The Establishments war on Donald Trump
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Title: A trade war Canada will lose to its larger, louder counterpart [Trump]
Source:
National Post
URL Source: http://nationalpost.com/opinion/and ... -its-larger-louder-counterpart
Published: Jun 3, 2018
Author: Andrew Coyne
Post Date: 2018-06-03 20:26:39 by Tooconservative
Keywords: None
Views: 5912
Comments: 44
Presumably Donald Trump was warned of the furious response he could expect from the United States’ trading partners were he to proceed with his threatened tariffs on their exports of aluminum and steel. He went ahead and did so anyway. This is one problem with trade wars: they seek to achieve in retrospect what they failed to achieve in prospect. Were he likely to have been deterred by retaliatory tariffs, of the kind that Canada, Mexico and the European Union have just applied to a fantastic assortment of U.S. goods, he would have been already. And yet, deterrence having so conspicuously failed, they feel obliged to carry out the threat regardless. It is difficult to see how the reality of a trade war is more likely to succeed than the anticipation, especially when dealing with a man who tweets “trade wars are good and easy to win.” Perhaps its advocates are right to believe that retaliatory tariffs will so focus congressional and public anger on Trump, notably in the states most affected, that he will be forced into a humiliating retreat. Perhaps Trump is right to calculate that people do not necessarily put cause and effect together quite so logically — his people in particular. They may even be moved to rally around their besieged (as they see it) president and country. Wasn’t it precisely to “fight back” against these scheming foreigners, with their long history of preying upon American naivety, that Trump hit them with the tariffs in the first place? At any rate, while we are testing this theory, matching the U.S. tariffs we decry as madness and ruin with mad, ruinous tariffs of our own, it is our consumers and businesses who will be the victims. This is the other problem with trade wars. In a real war, the guns are pointed at the other guys. But tariffs are self-inflicted wounds. This is a hard point to get across in the heat of battle. Suggest that retaliation is unlikely to work against them and certain to hurt us, and the response is a volley of patriotic oaths: We have to do something! So you’re saying we should just sit there and take it? You have to stand up to a bully! Why don’t you just take out U.S. citizenship then? It is neither appeasement nor treason to refrain from costly, futile measures that at best are unlikely to succeed and at worst will trigger an escalating series of attacks and counter-attacks. It is simply facing facts. The U.S. economy is more than 10 times as large as ours. Its exports to Canada account for two per cent of its GDP; our exports to them are 25 per cent of ours. Even in concert with the other countries targeted, it is unlikely that we can cause Trump to alter course, for the simple reason that he is Trump. A normal president in possession of a rational mind might well be dissuaded by the united opposition of much of the democratic world. Trump is not that president. If he were he would not have slapped the tariffs on us in the first place, in open defiance not just of economic sense or international trade law, but of the very “military security” invoked as its justification. This is a point that bears repeating. The sheer enormity of Trump, the impossible combination of every conceivable malignant quality in one man — comprehensive ignorance, pathological dishonesty, thoroughgoing corruption, and a seeming determination to use his time in office to cause as much damage in as many ways as he possibly can — is a constant invitation to denial. The mind does not want to believe what the eyes and ears are telling it, that an emotionally disturbed man-child has control of the White House. But it’s true. The nightmare is real. It is folly, then, to expect him to respond as other presidents might. What we can do is learn from this experience. Trump cannot be reasoned with, and he cannot be appeased; he can be flattered, but not with any expectation it will be repaid. His word is worth nothing, and while he can be frightened or bought, he absolutely cannot be relied upon. He will do what he will do, and there isn’t a lot the rest of us can do about it. This goes far beyond the odd tariff. It was evident from the start that Trump represented a total break with all previous norms and expectations of how a president should behave or what he should believe in. Among those norms, it is now incontrovertible, is much of the international order successive American presidents helped to build over many decades. Poster Comment: Trump will crush that Trudeau punk and make him cry. Trump wants to dump NAFTA and have one treaty with Canada, a separate treaty with Mexico. And they will lose a lot more than we will in any trade war. And they know it, just as they know that Trump will not be deterred or appeased or bought off.
