My thirty-seventh thread starter on trade

[Tiny]

Originally Posted by SpeedRacerXXX

https://www.project-syndicate.org/co...l-gros-2019-08

Here's something interesting from your link:

Before Trump took office, the average US tariff rate on industrial imports was about 2%, somewhat lower than that of China....Imports from China account for about one-quarter of all US imports, and the 25% tariff affects about one-half of imported Chinese goods. This implies that the average US import tariff has increased by about three percentage points, to 5% or so, which does not appear excessive.

I think 5% is a little high, because the average U.S. rate before the tariffs on Chinese products was probably a tad lower than 2%. And we're not importing as much from China as we once were. Still, the USA now has by far the highest average tariff rate of any country in the developed world, if you define "developed world" as Europe, Japan, Australia, New Zealand and Canada. China's average tariff rate was only 3.83%, although it should be higher now that they've placed additional tariffs on U.S. imports. See

https://en.wikipedia.org/wiki/List_o...by_tariff_rate

[bambino]

Originally Posted by SpeedRacerXXX

Exactly right. You do realize that very few people, economists and those on his own staff, supported his use of tariffs in a trade war with China. We are in a lose-lose fight with China using tariffs. They can wait us out. We are paying billions to farmers in the form of subsidies because China is no longer purchasing food from them. I read an article yesterday that said if China wants Trump out of office in 2020, they will do nothing to settle the trade dispute until that time. The one plus for Trump at this point in time is the economy. If we are still in a trade war with China in November 2020, my opinion is voters will not be happy.

Trump’s Tariffs Could Ruin Christmas. Here’s How.

https://www.barrons.com/articles/her...na-51565082001

The Real Cost of Trump’s Trade Wars

Aug 6, 2019 DANIEL GROS

Economic analysis suggests that bilateral trade wars are unwinnable in an interconnected world. By firing his latest tariff salvo against China, US President Donald Trump has further raised the stakes in an increasingly damaging dispute – and America is likely to emerge as the bigger loser.

https://www.project-syndicate.org/co...l-gros-2019-08

A
So,your solution is to do nothing? Let our jobs disappear again? Let Multi Nationals and corrupt politicians get richer? I guess the US voters will be content with that. As Joe Biden said “ the Chinese are no threat to us. They’re good people.”

[kehaar]

Originally Posted by SpeedRacerXXX

Exactly right. You do realize that very few people, economists and those on his own staff, supported his use of tariffs in a trade war with China. We are in a lose-lose fight with China using tariffs. They can wait us out. We are paying billions to farmers in the form of subsidies because China is no longer purchasing food from them. I read an article yesterday that said if China wants Trump out of office in 2020, they will do nothing to settle the trade dispute until that time. The one plus for Trump at this point in time is the economy. If we are still in a trade war with China in November 2020, my opinion is voters will not be happy.

Trump’s Tariffs Could Ruin Christmas. Here’s How.

https://www.barrons.com/articles/her...na-51565082001

The Real Cost of Trump’s Trade Wars

Aug 6, 2019 DANIEL GROS

Economic analysis suggests that bilateral trade wars are unwinnable in an interconnected world. By firing his latest tariff salvo against China, US President Donald Trump has further raised the stakes in an increasingly damaging dispute – and America is likely to emerge as the bigger loser.

https://www.project-syndicate.org/co...l-gros-2019-08

This has been discussed before.

China was already subsidizing soybean production in their country.

If China doesn't buy our soybeans, they have to buy them from somewhere else. The people that used to by the soybeans from the new supplier will buy ours. The effect of China's proclamation and actions on the market is minimal, unless they are going to choose to intentionally starve their people(they have been known to do that).

The effect of China subsidizing soybeans, and stealing our genetics is not minimal.

The basic concepts of economics and facts eludes the true believing hate filled fascist thugs, but that has been true since the beginning of time.

Partnering with the Eurofascist to control China is like partnering with a con man. At the first opportunistic moment, they would fuck us over, as they have done repeatedly in the past. They are lucy. We are Charlie Brown.

[Austin Ellen]

Thank you Tiny. Oppsie.
Since we are talking about how tariffs are being done and Trump doesn't want to cooperate with our allies on tariffs to put pressure on China - do you think that he may be raising them also because of Brexit? I don't know how that would effect the TPP if it happens,of course.

Originally Posted by Tiny

Ellen, We're not arguing that the U.S. shouldn't take steps to get China to play fairly. Our argument is about the way it's being done. Tariffs on toys and clothes that will now be made in Vietnam instead of China don't help us, they just make products more expensive.

President Trump isn't cooperating with our allies to put pressure on China. Instead he's placing tariffs on our allies' goods too. As I've already mentioned, Chinese exports to the USA only account for 3% of their economy. If the Chinese stop buying our products and sell their own products to other people instead, we're losers too. We would stand a much better chance of actually accomplishing something if we had our allies working with us. Instead, by placing tariffs on everyone and opting out of the Trans Pacific Partnership (a trade agreement between countries bordering the Pacific Ocean that left out China), we're encouraging closer trade ties between China and other countries. By cutting off exports of U.S. semiconductors to China, we're getting the Chinese to climb the tech ladder faster than they would otherwise.

