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Who really believes tariffs are good business


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My biggest and quite real complaints about China are: their own protectionism their rampant IP theft As for globalism itself, that ship sailed quite awhile ago. The invention of

Agreed - the corporations probably didn't expect to get ripped off as they did, and no argument the Chinese have engaged in industrial espionage on a huge scale. Tariffing their products incorpor

Wrong! Guess who's price went up? BOTH! I had a $10k budget.  the import was $7500, the domestic were $10k, so, I was going to buy domestic. The DOMESTIC is going up, estimate is 1

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1 hour ago, BillDBastard said:

Kindly name one.

Softwood lumber, especially yellow cedar and other high quality wood used in non-US markets.  UK and Russia for hardwoods.  The technology and business processes are so more advanced than the US. The business processes stand in the way of acquiring the advanced technology.  In other words, the privately held forests in the US southeast are holding the US industries back.  Nothing to do with subsidies, just a better way of doing business.

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6 hours ago, BillDBastard said:

Kindly name one.

I can think of four ...

1. Advanced and designer polymers

2. Virtual water

3. Healthcare Infotech

4. Indoor agriculture

I can't include Cleantech like others would, because the dirty secret of Canadian industry is that they often dump their debris south of their border, the same way the USA dumps our debris south of our border.

 

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8 hours ago, Mismoyled Jiblet. said:

I love Cliff doing econ theory.

And yet, oddly enough, CSIRO does exactly what I describe. Thus you amusingly can't tell the difference between "econ theory" and actual policy of your own country. 

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5 minutes ago, Mismoyled Jiblet. said:

last I checked I've a yank passport and live in Trumplandia, but whatever bullshit you need cliff.

Ah, apologies, then I guess that explains why you assume that CSIRO actual policy is "econ theory."

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7 hours ago, BillDBastard said:

Kindly name one.

Name one what?

You were talking about partisan animosity and that is what I responded to. We (and others) don't have it like you do.

And we don't elect creatures like Trump. Well, the Italians did elect Berlusconi but then they are Italian.

And we don't have a politicized Supreme Court.

And......

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4 hours ago, mikewof said:

I can think of four ...

1. Advanced and designer polymers

2. Virtual water

3. Healthcare Infotech

4. Indoor agriculture

I can't include Cleantech like others would, because the dirty secret of Canadian industry is that they often dump their debris south of their border, the same way the USA dumps our debris south of our border.

 

It was the only way to get rid of Malarkey.

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13 hours ago, mikewof said:

First, I'm not clear on why you don't consider REEs a commodity ... The sources aren't limited, every region in the world that I know has lots of them, because there are so many different kinds. We have plenty of them in the USA, as do you in Oz. The reason so few countries produce them is because China is selling them cheap, and also because it's incredibly difficult to extract them since they don't vein in epithermal vents like gold, copper and silver. It's even more expensive to extract them from all that ore in a clean way, which even China doesn't bother doing.

In theory they're a commodity because they're everywhere in the environment.

In practice, *at this point in time* they are *not* a commodity because of restricted sources of supply and volumes.

Probably like aluminium prior to the 20th Century.

Now if 10 (picking a number) suppliers in different countries were offering rare earths, I'd say they were now a commodity.

FKT

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12 minutes ago, Fah Kiew Tu said:

In theory they're a commodity because they're everywhere in the environment.

In practice, *at this point in time* they are *not* a commodity because of restricted sources of supply and volumes.

Probably like aluminium prior to the 20th Century.

Now if 10 (picking a number) suppliers in different countries were offering rare earths, I'd say they were now a commodity.

FKT

The number is 10 to define a commodity? Seems arbitrary, but okay, I guess there about about 6 or 7 REE producing countries at the moment, less than 10, not a commodity?

So then Titanium is not a commodity either? Since -- as far as I know -- there are even fewer countries that can fully refine titanium than REEs. Titanium, not a commodity.

I think of a commodity as something that can be bought and sold. Seems simpler.

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Want a really good reason to tariff the fuck out of China? Assuming this is true of course, doing something to cut them off at the knees is way overdue.

https://www.smh.com.au/national/stealth-doorway-china-s-stunning-server-hack-shows-its-true-hand-20181008-p508co.html

FKT

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11 hours ago, Fah Kiew Tu said:

Want a really good reason to tariff the fuck out of China? Assuming this is true of course, doing something to cut them off at the knees is way overdue.

https://www.smh.com.au/national/stealth-doorway-china-s-stunning-server-hack-shows-its-true-hand-20181008-p508co.html

FKT

Yep, they've been pulling this shit for decades now.  Its the only way they've become a major economy is because they cheated and copied their way there.

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26 minutes ago, Shootist Jeff said:

Yep, they've been pulling this shit for decades now.  Its the only way they've become a major economy is because they cheated and copied their way there.

That's true - the bit you elide over is, they did it with the full assistance of the US corporations who wanted to boost their profit margins by dumping expensive workers and safety/environmental laws.

