Markets did not hesitate to express their displeasure regarding protectionist tariffs last week, and the potential for retaliatory measures that may be taken. And just about every article out there focused on winners – producers of steel and aluminum, and losers – consumers of steel and aluminum.
Interestingly, about 35 years ago, in September 1984, President Reagan rejected a request by U.S. copper miners that he impose quotas or tariffs on copper to protect them from imports of metal. The miners claimed that competitors in Chile and Peru had an unfair advantage, because they were being subsidized by their governments.
U.S. copper fabricators, who convert raw copper into rods, strips and sheets opposed the imposition of quotas, arguing their own ability to compete internationally would be hurt by the resulting increase in copper costs. In the end, President Reagan decided that import restrictions were “not in the overall national economic interest.”
Of course, the issue was more complex, but the argument between winners and losers was just as valid then as it is now. Just two years after President Reagan’s decision, copper embarked on a major bull run that would eventually take the price from 57¢ in 1986 to a record high $1.56 by December 1988, and provide an embarrassment of riches for copper producers throughout the world.
Closer to home, we lost power here in Huntington, NY, on the Isle of Long when the nor’easter came through, and regrettably, yours truly lost a disc drive. Thus, we’ve been in the process of reconstructing various files and addresses, hence, we are running late, but both the weekly and monthly reports are included here.
It’s an interesting comparison between the two, as the monthly charts suggest the rising trends remain intact, while the weekly charts are looking iffy, first because of recent strength in the dollar, followed by the announcement of tariffs on steel and aluminum.
Last week we were in a “holding pattern” because of uncertainty in the dollar’s direction, but the picture has become even murkier with protectionist issues coming to the surface around the world.
So we remain in a holding pattern, patiently waiting for more clarity in the charts.