Author Topic: S&P futures for tomorrow just fell off a cliff. Trumpy wants 100B in new tariff  (Read 16531 times)

appleshampooid

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I'd love it if someone could explain to me in plain English why the TPP was bad for the USA. Perhaps Dustinst22 can do this?

What provisions would hurt US companies?

How would the USA be worse off?
Here's a long-winded comic strip on TPP (from the guy who makes comic strips about economics - aka economix):
http://economixcomix.com/home/tpp/

The Australia vs. Philip Morris thing is even in there.

Also the EFF (who I generally support) really hated the TPP for how it treated IP and copyrights etc.:
https://www.eff.org/issues/tpp

HBFIRE

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I'd love it if someone could explain to me in plain English why the TPP was bad for the USA. Perhaps Dustinst22 can do this?

What provisions would hurt US companies?

How would the USA be worse off?

Mainly it would make it easier for companies in the US to move our manufacturing jobs to countries where labor is cheaper. This doesn't impact me at all as my biz isn't in manufacturing, but pretty horrible for middle America.  It would impact all of us indirectly.

Also, the copyright/patent provisions were mostly favorable to big corporations (shocker, I know) -- for example, it would have made it harder for companies to create less costly options to the pricey drugs put out by the big corps.  That's already a very significant issue here in the US (I know it's not as bad in other countries), and it would have been exacerbated by the TPP.

The entire agreement was made by corporate lobbyists, those who were in the pockets of Obama.  Obama was manipulated by big corps to a very large degree.

It also reduced a lot of environmental safeguards that we currently have, and in general would have had a more negative impact on the environment than what we have in place now.  I'm a capitalist, but even I see this as bad.  It's strange that a liberal president claiming to be concerned about the environment would want these safeguards removed.  Now that's irony (insert cheesy animated meme here).

If it's the "Gold Standard" we're all pretty screwed.  Guess we need a Platinum Standard.
« Last Edit: April 09, 2018, 10:26:07 AM by dustinst22 »

KTG

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For those who oppose tariffs as being big and bad, whats the alternative? Something has to be done. Does everyone just want to sit and admit defeat? Give me a break. And when is there a better time to address this? When the economy is in the shitter and unemployment higher? There really isn't any other time to address this than when the economy is near full employment. Some might say even with a shortage of workers.

And for those that think China has too much of a hand to go up against, remember what keeps Xi up at night. It is not Taiwan, the South China Sea, nukes in North Korea,  India, or even the US. Its creating jobs. China needs a massive amount of people employed. They have also taken on an massive amount of debt and masterfully forced companies in the same sectors to provide loans to other less efficient companies to keep the whole thing afloat. Throw in higher housing costs, people migrating from rural areas to the cities, and you have one massive bomb ready to set off. Its one thing to have to pay higher prices for things, as you can opt to just not buy them, but its another to have to hope that others buy your products to keep your system afloat. And if those jobs get lost, and the government can no longer get away with lying on how good its doing, its going to scare a lot of people in the chinese government, who btw, have never experienced any kind of major economic downturn after a rise they have had. That is why they are coming around to allowing for foreign investment in China. Do you really think they want any of us there? Hell no. They are doing it to help bring money into their system, not just to absorb the debt, but to also make up for the massive amounts of money leaving China.

So when they say they do not want a trade war, believe them. Everything they have built and are doing hangs on stability. We're more chaotic and used to the ups and downs.
« Last Edit: April 09, 2018, 10:41:53 AM by KTG »

nereo

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For those who oppose tariffs as being big and bad, whats the alternative?
multilateral trade agreements.

KTG

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For those who oppose tariffs as being big and bad, whats the alternative?
multilateral trade agreements.

And who is willing to sign up for those?

Lets keep in mind here, if you have more than someone else, why would you give anything up to him? Countries work in self-interest. China isn't going to be a nice guy and just offer to give us a better deal. There will be a fight. There always is.

nereo

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For those who oppose tariffs as being big and bad, whats the alternative?
multilateral trade agreements.

