Baltic Dry Index. 1090 +48 Brent Crude 77.38
As we learned after President
Herbert Hoover signed the Smoot-Hawley tariff at the outset of the Great
Depression, vibrant international trade is a key component to economic
recovery; hindering trade is a recipe for disaster.
Asa Hutchinson
Bunker time!!! Run do not walk to the bunkers. Ignore the
experts who say, don’t worry it’s all
just a negotiating ploy. Getting out early beats getting carried out last!
Today will not be like yesterday nor like tomorrow. We are entering a new commerce
dark age. No trader alive today was active in the last trade war in the 1930s.
Our world is/was far more intertwined now.
Pax Americana, 1945 – 2008 has ended, what replaces it, isn’t
yet apparent, but it’s more akin to when the Vikings first arrived in Britain
and northern Europe, than the gentle decline after the Roman Legions were
forced, first out of England and Wales, then out of France and Spain. America
will never regain Pax Americana again.
Everyone loses in a trade war, although not all equally nor
at the same time. Prices have already risen in America in steel and aluminium
in anticipation of tariffs. Now Canada, the EU and Mexico will hit back with
retaliatory tariffs, in the EU’s case starting on June 20th. By
Christmas, it’s estimated, both the EU and USA will have lost about 250,000 jobs
each, but that’s only the first downpayment.
We have just entered a new Dark Age of unintended consequences
and increasing strife. For each scarce winner there will be multiple losers.
The longer a trade war lasts and the deeper it gets, the worse the outcome and
the greater the lasting damage.
A trade war would be a
disaster for the world. It's very easy to slip into a trade war.
Jack Ma
Below, America’s great gift to China and Russia.
Here’s what steel and aluminum tariffs on U.S. allies mean for the metals market
By Myra P.
Saefong Published: May 31, 2018 5:25
p.m. ET
Steel and aluminum prices climbed Thursday after the Trump administration
said it would impose steel and aluminum tariffs on U.S. allies Canada, Mexico
and the European Union starting Friday. Analysts said, however, that overall uncertainty over the impact of the decision is likely to feed further volatility for the metals markets.
“The U.S. has long been an attractive market for offshore steel suppliers,” with steel imports having averaged 31 million metric tons per year since 2010, said Joseph Innace, S&P Global Platts’ content director for Metals Americas.
“Most of those tons come from Canada, Mexico and the [European Union]—countries which will no longer be exempt from the tariffs,” he said.
The White House said it would impose tariffs of 25% on steel imports and 10% on aluminum imports from Canada, Mexico and the EU starting Friday. The three U.S. allies had previously been given waivers for May as the U.S. government attempted to win concessions from the EU and was engaged in trade talks on renegotiating the North American Free Trade Agreement.
The U.S. government had announced global tariffs on imported steel and aluminum in March.
The previous tariff announcements saw aluminum prices rally, wrote analysts at commodity brokerage Marex Spectron in a note Thursday, but “noticeably,” U.S. Commerce Secretary Wilbur Ross said he looks forward to “continued negotiations” and points to some “flexibility.”
The aluminum market has been “largely rangebound of late,” the analysts said. Prices on the London Metal Exchange rallied into the close on Thursday, settling up 1% at $2,292 per short ton, according to Marex Spectron.
But since the U.S. is a major importing country, the 25% tariff on steel products would “tend to curb imports, result in shifting global supply and exert downward pressure on global steel prices,” said Innace. “Steel that had been supplied to the U.S. market would need to find new homes, and there could be some stiff price competition.”
In the U.S., however, futures prices for U.S. Midwest domestic hot-rolled coil steel climbed by $37, or 4.2%, in Thursday trading, to $922 per short ton. It has risen by nearly 39% year to date.
“For anyone that produces steel in the U.S., this is very good news,” so U.S. steel companies are moving higher on the news, said Mike Shorr, an options trader at VantagePoint Software.