Canada has treated our Agricultural business and Farmers very poorly for a very long period of time. Highly restrictive on Trade! They must open their markets and take down their trade barriers! They report a really high surplus on trade with us. Do Timber & Lumber in U.S.?— Donald J. Trump (@realDonaldTrump) June 1, 2018
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#4. To: paraclete (#3)
We will get a better trade deal with Canada. There is no doubt. Trump won't even have to flood them with illegal aliens to make them give in. I think it is very likely that Trump will prevail and get a much better trade deal with Mexico as well. Our leverage isn't quite as strong with Mexico but it is still huge. With the EU, the picture is more complex. This is the perfect time for Trump to pick a trade fight with them because he is lowering the boom slowly on them over the Iran deal, giving them until fall (for the most part) to conclude all business with Iran and join our new sanctions regime against Iran. Since Trump is already pursuing that, this is the perfect time to go after their trade deficits with America as well. Even more so considering what a pack of weak sisters they are as NATO allies, especially Germany. But there are another half-dozen that pay nothing for their own defense, others that cheat and try to count things like military pensions as defense spending, etc. We're going to find out who our allies are and who we can rely on. Good allies will have more favorable trade with us. As long as they kowtow to our Iran sanctions as well. It wouldn't take that much for Trump to just destroy the cohesiveness of the EU. Don't imagine that he couldn't. They hate him so much because they know it. They are close to falling apart already and it would take so little to push them over the edge, a nightmare for France and especially Germany. Trump is pursuing multiple trade and economic policies at once, not a piecemeal approach that has worked to our disadvantage for so many years.
Trump only has one policy, turn trade in favour of the US, but tariff walls are a bad idea because the US has more to loose than it has to gain
That's where you're wrong. They are the ones with trade barriers and trade deficits and we don't need them nearly as much as they need us. Yes, a trade war would be mutually destructive but it would hit them a lot harder than it would hit us. That's before we even start meddling with their supply of Mideast oil and our own oil production. We are the petrodollar economy, in addition to being the top trading partner of all these countries. They can just suck it up or suffer the consequences. I don't care whether they like it or not.
yes back to the old beggar my neighbour policies of yesteryear, not much enlightenment there
Is there some reason that you think we owe Europe, with its larger 500M population, not only a NATO defense by America but the right to put up trade barriers to our exports? What would you consider to be "enlightened" policy? More giveaways to our rotten NATO allies in the EU who have practiced unfair trade against us for decades?
Feel the Bern 2020 Due to Trump's tariff on Canadian Steel & Aluminum, etc, the canuks have imposed a 10% tariff on Vermont Maple Syrup. Payback for Bernie losing? Many US producers will suffer. It's another Trump tax on all Americans. That's in addition to inflation which makes your dollars worth less. Another tax. Trump will have no one to blame but himself, if Bernie is elected prez in 2020.
Almost none of these tariffs have actually gone into effect yet. This is the threats stage, not the actual tariff collection stage. It's just mostly groaning at this stage. Wait and see who caves first. Trump will definitely win with Canada. Other trade partners like Mexico and the EU might be a little tougher. But because we are taking such a hard line with Iran now, the Saudis and Gulf oil sheiks are so happy that OPEC is essentially obeying our orders on how much to produce. The Gulf produces most of Europe's oil and Russia supplies the rest. No one even mentions this. We told OPEC we would prefer if they produced more at the same price. They meekly did as we asked, like last week. Because Trump didn't want consumer confidence eroding due to high summer fuel prices. We have immense power with the major oil producers of the Gulf. Did you happen to notice there wasn't a single riot or protest of any kind across the Mideast when we moved our embassy to Jerusalem? Not a peep other than the Palis (who the Arabs have thrown under the bus). And we have ourselves become the biggest oil and gas producer in the world. Bigger than the Arabs, bigger than Russia. And the entire international oil market is still traded in the petrodollar. That's not going to change either, in part because as long as Iran is a threat, the Arabs will never turn against trading oil in the dollar. Are you familiar with the phrase "balls in a vise"? You should probably be more worried about that than the price of maple syrup. Besides, maple syrup is crap anyway.
One thing often forgotten. Sanctions might work in such case. But ... If you sanction ten such countries or twenty then it becomes less clear who is sanctioning whom.
