Biden Reinstates Aluminum Tariffs
In one of his first trade moves Biden Reinstates Aluminum Tariffs
President Biden reinstated tariffs on aluminum exported from the United Arab Emirates on Monday evening, reversing President Donald J. Trump’s decision to lift them on his last day in office.
The decision is one of Mr. Biden’s first significant moves on trade and suggests that his administration may be inclined to maintain the type of hefty tariffs Mr. Trump imposed on foreign metals to protect domestic industry. That position found favor with unions, but disappointed industries and businesses that have argued the tariffs raise costs.
In March 2018, Mr. Trump imposed a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports from a variety of countries, including the United Arab Emirates, saying their metal exports had put American aluminum producers out of business and therefore threatened national security. He subsequently exempted aluminum from Argentina, Australia, Canada and Mexico and, just hours before his term ended, lifted the aluminum tariffs on the UAE.
Mr. Trump’s decision appeared to be motivated more by political than economic considerations. The decision to lift tariffs on the United Arab Emirates was led by White House officials, including Mr. Trump’s son-in-law, Jared Kushner, who had just carried out extensive negotiations to normalize relations between Israel and the United Arab Emirates.
Politically Motivated But So What?
Lifting the tariffs was motived by politics. But in this case, so what?
It was the correct thing to do regardless of motivation.
Biden flunked his first trade test. Unfortunately, I suspect more trade failures are on the way.
Mish
I would suggest a far less nefarious reason; Biden is simply killing all the appointments, changes that Trump did in the last 90 days in office. then when his team has the time to get everything in order they will reconsider. Frankly, if I was in his position I would do the same thing.
So many issues, so many crazy moves by Trump in the last days of office, a blanket cancelation of all Trumps’ move is the only sane way to consider America’s trade policy with the rest of the world.
I think this is more about the future than the past. Biden probably plans to ease other tarrifs so does not want to be called ‘soft’ out of the gate. Also, everything that went down with Israel and UAE appeared to be the US buying UAE to agree to normalization of relations. This is just a way of saying that is over.
I think this is more related to the fact that UAE was the first one to turn its back with the Democrats policy to work the Palestinians in any peace plan with Israel. I think this has nothing to do with protectionism.
Silver anyone? This morning it looks like we might get to have another round of testing support..I put first real support on SLV around 24 and 2nd support at 22 or so. No MACD crossover after all….everything says a second but lesser down-leg this morning……to me anyway.
Looks like the dollar might be rolling over now (2-3-21)….if it eases all the way into the weekend, it makes it easier for silver to rally tomorrow or Friday. USD still in a weekly cycle uptrend, looks like…but just barely.
Where are the Reddit warriors? (Gone, lol.)
I did not buy the “short squeeze” on 1st Majestic…..because I wasn’t a true believer in the hype.. Looks like the shorts are back in firm control on that one…..five day chart looks like a Bart Simpson…could be a crypto chart….
It looks like the downside might be over for today….SLV looking better technically …spot turning up…..if it isn’t some head fake. Waiting for volume….to prove it’s real.
Dollar still looking to have topped for now….just barely. I expect the dollar will continue to provide headwinds….but maybe not for a few days now.
Not sure what the best way is to gauge continued interest in physical silver….maybe some of you have a finger on that pulse….all I know is that my favorite dealer, who has always been fair, has raised his premium on 100 oz bars another .14.oz…from 4.85 on Monday night….to 4.99 today. I expect that does indicate robust demand….but I have no real way to quantify that.
If you look online at various dealers, what they have available and how high the premiums are you’ll get a good indication of demand/interest.
For example, in brittain 1oz coins are sold for~ £34 with spot @ ~ £19.50 and most dealers have very few coins available.
I read a fairly cogent piece (I think) by Keith Weiner…..and it’s easier to grok than his usual dense futures based intel.
I like the narrow straw analogy. I think that’s right.
If SLV is any kind of go-by…the pressure has dropped considerably…..volume remains elevated, but not enough to get excited. MY SLV trade is going sideways, the chart looks less than great….and if I had to guess I’d say the chances of silver breaking out anytime soon are quite low.
But the downside risk is fairly low here…and@Realist says I need to diversify….so I will hang in….I now have .0001% of my assets in silver….got to feel good about correcting my allocations.
I hadn’t checked on the Gold/Silver ratio until today. It’s fallen so far from last year’s nosebleed high….I don’t see that as contributory to anything. I suppose it’s still falling, and has a ways to fall further? I know Mish uses the ratio to trade between silver and gold…he could probably enlighten us on where we are with that.
Somehow I get the feeling that you don’t understand the value of gold and silver.
The dollar printed a new high last night. That means it’s still in an uptrend. It should be expected that the dollar will top in its daily cycle and drop into a DCL within a few days…the cycle is already stretched..the current cycle is on day 14 by my count. But we appear to be very early in a new intermediate cycle that started on Jan 6. The pressure is no longer to the downside for the USD. It might be an extremely high translated cycle.
