Author Topic: Tariffs/protectionism  (Read 300 times)

Offline Heinrich

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Tariffs/protectionism
« on: July 12, 2018, 08:45:12 PM »
I am hearing mostly economic armageddon in regards to POTUS's policies. What are the upsides, downsides to this in economic theory and practical application to USA 2018?
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Offline Davis Blank - EG

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Re: Tariffs/protectionism
« Reply #1 on: July 12, 2018, 11:26:29 PM »
Global society has built itself up a system which is extremely dependent upon global trade.  Infrastructure, systems, societies are all based upon it.  Major tariffs that aim to greatly decrease global trade will put a big cog in all economies.  It should be highly destabilizing.

From the US perspective, I think it has little to lose from doing this.  The US hollowed out its economy decades ago, sending manufacturing off to Asia and agriculture off to every corner of the globe.  If you ever look at the agricultural import statistics it is absolutely shocking how much of our food is imported.  Some people say that this is all good progress, that those with these "lowly" jobs will now find "better" work in "higher" industries.  I disagree.  It simply did not happen.  Those who lost their jobs ages ago did not re-educate themselves to be the proverbial rocket scientist - and besides, how many of those would we need?  And each year a new round of people enter the work place, and its simply the way man naturally is that many are suited for manual labor, not for intellectual pursuits or mindless office work.  Men were made for manual labor.  The US is strongly lacking in manual labor jobs.  Moves towards bringing this type of employment back will be good for American society.  Prices will be higher, material goods will be fewer, but society will be more grounded in reality with men working hard in manual labor industries they are naturally inclined to enjoy doing.  (cue Greg to explain how AI will wipe all manual labor out anyways)

The global political fallout from breaking trading ties will likely be very nasty.
 
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Online james03

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Re: Tariffs/protectionism
« Reply #2 on: July 13, 2018, 12:33:46 AM »
Economically this will be a plus for the US and a negative for everyone else.  Part of GDP is E - I, exports minus imports.  The trade deficit has already shrunk, so expect GDP to report higher.  Geopolitically it is another plus as China will end up with less cash to buy US companies with, and Canadian homes with.  Finally, "eurodollars" will come back home increasing money supply which will counteract the shrinking of money supply the Fed is currently doing.  It's a big win for the USA.

Another thing to consider is that China has no ammo.  A big threat supposedly are soybeans.  OK, China quits buying US soybeans and buys them from Brazil.  Who is Brazil selling to now?  Those customers will now be buying from the US.  China can't do much against us.
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Offline Jacob

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Re: Tariffs/protectionism
« Reply #3 on: July 13, 2018, 11:38:04 AM »
Finally, "eurodollars" will come back home increasing money supply which will counteract the shrinking of money supply the Fed is currently doing.  It's a big win for the USA.

James, do you read ZeroHedge on a regular basis?  Did you see the piece by Tyler Durden last year or early this year theorizing on how Trump is going to save the US from the eventual economic implosion not by figuring out a magical cure, but by guiding the US to a soft landing when default-time comes around.  One of the main elements of that plan was bringing home money to keep liquidity in the US.

EDIT: Okay, I found this:
https://www.zerohedge.com/news/2018-01-24/trumps-modest-plan

Is this fantasy?  The quote above made me think of it and I am interested in what you think.  Thank you.
« Last Edit: July 13, 2018, 01:11:43 PM by Jacob »
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Online james03

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Re: Tariffs/protectionism
« Reply #4 on: July 13, 2018, 01:59:32 PM »
I've been watching the Fed.  Explain how base money is staying stable or slightly rising as the Fed removes roughly $30Billion a month?  Yes, I'm seeing eurodollars showing up.  This is buying time.

However we have close to $22 TRILLION in debt.  Trump's move is a one off.  It needed to be coupled with a BALANCED BUDGET.  .gov is going to chew up $750 BILLION of the overseas money THIS YEAR.

One glimmer of hope:  Trump releases Armageddon on the Dems Sept./Oct. (Huber indictments / Weiner "Insurance" folder) and repubs get full control of the government.  Then they balance the budget.  I'm hopeful.  We'll know in a few months.