How would you measure the degree of damage? Decaying cities, crumbling infrastructure, mass real unemployment, rising personal debt,speculators getting richer, etc ...? What are your criteria? You must be quite sheltered from the world out there.
Trump is applying pressure on multiple fronts. It multiplies his leverage. The Orange One is executing a multifaceted foreign policy. We haven't seen anything like this in a long time, really since Reagan helped hasten the Soviet collapse with JP2 and Thatcher. Not even the two Gulf Wars were as big as what Trump is trying to do.
And multiplies the risk of blowback. He might win, at least in the short/middle term. I suspect he loves poker and hates chess. Do you like poker, TC?
If they want to go that far. Imagine large parking lots in Germany full of unsold luxury BMW and Mercedes sedans for instance. They have factories here in the States but bring a lot of others in from German factories. If you have the money, the ones from Germany are most desired. And we don't have to have those brands even if they're popular. And the fact that these are considered to be the cars preferred by the 1%ers over American cars, the would-be customers here won't get much sympathy. Least of all in Trump's tweets. And Trump hates seeing German luxury cars in NYC. He's said it many times. It's personal for him. This means that if they want to sell those cars here without tariffs, they need to build those cars here. Or they can keep them. We'll do other stuff. We're already moving toward a SUV and pickup fleet, far fewer cars overall. The only other real growth market in automotive is the hybrids/electrics and Toyota's hydrogen vehicles. But the EU doesn't have any strong hybrid/electric or fuel cell vehicles that we want. The ones we are building and the ones from Japan are the most advanced designs and are in production now, not 2-5 years from now.
Really? Trump could do a lot of things that people have considered unthinkable. Trump could cause the EU to dissolve. It's very weak. Trump could make NATO non-functional (like the EU's members could get any more disfunctional other than a handful like the nervous Baltics, Poland, Czechs) and bring our troops and planes out. Trump is not going to quit until he wins. He will do things no other president, even Nixon, would dare. Trump is going to make you guys an offer you can't refuse.
I don't play.
Be a libtarded pussy on some other snowflake venue... with “risks” come rewards.
I'm the infidel... Allah warned you about. كافر المسلح
Well you could stop being world policeman. You should have pulled out of Europe years ago. Your excuse for being there died with the Soviet Union. This would have forced Europe to look after its own defence, some thing it is fully capable of. You either have trade barriers or free trade, you must make up your mind which you want
Not hard to imagine given the absolute crappy quality control both marques have exhibited over the last few years. This is most likely due to all the ignorant Muslim immigrants over the last decade they were forced to hire and can't fire. I know a yuppie wannabe that has lusted after a BMW her whole life that finally bought one with her divorce settlement a few years ago,and it was hauled off for warranty work so often she sold it and went back to driving Honda Accords. If the Germans were to remove the high import tariffs on US,and especially Japanese cars,BMW and Mercedes would go out of business.
In the entire history of the world,the only nations that had to build walls to keep their own citizens from leaving were those with leftist governments.
