1 week ago

Tariffs and their impacts explained

President Trump announced last week that he would seek tariffs on imported steel and aluminum. What will the impacts of these tariffs be, and do they constitute wise policy?A tariff is a tax imposed on items imported to the U.S. The proposed 25 and 10 percent tariffs on steel and aluminum will make imported metals more expensive, increasing domestic production of these metals. President Trump will impose the tariffs via executive order, since Congress decades ago gave the president relatively broad discretion to impose tariffs for national or economic security. The Commerce Department determined in February that steel and aluminum imports threaten security, allowing this action.

The president intends to boost domestic steel and aluminum production. The first element of good policy is accomplishing the intended goal. The tariffs do this.

Increased domestic production will come at a cost. Steel and aluminum are used to make consumer goods like cars, lawn mowers, and beverage cans. Furthermore, there are dozens of types and grades of steel. American companies are very good at making some types of steel, while foreign companies are quite good at making other types. No American companies currently make some types of steel.

Manufacturing is efficient when producers of cars, mowers, and cans can purchase the best product at the best price. The tariffs will increase the cost of manufacturing in the U.S., reducing output and employment in industries using these metals. Consumers will face higher prices as well.

The second and more significant element of wise policy is ensuring that the benefits exceed the costs. Is there a compelling reason to protect domestic metals production?

We might think that such protection could spur the labor market. Employment is currently less than 100,000 and 30,000 in aluminum. Based on current import penetration, eliminating all imports – which these tariffs will not do – might in time create 50,000 additional jobs. This total is modest relative to our economy’s 150 million total jobs and 60 million jobs filled annually, and would be at least partially offset by job losses in manufacturing. And January’s 4.1 percent unemployment rate signals a currently strong labor market.

President Trump has spoken often about economic dangers from China. China is only our 11th largest steel supplier; we import the most steel from Canada, South Korea, Brazil and Mexico. Regardless of whether trading less with China is desirable, these tariffs will not really achieve this goal.

The identity of our largest steel trading partners, I think, also allays national security fears. If we feared some security scenario requiring significantly greater domestic production, we could pay American companies to mothball recently closed plants. We do not need to punish automakers daily to prepare for a contingency which may never arise.

Competition from foreign producers receiving government assistance provides, I think, the strongest argument for ever protecting American industries. Government assistance violates the rules of the market, raising economic and justice concerns. Economic efficiency requires that the firms producing the best different steel and aluminum products win out. Export subsidies encourage production by firms which are not the most efficient. Plant closings devastate families and communities. This pain can be justified as like recuperation from surgery if the closings improve economic efficiency. Pain which does not improve the economy is hard to justify.

Are steel producers losing because of unfair trade? The World Trade Organization allows remedies in response to documented unfair trade practices. As of June 2017, American steelmakers had 149 remedies in place, including 24 against China. We had 18 remedies against South Korea (second most after China), yet only eight, six, and zero against Brazil, Mexico, and Canada. Competition in steel seems reasonably fair.

The response of our trading partners provides a final variable here. Our trading partners may impose tariffs against American products in retaliation. No one knows if President Trump’s tariffs will spark a trade war, but wars almost always injure many innocent parties.

Daniel Sutter is the Charles G. Koch Professor of Economics with the Manuel H. Johnson Center for Political Economy at Troy University.


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4 hours ago

Evidence mounts of full-scale Russian campaign to undermine American energy

The U.S. government for the first time ever blamed Russia for hacking into American energy infrastructure. The Trump administration action comes a little over two weeks after a House committee detailed Russian attempts to influence energy markets.

U.S. officials said a “multi-stage intrusion campaign by Russian government cyber actors” that began in March 2016, possibly earlier, is part of a campaign to target critical infrastructure, including energy, nuclear and aviation facilities.


The FBI and Department of Homeland Security on Thursday said hackers targeted small facilities “where they staged malware, conducted spear phishing, and gained remote access into energy sector networks,” Reuters reported.

It’s the first time the U.S. has directly called out Moscow for infrastructure hacking. It’s still unclear whether or not the hacks were successful or led to any damage, and the security alert did not name the companies targeted.

The Trump administration condemnation comes more than two weeks after the House Committee on Science, Space and Technology found Russian agents used social media outlets to embolden opposition to American energy production.

“Russia exploited American social media as part of its concerted effort to disrupt U.S. energy markets and influence domestic energy policy,” reads the committee’s report on Russian activities.

The committee found accounts linked to the Internet Research Agency (IRA), a Russian troll farm, published 9,097 social media posts from 2015 to 2017 targeting energy policies and projects. Thirteen Russians connected to IRA were indicted by special counsel Robert Mueller.

“The IRA targeted pipelines, fossil fuels, climate change, and other divisive issues to influence public policy in the U.S.,” the House committee found.

For years, Republicans and energy industry experts have worried Russian money was being used to undermine U.S. energy policy.

Intelligence officials confirmed in early 2017 in a declassified report on election meddling that the state-owned media outlet Russia Today (RT) ran “anti-fracking programming, highlighting environmental issues and the impacts on public health.”

The House committee began the investigation in 2017 and asked Treasury Secretary Steve Mnuchin to investigate whether or not Russians were using an offshore Bermuda-based law firm to funnel money to U.S. environmental groups.

