s what U.S. antitrust authorities suggested back in 2006, when they let American companies Whirlpool and Maytag merge. At the time, the combined company controlled about half the domestic washer market, according to market research firm TraQline.

Normally, this level of market concentration would be a red flag. But the Justice Department said it wasn’t worried in part because Whirlpool’s newer South Korean rivals, LG and Samsung , “have quickly established themselves in recent years.” These imports, Justice officials said, would help keep Whirlpool’s U.S. market power in check.

That is, in fact, what happened, much to Whirlpool’s dismay. Over the next dozen years, Whirlpool’s market share shrank faster than a cotton T-shirt. It’s now down to a little more than a third.

Samsung and LG said they’ve gained ground because they’re giving consumers what they want, with their focus on high-efficiency front-loaders with fancy new features, such as the ability to wash two loads simultaneously.

Whirlpool, which runs the world’s largest washing machine factory here in Clyde, strongly disagrees. It accused the Korean companies of playing dirty, “dumping” their machines below cost in the U.S. market and receiving unfair subsidies from the Korean government.

Then-President Barack Obama’s Commerce Department took Whirlpool’s side. In 2013, the administration issued anti-dumping and countervailing tariffs on imported washers from South Korea and Mexico.

Both companies subsequently moved production to China. So Whirlpool filed another complaint, and the U.S. government announced another round of tariffs, this time on Chinese washers. LG and Samsung moved production again, this time to Thailand and Vietnam.

Then came Trump, who looked exactly like the kind of uncompromising “fair trade” champion Whirlpool had been yearning for. Clyde’s surrounding county voted for Trump by 23 points in 2016.

And at first, it seemed their electoral choice paid off.

In January, Trump announced steep worldwide tariffs on washers (and solar panels, which got a lot more attention). He did this by invoking a rarely used trade provision that didn’t require proof that Samsung and LG had done anything wrong, just that domestic producers were suffering.

Perhaps seeing the writing on the wall, a few months before this, both Korean companies announced plans to open washer factories in the United States. States and counties desperate for new manufacturing jobs have showered them with tax credits, grants and other goodies.

You know, the same kinds of generous government subsidies Whirlpool had accused them of receiving back in South Korea.

Nonetheless, Whirlpool and the Trump administration declared victory: for American firms, American workers and even American consumers.

“We hope that the tariffs and the order in full effect will ensure the highest level of innovation, and more choices for consumers,” Aaron Spira, Whirlpool’s chief legal officer, told me in an interview for “PBS NewsHour.”

But so far, the data suggest consumers have been hung out to dry.

This spring, laundry equipment prices skyrocketed 17 percent, the biggest increase on record. It’s hard to see how higher prices expand shoppers’ choices.

https://www.washingtonpost.com/opini...=.95e143cc8e62

Of course Trump's tariffs are backfiring: he just raised taxes on the US consumer. His tariffs are backfiring on him for the same reasons ours are backfiring on us.
 
Bar Sinister
No Party Affiliation
#14
Quote: Originally Posted by IdRatherBeSkiing View Post

And you are acting like this is a bad thing.




Protectionism is a bad thing. Mainly because it rarely achieves the results it is supposed to.
 
IdRatherBeSkiing
+1
#15
Quote: Originally Posted by Bar Sinister View Post

Protectionism is a bad thing. Mainly because it rarely achieves the results it is supposed to.


With your example, more factories in the USA by Japanese automakers was the result. For those employed in those factories, it is a good thing. Generally I consider employment good.
 
Danbones
Free Thinker
+2
#16
Yes, Bill Maher wants a recession to get rid of trump, but what the dummie doesn't realize is that America voted in trump to get rid of the recession.
 
Curious Cdn
Conservative
#17
Quote: Originally Posted by Danbones View Post

Yes, Bill Maher wants a recession to get rid of trump, but what the dummie doesn't realize is that America voted in trump to get rid of the recession.

... yeah, the fake-news recession.
 
Hoof Hearted
+1
#18
If Hoid blames all of this on white nationalist climate change deniers, I'm outta here!

 
taxslave
Free Thinker
+1
#19
Quote: Originally Posted by Bar Sinister View Post

Protectionism is a bad thing. Mainly because it rarely achieves the results it is supposed to.

So we export all our manufacturing jobs to Asia and only rich government employees will be able to afford to buy anything.

Quote: Originally Posted by Hoof Hearted View Post

If Hoid blames all of this on white nationalist climate change deniers, I'm outta here!

BHe blames his bad grades on the same thing.
 
Danbones
Free Thinker
#20
Quote: Originally Posted by Curious Cdn View Post

... yeah, the fake-news recession.

You make it so obvious that you don't understand derivatives or quantitative easing nor the bond market at all.