You're right that the French would perceive it as a nightmare, as would the Germans. But in concrete reality, it would mostly be a psychological trauma for France: seeing a half-century dream crumble and die. It would be a literal physical body blow to Germany. France has staked its notion of "glory" on the European project. It is integration and expansion for the purpose of doing it, with France as elder statesman. The French are acutely aware that they are the architects and originators of the EU, all the way back to 1949. They had complicated reasons for doing it then, and complicated reasons for doing it now, and the psychological aspect of it is hugely important to them: this is their baby. But the actual PHYSICAL nature of the EU is not as important for France as it is for just about any other country. Originally, it was to economically bind Germany and France together for French national security after three wars with Germany in 70 years, all of them disastrous (indeed, the one the French WON did the most damage of all to them!). With nuclear weapons and the utter pacification (to the point of pussification) of the Germans, the security raison d'etre disappeared in the 1960s. Economically, France has chosen to skew in diverse: heavy agriculture (always a French forte), heavy science - particularly medical science, pharmaceuticals and aerospace, and heavy culture/luxury goods. This has left France with a diverse economy that is heavily insulated against economic crises: everybody always has to eat, medical care is a constant in all economies, the space program is government funded, aviation continues to grow worldwide as the Third World ceases to be, there will always be rich people who want the champagne and the Hermes scarves, and while all tourism suffers in down times, Paris remains the leading tourist city in the world. More marginal places get the overflow and adventurous people in flush times, but sooner or later everybody goes to Paris. So, the EU is this precious thing to the French mind, this ornate tapestry of statecraft, but if the EU were to completely unravel, France still has its nukes - and therefore national security. It still has it nuke plants - just a shrunken market for energy export. It still has the doctors, the drugs, the planes, the food and the tourists. The Franc comes back, but the Franc was always a stable currency. It wasn't the Deutschmark, but it certainly wasn't the Lira. The emotional trauma to the French would be very bad, seeing their diplomatic baby blow up, but economically France would not be devastated. Germany would be laid low. They have perfected a manufacturing economy that is BASED ON export to a common market that has a common currency and an overarching court and tax system. Germany is no longer a stand-alone sovereignty. The Germans have no military. The Germans cannot feed themselves. It's not a widely diverse economy. The Germans produce cars and household machines, in prodigious numbers, and they sell them to Europe. Germany's not really a country any more, it's more like a state in the USA. Essentially, Germany is a giant Detroit in Detroit's heyday: a foundry and an industrial capital. Pull apart the EU and the integrated economy, and the German economy would collapse, and there would literally be the danger of people not having enough to eat. It would not "muddle along", because half of German economic activity is devotes SOLELY to producing stuff to trade. In France, the comparable number is about 15%. For Germany, then, the survival of the EU is nothing sort of national survival. The collapse of the EU would be a Gotterdammerung for the Germans. It wouldn't REALLY be for the French, but the French THINK it would be, because they are so deeply wedded psychologically to the European project. Of course US tariffs won't break up the EU. The EU countries - England excepted - all think they need the EU. And they're right: they are all much more prosperous with the EU than without it. There's nobody who loves the IDEA of EU more than the French, though they are the ones who actually NEED it less than any other European country - they're psychologically so wedded to the idea that an EU collapse would be viewed by them as one of the worst calamities in history.
That's because he is focused more on the history books than repaying favors to other pols and corporate donors. In FACT,he doesn't even own any political favors. Those he got before he became president he paid cash for,so the people he paid are in no position to make demands. There is NOTHING more important to Trump than how successful his presidency is seen in the history books,and if when they are written they say he accomplished great things DESPITE even most of the professional pols in his own party trying to block him,it will just be cream in his coffee.
In the entire history of the world,the only nations that had to build walls to keep their own citizens from leaving were those with leftist governments.
I want regulated trade that makes sense for American employment rates. So, for example, absolutely free and open trade in bananas, mangoes, coffee, tea, cinnamon and chocolate: we can't grow that stuff here at all, we like it, and there are countries whose economies rely on those exports. There is no good reason to have a blanket tariff cover any of that. Such a tariff would not protect American jobs at all: we don't have people growing bananas because our climate won't permit it. All the tariff will do, in that case, is damage the foreign producer's economy and make bananas more expensive for us, with only a small revenue going to the treasury. Absolute free trade with the banana republics is good for them and for us. There are very good reasons to have protective tariffs against China. The Chinese use slaves - literally slaves - to power part of their economy. Otherwise, they dump goods, they lack environmental standards, they pay their workers very very little, they have no labor protection laws, and they steal our intellectual property. American businesses cannot compete with that. When labor is at slave wages, there are no workplace safety, working hours limits or environmental protections, those things right there give the Chinese an invincible advantage over any American manufacturer of comparable products. When the Chinese practice of wholesale theft of intellectual property is added to it, it makes it that much harder. The China Price cannot be beaten in the free market, because the low, low China price is built on a foundation of overlapping crimes against humanity and crimes against the environment. We must not have free trade with China. All that free trade with China MEANS is that those Americans involved in the trade itself, the middlemen, as well as the financiers, make a killing from the price differential, but whole industries in the US - such as clothing manufacturers - are put out of business, with massive unemployment. Now, the overall profits into the US economy may be the same, but the DIFFERENCE is that then you have millions of Americans on WELFARE in order to eat, instead of making socks for a paycheck in order to eat, and the taxes that pay for that welfare come primarily from the middle and upper middle class, not from the super-rich middlemen and financiers in the China trade. They externalize the costs and socialize the bad effects, but privatize the profits. Economists of a certain unrealistic and autistic mindset - good with numbers, pathological with human beings, and "assume a can opener" levels of realism with regards to the actual world - look at numeric balance sheets and observe that the GDP numbers, in the abstract, are higher on both sides of the Pacific because of the China trade, but this is a childish and completely unreal way to look at it: the externalities are ignored. Nobody ever changes their minds about any of these things, though. So we have to resolve it through brute force politics. Trump won in large part because huge numbers of Americans suffer too much from the existing politics, and therefore the ideas of economists, a much smaller portion of people, have to be set aside in favor of policies that favor American work over welfare, at the opportunity cost of lost trading profits and a nominally higher GDP. You say that we have to have either free trade or trade barriers, one or the other. But actually we can have free trade with SOME countries, and set trade barriers with other countries differently, in order to level the playing field on a country-by-country basis. We do not have to be consistent across the board at all.