And who is willing to sign up for those?

Really?  Countries have been making trade deals since international trade was a thing. We've got deals (either bilateral or poly-lateral) with almost every major economy we don't have an active embargo on.
Are you asserting that the US is incapable of establishing these anymore?  Or that a tariff war is preferable.
Even if its the latter - what ends a tariff standoff?  Generally it's a trade deal.

ChpBstrd

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I'm surprised how many experts we have on global economics here.

For 10 mustache hairs, name this person.
For 20 hairs, name his plan... the ___ Plan.
For 50 mustache hairs, post his infamous quote.

Yeah, I’m wondering if you mean “liquidate labor, liquidate stocks, liquidate farmers, liquidate real estate... it will purge the rottenness out of the system.“

WINNER!

KTG

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Really?  Countries have been making trade deals since international trade was a thing. We've got deals (either bilateral or poly-lateral) with almost every major economy we don't have an active embargo on.
Are you asserting that the US is incapable of establishing these anymore?  Or that a tariff war is preferable.
Even if its the latter - what ends a tariff standoff?  Generally it's a trade deal.

I am saying who is going to sign up for a deal that gives them less in the end? If I am going to give up something, whether by force or choice, its going to have to be by force or by choice from the threat of force. I am not going to do it to be nice.

In the case of China, the US has whored itself out and put itself in this position. Now it wants some back. Why would China just be willing to go along with it? They have been getting a gift of blue prints, shared technology, the training of its citizens, and in turn dumping cheap products in the US. Why would they want to change that? Their entire system works under the assumption that will continue. If they were nice enough to just change it, they would have done it by now.

Any change to the status quo weakens them. They will not give anything up willingly. Nor would you.

nereo

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Really?  Countries have been making trade deals since international trade was a thing. We've got deals (either bilateral or poly-lateral) with almost every major economy we don't have an active embargo on.
Are you asserting that the US is incapable of establishing these anymore?  Or that a tariff war is preferable.
Even if its the latter - what ends a tariff standoff?  Generally it's a trade deal.

I am saying who is going to sign up for a deal that gives them less in the end? If I am going to give up something, whether by force or choice, its going to have to be by force or by choice from the threat of force. I am not going to do it to be nice.

In the case of China, the US has whored itself out and put itself in this position. Now it wants some back. Why would China just be willing to go along with it? They have been getting a gift of blue prints, shared technology, the training of its citizens, and in turn dumping cheap products in the US. Why would they want to change that? Their entire system works under the assumption that will continue. If they were nice enough to just change it, they would have done it by now.

Any change to the status quo weakens them. They will not give anything up willingly. Nor would you.

As near as I can figure, your argument is that the US is unable to make a trade deal with China, and a tariff war is the only way to get what we want.
Is that true?  If not I don't understand what you mean when you suggest there is no other option other than slapping tariffs on each other.

HBFIRE

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Really can't stand his tweeting, but hard to argue with this:

“When a car is sent to the United States from China, there is a Tariff to be paid of 2 1/2%. When a car is sent to China from the United States, there is a Tariff to be paid of 25%. Does that sound like free or fair trade? No, it sounds like STUPID TRADE - going on for years!”

KTG

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As near as I can figure, your argument is that the US is unable to make a trade deal with China, and a tariff war is the only way to get what we want.
Is that true?  If not I don't understand what you mean when you suggest there is no other option other than slapping tariffs on each other.

In order to negotiate, you need leverage. Right now China has what we want. We have an open system and they have restrictions. In turn they flood our market with cheap goods and create barriers preventing our products coming in. And if/when they do go in, they go in under a partnership with a Chinese company, in-part owned by the state as just about all are, who collect the blue prints of what is being manufactured, and train Chinese workers to build those products, who go on to work for other Chinese companies who gain that knowledge.

Its extremely unfair. We've gone along with it because a few companies have made a lot of money in that environment, but some have gotten completely screwed. But we would have addressed with sooner, and while I am critical of many of Obama's international policies, his hand was tied behind his back because of the great recession.

