Investors in the commerce between China and the United States should start preparing for the fall out of the trade ties between these two economic superpowers. This alarm is following the United States Department of Commerce being on the Cusp on whether to impose tariffs on aluminum and steel imports from China. The American commerce is at a significant crossroad when it commerce to international trade policies and investors should seriously consider a protectionist agenda before making purchases of stocks at the global market which are subject to exposure from external factors.
The host of Mad money, Cramer, said that President Trump should quickly intervene in the Department of commerce which is headed by Secretary Wilber Ross. Cramer said that the president should promptly make a recommendation for tariffs for the sake of national security. The Chinese businessmen have a tradition of keeping the prices of steel very low artificially to eliminate competition which is popularly known as “steel dumping.” This practice has become a bone contention in the trade policy of the trump administration.
Cramer noted that the steel producers in the United States could come under severe pressure, struggle to do business or even close down if steel dumping by China continues. The producers will have lost a competitive edge in the steel business and thus being edged out of business. The Trump administration has repeatedly raised concerns about the Chinese government failures to impose regulations that would enable a free global market to thrive. One of the senior officials in the trump administration has said that steel dumping could be one of the issues of national security under Trump’s trade policy.
The Mad money host said that with the no-nonsense and tough Wilbur Ross steering the Commerce Department, there was a good chance that would impose a ban on steel and aluminum imports from China or impose some very heavy tariffs on the imports. The US Department of commerce could make use of Trade Expansion Act under Section 232 to impose the artificially cheap metals from China.
The Mad Money host said that having section 232 enabled could bring the two factions of the political divide, both Republicans and Democrats into a bipartisan agreement that would serve to benefit American trade. Allowing the trade to expansions act would also promote a symbiotic trade relationship between China and the United States and give American steel manufacturers a better chance to survive, thrive and compete in the global free market.