Russians are chess players. Americans are poker players. This is true. Chinese are go players. Each game has its virtues, and reflects certain character traits. If we were playing checkers while the Russians play chess, we'd be at a disadvantage, because chess is much more complex and requires strategic thinking. Of course "Go" is more complex than chess. Chess rewards strategic thinking more than poker, certainly, and Go does so more than Chess. In this sense, chess and go are good mental exercises to prepare for statecraft. But they both lack two things that poker has in spades: luck, and the fog of war. In chess and in go, you develop your positions through skill. But in poker, you take what life hands you, and then you have to use keen psychology to defeat your opponents. The implication when chess versus poker is made - as it frequently has been in the past - is that chess is more intellectual, and that therefore the Russians, as chess players, have an intellectual advantage over those childish American poker plays. But poker is not a child's game at all. It is frequently played with alcohol, something that chess isn't. And prodigious amounts of real money are on the table in poker, which is not the case in chess. Americans ARE poker players, and Russians are chess players. And over the past century and more of Russo-American rivalry, I would have to say that the poker playing Americans have very much come out on top. Which makes me think that poker is actually a better game to prepare for real life than chess is. A comparable thought comes to mind. The Germans up until 1945, and really since, though more subtly, always prided themselves on their Prussian discipline and military order. They didn't have an Army, they had a war machine. Precision, discipline, orderliness - these were strong German virtues, they reflected in their military (and the military reflected back into the society), and they resulted, over the course of modern history, in some stunning German battlefield victories. The Germans have quite a history of battlefield triumphs, but their overall record of warfare is one of pretty bad defeats in the end. Their military discipline and precision gives them momentary advantage, but they have relied too heavily on battlefield victories to overcome strategic weaknesses, and have lost to the strategic factors. On battlefields, they have had great success against many armies, but they have had the greatest difficulty with those armies that, in the face of defeat and a bad outcome, remained stubbornly in the field. One army and culture the Germans historically disdained were the Americans, whom they considered to be inexperienced, relatively undisciplined, and lacking in sharp cohesion. But unlike their French and British foes, or Russians, whom they overwhelmed on the battlefield at various points, the Germans always had a really hard time on the battlefield against Americans. They disdained us for our relative indiscipline, but there was some "secret sauce" in American warfighting that made American armies more difficult for the Germans to handle in World War I and World War II. I speak of battlefield results, not grand strategy. A German officer in World War II famously remarked: "The reason the U.S. military does so well in wartime is that war is chaos, and the U.S. military practices chaos on a daily basis." - It's funny, and it is at least partly sarcastic, but it is also true: the Germans were precise and disciplined, like cold steel, and they always had a hard time fighting Americans and almost never actually won on the battlefield against us. Poker players play a game full of chance and the fog of war. Chess has neither, but real life does. A Soviet military observer similarly famously observed: "A serious problem in planning against American doctrine is that Americans do not read their manuals, nor do they feel any obligation to follow their doctrine." This is also true, and was viewed with the same sort of contempt that the Germans had. But the Soviets were smart enough not to tangle with it, while the Germans really thought they would simply carry the day through discipline and precision. Finally, a note from a German after World War I: “The prevailing opinion in Germany before our entry into war, was, that American was a money hunting nation, too engrossed in the hunt of the dollar to produce a strong military force. But since our troops have been in action the opinion has changed, and he says that though Germany is at present a defeated nation, he believes that they would be victors in a war with any nation in the world with the exemption of the United States.”