It comes down to the deficit.  If we keep the same kind of congress, no budget reforms will be passed and mathematics takes over.  The US goes bust.  The main problem is high MEDICAL costs, not insurance costs.  That has to be tackled.  Messing with INSURANCE (actually health plans, insurance is illegal) solves nothing.  That is why Obamacare failed so spectacularly.  There are only two ways to lower MEDICAL costs:

1.  Use the Canadian model.  Import Paki doctors, create waiting lists.  Ask Ontario (most indebted government body in the first world) how that is working.

2.  Return medical care to the free market.  Bust up the CMS and FDA.  Use the Sherman act to bust up medical/pharma monopolies.  Allow Army medics to practice medicine.  Malpractice reform.  Allow businesses to run diagnostic labs (Arizona model).  Basically return to a 1950's model where the doctor used to COME TO YOUR HOUSE, called a "house call".  There is one "insurance" reform that would lower medical costs through competition:  Remove the tax deduction for corporate health plans and allow people to opt out of corporate plans and take the money instead.  Couple that with HSA's and high deduct INSURANCE and there will be a lot of pressure on doctors to lower prices.
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Offline longstrangetrip5

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Re: Tariffs/protectionism
« Reply #5 on: July 13, 2018, 04:46:40 PM »
haven't read everything here yet

but anyhow, Trump's use of  tariffs, even knowing that we will be tariffed back by the rip-off artists in China and elsewhere.. is smart, even though painful. American companies will have to suffer a little for awhile, but hey, we Americans have gotten too dang soft over the years anyway.

I don't know why other countries don't agree to the no tariff philosophy. It makes no sense but again, there is much going on behind the scenes that most of us know nothing about.

but then, how do i know that, seeing as how we don't know (can't know what you don't know...)? Well-- i just assume there is much we are not being told, such assumptions taking root in our suspicious hearts because we have been lied to so often (Democrats)

and seen so much corruption (Democrats).

and perversity (Democrats)

 

Offline Jacob

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Re: Tariffs/protectionism
« Reply #6 on: July 13, 2018, 05:14:34 PM »
but then, how do i know that, seeing as how we don't know (can't know what you don't know...)? Well-- i just assume there is much we are not being told, such assumptions taking root in our suspicious hearts because we have been lied to so often (Democrats)

and seen so much corruption (Democrats).

and perversity (Democrats)

I've noticed you keep going on about the Dems in different posts.  Are you aware of the pervading hypocrisy and corruption within the Republican Party?
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Online james03

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Re: Tariffs/protectionism
« Reply #7 on: July 14, 2018, 12:14:45 AM »
For repubs, its hypocrisy and corruption.  For dems its sanctioned policy.

We'll see it on full display with the SCOTUS vote.
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Offline PerEvangelicaDicta

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Re: Tariffs/protectionism
« Reply #8 on: July 14, 2018, 01:04:53 AM »
but then, how do i know that, seeing as how we don't know (can't know what you don't know...)? Well-- i just assume there is much we are not being told, such assumptions taking root in our suspicious hearts because we have been lied to so often (Democrats)

and seen so much corruption (Democrats).

and perversity (Democrats)

I've noticed you keep going on about the Dems in different posts.  Are you aware of the pervading hypocrisy and corruption within the Republican Party?

Yes, I've also noticed a high ratio of daily postings. (not that you can't post a lot) 
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Offline mikemac

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Re: Tariffs/protectionism
« Reply #9 on: July 14, 2018, 12:01:39 PM »
...
I don't know why other countries don't agree to the no tariff philosophy. It makes no sense but again, there is much going on behind the scenes that most of us know nothing about.
...