We have repeatedly tried to address these things with China who just blows us off. You can't 'negotiate' with someone who doesn't (1) want to negotiate, and (2) be the guy who has more to lose. Which they do.

So the tariffs are pretty small. 50 billion is nothing. They are the opening shots to let China know they we are serious about going down this road. The Chinese also want to play tough, and slap tariffs back on us to let us know they do not want things to change. Which is why they are going after imports that impact POLITICS versus ones that are actually unfair. Will things escalate from here? They might. But believe me, China has far more to lose there than we do. Eventually there will be negotiations, but they will not come willingly.

The threat of being able to knock back everything they have built in recent years while taking a hit ourselves is leverage. Just saying we are willing to go down this road while they have repeatedly said they do not want to is leverage. They do not want anything messing up their employment, One Belt One Road, military build up in the South China Sea, etc etc.
« Last Edit: April 09, 2018, 11:28:05 AM by KTG »

ChpBstrd

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Kind of a side note, but I wonder why US oil subsidies aren't mentioned as a job killer.

The US spends trillions each decade attempting to secure the Persian Gulf for oil shipments, our taxes on motor fuel have been frozen for many years and have fallen in net inflationary terms, we give away offshore mineral rights (and increasingly onshore on state/federal lands), the government seizes the property of people on pipeline routes, and taxpayers eat the cost of road repairs and expansion from their income taxes rather than from a consumption tax on fuel. The net result is an oil price much cheaper than what the market price would be in a world where these policies were not in place.

As a result of subsidized petroleum, it became economical to burn tens of thousands of gallons of the stuff to send huge freighters across the ocean to exploit the wage differences between countries. Manufacturers in the US went out of business because their own government was spending their own tax dollars to suppress the price of the oil so overseas competitors could economically ship competing products from around the globe at an enormous environmental cost.

Had we let the Middle East alone and taxed oil as a proxy for the cost of building and maintaining all our roads, it would be prohibitively expensive to ship many bulky or low-value-density products all they way from China and a lot more US factories would still be producing those kinds of goods. Also, our national debt would be about half its current amount. Yet, because it would cost $80-100 to fill up one's (much more efficient) car in such a world, this is considered a political impossibility.

So we blame the people we buy our goods from.

CorpRaider

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Buffett came up with a seemingly elegant solution years ago.  It basically used import credits to ensure balanced trade.  You import $1 of American goods you get a credit to export $1 of goods to America.  These can be resold so whatever is the highest value will end up buying the credits/completing the transaction.  You can Google around for it or I can dig it up if you're really interested.  I think it was printed in Forbes or Fortune.

bwall

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Really can't stand his tweeting, but hard to argue with this:

“When a car is sent to the United States from China, there is a Tariff to be paid of 2 1/2%. When a car is sent to China from the United States, there is a Tariff to be paid of 25%. Does that sound like free or fair trade? No, it sounds like STUPID TRADE - going on for years!”

It's easy to argue with that since THE USA DOES NOT IMPORT CARS FROM CHINA! ! ! !

Quality of cars built in China is so bad, they wouldn't sell in the USA, or Western Europe.

HBFIRE

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Really can't stand his tweeting, but hard to argue with this:

“When a car is sent to the United States from China, there is a Tariff to be paid of 2 1/2%. When a car is sent to China from the United States, there is a Tariff to be paid of 25%. Does that sound like free or fair trade? No, it sounds like STUPID TRADE - going on for years!”

It's easy to argue with that since THE USA DOES NOT IMPORT CARS FROM CHINA! ! ! !

Quality of cars built in China is so bad, they wouldn't sell in the USA, or Western Europe.

