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Discussion in 'Politics, Guns, and a can of Whoop Ass!' started by turq66, Mar 6, 2018.

  1. turq66

    turq66 Well-Known Member

    I've heard a lot about this and was just curious what you guys think. Especially would like to get Craig's (tarafied1) take as this seems to affect him directly.
  2. guruatbol

    guruatbol Always on vacation!

    Been thinking the same thing.

    Sent from my Pixel 2 using Tapatalk
    FordDude likes this.
  3. FordDude

    FordDude Well-Known Dude Staff Member Moderator

  4. guruatbol

    guruatbol Always on vacation!

    Mach1Mark likes this.
  5. FordDude

    FordDude Well-Known Dude Staff Member Moderator

    The point is that Cohn resigned most likely over his disagreement with the tariff.

  6. guruatbol

    guruatbol Always on vacation!

    I don't know how I feel about them. I'm not sure if those industries need the help.

    Very curious to get Craig's take since he is closer to it.


    Sent from my Pixel 2 using Tapatalk
  7. rbohm

    rbohm Active Member

    i have mixed feelings about tariffs. on the one hand they can help level the playing field by making imports more expensive.

    on the other hand, it can start a trade war that will hurt the economy, if done wrong. i think trump is starting his tariffs at to high a level.

    the other problem wsith tariffs is that often times domestic manufacturers raise their prices as well, so everything get more expensive.
  8. Midlife

    Midlife Well-Known Member Staff Member Moderator

    It's Crony Capitalism in another guise.
  9. 3175375

    3175375 Well-Known Member

    In my opinion, trade has been a mess for years and this is the POTUS' method of trying to equalize things.
  10. Mach1 Driver

    Mach1 Driver Active Member

    Number 1: don't believe anything in the main stream media, Number 2: don't believe anything in the main stream media. Trump says that other countries are dumping aluminum and steel here at or below cost. Our companies can't be competitive, and this helps drive them out of business. Its a strategic move on Trumps part to keep industries afloat. He said he was going to do it, and like his other campaign promises, he's doing it. Congress relinquished its authority to the President in these matters long ago, and they can't stop him anyway. Product costs will of necessity go up, but that's short term, as inflation always raises costs anyway, and a new equilibrium will be established. I'm not sure of all the fallout, but let the big guy roll. Hes done really well so far, and isn't afraid to make bold moves.
    I am interested in Craig's insight on this as well.
  11. BobV

    BobV Well-Known Member

    WORD of the potential tariffs came out weeks ago... About 2 weeks before the media jumped in.
    I've seen aluminum & steel prices up ~10% from last year. Some of that was normal, but at least 5% was in anticipation of the tariffs.
    There have been some crazy daily jumps since then, but I locked in my fall purchase 2 weeks ago. Still, our finished products will see some price increases this year...

    FWIW, I buy 200k pounds of anodized aluminum and 100k pounds of steel yearly.
  12. tarafied1

    tarafied1 Well-Known Member

    Well, I am no expert. I can tell you what our company has said.
    While China is undercutting prices and producing more product than the market needs, China ships only 10 per cent of its aluminium exports to the US, worth less than 1 per cent of its total primary production of the metal. We are basically a converter of aluminum. China does both produce aluminum sheet and other products as well as produce primary aluminum for it's factories. They also buy up a lot of the worlds scrap. Our factories cannot compete with China's pricing and subsidies on converted aluminum products such as sheet used in auto and cans. We pay respectable salaries to our employees and we ARE global. We have facilities in South America, Europe, Korea, the US and in China and India. We are not a "primary aluminum producer" meaning we do not mine bauxite and smelt it into aluminum. We buy our scrap and raw materials on the open market. We will have to pass the increase in cost to consumers. The can and auto industry are our biggest markets. What could happen, since aluminum is already an expensive materiel for the auto industry is we could lose out to other composite materials. In the can industry, we could lose to PET (plastic). Since oil is down, plastic is cheap right now. The big fillers, like Coke, don't care what container their product is in. They want to sell liquid. Anyway, the tariffs don't help us compete because we have higher costs to convert. The tariffs will only raise aluminum prices which we have to buy. Our pricing is vaguely explained as the cost of the material and our cost to convert it and some profit margin. Our pricing is tied to the LME (London Metal Exchange). So as the cost of aluminum increases so does our price.
    So in the long run tariffs could hurt our business thru potential loss of business. This is not likely to be a huge issue in auto industry as more and more car manufactures are using more aluminum but it could mean less aluminum cans for example.
    On the other hand, companies like Alcoa, one of our biggest competitors, are celebrating. They are a primary aluminum producer. They have reduced output and even shut down or curtailed facilities due to the Chinese over capacity. They not only supply the US industry but export as well. As prices increase they become more competitive and can pay the salaries North American workers expect. So it could be good for them. Now still keep in mind, the consumer and end user will bear the cost increase.
    In Brazil, we have a situation much like Trump is proposing. Brazil has hefty tariffs on imports. We have the only aluminum production in South America. We have basically a captive audience. Our pricing doesn't have to be competitive with global markets in Brazil because even if China bid way below our price, the Brazilian tariffs keep the Chinese from being competitive. This is great for us in Brazil but their market is much different than the US. Brazil for example has lots of oil reserves and they use almost exclusively grain alcohol fuel so they export almost all their oil. It puts them in a pretty good position for trades. It does mean that they pay more for a can of Coke though than other global markets.
    Anyway, back to Trumps tariffs, our company doesn't see this tariff causing any significant issue, like closing plants or laying off staff, but there may be an increasing cost that the company will have to manage. The kicker is that Canada is the number-one source of aluminum imports to the United States, accounting for about 43 percent in total. While the tariffs may be good for Alcoa and potentially bad for us, hopefully Trump will exempt Canada because the aluminum industry between the U.S. and Canada is so interdependent. If Canada has to pay tariffs like China, it will hurt Canada much more than China and increase our (US consumers) costs significantly.
    Last edited: Mar 8, 2018
  13. tarafied1

    tarafied1 Well-Known Member

    More from Novelis on the topic
  14. turq66

    turq66 Well-Known Member

    Thanks, Craig. Interesting subject. I guess we'll just have to wait and see what happens and what the effect will be.
    tarafied1 likes this.
  15. Midlife

    Midlife Well-Known Member Staff Member Moderator

    Boycott beer in aluminum cans: drink it out of glass bottles!

    Sorry, Craig...
  16. tarafied1

    tarafied1 Well-Known Member

    Beer goes skunky in glass!

    Sent from my iPhone using Tapatalk
  17. guruatbol

    guruatbol Always on vacation!

    After doing some research, I've decided I don't agree. Campaign payoff.

    Sent from my Pixel 2 using Tapatalk
  18. tarafied1

    tarafied1 Well-Known Member

    Just got word that what Trump signed into effect excludes Canada and Mexico. That's good at least
    FordDude likes this.
  19. turq66

    turq66 Well-Known Member

    That's what I suspected, but haven't seen the evidence.
  20. Midlife

    Midlife Well-Known Member Staff Member Moderator

    For a time, depending upon how the NAFTA negotiations go forward, from what I understand.
    tarafied1 likes this.

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