FKT

 

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11 hours ago, Fah Kiew Tu said:

Want a really good reason to tariff the fuck out of China? Assuming this is true of course, doing something to cut them off at the knees is way overdue.

https://www.smh.com.au/national/stealth-doorway-china-s-stunning-server-hack-shows-its-true-hand-20181008-p508co.html

FKT

 

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16 minutes ago, Fah Kiew Tu said:
45 minutes ago, Shootist Jeff said:

Yep, they've been pulling this shit for decades now.  Its the only way they've become a major economy is because they cheated and copied their way there.

That's true - the bit you elide over is, they did it with the full assistance of the US corporations who wanted to boost their profit margins by dumping expensive workers and safety/environmental laws.

FKT

Ish.  Maybe early on, but when it became apparent Jhyna was stealing IP or forcing US companies to turn over IP and then they would blatantly copy it, and sell it and drive the original IP holder out of business - I think the practice was more frowned upon.

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1 minute ago, Shootist Jeff said:

Ish.  Maybe early on, but when it became apparent Jhyna was stealing IP or forcing US companies to turn over IP and then they would blatantly copy it, and sell it and drive the original IP holder out of business - I think the practice was more frowned upon.

Still doing business there, though.

Be better off using Mexico as the cheap labour source.

I kind of admire China for the way they basically screwed over those multinationals who thought they were going to exploit a bunch of ignorant peasants and make even bigger profits. OK, what China did in forcing domestic partners and stealing IP was pretty rank (it still is pretty rank). Nobody made the corporations agree though. Turns out they weren't so smart after all and a focus on short-term P&L doesn't work out that great when dealing with a *big* country that can take a longer view.

I still don't like China's practices, though, but I do admire their rat-cunning.

FKT

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On 10/7/2018 at 11:11 AM, mikewof said:

First, I'm not clear on why you don't consider REEs a commodity ... The sources aren't limited, every region in the world that I know has lots of them, because there are so many different kinds. We have plenty of them in the USA, as do you in Oz. The reason so few countries produce them is because China is selling them cheap, and also because it's incredibly difficult to extract them since they don't vein in epithermal vents like gold, copper and silver.

This is truth.  Rare earths aren't rare.  At all.  Extracting and refining them is heavily polluting because of the chemicals used.  That's generically true because the rare earths themselves are so chemically similar, it takes a lot of work to separate them.

The global supply chain basically involves China roughing out a bunch of ore and then selling it to refiners around the world who clean up the purity.  If you're Rhone-Poulenc, it's cheaper to buy the 98% CeO2 chinese powder and turn in into 99.999% optical grade and sell it than run some factory in the DRC.

Outsourcing pollution and all that stuff we don't like to talk about.

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23 hours ago, Ishmael said:

More winning. Ford lost a $billion due to Trump's tariffs and are laying off 24,000 workers. https://www.dailymail.co.uk/news/article-6254701/Ford-planning-lay-thousands-worldwide-Trumps-tariffs-cost-U-S-car-giant-1BILLION.html

Ish, did you even read the article or did you just key on the headline??

Here's some highlights:

  • 24K laid off Globally - Boo FUCKING Hoo if workers in Jyhna's ford plants are losing their jobs.
  • On Jun 15th, the Trump Tariffs were announced and they didn't go into effect until 6th July.  Ford announced a $25.5B restructuring plan on 25th July.  NFW they came up with this in a month in response to the tariffs.  Utter BS.  This had to have been in the works for months and months for something that big.  No way the tariffs were even being felt that quickly.
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We are in the early stages of reorganizing our global salaried workforce to support the company's strategic objectives, create a more dynamic and empowering work environment, and become more fit as a business,’ Ford said late Friday.

  • There were other market forces going on that were impacting Ford Bigly well before the trump tariffs were ever announced.  Ford was on the wrong side of the market demand for SUVs and were all in for building small sedans in China.  
Quote

In April, Ford surprised many analysts by announcing massive cost-cutting targets and plans to phase out many sedans in North America amid surging demand for sport-utility vehicles and other trucks.

  • Ford was already massively cost cutting several months BEFORE the Tariffs were even announced.

RIF.  Sorry, this is much ado about nothing.  

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Just now, Shootist Jeff said:
  • On Jun 15th, the Trump Tariffs were announced and they didn't go into effect until 6th July.  Ford announced a $25.5B restructuring plan on 25th July.  NFW they came up with this in a month in response to the tariffs.  Utter BS.  This had to have been in the works for months and months for something that big.  No way the tariffs were even being felt that quickly.

If it was good news you can bet your ass that the Trump tariffs would be getting the credit.

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3 minutes ago, SloopJonB said:

If it was good news you can bet your ass that the Trump tariffs would be getting the credit.

WTF does that even mean or have to do with the subject at hand???  Can you actually address my point, or are you only into "Whataboutism"?  