I agree. We have indulged the domestic spending habits of the EU for far too long. Why should we pay to defend the EU and put our troops in frontline positions as a tripwire for war when the EU seems so totally uninterested in defending itself?
It's hard to beat the Honda (and even the Toyota) for worry-free ownership. I generally think the BMW (and Audi) are generally better than Mercedes overall. Still very pricey considering some of the downsides in reliability. Mercedes has a lot of problems, like Jaguars. They're great cars when everything goes right but they have a lot of issues that get to be a huge nightmare for many owners. Somewhat. The German cars are designed to be autobahn cruisers. You can't say quite the same for US or Jap cars.
The De Gaulle is six months into an 18-month refuel and repair cycle. I wonder how they'd like it if Trump told them that we weren't going to keep the American catapult on their carrier in working order for them? American crews and equipment, 100%. And the only reconnaissance aircraft that fits on their carrier is one of ours. We have a lot of leverage with the EU if we really want to use it. Your point on Germany as the workshop of Europe vs. the more varied economy of France was well-taken.
Exactly so. He owes no one anything except the people who voted for him. And he clearly knows it.
I think it's a waste of time to try to predict who's going to win or lose any trade war. Whatever happens will happen. What is much less speculative is that the US national debt is going to ruin the USA eventually. Some $300 - $400 billion is spent each year just to pay the interest on the debt which does NOT provide a single penny of service to the American people, and of course a percentage of that payment in coming from new borrowing. Congress is incapable of passing any balanced budget, so it's just a matter of time when the system crashes, and when it does, foreign trade "winners" and "losers" will be very much redefined.
They wouldn't LIKE it, but it wouldn't be an existential crisis either. They'd have to muddle along with regards to their carrier, and wouldn't be able to deploy it for awhile. But they can't do that right now anyway. That would diminish their ability to project such power as they occasionally do. France doesn't want the US out of Europe, doesn't want NATO to dissolve, and doesn't want the EU to breakdown. But if those things were to happen, France would be ok. BeNeLux will only still be ok because France and Germany stick together. Essentially, the Empire of Charlemagne is the part of Europe that can and should be integrated. But Eastern Europe? Austria, ok. Romania? No. Greece? God.
I agree. What we will DO, of course, is inflate our way out of it, because Americans cannot agree to slash the military or social services, or to raise taxes, sufficiently to ever close the gap. Which means that either we will print money to pay the debt, or we will default. The political will will never exist to just outright default. So we'll inflate our way to solvency, as we always have.
That is the historical norm. It amounts to a tax via devaluation on everyone holding US dollars, including US debt. to pay it off.
Exactly. All countries do this. For example, we all know that the British "Pound Sterling" used to literally be a pound, 22 troy ounces, of sterling silver. What would 22 oz of silver be worth today in British Pounds "Sterling"? Now consider this: the Italian word "lira" means pound. Obviously by the time the plenteous lira was dissolved into the Euro, a lira was worthy nowhere close to a pound of silver.
Polish "zloty" means golden (adjective from "gold")
How close in value is a zloty to an ounce, or a tenth of an ounce, of gold. I'll hazard a guess that it's off by four or five orders of magnitude. It's another demonstration of the point: all nations inflate their currency in order to have sooner what they would otherwise have to wait too long for.
All tariff barriers do is increase the cost to the consumer, but it is a way of taxing the consumer and balancing the budget. You want tariff free bananas, great, what are you willing to trade for them?