Economically, Could Obama Be America's Worst President? - Forbes
https://www.forbes.com/sites/peterfe...rst-president/

Trump has to undo the whole effed thing - crash it back to price to market, which is going to be infinitely more difficult now that obummer had the economy literally mainlining opium for so long.

Here's to soros losing trillions in the process...
Last edited by Danbones; Jun 16th, 2018 at 09:14 PM..
 
Curious Cdn
Conservative
+1
#21
Quote: Originally Posted by Danbones View Post

You make it so obvious that you don't understand derivatives or quantitative easing nor the bond market at all.

Economically, Could Obama Be America's Worst President? - Forbes
https://www.forbes.com/sites/peterfe...rst-president/

Trump has to undo the whole effed thing - crash it back to price to market, which is going to be infinitely more difficult now that obummer had the economy literally mainlining opium for so long.

Here's to soros losing trillions in the process...

How are you going to keep up your aluminum foil hat supply after that stiff tariff on aluminum?
 
Bar Sinister
No Party Affiliation
#22
Quote: Originally Posted by IdRatherBeSkiing View Post

With your example, more factories in the USA by Japanese automakers was the result. For those employed in those factories, it is a good thing. Generally I consider employment good.




It is a good thing, but the original intent of the tariffs was to support the US "Big Three" auto producers. Obviously it didn't.

Quote: Originally Posted by taxslave View Post

So we export all our manufacturing jobs to Asia and only rich government employees will be able to afford to buy anything.


Haven't US corporations like Apple and so on already done that? The question is why doesn't the US government go after companies that export jobs and profits offshore? There is an answer to that question, of course and that is that much of the profit from off-shore manufacturing flows back to the US. Another is that foreign manufacturing keeps the prices of manufactured goods low for domestic consumers. And a third is that many of the Asian nations manufacturing products for the US economy are large buyers of US agricultural products. World trade is much more complicated than the average citizen understands.
 
Ocean Breeze
Free Thinker
#23
"
Get ready for auto tariffs, U.S. congressman warns


Get ready for auto tariffs, U.S. congressman warns | CBC News
 
mentalfloss
#24
Americans will feel this but we'll be fine.

Thanks Troomp.
 
Hoid
#25
SO we have to wait to see how much American cars that are made in Canada wil cost Americans.

Currently a Toyota Matrix made in Ontario and shipped to Califronia sells for less than that same car that is sold in Ontario - so bring on the tariffs on cars.

Long overdue.
 
Ocean Breeze
Free Thinker
#26
U.S. stocks sag as U.S.-China trade war talk heats up

The U.S. markets are having their worst day in June on reports that President Trump will ramp up his threats of an emerging trade war with China, with the Dow Jones industrial average sliding nearly 500 points, or 2 percent.

McDonald��s, Intel and the big industrial companies, Boeing, Caterpillar and DowDuPont, were heavy drags on the Dow.

The sell-off was global, with major European benchmarks in London, Germany, France all off by 2 percent or more.

https://www.washingtonpost.com/busin...economy&wpmk=1
 
Walter
#27
Quote: Originally Posted by Ocean Breeze View Post

U.S. stocks sag as U.S.-China trade war talk heats up

The U.S. markets are having their worst day in June on reports that President Trump will ramp up his threats of an emerging trade war with China, with the Dow Jones industrial average sliding nearly 500 points, or 2 percent.

McDonald��s, Intel and the big industrial companies, Boeing, Caterpillar and DowDuPont, were heavy drags on the Dow.

The sell-off was global, with major European benchmarks in London, Germany, France all off by 2 percent or more.

https://www.washingtonpost.com/busin...economy&wpmk=1

Time to buy.
 
Curious Cdn
Conservative
#28
Quote: Originally Posted by Walter View Post

Time to buy.

Don't bother with ALCOA or US Steel. Their values are "artificially inflated", right now.
 
Hoid
#29
Quote: Originally Posted by Walter View Post

Time to buy.

Said Walter when GE was $30?

GE is $12 an change today.
 
Ocean Breeze
Free Thinker
+1
#30
Harley-Davidson will shift some U.S. production abroad to avoid European Union tariffs imposed in retaliation to President Trump's trade policy

Monday, June 25, 2018 10:13 AM EST




Harley-Davidson, the American motorcycle manufacturer, said on Monday that it was shifting some of the production of its bikes outside the United States to avoid European Union tariffs imposed as part of a widening trade dispute.

The announcement, made in a public filing, is an early sign of the financial cost to companies on both sides of the Atlantic as the United States and Europe impose tariffs and counter-tariffs on each other.


https://www.nytimes.com/2018/06/25/b...s&ref=headline


Hmm.
 

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