Oh wait, nevermind - I looked at who I responded to after I wrote that ^^ and realized that was a dumb question.

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On 3/5/2018 at 3:40 AM, shaggybaxter said:

Whilst Trump plays tiddlywinks with global trade, lumping American allies and competitors for the top dog crown all in one basket, at least he’s uniting the rest of the world and giving them a common goal. 

The revised PTPP, renamed as the CPTPP, is bubbling along nicely. Not only that, the RCEP is becoming an even more serious power bloc too, albeit with tougher challenges.

What’s noticeable is the commitment to trading borders remain open and more determined than ever, but specifically not to the US if Trump continues his isolationist approach. Short summation below:

Conclusion of CPTPP does not deliver the big strategic goal of keeping the US entrenched in Asia. However, it still sends to Mr Trump a message on the region's commitment to openness. Holding the line and pushing back against growing protectionist sentiment keeps up the pressure. It could add momentum for broader liberalisation in Asia by facilitating expansion of membership and by lifting the ambition in the Regional Comprehensive Economic Partnership (RCEP), an agreement being negotiated by the 10 ASEAN members as well as Australia, China, India, Japan, New Zealand and South Korea.
 

RCEP includes some of the largest and most dynamic economies in the world and is important enough to make a difference globally. An Australian Productivity Commission study estimates that even if tariffs were raised 15 percentage points globally (similar to what happened in the Great Depression), RCEP countries could all continue economic expansion if they abolished tariffs as a group. The gains for RCEP countries would be even larger with behind-the-border reforms.

Australia has a trade deficit on trade to the US by almost double, and have been told we are not exempt from the Trump steel and alloy tariffs. Talk about pushing away your trading partners.

Actions have consequences. It’s a shame Trump’s just too thick to think more than one sound bite ahead. 

Some unelected hack crackpot named Pettit Navarro who has been free reign to impose tariffs left right and center.

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  • 4 weeks later...

ND will take it up the ass. ND also pays more in Federal tax revenues than they take in in Federal spending, a lot more. But they elect their representatives and they have 2 Senators for their population of 750,000. If they were a city, they'd rank 5th in CA. This is on them.

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US soybean sales to China down 94 percent amid Trump tariffs: report

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U.S. soybean exports to China are down by 94 percent this year amid President Trump's trade war with Beijing.

The New York Times reported Monday that the latest federal data, which tracked up to mid-October, showed a dramatic drop in sales to China, which is by far the world's biggest soybean importer.

However, federal data through September show that soybean exports are up 1 percent over all this year above where they were at this time in 2017. 

Eighty-seven percent of the reported 110 million tons of soybeans China consumed in 2017 were imported, largely from the U.S. or Brazil.

Though many soybean farmers expressed trust in Trump and his protectionist trade agenda, others told the Times that they were unhappy with the effect Beijing's retaliatory tariffs have had on their business. 

“I’m trying to follow and figure out who the winners are in this tariff war,” said Greg Gebeke, who farms 5,000 acres outside of Arthur, N.D. “I know who one of the losers are and that’s us. And that’s painful.”

 

https://thehill.com/policy/finance/415028-us-soybean-sales-to-china-down-94-after-tariffs

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21 minutes ago, Mid said:

“I’m trying to follow and figure out who the winners are in this tariff war,” said Greg Gebeke

Tax wars are going to benefit the governments that receive the taxes and cost anyone else.

The ability to hand out subsidies when the above happens is also going to benefit the governments that hand out the goodies and cost everyone else.

 

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American businesses paid 50% more in tariffs in September due to Trump's trade war, industry coalition says

  • Quote

     

    • U.S. businesses shelled out $4.4 billion in tariffs in September, a surge of more than 50 percent from the same month a year ago, according to an industry coalition called Tariffs Hurt the Heartland.
    • Duties on steel and aluminum imports cost U.S. companies about $545 million in September, the data show.
    • Tariffs levied against China accounted for $800 million in September, even though the bulk didn't take effect until the end of the month.

     

     

https://www.cnbc.com/2018/11/05/tariff-payments-up-50percent-in-september-on-trump-trade-war-industry-group.html

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1 hour ago, Mid said:

American businesses paid 50% more in tariffs in September due to Trump's trade war, industry coalition says

  •  

https://www.cnbc.com/2018/11/05/tariff-payments-up-50percent-in-september-on-trump-trade-war-industry-group.html

So basically tariffs are good for US Govt tax revenue and farmers.

Brazilian farmers.

FKT

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19 minutes ago, Fah Kiew Tu said:

So basically tariffs are good for US Govt tax revenue and farmers.

Brazilian farmers.

FKT

May as well enjoy the products coming from Brazil while they can. Who knows what the hell the new guy is going to do there, but it probably isn't good.

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3 hours ago, Ishmael said:

May as well enjoy the products coming from Brazil while they can. Who knows what the hell the new guy is going to do there, but it probably isn't good.