Lawmakers asked Mnuchin to investigate whether or not the U.S.-based environmental group, the Sea Change Foundation, took $23 million from a Bermuda-based shell company with ties to Russian oligarchs in 2010 and 2011.

Sea Change gave millions to U.S.-based environmental groups, including the Natural Resources Defense Council, the Sierra Club and the League of Conservation Voters. All of those groups oppose hydraulic fracturing.

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5 hours ago

VIDEO: PA-18’s lessons — dangerous teachers — student walkouts … and more on Guerrilla Politics

Radio talk show host Dale Jackson and Dr. Waymon Burke take you through this week’s biggest political stories including:

— Were the results in Pennsylvania’s special election a rejection of Trump or Pelosi?

— Why did the executive director of the state’s superintendent association imply teachers were unstable and dangerous?

— Will the student walkouts bring about some real change on gun issues?

Clayton Hinchman joins Jackson and Burke to discuss his campaign for Congress in Alabama’s 5th Congressional District.

Jackson closes the show with a “Parting Shot” directed at Hillary Clinton where he begs her never stop talking.

6 hours ago

AlabamaWorks! is holding a career event for students to learn about jobs in the state

Edie Gibson and Antiqua Cleggett talk “Worlds of Work at SkillsUSA” which will be held April 24-25 at the Birmingham Jefferson Civic Complex.

Worlds of Work at SkillsUSA is designed to help 8-12th grade students “connect the dots” and clearly identify steps toward a college or career pathway as they enter their high school education.

More information is available here.

Subscribe to the Yellowhammer Radio Presents The Ford Faction podcast on iTunes or Stitcher.

7 hours ago

Wounded Warrior running for Alabama State House representing Chambers and Lee Counties

Back in 2003, while U.S. Army Specialist Todd Rauch and his buddies were patrolling the streets of Abu Ghraib, an Iraqi city made famous by its notorious prison, a remotely-detonated mortar exploded near his patrol. His right shoulder and hand were severely injured in the blast.

Rauch was eventually flown to Walter Reed Army Medical Center in Washington, D.C., and endured 12 surgeries to save his limbs from amputation.

He is now running as a Republican for the State House of Representatives district representing Chambers and Lee Counties.

So how did this Illinois-native find himself running for office in Alabama?

While recovering at the hospital, Rauch’s roommate was from Fort Payne and “all he talked about was Auburn and Auburn and Auburn,” Rauch told Yellowhammer News.


Rauch soon recovered from his injuries, and then his plans for a transition to civilian life became all about … Auburn, Auburn, Auburn.

“I applied to Auburn and felt like it was a good place to get a fresh start,” he said

Rauch studied psychology at Auburn University, with the intention of working in veteran services or military intelligence. He then worked for a time as an intelligence analyst and then began working in veterans’ services, helping his brothers and sisters in arms receive the benefits they were promised.

He’s running on a platform strengthening communities.

Rauch has a firm conviction that a community’s representative ought to be more present in the community itself, something he said he hasn’t seen much at the 75 city and county commission meetings he has attended over the last few years.

“I realized that there was no one there who was representing us in Montgomery to take those voices and those issue and those problems to Montgomery,” he said.

Rauch has put improving jobs and education among his platform principles.

He is a stanch supporter of the community college system, of which both he and his wife are products.

“It’s a good and affordable way to get your education and to get experience in college without jumping into a four-year university,” he said.

Rauch also supports expanding broadband access to rural areas. He said it is critical to the development of rural areas that have little internet and cell service.

“You’re not able to do your banking,” he said. “Some of these people aren’t even able to have home security systems because some of that works off of cell service.”

With the campaign motto, “Community. Country. Service,” Rauch said he wants to work to improve life for his constituents, and by extension, the rest of the state and country.

“Focusing on the community creates better environment for the kids, inspires better leaders, and provides better community for our state, and provides a better state for our country,” he said.

The GOP primary is June 5.

(Image: Todd Rauch for Alabama/Facebook)

The conservative alternative to Martha Roby gains momentum as Terry Everett, lawmakers endorse Barry Moore

State Rep. Barry Moore’s campaign for Congress recently received strong endorsements from the district’s former congressman and a dozen of Alabama’s most conservative state lawmakers.

“Since I left Congress, government has grown, our representation has wavered, and District 2 values have been casted aside,” said former Republican Congressman Terry Everett, who represented the district from 1993-2009. “We need to make a change, and I am privileged to support Representative Barry Moore for Congress.”

Everett’s powerful endorsement comes days after 12 of the state’s most conservative lawmakers gathered in Montgomery to endorse Barry Moore, whose conservative record they witnessed firsthand while working alongside him in the State Legislature.

Wetumpka State Rep. Mike Holmes told reporters that the district has “an opportunity to send a strong, unapologetic conservative to Washington,” and Montgomery State Rep. Dimitri Polizos agreed, saying that Moore is a “proven conservative leader” who will “stand with President Trump and give our district the representation it deserves.”

Visit Barry Moore’s website, his Facebook page and @RepBarryMoore on Twitter to learn why Terry Everett and others believe in his vision to Make Alabama Great Again!

(Paid for by Barry Moore for Congress)