Hi Banjo,

Good analysis of the effects of tariffs, the result for Americans (indirect effects for Australia) will be a rise in inflation, followed by a slowdown in the economy as consumer demand diminishes, leading to rising unemployment and reduced living standards. The loyal Trumpster mhaze, either doesn't have the foggiest understanding of economics, which he has demonstrated many times, or he is such a loyal Trumpster, that he believes the Orange Man can do or say no wrong, in fact just as ardent Nazi's believed Hitler was a genius, mhaze believes Trump is a genius!

Banjo,

What you say is correct... but only in a theoretic world where there is complete free trade and no international players game the system.

But we don't live in a theoretic world. Some of us live in the real world. And in the real world, some nations game the system to their advantage and to the disadvantage of others. Equally in the real world some sections of society use the system to advantage themselves and disadvantage their neighbours.

Whilst it is true that, in your theoretic world, inflation may rise due to the tariffs, it is also true that many of those previously disadvantaged by a fanatical adherence to globalist principles, will be advantaged. If you are a US steel worker at the moment, the potential increase in inflation is a minor concern compared to the hope that jobs previously exported to countries paying slave wages will be re-imported to your advantage.

Equally, if you a US farm worker you are now living in hope that Trump will follow through on his intention to match the many 100%+ tariffs that nations like Canada and the EU impose on your output.

You carry on like the funds from tariffs disappear into the ether. But they don't. Instead they become part of the government's revenue stream where they form the basis of future tax cuts or reduce the Federal Deficit and therefore interest rates.

Its easy in the theoretic world to think one step ahead and assume that's the end of the tale. In the real world, one changed policy (eg tariffs) leads to a multitude of unquantifiable effects. Its about understanding the complexity of the national economy.

Governments for millennia heavily relied on funding themselves by taxing trade ie tariffs. The last 100 years where governments learned to tax incomes are the exception not the rule. And that rule change has been to the significant disadvantage of the working class.

Again its interesting that those, such as yourself, who would claim to be on the side of the working class are opposed to a policy that is very much pro-worker.

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Dear mhaze,

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You wrote :

« If you are a US steel worker at the moment, the potential increase in inflation is a minor concern compared to the hope that jobs previously exported to countries paying slave wages will be re-imported to your advantage. »
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The United States is the fourth-largest producer of raw steel in the world, behind China, India and Japan.

In 2024, only 13% of steel use was from imported steel. The main suppliers of those 13% were Canada, Brazil, Mexico, South Korea and Vietnam.

As regards aluminium, 47% of U.S. consumption was from imports, the main suppliers of those 47% being Canada, United Arab Emirates, China, South Korea and Bahrain.

Canada alone supplied roughly 58% of the total U.S. aluminium imports in 2024. Canada was also the top supplier of the US steel imports – and Canada is not a “country paying slave wages” as you seem to suggest.

Nevertheless, steel and aluminium producers in the United States could stand to benefit from Trump’s 25% tariffs -- data shows that U.S. steel and aluminium production increased in 2018 and 2019 when tariffs on those products were in effect during Trump’s first presidency. However, there is little chance of that occurring given that adding new production capacity to offset higher-priced imports, particularly steel production, would take massive investments and years of infrastructure and talent development.

There is also a risk of foreign retaliatory tariffs, as occurred the last time steel and aluminium tariffs were put in place. That could once again pose a risk to other sectors of the U.S. economy.

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Banjo,

Thanks for the stats but they were already known. Trump is seeking to rebuild the US manufacturing sector and steel/aluminium etc are integral to that. He's also seeking to make the US economically self-sufficient and steel production is integral to that as well.

"However, there is little chance of that occurring given that adding new production capacity to offset higher-priced imports, particularly steel production, would take massive investments and years of infrastructure and talent development."

You're assuming that the US doesn't have excess capacity at the moment. That's incorrect. They already have the production capacity in place and will be able to quickly gear up to take advantage of the new opportunities. The Trump team wouldn't have gone down this path if that wasn't the case.

A couple of nights ago, some Dill on Q&A was waffling on about Australia's 42 % export rate.
No-one questioned him what these export consist of. What manufacturing is being exported & earns dividends for Australia ?
Anyone has a couple of such exports to enlighten us on ? And, no I don't mean Iron ore & Bauxite. Real manufactured here products !

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Dear Indyvidual,

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You wrote :

« A couple of nights ago, some Dill on Q&A was waffling on about Australia's 42 % export rate »
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The latest available stats are for the year 2022. Trade as a whole was equivalent to 45.75% of Australian GDP.

Of that figure, exports of goods and services counted for 25.81% of GDP and imports of goods and services counted for 19.94% of GDP .

Trade balance : Exports exceeded imports by 5.87% of GDP in 2022.

Here is the source :

http://wits.worldbank.org/CountryProfile/en/AUS

Overview :

In 2023, Australia was the number 13 economy in the world in terms of GDP (current US$), the number 20 in total exports, the number 22 in total imports, the number 16 economy in terms of GDP per capita (current US$) and the number 75 most complex economy according to the Economic Complexity Index (ECI) .

Exports :

The top exports of Australia are Iron Ore ($85.4B), Coal Briquettes ($71.7B), Petroleum Gas ($47.8B), Gold ($29B), and Other Mineral ($12.1B), exporting mostly to China ($137B), Japan ($59B), South Korea ($20.9B), India ($19.9B), and Chinese Taipei ($17.4B).

In 2023, Australia was the world's biggest exporter of Iron Ore ($85.4B), Coal Briquettes ($71.7B), Other Mineral ($12.1B), Aluminium Oxide ($5.29B), and Sheep and Goat Meat ($3.26B)

Imports :

The top imports of Australia are Refined Petroleum ($35.3B), Cars ($24.8B), Delivery Trucks ($11.3B), Broadcasting Equipment ($8.58B), and Computers ($6.38B), importing mostly from China ($72.3B), United States ($31.9B), South Korea ($18.1B), Japan ($17.7B), and Thailand ($13.5B).

In 2023, Australia was the world's biggest importer of Sodium or Potassium Peroxides ($1.14B)

Here is the source :

http://oec.world/en/profile/country/aus

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