Umm, the Brazilians are supplanting the US exports of soybeans etc to China. Makes no difference to me, I don't live in the USA, Brazil or China. OK if China's economy takes a dump that will affect Australian exports and might have some effect. Second or third order effects though.

OTOH your farmers are taking it up the arse thanks to Trump's tariffs on Chinese imports. Do you feel like you're winning yet?

I still think that China needs to be taken to task about their predatory mercantilist practices and outright theft of IP but what Trump has done is really a massive own-goal for the US economy.

FKT

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44 minutes ago, Fah Kiew Tu said:

Umm, the Brazilians are supplanting the US exports of soybeans etc to China. Makes no difference to me, I don't live in the USA, Brazil or China. OK if China's economy takes a dump that will affect Australian exports and might have some effect. Second or third order effects though.

OTOH your farmers are taking it up the arse thanks to Trump's tariffs on Chinese imports. Do you feel like you're winning yet?

I still think that China needs to be taken to task about their predatory mercantilist practices and outright theft of IP but what Trump has done is really a massive own-goal for the US economy.

FKT

It's all good for me, being Canadian and all. However, I don't have a lot of that "winning" feeling. I think everyone's taking it in the arse on this one, no matter who "wins".

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39 minutes ago, Ishmael said:

It's all good for me, being Canadian and all. However, I don't have a lot of that "winning" feeling. I think everyone's taking it in the arse on this one, no matter who "wins".

Sorry, forgot you weren't a US citizen. Trump's tariffs on Canadian aluminium has to rate right at the top of stupid things to do.

FKT

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11 hours ago, Fah Kiew Tu said:

Sorry, forgot you weren't a US citizen. Trump's tariffs on Canadian aluminium has to rate right at the top of stupid things to do.

FKT

Well, there is a trove of stupid things to pick from, but that one and the steel tariffs are definitely near the top.

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I work in a retail hardware store.  The past month, I have spent about 20% of my time doing price changes.  The bosses are spending 1-2 hours a day updating them.

At least the price increases are partially covering the carrying cost of some of the obscure items.  The 3/4 drive ratchet went up $5.00, but has been hanging on the wall for 5 years.

 

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No idea which thread to put this in but it sounds right.

https://www.smh.com.au/business/the-economy/trump-s-2-1-trillion-deal-with-the-devil-has-failed-20181108-p50eom.html

Donald Trump's economic deal with the devil has failed even in its most immediate and cynical objective. It is downhill on every front from now on. The president debased the US public accounts with a Peronist fiscal policy of staggering irresponsibility in order to keep control of Congress - or rather to buy Congress with $US1.5 trillion ($2.1 trillion) of future public debt, might be a better description.

 

The sugar rush of stimulus so late in the economic cycle is already starting to fade. Over the course of 2019 the Faustian pact will progressively close in on Mr Trump, and on the credit-rating of the US Treasury. Morgan Stanley said it will turn ineluctably into "fiscal drag" as the months pass without more handouts to feed the monster.

Perhaps Speaker Nancy Pelosi will give Trump a partial reprieve. Common ground exists on infrastructure spending. But the Democrats will keep him on a tight leash before the next election. "They are not going to give him anything to run on, any victories," said Steve Blitz from TS Lombard.

 

Ominous signs are already evident in sectors most sensitive to higher borrowing costs. The Freddie Mac rate for a 30-year fixed mortgage has risen 100 basis points to 4.83 per cent over the last year. Home sales have dropped by 21 per cent. Average prices have slipped 3.5 per cent.

RELATED ARTICLE

 

Despite Democratic gains, Trump's race-baiting pays off

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This is remarkable given that the fiscal pedal is pushed to floor. The federal budget deficit is nearing 5per cent of GDP, at a time when full employment should restore balance. Bill Clinton had a surplus of 2.3 per cent at the end of the Nineties expansion.

The US has never run a late-cycle deficit of this scale in peace time yet the stimulus has washed over the economy like a deluge of rain on parched soil, a flash flood that leaves only damage. "They have had a terrible bang for the buck," said Adam Posen, chairman of the Peterson Institute.

"They are racking up debt with a low fiscal multiplier. The tax cuts have not unleashed investment and have added almost nothing to GDP on a sustained basis," he said. What remains is an overheated economy with early signs of stagflation.

 

Above all, there remains the future debt claims on American taxpayers. The International Monetary Fund says America's gross public debt will be 106 per cent of GDP this year, 110 per cent in 2020, and 117 per cent in 2023, but without the huge pool of internal savings and external assets that have made it possible for Japan to defy gravity for two decades.

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  • 3 weeks later...

U.S. Trade Deficit Rises Despite Trump’s Tariffs

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The monthly items deficit grew by $1 billion in October, in response to a US Census report launched Wednesday.