Pressure is still on the metals this morning. A rising dollar makes headwinds for metals,all other things being equal.
The interesting thing to think about is the Au/Ag ratio….which crashed from nosebleed highs very quickly…..from over 120….down to the mid 70’s…..and now headed sideways since September.
Part of that is that silver has had a good run….but gold has been particularly moribund too. At this point it probably makes good sense to consider whether gold should be favored over silver…
“extremely right translated cycle”….not high…damn autocorrect.
So….the story on silver today is that it looks pretty strong compared with gold, which got monkey-hammered at the NY open.
I averaged down, buying a few SLV earlier, and now I added a starter in GLD.
Now that stocks are ripping again, gold is a forgotten asset..for the moment. volume is way down on GLD.
I’m building a small position in both metals. At some point gold will start to outshine silver again…it’s pretty beaten down.. As long as the dollar is rising and stocks are in an uptrend, I don’t expect much….but both metals are in bull markets, and in bull markets, you get upside surprises sometimes.
Some context helps on these matters helps to clarify the issues.
The US consumes about 3.5 million metric tons a year, but produces only 1.1 million metric tons.
And, yes, aluminum is a strategic defense product.
Primary aluminum production (millions of metric tons)
1 China 36.0
2 India 3.7
3 Russia 3.6
4 Canada 2.9
5 United Arab Emirates 2.7
6 Australia 1.6
7 Bahrain 1.4
8 Norway 1.3
9 United States 1.1
10 Saudi Arabia 0.93
11 Iceland 0.85
12 Malaysia 760
13 South Africa 714 2018
Holy crap China produces a lot!
The era of open global trade facilitated by a strong US position as global hedgemon is simply coming to a close. It no longer serves the interest of the country the way it once did….and we can now look for a different world with new regional alliances….and more conflicts..between ancient rivals who are no longer going to be kept in check.
Biden is not going to be as abrasive and confrontational as Trump…..but he will take the political path of least resistance on this, I expect.
If the United States is serious about taking on China it needs to embrace TPP
“And do not imagine that what we are fighting for is simply the question of freedom or slavery: there is also involved the loss of our empire and the dangers arising from the hatred which we have incurred in administering it. Nor is it any longer possible for you to give up this empire, though there may be some people who in a mood of sudden panic and in a spirit of political apathy actually think that this would be a fine and noble thing to do. Your empire is now like a tyranny: it may have been wrong to take it; it is certainly dangerous to let it go.”
― Thucydides, History of the Peloponnesian War
Fantastic quote.
Pericles telling the truth to the Athenian assembly.
When I think of the US empire….I usually tend to compare it to Rome….because the similarities are so obvious…..but it pays to remember that Rome isn’t the only ancient empire than bit the dust…..Thanks for the history lesson. I’m often sorry I missed getting an education in the classics……maybe next life.
At the time he wrote it Greek cities were torn between two parties, the one representing the common people and the other representing the oligarchs. It’s an exact description of what we see today and back then there was no internet. Perhaps political dissention is inherent in humans. Here what he wrote about it.
“Love of power, operating through greed and through personal ambition, was the cause of all these evils. To this must be added the violent fanaticism which came into play once the struggle had broken out. Leaders of parties in the cities had programmes which appeared admirable – on one side political equality for the masses, on the other the safe and sound government of the aristocracy – but in professing to serve the public interest they were seeking to win the prizes for themselves. In their struggles for ascendancy nothing was barred; terrible indeed were the actions to which they committed themselves, and in taking revenge they went farther still. Here they were deterred neither by the claims of justice nor by the interests of the state; their one standard was the pleasure of their own party at that particular moment, and so, either by means of condemning their enemies on an illegal vote or by violently usurping power over them, they were always ready to satisfy the hatreds of the hour. Thus neither side had any use for conscientious motives; more interest was shown in those who could produce attractive arguments to justify some disgraceful action. As for the citizens who held moderate views, they were destroyed by both the extreme parties, either for not taking part in the struggle or in envy at the possibility that they might survive.”
― Thucydides, The History of the Peloponnesian War
Wow.
Plus ça change, plus c’est la même chose.
This is a further description. The meaning of words changed.
“Revolution thus ran its course from city to city, and the places which it arrived at last, from having heard what had been done before, carried to a still greater excess the refinement of their inventions, as manifested in the cunning of their enterprises and the atrocity of their reprisals. Words had to change their ordinary meaning and to take that which was now given them. Reckless audacity came to be considered the courage of a loyal supporter; prudent hesitation, specious cowardice; moderation was held to be a cloak for unmanliness; ability to see all sides of a question incapacity to act on any. Frantic violence became the attribute of manliness; cautious plotting a justifiable means of self-defense. The advocate of extreme measures was always trustworthy; his opponent a man to be suspected. To succeed in a plot was to have a shrewd head, to divine a plot still shrewder; but to try to provide against having to do either was to break up your party and to be afraid of your adversaries”
Many things do change, but human nature doesn’t seem to change all that much, does it?