Check out Geely (Volvo).  Also, I believe US cars that are built in China and shipped here (Ford plans to do this, as well as GM/Buick) experience the tariff.  You're right, chinese designed vehicles are not imported here (yet).  But non-Chinese car companies are still leveraging china for manufacture and then importing here.
« Last Edit: April 09, 2018, 11:47:08 AM by dustinst22 »

bwall

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Really can't stand his tweeting, but hard to argue with this:

“When a car is sent to the United States from China, there is a Tariff to be paid of 2 1/2%. When a car is sent to China from the United States, there is a Tariff to be paid of 25%. Does that sound like free or fair trade? No, it sounds like STUPID TRADE - going on for years!”

It's easy to argue with that since THE USA DOES NOT IMPORT CARS FROM CHINA! ! ! !

Quality of cars built in China is so bad, they wouldn't sell in the USA, or Western Europe.

Check out Geely (Volvo).  Also, I believe US cars that are built in China and shipped here (Ford plans to do this, as well as GM/Buick) experience the tariff.

Geely isn't sold in the USA. Volvo's sold in the USA are built in Sweden. Ford/GM/Buick may build in China, but they don't export to the USA and they have no plans to do this. No car company in the world builds in China and exports to the USA.

HBFIRE

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Really can't stand his tweeting, but hard to argue with this:

“When a car is sent to the United States from China, there is a Tariff to be paid of 2 1/2%. When a car is sent to China from the United States, there is a Tariff to be paid of 25%. Does that sound like free or fair trade? No, it sounds like STUPID TRADE - going on for years!”

It's easy to argue with that since THE USA DOES NOT IMPORT CARS FROM CHINA! ! ! !

Quality of cars built in China is so bad, they wouldn't sell in the USA, or Western Europe.

Check out Geely (Volvo).  Also, I believe US cars that are built in China and shipped here (Ford plans to do this, as well as GM/Buick) experience the tariff.

Geely isn't sold in the USA. Volvo's sold in the USA are built in Sweden. Ford/GM/Buick may build in China, but they don't export to the USA and they have no plans to do this. No car company in the world builds in China and exports to the USA.


Not totally up to speed on this, but found this.  Is it not accurate?

"Geely Automobiles Holding Ltd.-owned Volvo Cars started importing S60 sedans from China to the US in 2015"

"General Motors Co. has followed suit with the Buick Envision SUV and Cadillac CT6 plug-in hybrid."

"Ford Motor Co. plans to begin importing Chinese-assembled versions of it Focus model to the U.S. next year. "

bwall

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Here's an easy VIN decoder you can use to see where cars are built. If, and only if the VIN begins with an "L", it was built in China.

https://en.wikibooks.org/wiki/Vehicle_Identification_Numbers_(VIN_codes)/World_Manufacturer_Identifier_(WMI)

I'd be very surprised to find a car in the USA with VIN beginning with "L".

HBFIRE

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ChpBstrd

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Our last president didn't do anything other than his disastrous Trade agreement.

Care to elaborate on this or is it just a Sean Hannity talking point? Genuinely curious. @dustinst22

Don't want to derail this thread, happy to PM about it if you'd like.  In short, NAFTA cost the US a lot of jobs, drove illegal immigration to astronomical numbers, drove our trade deficit through the roof w/Mexico and Canada, and the deal has worked poorly for Mexico as well.

NAFTA cost the US a lot of jobs because factories were built in Mexico instead of the US.

NAFTA drove illegal immigration to records because people in Mexico had to flee all those factory jobs they took from Americans. They came to the US where zero Republican-voting business owners in agriculture, construction/roofing, restauranting, or the hotel industry would ever hire them. But at least they got away from all those factory jobs that ravaged their homeland.

The trade deficit with Mexico rose because the cost of labor is cheaper there, and the trade deficit with Canada rose because the cost of labor is higher there.

NAFTA worked out poorly for Mexico as a result.

HBFIRE

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« Last Edit: April 09, 2018, 12:00:46 PM by dustinst22 »

maizeman

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Also the EFF (who I generally support) really hated the TPP for how it treated IP and copyrights etc.:
https://www.eff.org/issues/tpp

Yup. I'm all in favor to lowering barriers to trade, but the horrible crazy no good very bad intellectual property provisions are a major silver lining on the deal not going through.

toganet

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I'm having fun following this thread.  I'm generally opposed to high tariffs,  though I can understand why a developing country would use them, as Hamilton argued for when the USA was young. 