The Census report is among the first measures of commerce launched since Trump imposed his largest round of tariffs in September on $200 billion of Chinese goods. It put a 10% tax on items starting from luggage to bikes and baseball gloves. Trump has threatened to extend the speed to 25% on January 1.

The duties make it costlier for US importers to buy these gadgets, but People purchased extra items from overseas in October than they did the month earlier than. The determine might mirror stockpiling by American importers ahead of a further hike in tariffs set to take impact in January, as properly as robust shopper spending.

“There’s some anecdotal proof that US importers are probably pulling forward orders to get ahead of further tariffs on Chinese language goods, which might be one of many elements driving imports larger in current months,” stated Pooja Sriram, an economist at Barclays.

 

https://buzzbry.com/u-s-trade-deficit-rises-despite-trumps-tariffs/

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On 11/6/2018 at 8:30 PM, Fah Kiew Tu said:

Umm, the Brazilians are supplanting the US exports of soybeans etc to China. Makes no difference to me, I don't live in the USA, Brazil or China. OK if China's economy takes a dump that will affect Australian exports and might have some effect. Second or third order effects though.

OTOH your farmers are taking it up the arse thanks to Trump's tariffs on Chinese imports. Do you feel like you're winning yet?

I still think that China needs to be taken to task about their predatory mercantilist practices and outright theft of IP but what Trump has done is really a massive own-goal for the US economy.

FKT

So far the farmers seem willing to get butt-fucked by a city-slicker conman in a cheap suit (with an illegal immigrant wife) by convincing themselves that there is a "long-game" being played (by the con who only knows short-game bankruptcies) and by being bribed by a 12 billion dollar welfare program (but they still hate socialism.)

So situation normal, all fucked up.

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Untitled.jpg.c81eb84f28cdfd3da0ec7943334ce3a0.jpg

*Percentage of GDP from industries helped by tariffs minus perentage of GDP from industries hurt by tariffs. Calculations don’t include harm to industries that use in their manufacturing Chinese goods subject to tariffs. Note: Statewide election result used for Alaska

Sources: Moody's Analytics (net impact); Dave Leip’s Atlas of U.S. Presidential Elections (election results) Kara Dapena/The Wall Street Journal

https://www.wsj.com/articles/bring-me-tariffshow-trump-and-xi-drove-their-countries-to-the-brink-of-a-trade-war-1543420440

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4 hours ago, Mid said:

Untitled.jpg.c81eb84f28cdfd3da0ec7943334ce3a0.jpg

*Percentage of GDP from industries helped by tariffs minus perentage of GDP from industries hurt by tariffs. Calculations don’t include harm to industries that use in their manufacturing Chinese goods subject to tariffs. Note: Statewide election result used for Alaska

Sources: Moody's Analytics (net impact); Dave Leip’s Atlas of U.S. Presidential Elections (election results) Kara Dapena/The Wall Street Journal

https://www.wsj.com/articles/bring-me-tariffshow-trump-and-xi-drove-their-countries-to-the-brink-of-a-trade-war-1543420440

Good read.

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Thai rubber farms stretched as US-China trade war saps demand

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Thai latex makes everything from tires and condoms to baby pacifiers and surgical gloves, the fruit of the rubber trees cultivated across endless acres of the country.

But the rubber trade is at a crossroads as a bitter dispute between the world’s two biggest economies ricochets across Southeast Asia with unexpected consequences.

Countries such as Vietnam are benefiting as manufacturers migrate from China to avoid punishing tariffs on exports to the US.

 

https://www.japantimes.co.jp/news/2018/11/29/asia-pacific/thai-rubber-farms-stretched-us-china-trade-war-saps-demand/#.W_-ghWgzbIU

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  • 3 weeks later...

The Economic and Distributional Impact of the Trump Administration’s Tariff Actions

  •  

    Quote

     

    • The Trump administration has imposed $42 billion worth of new taxes on Americans by levying tariffs on thousands of products.

    • Outstanding threats to impose further tariffs mean Americans could see additional tax increases up to $129 billion.

    • Tariffs are regressive, placing a higher burden on lower-income households.

    • The $42 billion of tariffs imposed so far are estimated to reduce after-tax incomes by 0.30 percent on average. This negative effect is more pronounced for households in the middle and lowest quintiles, reducing their after-tax incomes by 0.33 percent.

    • For taxpayers in the middle quintile, this represents a decrease of $146 in after-tax income.

    • If threatened tariffs are all imposed, after-tax income for households in the bottom and middle quintiles would fall by an additional 1.04 percent, higher than the average decrease of 0.92 percent.

     

    https://taxfoundation.org/trump-tariffs-economic-distributional-impact

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  • 3 weeks later...

Trump Has Promised to Bring Jobs Back. His Tariffs Threaten to Send Them Away.

 

Quote

 

Plants in every direction shut down and moved their operations to Mexico, succumbing to the relentless pressure to cut costs in an age of globalization. Not EBW Electronics. As the decades passed, the family-owned business stayed put, on the eastern edge of Lake Michigan, churning out lights for the auto industry.