I don’t suppose you’re into Owen Barfield and C.S. Lewis? No? Just thought I’d ask.
“Events of future history will be of the same nature – or nearly so – as the history of the past, so long as men are men.”
― Thucydides
I read C. S. Lewis’ Space Trilogy in junior high and liked how he made me think of good vs evil. The Lion, the Witch and the Wardrobe I discovered with my children. The other fella I am not familiar with. Are these two your favorites?
Well, yes, to make a very long story short. I thought of Barfield because of what you said about words changing their meaning. He was a 20th century British philosopher who speculated a lot about the evolution of human consciousness. Language was how he approached that subject.
Do you remember how Homer wrote about “the wine dark sea”? Nowadays very few people would refer to the sea as wine colored….but Barfield (and more recently many others) believed that man’s sense of color has evolved since ancient times. It’s an interesting idea ,and it is developed in his best known book……Saving The Appearances.
He is very hard to read, Barfield, but there is a renewed interest in his work these days.
Barfield was C.S. Lewis’s best friend, and his attorney, among other things. Lewis was pretty successful with his books, and Barfield helped him give most of his money away to charity.
Barfield was largely responsible for persuading Lewis to abandon his early atheism and become a Christian… Lewis is perhaps best known today know as a Christian apologist.
They were both part of a drinking club in Oxford between the wars…one that included J.R.R. Tolkien too…the Inklings. They all shared one thing….they were all friends of Lewis, who was the glue that stuck them together.
Just an aside….no real reason to bring all that up. Never mind. Hehehe.
Yes I know them. Both were in the trenches in WW I. One went in a Christian and came out an atheist and the other went in an atheist and came out a Christian. My kids gave me a book on them “The Fellowship” but I admit I haven’t got around to reading yet. It’s always a pleasure to talk with someone who shares the same likes and I thank you for the opportunity. It’s my bedtime now so see you the next time.
You did your best to get home elected. He’s your president. Own him.
I never expected otherwise from Biden. Tariffs are welcomed in many quarters of the Democratic and progressive party. If you recall Bernie and Trump were closest on Economic and Trade than any other issue.There will be one distinction however in that Biden won’t slap a tariff on a trading partner every time he has a bad phone call. Trump engaged in carousel tariff retaliation and you never knew what industry, country he would target and at what rate. The number were simply visceral based on what felt good to him. I’d note Biden also voiced support for the Jones act so I count this as Biden’s second mistake at least. And there’s simply no way Biden jumps on TPP which he should.
I trust Biden to make the right political decision unlike Trump. I also agree maintaining aluminum production in the US is a matter of national security. Mish’s assessment of Biden in this matter seems a bit presumptive….
Yes I agree he will make the right political decision he has been doing it for over 40 years. The question is who is his political decisions truly helping?
Yes right. You sir are drunk. It’s also not even the same human. Biden is likely the most pinocchio of any president ever while Trump was 100% his own idiot. He blew it then he blew it. Biden is a nothing. Biden is the CCP in charge of the newly burned in USSA.
You are drunk. Biden is the most pinocchio of any president in the past 70 years. Trump was his own man. Right or wrong you knew it was the deal. This is not even the same guy. Biden could not walk. Suddenly he is all better. I love the nonstop masking as well.
God forbid we get back to being human and survive as humans have for the past thousands of years. Why kind of people truly believe a mask will stop a virus. The same people that put up chicken wire to keep mosquitoes out. Idiots.
Good luck with the CCP and London running the USSA cause that is what you have. Where are the 81 million that voted for Biden now?
Could be the second. Raising the minimum wage could be interpreted as a tariff against the US at least as it relates to the global arena.
Increase pay and open the borders….hmmm I wonder what will happen…
I hope that in a sign of unity he will remove the fence around the White House since walls don’t work.
Consumption is increasingly supported by social entitlements, food stamps, EITC, welfare etc….at the point a full time worker qualifies for food stamps, it’s time to consider why.
A better question is why individual programs such as food stamps, EITC, etc even exist. Why isn’t there a unified program that combines everything into one, and integrates it in a way that is rational?
That was Friedman’s gripe, I’m sure you know the EITC, partly based on his N.I.T., was intended to cover everything.
The greater question is why these programs are growing, atop regular stimulus payments at the first sign of a market route, when we’re one of the wealthiest counties in the world.
Quid pro quo, with the quid being announced on the Trump departure flight down to Mary-lego-my-eggo.
The most important thing in the world to do at the last minute–free the UAE state-supported aluminum industry to export to the US market. It’d be fun to see the ping pong of texts on that one.
I don’t think it preposterous to guess, maybe Kushner got something out of the deal and Biden knows.
He specifically went for the UAE tariff, none of the others…yet.
YES …and Biden being an expert in ‘getting something out of deals’….