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Will they effect scrap prices?

For sure, they say it will cost more for producers who use both aluminum and iron. I'm thinking, I'm going to have to start collecting aluminum again? For the last year or two I've been bringing in iron where I used to just throw it in the dumpster.

I'm definitely no expert here, but I don't think this means that aluminum and steel themselves (raw materials) will go up in price so the tariffs in and of themselves shouldn't be a big deal for scrappers. That said, the timing is such that we could be at the beginning of a commodities super cycle where all (or virtually all) commodities go up sharply over the next several years.

Now, that said, does anyone know about the mechanics of a tariff on metals? I'd like to find a site that explains in plain English how this works. For instance, a car that will ultimately have aluminum and steel in it crosses the border into the U.S. for partial assembly. The car needs to cross the border back and forth a total of seven times before final assembly. How does this actually work regarding the imposition of metals tariffs?

For those interested in the stock market I did write a blog on the SeekingAlpha.com website that scrap yard business Commercial Metals (Ticker: CMC) seemed to be a solid play after Hurricane Harvey hit Texas in late August. The article was published on August 31 after market close when the stock finished the day at $18.89. The blog said that that it often took 2-4 months after the event for the stocks to get moving. That is indeed what happened with CMC. The stock initially surged to $22+, but went back down to the low $18's by mid-November. From there it took off and yesterday it closed at $25.97.

For anyone interested in more details on this go to SeekingAlpha.com. Search on the top right for me- I am listed as Stock Market Steve. Then click Blogs to see the article where 16 stocks in total are mentioned. This is still worth evaluating, but I don't recommend going all in at one time- rather in stages. Not an official recommendation- do your own due diligence.

Maybe since it will cost more to bring in steel there may be more domestic demand for scrap steel to refine - if that is the case then the price might tick up a little since its probably cheaper to ship on rail to a US producer than to send it on rail to a port then over the ocean. I don't know if there are any big domestic producers that use scrap rather than making brand new.

AGgressive Metal wrote: I don't know if there are any big domestic producers that use scrap rather than making brand new.

You've got one of the biggest recyclers anywhere in your backyard- Schnitzer Steel, HQ'ed in Portland.

Trump's tariffs will kill American jobs.

Not only do tariffs not work in the long run (the limited number of jobs "created" or "brought back" are more than offset by the rise in consumer prices and the cost of living), but Trump's tariffs won't even work in the short run. Trump's tariffs tax aluminum and steel when they are imported as raw materials, but they do NOT tax imported completed goods made of aluminum and steel. So the cheap imported products stay cheap while the US-based companies that import metals to use in their products see a 10% - 25% increase in the cost of their raw materials. It's hard enough for US manufacturers to compete with imported goods without arbitrarily and artificially raising the cost of their raw materials.

The only parties that benefit from the tariffs are the federal government, which collects revenue, and a handful of US-based aluminum and steel producers who get a temporary boost from artificially reduced competition. Manufacturers who use these raw materials to make finished products, all of the employees who work in those steel-dependent industries (6+ million of them versus the 140k who work in actual steel production), and all of the consumers who buy finished products made of steel or aluminum, lose.

It's already happening in Pennsylvania. 10 of 30 jobs gone at the last US manufacturer of stainless steel kegs. Watch for hundreds or thousands of other small businesses to cut back or go under in the coming years.

https://www.wsj.com/articles/the-trump- ... 1521241456

Maybe Trump will figure out the hard way what George W. Bush had to figure out the hard way and abandon this asinine token gesture. Bush's tariffs weren't as high and had more exemptions, and he still repealed them after less than two years due to their failure to "work" as promised and the damage they were doing.

Let's see- so we (potentially anyway) slap tariffs on aluminum and steel at least with certain countries. They can retaliate by slapping tariffs on our coin, soybeans, etc. Or they can ship to places like Vietnam, Mexico and Vancouver, BC for rerouting into the US. I can't imagine that we have enough staff to keep track of everything and where the true point of origin was.

Also, if China slaps a tariff on our farm crops, does that mean we then need to subsidize domestic farming and tell farmers to burn their crops?

So we get extra revenue from tariffs coming from some locations. But then we need to spend more money subsidizing farmers to destroy their crops. Doesn't seem right.

This can get incredibly complicated. I believe there is a new meaning to the term "Chinese fire drill."