Not really. They impose a tax on the importer. The importer then ATTEMPTS to pass along the cost to the consumer. Economists oversimplify things (and they do it for political reasons) when they say that taxes are "merely passed along to the consumer". That's not true. Rather, when taxes of any sort - including tariffs - are imposed, the importer/vendor/manufacturer ATTEMPTS to pass the cost along to the consumer, to the extent it can. But the commerce in any item is elastic. Raise the price, and people may just pay the price and go on - if the demand curve is inelastic - or they will buy less of it, or none of it at all. Vendors cannot simply "pass along the costs". They can try, but if the consumer won't buy at the inflated price, the vendor has to start taking a cut to its own profit margin: it pays the part of the tax that it can't pass along. Of course, there comes a point where the part that it has to pay cuts so deeply into its profit margin that it decides that it cannot continue in the business. With real actors this does not happen at the first penny, or the first dollar, any more than it does with consumers. There is a degree of stickiness in all behaviors, precisely because transitions are not free. To be selling a product, an importer/vendor has spent money creating a supply chain, creating a retail point of sail, creating an accounting system, advertising, etc. This was set up under conditions of a certain (transitory) profit margin for their goods that is sufficient to make it worthwhile to do so. Once those costs have been sunk and that system is in place, if an intervening event such as a tax hike comes, of course the vendor will TRY to pass that along to the consumer, but he can only do so the point that the market will bear it. If the price hike causes a substantial fall off in sales, the lost revenue from reduced sales with overwhelm the additional revenue from the price hike. Vendors do not have the ability to hike their prices in an unlimited fashion to pass along new costs to the consumer - that's the point. If the vendor petulantly stops his little feetsies and takes the attitude that if he cannot continue to collect his previous profit margin by passing along new costs, he will get out of the business completely, he may do so, but at the cost of the loss of all of those sunk costs. Somebody else will step in and take his market share. The overall profit margin will be reduced because the full impact of a new tax usually cannot be completely passed off onto the consumer. So, what the tariff barrier does is increase the cost of the foreign good to both the consumer and the importer. At a certain tariff point, the foreign good is no longer economically competitive with the domestically-produced good, and natives will substitute the native good for the foreign. This, then creates jobs in the country (or preserves them, which is a key purpose of the tariff. Bref: a tariff, or any other tax, does more than simply increase costs to consumers. It changes consumer behavior, and it changes vendor behavior. And that's the POINT. The tariff isn't there to raise taxes. It is there to prevent foreign enterprises from exploiting an imbalance between the two systems to the disadvantage of native producers.
Dollars.
so the theory goes however in trump's world a tariff is a penalty for being successful
Say what? what do they buy in my banana republic?
Very well stated Vic.
Depends on where your banana republic is. If Central America: Bananas. If Centertown Mall: chinos.
Trump wants fair trade... and you progressive libtards get a big fat chubby over America getting short changed. GFY.
I'm the infidel... Allah warned you about. كافر المسلح
Oh please, stop drinking the koolaid. Trump doesn't want fair trade, he doesn't want free trade, he wants someone to build his wall, give Americans back their jobs in out of date steel mills and coal mines so he can say he got it done, but he doesn't realise that the only ones who can afford American goods are Americans and maybe not many of them
#5. To: Tooconservative (#4)
Trump is pursuing multiple trade and economic policies at once, not a piecemeal approach that has worked to our disadvantage for so many years.
#6. To: paraclete (#5)
tariff walls are a bad idea because the US has more to loose than it has to gain
#7. To: Tooconservative (#6)
. I don't care whether they like it or not.
#8. To: paraclete (#7)
yes back to the old beggar my neighbour policies of yesteryear, not much enlightenment there
#9. To: Tooconservative, Maple Syrup wars, Feel the Bern 2020, *2020 The Likely Suspects* (#0)
#10. To: hondo68 (#9)
Due to Trump's tariff on Canadian Steel & Aluminum, etc, the canuks have imposed a 10% tariff on Vermont Maple Syrup. Payback for Bernie losing?
#11. To: Tooconservative (#0)
simply facing facts. The U.S. economy is more than 10 times as large as ours.
#12. To: Tooconservative, hondo68, sneakypete, Pinguinite, Vicomte13, Deckard (#6)
a trade war would be mutually destructive but it would hit them a lot harder than it would hit us.
#13. To: A Pole (#11)
If you sanction ten such countries or twenty then it becomes less clear who is sanctioning whom.