Steel and aluminum stocks rallied Thursday, with shares of U.S. Steel Corp. X, +1.71% trading 1.7% higher.
Moody’s also revised its 12- to 18-month outlook for the U.S. steel industry to positive from stable on Thursday, in part due to reduced imports following news of the U.S. plan to impose steel tariffs on Canada, Mexico and the EU.
----Joe Casucci, chief executive officer of steel fabricator and erector FJM Ferro Inc., told MarketWatch that the tariffs announced in March have already “caused the American mills to increase their prices by almost 30%.”
More
https://www.marketwatch.com/story/heres-what-steel-and-aluminum-tariffs-on-us-allies-mean-for-the-metals-market-2018-05-31
Trump pulls tariff trigger on EU — what analysts say investors should expect
By Barbara
Kollmeyer Published: May 31, 2018
11:08 a.m. ET
President Donald Trump has lit the fuse for a trade battle with the European
Union, and investors have no choice but to ride out tit-for-tat retaliatory
moves from both sides.That’s the view of analysts, as U.S. threats to slam the EU with tariffs — which have been brewing for months — were coming to a head. Fed up with waiting for Europe to cough up adequate concessions, the Trump administration on Thursday slapped levies on imports of steel and aluminum from the EU.
“What we have learned with Trump is that the situation is dynamic and fluent,” said Peter Garnry, head of equity strategy at Saxo Bank, speaking ahead of the White House announcement.
Garnry said he could easily see Trump put tariffs on the EU, Canada and Mexico into effect, just to get those countries to the bargaining table. The U.S. president has done so, leading to strong reaction from all three.
----In its response Thursday, the EU has said the metals tariffs are “protectionism, plain and simple” and vowed not to negotiate with the U.S. under threat.
“Today is a bad day for trade. We did everything to avoid this outcome,” said Cecilia Malmström , the EU’s commissioner for trade, in a European Commission statement. “This is not the way we do business, and certainly not between longstanding partners, friends and allies.”
When the proposed tariffs were first announced, the European bloc threatened to bring in $3.5 billion of its own levies, with European Commission President Jean-Claude Juncker saying the EU could “also do stupid.” In the frame are levies on U.S. agriculture, steel and industrial products, as well as on classic American items, such as Harley-Davidson HOG, -2.17% motorcycles, Levi’s jeans and Jack Daniel’s whiskey.
In response to that trade threat, Trump has warned the U.S. will hit European cars with a U.S. import tax. Plus, a report published Thursday in German magazine Wirtschaftswoche said Trump told French President Emmanuel Macron he wants to bar German luxury cars from the U.S. market.
More
https://www.marketwatch.com/story/trump-ready-to-pull-tariff-trigger-on-eu-what-analysts-say-investors-should-expect-2018-05-31
May 30, 2018 / 10:39 PM / Updated
3 hours ago
U.S. allies hit back at Washington's steel, aluminum tariffs
WASHINGTON/PARIS (Reuters) - Canada and Mexico retaliated against the U.S. decision on Thursday to impose tariffs on steel and aluminum imports and the European Union had its own reprisals ready to go, reigniting investor fears of a global trade war.
The tariffs, announced by U.S. Commerce Secretary Wilbur Ross in a
telephone briefing on Thursday, ended months of uncertainty about potential
exemptions and suggested a hardening of the Trump administration’s approach to
trade negotiations.
The measures, touted by President Donald Trump in March, drew
condemnation from Republican lawmakers and the country’s main business lobbying
group and sent a chill through financial markets.
The Dow Jones Industrial Average lost 1 percent and the S&P 500 shed
0.69 percent. Shares of industrial heavyweights Boeing and Caterpillar both
fell, with Boeing down 1.7 percent and Caterpillar down 2.3 percent.
Tariffs of 25 percent on steel imports and 10 percent on aluminum will
be imposed on the EU, Canada and Mexico from midnight (0400 GMT on Friday),
Ross told reporters.