Trump's trade "strategy" is poorly thought out and self defeating.

[Tiny]

Originally Posted by bambino

A
So,your solution is to do nothing? Let our jobs disappear again? Let Multi Nationals and corrupt politicians get richer? I guess the US voters will be content with that. As Joe Biden said “ the Chinese are no threat to us. They’re good people.”

SpeedRacer didn't say do nothing. He said don't get in a trade war with China by imposing tariffs.

This is something most economists agree about, everyone from Milton Friedman to Paul Krugman. People are more prosperous and there are more jobs when every country does what it's best at, instead of hiding behind protective tariffs:

https://en.wikipedia.org/wiki/Comparative_advantage

Many corporations love high tariffs. It keeps more efficient producers out of their markets and shields them from competition. Same for many politicians. They pick favorites, who receive tariff protection, and get payoffs in return.

[Tiny]

Originally Posted by kehaar

This has been discussed before.

China was already subsidizing soybean production in their country.

If China doesn't buy our soybeans, they have to buy them from somewhere else. The people that used to by the soybeans from the new supplier will buy ours. The effect of China's proclamation and actions on the market is minimal, unless they are going to choose to intentionally starve their people(they have been known to do that).

The effect of China subsidizing soybeans, and stealing our genetics is not minimal.

The basic concepts of economics and facts eludes the true believing hate filled fascist thugs, but that has been true since the beginning of time.

Partnering with the Eurofascist to control China is like partnering with a con man. At the first opportunistic moment, they would fuck us over, as they have done repeatedly in the past. They are lucy. We are Charlie Brown.

Then why are we paying $14.5 billion in subsidies to farmers hurt by tariffs?

[Tiny]

Originally Posted by Austin Ellen

Thank you Tiny. Oppsie.
Since we are talking about how tariffs are being done and Trump doesn't want to cooperate with our allies on tariffs to put pressure on China - do you think that he may be raising them also because of Brexit? I don't know how that would effect the TPP if it happens,of course.

Ellen, I don't think Brexit enters into Trump's calculations. On that subject, there was an article in the Economist, a British magazine, last week that highlighted several economic studies on the expected effect of Brexit.

The two best case scenarios were go ahead with Brexit, and unilaterally end all tariffs and trade barriers. Britain actually ends up better off by leaving the European Union and getting rid of all the tariffs they have to charge because the Brits are members.

The second best case was leave but enter into a free trade agreement with the EU.

The worst case was leave with no free trade agreement, and start charging tariffs that are allowed under terms of the World Trade Organization agreements. One study showed a massive decrease in GDP over the long term for this case. The British economy would end up 15% smaller than it would with the status quo.

Are the economists right? Singapore and Chile would indicate they're on the right track. Singapore stopped charging tariffs, even though other countries continued levying tariffs on its exports. It became one of the wealthiest countries in the world. Chile didn't eliminate tariffs, but unilaterally reduced them sharply, and prospered.

[bambino]

Originally Posted by Tiny

SpeedRacer didn't say do nothing. He said don't get in a trade war with China by imposing tariffs.

This is something most economists agree about, everyone from Milton Friedman to Paul Krugman. People are more prosperous and there are more jobs when every country does what it's best at, instead of hiding behind protective tariffs:

https://en.wikipedia.org/wiki/Comparative_advantage

Many corporations love high tariffs. It keeps more efficient producers out of their markets and shields them from competition. Same for many politicians. They pick favorites, who receive tariff protection, and get payoffs in return.

Paul Krugman? When was he ever right?

[Tiny]

Originally Posted by bambino

Paul Krugman? When was he ever right?

Krugman's a partisan who almost always takes the party line and who doesn't know a lot about much of what he writes about. However he did receive the Nobel Prize for work related to free trade. The reason I mentioned both Krugman and Milton Friedman was that economists across the ideological spectrum agree about this. You would probably agree with most of Friedman's beliefs, as do I.

[bambino]

Originally Posted by Tiny

Krugman's a partisan who almost always takes the party line and who doesn't know a lot about much of what he writes about. However he did receive the Nobel Prize for work related to free trade. The reason I mentioned both Krugman and Milton Friedman was that economists across the ideological spectrum agree about this. You would probably agree with most of Friedman's beliefs, as do I.

I trust what Friedman has to say, not Krugman. His Nobel Prize is as worthless as Obama’s or CNNs recent Pulitzer Prize award. It’s naive to think the rest of the world is going to jump in on China. First off, their economies are in the crapper, much like ours was before 2016. You can’t keep kicking the can down the road. China will suffer more than we do. Inflation numbers are going down, not up. Retailers prices are in place thru the end of the year. The Fed is going to lower rates again in September and most likely another time by the end of the year. If we don’t take them on now, probably never. Then China will be eating our lunch for a longtime. Maybe China will get lucky and Trump will not be re-elected. Seems that’s what they’re hoping for.