For another example of how silly, unfair, and generally not effective tariffs can be, check out the Chicken Tax.

steveo

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For those who oppose tariffs as being big and bad, whats the alternative?

I don't believe the argument that tariffs are required but the simple alternative is subsidies. If for instance a farmer can't compete and you have to give him a job pay him a subsidy. If he chooses not to remain in business and just collect the subsidy then go for it.

Economically subsidies do not negatively impact the rest of the economy via increased prices. Politically it's harder to do because it's more obvious what is actually occurring.

Gray_ghost

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I'm surprised how many experts we have on global economics here.

For 10 mustache hairs, name this person.
For 20 hairs, name his plan... the ___ Plan.
For 50 mustache hairs, post his infamous quote.

Yeah, I’m wondering if you mean “liquidate labor, liquidate stocks, liquidate farmers, liquidate real estate... it will purge the rottenness out of the system.“

WINNER!

If you believe Mellon ever said that.......

Travis

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For those who oppose tariffs as being big and bad, whats the alternative?

I don't believe the argument that tariffs are required but the simple alternative is subsidies. If for instance a farmer can't compete and you have to give him a job pay him a subsidy. If he chooses not to remain in business and just collect the subsidy then go for it.

Economically subsidies do not negatively impact the rest of the economy via increased prices. Politically it's harder to do because it's more obvious what is actually occurring.

The negative side comes that 1) the government is blatantly playing favorites with an noncompetitive business and 2) the price of the thing being subsidized becomes too expensive for the government to bear. The Middle East oil producers have struggled with this a lot the last few years as their single-commodity industry lost money and they couldn't afford to just sell oil for pennies to their own people.

aspiringnomad

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For those who oppose tariffs as being big and bad, whats the alternative?
multilateral trade agreements.

And who is willing to sign up for those?

Lets keep in mind here, if you have more than someone else, why would you give anything up to him? Countries work in self-interest. China isn't going to be a nice guy and just offer to give us a better deal. There will be a fight. There always is.

The bedrock principle of freer international trade, and the global economy writ large is that trade is not a zero sum game. Comparative advantage and all that. It doesn't mean that every individual participant within countries win out, and the terms of trade certainly matter, but it is a theoretically and empirically sound principle. Tariffs, on the other hand, create losers everywhere.

And who's willing to sign up for multilateral agreements? We've been over this! Eleven other countries were willing to sign up to the TPP, a massive multilateral trade agreement, and in fact they decided to go ahead without the US, again pending ratification. This includes countries with higher environmental and labor standards and larger social safety nets than the US, such as New Zealand. And it includes developing countries. They all understand that their pies will all get bigger, because trade is not a zero sum game.
« Last Edit: April 09, 2018, 07:25:57 PM by aspiringnomad »

maizeman

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Alternatively you could just pay the people whose jobs would be lost to foreign competition not to work.

Obama's tariffs on chinese tires cost american consumers $900,000 per job saved. (Source: https://piie.com/publications/policy-briefs/us-tire-tariffs-saving-few-jobs-high-cost)

In an old study from 1986, the vast majority the tariffs cost consumers more each year than it would have cost to just pay each person whose job was saved to not work.




nereo

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I volunteer to accept payment to not work producing any color TVs in lieu of a tariff.

v8rx7guy

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I volunteer to accept payment to not work producing any color TVs in lieu of a tariff.

Seconded.

HBFIRE

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Gotta give credit to Trump where it's due. 


"Xi said China would lower tariffs on auto imports, something President Trump recently tweeted about. He also said he would ease restrictions on foreign automakers' ownership of Chinese operations. Xi said he would open up the financial, shipping and aviation industries to more foreign competition. He also said China would beef up property rights as well as oppose monopolies."

2Birds1Stone

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Gotta give credit to Trump where it's due. 