----Canada and Mexico, embroiled in talks with the United States to modernize the North American Free Trade Agreement (NAFTA), responded swiftly.
Canada, the largest supplier of steel to the United States, will impose
tariffs covering C$16.6 billion ($12.8 billion) on imports from the United
States, including whiskey, orange juice, steel, aluminum and other products,
Foreign Minister Chrystia Freeland said.
“The American administration has made a decision today that we deplore,
and obviously is going to lead to retaliatory measures, as it must,” Prime
Minister Justin Trudeau said at a news conference with Freeland.
Late on Thursday, Trump issued a statement about the NAFTA negotiations,
saying the days of the United States being taken advantage of on trade were
over.
“Earlier today, this message was conveyed to Prime Minister Justin Trudeau
of Canada: The United State will agree to a fair deal, or there will be no deal
at all,” Trump said.
Mexico announced what it described as “equivalent” measures on a wide
range of U.S. farm and industrial products.
The measures, which target pork legs, apples, grapes and cheese as well
as steel and other products, will be in place until the U.S. government
eliminates its tariffs, Mexico’s Economy Ministry said.
The S&P 500’s packaged foods and meats industry sub-index fell 2
percent, with shares of meat producer Tyson Foods Inc falling 3.9 percent,
Campbell Soup Co 2.6 percent and spice maker McCormick & Co Inc 2.9
percent.
----The EU threatened tariffs on Harley Davidson motorcycles and bourbon, measures aimed at the political bases of U.S. Republican legislators. Shares of Harley-Davidson Inc fell 2.2 percent and Brown-Forman Corp, maker of Early Times and other bourbon brands, lost 2.1 percent. EU members have given broad support to a European Commission plan to set duties on 2.8 billion euros ($3.4 billion) of U.S. exports if Washington ends tariff exemptions. EU exports potentially subject to U.S. duties are worth 6.4 billion euros ($7.5 billion).
“It’s entirely up to U.S authorities whether they want to enter into a trade
conflict with their biggest partner, Europe,” France’s finance minister, Bruno
Le Maire, said after meeting with Ross on Thursday.
U.S. Chamber of Commerce President Tom Donohue warned in a letter to the
body’s board, and seen by Reuters, that current trade policies could threaten
“economic progress” and cause the loss of more than 2 million jobs, mostly in
states that voted for Trump and Republican candidates.
Morehttps://uk.reuters.com/article/us-usa-trade-metals-europe/u-s-to-slap-tariffs-soon-on-steel-aluminum-from-eu-wsj-idUKKCN1IV2TN
May 31, 2018 / 4:16 PM
Trump's "muscle-flexing" with allies will cost US consumer, France says
PARIS (Reuters) - U.S. trade tariffs on European metals exports are unjustified and will be met with a proportionate and calibrated EU response, the French government said on Thursday.
“Today, France and the EU disapprove, of course, these measures. We are
getting ready to put in place safeguards, rebalancing measures because we won’t
let unjustifiable and unjustified measures go unanswered,” ,” France’s junior
trade minister Jean-Baptiste Lemoyne told reporters.
“I’m happy that, in this moment of truth, the EU is united.”
----“While some leaders are enjoying themselves with measures that amount to muscle-flexing and are pointing fingers at allies, what will happen in real life? These tariffs will increase the cost of products,” the French minister said.
“And in the end who will pay the bill? The consumer, the American
consumer,” Lemoyne added.
“Today, in terms of trade, we’re dancing by the edge of the cliff. It
takes a lot of self-control to show the U.S. they are completely wrong,” he
said.
https://uk.reuters.com/article/us-usa-trade-france/u-s-trade-tariffs-unjustified-eu-facing-moment-of-truth-france-says-idUKKCN1IW24L"Never interrupt your enemy when he is making a mistake."