#14. To: Tooconservative (#13)
(Edited)
Trump is applying pressure on multiple fronts. It multiplies his leverage.
#15. To: A Pole (#12)
How would you measure the degree of damage? Decaying cities, crumbling infrastructure, mass real unemployment, rising personal debt,speculators getting richer, etc ...? What are your criteria?
#16. To: A Pole (#14)
And multiplies the risk of blowback.
#17. To: A Pole (#14)
Do you like poker, TC?
#18. To: A Pole (#14)
And multiplies the risk
#19. To: Tooconservative (#8)
What would you consider to be "enlightened" policy?
#20. To: Tooconservative (#15)
(Edited)
Imagine large parking lots in Germany full of unsold luxury BMW and Mercedes sedans for instance.
#21. To: Tooconservative (#4)
They are close to falling apart already and it would take so little to push them over the edge, a nightmare for France and especially Germany.
#22. To: Tooconservative (#16)
Trump is not going to quit until he wins. He will do things no other president, even Nixon, would dare.
#23. To: paraclete (#19)
You either have trade barriers or free trade, you must make up your mind which you want
#24. To: A Pole (#14)
#25. To: paraclete (#19)
Well you could stop being world policeman. You should have pulled out of Europe years ago. Your excuse for being there died with the Soviet Union. This would have forced Europe to look after its own defence, some thing it is fully capable of.
#26. To: sneakypete (#20)
I know a yuppie wannabe that has lusted after a BMW her whole life that finally bought one with her divorce settlement a few years ago,and it was hauled off for warranty work so often she sold it and went back to driving Honda Accords.
If the Germans were to remove the high import tariffs on US,and especially Japanese cars,BMW and Mercedes would go out of business.
#27. To: Vicomte13 (#21)
(Edited)
France has staked its notion of "glory" on the European project. It is integration and expansion for the purpose of doing it, with France as elder statesman. The French are acutely aware that they are the architects and originators of the EU, all the way back to 1949. They had complicated reasons for doing it then, and complicated reasons for doing it now, and the psychological aspect of it is hugely important to them: this is their baby.
#28. To: sneakypete (#22)
In FACT,he doesn't even own any political favors. Those he got before he became president he paid cash for,so the people he paid are in no position to make demands.
#29. To: A Pole (#12)
#30. To: Tooconservative (#27)
I wonder how they'd like it if Trump told them that we weren't going to keep the American catapult on their carrier in working order for them? American crews and equipment, 100%.
#31. To: Pinguinite (#29)
What is much less speculative is that the US national debt is going to ruin the USA eventually. Some $300 - $400 billion is spent each year just to pay the interest on the debt which does NOT provide a single penny of service to the American people, and of course a percentage of that payment in coming from new borrowing. Congress is incapable of passing any balanced budget, so it's just a matter of time when the system crashes, and when it does, foreign trade "winners" and "losers" will be very much redefined.
#32. To: Vicomte13 (#31)
Which means that either we will print money to pay the debt, or we will default. The political will will never exist to just outright default. So we'll inflate our way to solvency, as we always have.
#33. To: Pinguinite (#32)
That is the historical norm. It amounts to a tax via devaluation on everyone holding US dollars, including US debt. to pay it off.
#34. To: Vicomte13 (#33)
Now consider this: the Italian word "lira" means pound. Obviously by the time the plenteous lira was dissolved into the Euro, a lira was worthy nowhere close to a pound of silver.
#35. To: A Pole (#34)
#36. To: Vicomte13 (#23)
You say that we have to have either free trade or trade barriers, one or the other.
#37. To: paraclete (#36)
All tariff barriers do is increase the cost to the consumer,
#38. To: paraclete (#36)
You want tariff free bananas, great, what are you willing to trade for them?
#39. To: Vicomte13 (#37)
t is there to prevent foreign enterprises from exploiting an imbalance between the two systems to the disadvantage of native producers.
#40. To: Vicomte13 (#38)
Dollars.
#41. To: Vicomte13 (#37)
#42. To: paraclete (#40)
what do they buy in my banana republic?
#43. To: paraclete (#7)
#44. To: GrandIsland (#43)
Trump wants fair trade..
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