But now, the company’s management is reluctantly mulling the possibility of moving its production to Mexico to escape the tariffs that President Trump has put on imported components, his primary weapons in a trade war waged in the name of bringing jobs home to America.

“It’s killing us,” said the chairman of the company, Pat LeBlanc, 63, a Republican who voted for Mr. Trump. He now expects the president’s tariffs will chop his 2019 profits in half. “I just feel so betrayed. If we fail because the company is being harmed by the government, that just makes me sick.”

 

https://www.nytimes.com/2019/01/06/business/trump-tariffs-trade-war.html?action=click&module=Top Stories&pgtype=Homepage

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4 minutes ago, Mid said:

Fuck all these morons that voted for Trump and are now taking It in the ass.  It was obvious what a stupid piece of shit he was.

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6 minutes ago, mad said:

Feel sorry for his staff members that didn’t vote for him, but those that did......... well you got what voted for. 

The employees are the ones that are going to pay. Or maybe a bunch of them are going to move to Mexico.

-DSK

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How could anyone not understand exactly what he was telling us before he got elected....

 

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Three Reasons Trump’s Trade War Will Become a Pain for the U.S. Economy

  •  
Quote

 

  • Any escalation of the trade war “would be much more painful” after the Trump administration sought to avoid tariffs on widely-used consumer products and exempted products without easy substitutes.
  • The trade war seems to be increasingly affecting U.S. consumer and investor confidence as the stimulus fades from the tax cuts and government-spending boost.
  • The U.S. has “limited room to loosen policy” both on the fiscal and monetary sides, while China is using its “full arsenal of stimulus tools.” The U.S. government’s political gridlock makes a fiscal boost unlikely, while the Federal Reserve will be reluctant to cut interest rates with unemployment already so low.

“The upshot is that while China is currently slowing faster than the U.S., by the spring we expect growth in China to start to pick up, even as the U.S. continues to slow down,” Harris and Bhave wrote. “Everyone loses in a trade war.”

 

https://www.bloomberg.com/news/articles/2019-01-07/three-reasons-why-trade-war-will-become-a-pain-for-u-s-economy

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Senate finance chair says no to giving Trump more tariff authority

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“We ain’t going to give him any greater authority. We already gave him too much,” Grassley, an Iowa Republican, told reporters in response to a Bloomberg report that the White House is preparing a bill that would seek to give Trump broad authority to levy new tariffs to break down other countries’ non-tariff trade barriers.

https://www.reuters.com/article/us-usa-trade-grassley/senate-finance-chair-says-no-to-giving-trump-more-tariff-authority-idUSKCN1P32DU

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I'm working on a project with a shipyard in WA state building 4 tugs for the US Navy. The price has gone up significantly - because of tariffs on steel.

Gotta love your own tariffs costing your Navy more to build ships. Wonder what the cost increase in a really big ship like a destroyer would be?

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5 hours ago, Zonker said:

I'm working on a project with a shipyard in WA state building 4 tugs for the US Navy. The price has gone up significantly - because of tariffs on steel.

Gotta love your own tariffs costing your Navy more to build ships. Wonder what the cost increase in a really big ship like a destroyer would be?

The country has gone crazy, it was already terminally stupid. In a little while we won't need a Navy anyway.

-DSK

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  • 2 months later...

President Trump's former economic adviser Gary Cohn took aim at Trump's trade adviser Peter Navarro on Wednesday by referring to Navarro as the only Ph.D-holding economist in the world who believes in the effectiveness of tariffs. 

https://thehill.com/policy/finance/433974-gary-cohn-says-trump-trade-adviser-the-only-economist-in-world-who-believes-in

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  • 1 month later...

I never got a PhD in economics but know that tariffs, like other taxes, are effective. At slowing economic activity.

Trump sorta knows too
 

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Trump administration’s policy objectives were clear. American manufacturing had to be protected against cheaper products coming from China. If that meant farmers took it on the chin, so be it.

That’s why it’s a little bit ironic to see that, a year after the trade war started, the Trump administration is now trying to score a “win for farmers” by securing access to Chinese export markets in a new trade deal with China. That’s how Bloomberg describes the latest gambit in the ongoing trade negotiations between the two nations, in which Trump’s team is asking China to shift $50 billion of retaliatory tariffs off agricultural goods and onto other American exports in advance of next year’s elections. The U.S. would maintain its own tariffs on Chinese goods even if a trade deal is reached, the news organization reports, citing sources familiar with the negotiations.

That’s stunning. The Trump administration’s newest trade negotiating tactic is to ask China to put tariffs on American manufactured goods—the very sector Trump’s trade war was supposed to be helping—in order to relieve the pain the trade war caused for American farmers.