1. Some countries subsidize certain business sectors more than other countries do.  Because some countries subsidize certain business sectors more than other countries do that means there can never be a no tariff philosophy trade in those certain business sectors, because it would not equate to free trade or fair trade.  Yes, there is much going on behind the scenes that most of us know nothing about.  For example;

U.S. dairy subsidies equal 73 percent of producer returns, says new report
https://www.realagriculture.com/2018/02/u-s-dairy-subsidies-equal-73-percent-of-producer-returns-says-new-report/

2. Economy of Scale.  I will use the difference between the US and Canada to explain this.  The US has ten times the population of Canada.  This means a US company has ten times the advantage of a competing Canadian company at the start of a "free trade" agreement, because the US company had already been set up to produce for ten times the amount of consumers, bringing the cost of production for the US company much lower than the competing Canadian company.  This is not fair trade.  Before the former Canadian Prime Minister Mulroney signed the "free trade" agreements with the US (when most Canadians were against it) every Canadian Prime Minister before Mulroney said there can not be free reciprocity (free trade) between the US and Canada because of the difference in Economy of Scale of the countries.  This would hold true between any two countries.  As a result of the "free trade" deals with the US Canada has lost a lot of it's manufacturing and retail sectors.  Personally I was against them from the start and would still like to see the "free trade" deals scrapped.  A "no tariff philosophy" is not possible.

3. It was Trump that started the trade war by applying tariffs to certain goods and services coming into the US from other countries.  The other countries are simply retaliating by applying tariffs to US goods and services coming into their countries on a dollar per dollar basis.  Protectionism is what started the Great Depression.  Time will tell whether Trump just put the next depression into play.

4. We all rail against globalists, right?  Well I was surprised when Trump said "If it were up to me there wouldn't be any tariffs or subsidies."  Guess what that makes Trump?  The ultimate globalist.
« Last Edit: July 14, 2018, 12:20:09 PM by mikemac »
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Offline longstrangetrip5

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Re: Tariffs/protectionism
« Reply #10 on: July 14, 2018, 12:25:17 PM »
Quote
  Time will tell whether Trump just put the next depression into play.

4. We all rail against globalists, right?  Well I was surprised when Trump said "If it were up to me there wouldn't be any tariffs or subsidies."  Guess what that makes Trump?  The ultimate globalist.

well, i don't know.. i feel that is a bit of a stretch. But if you could explain a little better. I am not clear on this. My understanding is that China was charging us 25% on some goods while we only charged them 2.5% tariff on goods

i don't know about Canada but then again, i did hear that they wanted to slap us with something like 200% tariff on milk or some such thing.. so i don't see how what Trump is doing can be called bad....
 

Offline mikemac

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Re: Tariffs/protectionism
« Reply #11 on: July 14, 2018, 02:05:41 PM »
Quote
  Time will tell whether Trump just put the next depression into play.

4. We all rail against globalists, right?  Well I was surprised when Trump said "If it were up to me there wouldn't be any tariffs or subsidies."  Guess what that makes Trump?  The ultimate globalist.

well, i don't know.. i feel that is a bit of a stretch. But if you could explain a little better. I am not clear on this. My understanding is that China was charging us 25% on some goods while we only charged them 2.5% tariff on goods

i don't know about Canada but then again, i did hear that they wanted to slap us with something like 200% tariff on milk or some such thing.. so i don't see how what Trump is doing can be called bad....

The Canadian tariffs on US dairy products are countervailing duties (also known as anti-subsidy duties) meant to  neutralize the negative effects of the large subsidies that the US dairy industry receives.  These trade import duties are imposed under World Trade Organization (WTO) rules.  They are imposed after an investigation finds that a foreign country subsidizes its exports, injuring domestic producers in the importing country.  The link in my previous post shows that the subsidies that the US dairy industry receives are massive.  Those huge subsidies that the US dairy industry receives comes from the US taxpayer, so you would think that the US taxpayer would be pissed if they knew this.

I understand Trump's tariffs on China, especially when you hear about the largest container ships in the world doing back to back trips across the Pacific, mostly for Walmart, with the return trips to China mostly carrying empties.  But Trump's tariffs on his allies in Europe and Canada have a lot of people wondering if he actually knows what he's doing.  I don't think Trump's 25% tariffs on Canadian steel and 10% tariffs on Canadian aluminum had anything to do with the dairy industry.  I think Trump's tariffs on steel and aluminum were meant to try to force Canada into accepting a NAFTA sunset clause, which won't happen.     
« Last Edit: July 14, 2018, 02:32:09 PM by mikemac »
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