[Tiny]

Originally Posted by bambino

I trust what Friedman has to say, not Krugman.

Friedman was a huge supporter of free trade. He's probably rolling over in his grave over what's happening now:

https://www.minneapolisfed.org/publi...-on-free-trade

Originally Posted by kehaar

This has been discussed before.

China was already subsidizing soybean production in their country.

If China doesn't buy our soybeans, they have to buy them from somewhere else. The people that used to by the soybeans from the new supplier will buy ours. The effect of China's proclamation and actions on the market is minimal, unless they are going to choose to intentionally starve their people(they have been known to do that).

The effect of China subsidizing soybeans, and stealing our genetics is not minimal.

A tidbit, today's Wall Street Journal says, "For every dollar brought in by the new tariffs, a dollar has been authorized to fund rescue programs for farmers who have been harmed by retaliation from China and other countries. The U.S. authorized $12 billion in farm rescue funds in 2018 and an additional $16 billion this year, for a total of $28 billion."

WTF? The silver lining in all this was that revenues from the tariffs could be used to reduce the deficit or lower income taxes. Looks like that's not going to happen, we're just recycling the money to farmers. And farmers are the tip of the iceberg as to American individuals and businesses which are being harmed by Trump's tariffs.

[eccieuser9500]

Agricultural welfare? My word, you don't say.

Originally Posted by Tiny

A tidbit, today's Wall Street Journal says, "For every dollar brought in by the new tariffs, a dollar has been authorized to fund rescue programs for farmers who have been harmed by retaliation from China and other countries. The U.S. authorized $12 billion in farm rescue funds in 2018 and an additional $16 billion this year, for a total of $28 billion."

but . . . But . . . BUT that Socialism! "Government is not the solution to their problem, . . . ." Some rugged individuals would find a way.

[bambino]

Originally Posted by Tiny

Friedman was a huge supporter of free trade. He's probably rolling over in his grave over what's happening now:

https://www.minneapolisfed.org/publi...-on-free-trade



A tidbit, today's Wall Street Journal says, "For every dollar brought in by the new tariffs, a dollar has been authorized to fund rescue programs for farmers who have been harmed by retaliation from China and other countries. The U.S. authorized $12 billion in farm rescue funds in 2018 and an additional $16 billion this year, for a total of $28 billion."

WTF? The silver lining in all this was that revenues from the tariffs could be used to reduce the deficit or lower income taxes. Looks like that's not going to happen, we're just recycling the money to farmers. And farmers are the tip of the iceberg as to American individuals and businesses which are being harmed by Trump's tariffs.

You said “free” trade. But that’s not happening with China is it? Or any other country. Trump proposed no tariffs with the EU. They said no. Trump wants free trade, at the very least, fair trade with China. They agreed to a deal, then reneged. It’s on them Tiny, not Trump.

[Tiny]

Originally Posted by bambino

You said “free” trade. But that’s not happening with China is it? Or any other country. Trump proposed no tariffs with the EU. They said no. Trump wants free trade, at the very least, fair trade with China. They agreed to a deal, then reneged. It’s on them Tiny, not Trump.

Your post is misleading Bambino. I don't think Trump's objective is free or fair trade. Our average tariff rate on imports will be 75% higher than the EU's, after the additional tariffs on Chinese goods take effect on September 1.

I posted on this before, but my old source overstated current U.S. tariffs, because it assumed Chinese exports to the U.S. wouldn't plummet as a result of tariffs. They did, so that what I write below should be more accurate.

Before Trump, the average U.S.A. tariff rate was 1.66% of the value of imported goods. That was consistent with tariff rates of other developed countries. Hong Kong and Singapore are virtually 0%, Australia is 1.18%, New Zealand 1.27%, Switzerland 1.31%, Canada 1.52%, all the European Union countries are 1.79%, Japan 2.51%, and Norway 3.13%. China, while not a developed country, clocks in at 3.83%. See

https://en.wikipedia.org/wiki/List_o...by_tariff_rate

That's not the case any more though, after the USA imposed 25% duties on steel, 10% on aluminum, and 25% on $310 billion of Chinese imports. The Wall Street Journal projects tariffs will hit $100 billion per year after the new 10% tariffs on the additional $300 billion in Chinese goods takes effect on September 1:

https://www.wsj.com/articles/u-s-col...ne-11565168400

U.S. imports are approximately 262 billion per month, or 3.144 trillion per year:

https://tradingeconomics.com/united-states/imports

So our tariff rate will soon hit 3.144%, the highest in the developed world (actually a tie with Norway) and not far off China's level.

If you take close link at Milton Friedman's comments in the link I posted above, you'll see that he would unilaterally lower tariff rates to "0".

I don't think Trump believes in free trade or fair trade. He calls himself the "Tariff Man". He thinks tariffs are the cat's meow. That's not consistent with free or fair trade.