And what’s going to happen if China goes along with that idea? Like before, American farmers will export goods to China, and then will use the money they earn to buy other things—because that’s how trade works—and often those other things will be made in China.

“It’s not enough to switch tariffs from farm products to manufactured goods; the Trump administration also wants to encourage the Chinese to buy more U.S. farm products than ever before, which will cause China to send even more manufactured goods to America,” writes Scott Sumner, an economist with the Mercatus Center, a free market think tank. “Any policy that encourages the export of farm products also encourages the import of manufactured goods. (There’s a reason they call it ‘trade’.)”

On one hand, it’s great that the Trump administration is effectively admitting a mistake and trying to reverse course out of the mess it created. China was already buying lots of American agricultural goods before Trump came along, but if he wants to basically restore the old status quo and claim that he “won” something for American farmers—well, fine, that’s what politicians do all the time.

 

 

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What has Trump offered China?  I doubt he can bully them.    He has to give up intellectual property or the South China Sea in exchange.    

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2 hours ago, Importunate Tom said:

 if he wants to basically restore the old status quo and claim that he “won” something for American farmers—well, fine, that’s what politicians do all the time.

I would take that deal.  Let him have his political victory and stop fucking over poor people. 

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Taxpayers Pay Taxes

It's yuge news. Also notable: tariffs are taxes!
 

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Tariffs on imported washing machines ended up increasing not only the retail price of washing machines but dryers too—despite the fact that dryers were not subject to the new import taxes imposed by the Trump administration in January 2018. Research from a trio of economists at the University of Chicago and the Federal Reserve show that retailers made the decision to hike the price of both washing machines and dryers (since they are frequently bought together) after the tariffs took effect.

All told, those tariffs raised about $82 million for the U.S. Treasury but ended up increasing costs for consumers by about $1.2 billion during 2018 economists Aaron Flaaen, Ali Hortacsu, and Felix Tintelnot conclude. Although the trade policy did cause some manufacturers to shift production from overseas to the United States in an effort to avoid the new tariffs, the 1,800 jobs created by Trump's washing machine tariffs cost consumers an estimated $820,000 per job.

The new working paper provides yet more evidence that consumers, not Chinese-based companies as the president has often claimed, are paying the costs of tariffs. The increase in retail prices for dryers also demonstrates how some businesses have taken advantage of the Trump administration's trade policy to soak consumers a second time.

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"Companies that largely sell imported washers, like Samsung and LG, raised prices to compensate for the tariff costs they had to pay. But domestic manufacturers, like Whirlpool, increased prices, too, largely because they could," writes the Times' Jim Tankersley. "There aren't a lot of upstart domestic producers of laundry equipment that could undercut Whirlpool on price if the company decided to capture more profits by raising prices at the same time its competitors were forced to do so."

 

We're never going to tax our way to prosperity because it can't be done. It can't be done by taxing those evil rich people as TeamD wants nor by taxing those evil importers as TeamR has recently joined TeamD in advocating.

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The Message Is Changing
 

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Tariffs are draining $1.4 billion out of the U.S. economy every month, according to a comprehensive review published in March by a trio of economists from the Federal Reserve Bank of New York. New jobs created in steel and aluminum manufacturing have come at a steep price, and the trade deficit that Trump vowed to reduce has continued growing.

Facing that mounting pile of evidence, the Trump administration is now quietly pivoting away from the "easy to win" framing. Kevin Hassett, chairman of the White House's Council of Economic Advisers, tells Bloomberg that the economic pain caused by tariffs is the bitter pill that must be swallowed to improve the economy in the long run.

"We've had these very bad trade deals, and we are taking the medicine to improve them," he says.

That's a far cry from how the Trump administration represented the trade barriers when they were first implemented. In the weeks after Trump slapped tariffs on steel and aluminum imports, Commerce Secretary Wilbur Ross made the rounds on cable news with a prop can of Campbell's Soup, which he showed while laughing off concerns about how the tariffs would affect American businesses. If tariffs increased the price of steel by 25 percent, that would amount to "a tiny fraction of one penny" in the price of a can of soup, he argued.

Kudlow's flub of the USMCA jobs numbers might have been an honest mistake, but Ross was deliberately trying to mislead viewers about basic economics. He wasn't reassuring Americans that they would have to endure bitter medicine—he was promising, literally, that the economy would feel no pain.

 

Bitter pills are easy to swallow.

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Grassley to Trump: End the Tariffs or We'll Kill Your NAFTA Rewrite
 

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There's only one way for President Donald Trump to get his much-touted rewrite of the North American Free Trade Agreement (NAFTA) through Congress: End the tariffs.

That's the blunt message that Sen. Chuck Grassley (R–Iowa) delivers in an op-ed that ran in Sunday's Wall Street Journal. Grassley's opinion matters more than most, given that he is chairman of the powerful Senate Finance Committee, which would likely have to give its approval to Trump's United States-Canada-Mexico Agreement (USMCA) before it could face an up-or-down vote from the full Senate.