President Putin, with apologies to Napoleon Bonaparte
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
In the Great Global Trump Trade War on NATO, President Trump is
reportedly seeking a knockout blow for Europe. Banning German cars from the USA
for strategic defence reasons of the USA, will have the effect of knocking out
much of Germany’s economy, probably collapsing NATO and the EU at the same
time.
With Juncker and his poodle Barnier already messing up Brexit, Germany
already faces selling its autos in the UK under WTO tariffs after Brexit.
President Trump is going for a German chokehold.
Trump wants to bar German cars from U.S.: report
By MarketWatch Published: May 31, 2018 5:22 a.m. ET
-U.S. President Donald Trump last month told French President Emmanuel
Macron that he plans to bar German premium car manufacturers like Daimler AG
(DAI.XE) and BMW AG (BMW.XE) from the U.S. market, reports German business
weekly Wirtschaftswoche, citing European and U.S. diplomats.
--During Macron's visit to Washington in April, Trump said he would
maintain his trade policy until no more Mercedes models rolled onto Fifth
Avenue in New York, the magazine reports.
--Last week Trump instructed his administration to review whether the
country could raise tariffs on car imports using national security as a justification.
Full story: https://bit.ly/2H5Sqh3
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The gain from foreign trade is
what we import. What we export is the cost of getting those imports. And the
proper objective for a nation as Adam Smith put it, is to arrange things, so we
get as large a volume of imports as possible, for as small a volume of exports
as possible.
This carries over to the
terminology we use. When people talk about a favorable balance of trade, what
is that term taken to mean? It’s taken to mean that we export more than we
import. But from the point of view of our well-being, that’s an unfavorable
balance. That means we’re sending out more goods and getting fewer in. Each of
you in your private household would know better than that. You don’t regard it
as a favorable balance when you have to send out more goods to get less coming
in. It’s favorable when you can get more by sending out less.
Milton Friedman
Technology Update.
With events happening fast in the
development of solar power and graphene, I’ve added this section. Updates as
they get reported. Is converting sunlight to usable cheap AC or DC energy
mankind’s future from the 21st century onwards?
Google launches UK solar power service
UK homeowners can check how much they'd save with a solar roof.
UK homeowners can now check how much money they would save by installing solar panels on their roofs. Google has just released a new tool, in collaboration with energy supplier Eon. It's called Project Sunroof, and it uses data from Google Earth and Google Maps to determine how much energy a house could save with solar panels.The premise is simple – by using data from these two platforms, as well as from weather data, it can calculate how much sun a roof is getting throughout the day, and use that data to come up with an estimate.
The tool is not the first of its kind, though, with both Ikea and Tesla having similar ones already operational. However, these tools required homeowners to supply additional data, like the shape of their roofs, or their homes.
Google says it can eliminate these steps with the help of Maps and Earth.
Projoect Sunroof 'lowers the barriers' for homeowners, with the help of Maps and Earth, says Jonathan Marshall, head of analysis at the non-profit organisation Energy and Climate Intelligence Unit.
"By analysing the roof shape, they will take out one of the steps that you would have to go through to get solar panels installed," Mr Marshall told the BBC. "The speed of the process means that if you're half-tempted by the idea, you're more likely to go ahead with it."
Project Sunroof has been operational for three years now, in the US and Germany.
https://www.itproportal.com/news/google-launches-uk-solar-power-service/
Another weekend , the start of June and the start of a trade war. Place your bets now for the winners and losers. Have a great weekend everyone, the good times are about to end.
“One of
the great mistakes is to judge policies and programs by their intentions rather
than their results.”
Milton
Friedman
The monthly Coppock Indicators finished May.
DJIA: 24,416 +201 Down. NASDAQ:
7,442 +276 Down. SP500: 2,705 +180 Down.
All
three slow indicators moved down in March and have continued down in April and
May. For some a new bear signal, for others a take profits and get back to cash
signal.
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