Congress must approve the USMCA before it can take effect, but Grassley says it will not do that until the Trump administration lifts tariffs on steel and aluminum imports from Canada and Mexico. "These levies are a tax on Americans, and they jeopardize USMCA's prospects of passage in the Mexican Congress, Canadian Parliament and U.S. Congress," he writes. "Canadian and Mexican trade officials may be more delicate in their language, but they're diplomats. I'm not. If these tariffs aren't lifted, USMCA is dead. There is no appetite in Congress to debate USMCA with these tariffs in place."

 

Grassley is a major reason we still have a stupid drug war and so I often wish he'd retire.

He's also a stubborn old mule and likely means what he says in this case.

So hat tip to the drug war dinosaur.

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I agree with Grassley on this one.

The Steel/Aluminum supply chain is a success story, such as it is.  Steel and Aluminum are energy driven commodities - they can and should be made where energy is cheep and plentiful and people are scarce.  That's what the industry evolved into - tariffs aren't going to push it back to the 1950's model.  

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19 minutes ago, HuronBouy said:

Yah but Canada is a threat to US national security. So energy/economic arguments are moot.  

 

I appreciate your sarcasm and tend to agree that those arguments should carry weight.

Thing is, when that old mule Grassley bluntly says they're going to carry weight, they magically do.

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The answer to the topic question continues to be: Trump.
 

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The tariffs imposed by Trump in 2018 cost the U.S. economy $6.9 billion last year—above and beyond the $12.3 billion paid by American consumers and importers to the federal government.

"We find that the U.S. tariffs were almost completely passed through into U.S. domestic prices, so that the entire incidence of the tariffs fell on domestic consumers and importers," write economists from the Federal Reserve Bank of New York, Princeton University, and Columbia University in a March paper published by the Centre for Economic Policy Research. By the end of last year, Trump's tariffs were costing American consumers and businesses about $1.4 billion each month, they found.

Trump continues to claim that China is paying for the tariffs, but his administration has not published any data to support that claim. Indeed, the president's own Council of Economic Advisors admitted in its year-end report that the estimated $14.4 billion in tariff revenue sent to the U.S. Treasury during 2018 was due to "costs paid by consumers in the form of higher prices."

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If you really want to understand just how absurd Trump's latest trade tactic is, just take a look at who's cheering for him:


 

And Schumer.

"Strength" means "raising taxes" to New Yorkers, apparently.

 

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Trump's Tomato Tariff on Mexico
 

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Indeed, tomato growers and some members of Congress have been lobbying the Trump administration for months, asking for the termination of the Tomato Suspension Agreement. They argue that Mexican tomatoes are flooding the market and making it impossible for American farmers to compete—American tomato production is down 34 percent since 2002, while Mexican tomato imports are up 125 percent in the same period, according to a letter sent in February to Ross by Sen. Marco Rubio (R–Fla.) and other members of Congress.

But this week's victory for Florida-based tomato growers comes at the expense of not only Mexican farmers and American consumers; it also deals a serious blow to tomato-importing jobs in Arizona.

Those are, of course, American jobs.

In Nogales, Arizona, for example, the largest single commodity brought over the border from Mexico is tomatoes. More than 1.5 billion pounds enter the United States each year, entering a supply chain that supports 30,000 American jobs, according to a University of Arizona analysis published last year. The new tariffs put those jobs in jeopardy.

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"Without the Tomato Suspension Agreement, Arizona's economy, jobs and tomato prices are at risk," Sen. Martha McSally (R–Ariz.) wrote in an op-ed this week.

Trump has apparently sided with Florida.

When trade policy is dictated from Washington, those types of choices are unavoidable. Trump's decision to put tariffs on steel and aluminum imports, for example, benefited the businesses that produce those metals—which immediately raised their prices—while disadvantaging any business that uses steel or aluminum to make its products. There are far more employers and employees in the latter category than the former.

The spat over imported tomatoes is a good reminder that trade isn't really conducted between countries at all, but between businesses and individuals seeking to find mutually beneficial arrangements. It's overly simplistic to think about Mexican tomatoes and Floridian tomatoes as if they are on opposite sides. More tomatoes being grown and imported into American means more jobs—and more delicious tomatoes.

 

And more taxes mean the same thing as always. But we'll tax our way to prosperity soon.

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Imported tomatoes..................... What an absurd idea....................

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For anybody,    

Premise:   Sachs is giving 45% odds on the 25% increase tomorrow.   Walmart and Lowe’s buy by the container and customs paperwork is likely right,     Amazon brokers by the unit and half the shit is shipped direct from China.   

Question:    How likely is the amazon stuff to pass customs with paperwork declaring it to be the lowest tariff or non taxed items?    When it is shipped by the unit the task of checking even a couple percent by customs is clearly impossible.    I think Trump is giving his ‘friend’ Jeff Bezos a present.    

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