Stop it, this is blasphemy here ;)

nereo

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Gotta give credit to Trump where it's due. 


"Xi said China would lower tariffs on auto imports, something President Trump recently tweeted about. He also said he would ease restrictions on foreign automakers' ownership of Chinese operations. Xi said he would open up the financial, shipping and aviation industries to more foreign competition. He also said China would beef up property rights as well as oppose monopolies."

How is this different from what China has been promising for decades? Xi has made such vague statements in the past only to not follow through.  Time will tell whether this is just more of the same. My personal reading here is that he's placating Trump, giving him something to boast about, with little intent to change anything. Xi is playing the long game, knowing he doesn't need to worry about elections and has cash on hand to weather a tariff storm for quite a while.

More important than Xi's rhetoric is China's actions. On that topic, today China carried through officially filing its complaint with the WTO against the US's steel & aluminum tariffs. They did this literally hours after Xi's broad comments about 'opening up trade'.

KTG

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Yeah I was just going to post this news. I know a lot of people do not like Trump but he is right for making this an issue. It also goes to show that China is doing what it can to avoid a trade war. China is also taking the US to court over the steel tariffs which is hysterical because it’s just going to show that China is dumping their steel. But these are really just delaying tactics too. 

Maizeman: have you read the TTP agreement? Few have. It’s 7,000 pages long. I would be wary of signing a massive agreement like that as well.

And the case study you posted, there is a whole lot more at stake than the items that have been hit with the tarrifs. Why not put up a list of all the barriers within China and the ridiculous laws foreign companies have to folllow in China but Chinese companies do not have to folllow in other countries. Then explain how you would change that when the Chinese had no interest in changing? Their hand needed to be forced, and you are seeing that played out right now. It’s harsh, but you have to break some eggs to make an omelet.

I know this is going to sound a little arrogant, especially to our international visitors, but the world need a strong US president internationally. When there isn’t one, the world gets pretty chaotic. Once the hammer falls peeps seem to fall in order. Obama was pretty weak internationally.

KTG

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I don’t want people to think I am a faithful Trump supporter that’s just trashing Obama. I am an independent. I think there are clowns and criminals in both parties.
« Last Edit: April 10, 2018, 05:45:31 AM by KTG »

nereo

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...
I know this is going to sound a little arrogant, especially to our international visitors, but the world need a strong US president internationally. When there isn’t one, the world gets pretty chaotic. Once the hammer falls peeps seem to fall in order. Obama was pretty weak internationally.
To be fair, I think Obama's international policies were the weakest portion of his administration, but I'm curious about this assertion that Trump is somehow better. He describes his policy as "America First" and in practice it's involved a lot of pulling back, squabbling with allies and threatening to not participate. Sure, military spending is going up - slightly - but he's pretty much giving China and Russia more power in our absence.

maizeman

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Maizeman: have you read the TTP agreement? Few have. It’s 7,000 pages long. I would be wary of signing a massive agreement like that as well.

And the case study you posted, there is a whole lot more at stake than the items that have been hit with the tarrifs. Why not put up a list of all the barriers within China and the ridiculous laws foreign companies have to folllow in China but Chinese companies do not have to folllow in other countries. Then explain how you would change that when the Chinese had no interest in changing? Their hand needed to be forced, and you are seeing that played out right now. It’s harsh, but you have to break some eggs to make an omelet.

No I haven't read the entire document. As I said, the IP portions of the TPP were terrible, and yes there was a lot of other bad stuff tucked away in the agreement. I don't know whether on balance it would have done more good than harm or more harm than good.

I am confident that the reason given for killing it ("protecting" americans from more open trade with a lot of the world), is something that definitely would have done us more good than harm in coming years. *shrug*

As for the ridiculous barriers foreign companies have to follow when doing business in China, I'm quite familiar with them. At one point when one of the companies I've involved in was going to open a business in China we were being forced into a legal structure where one of the owners was going to be personally legally liable for any misconduct on the companies part. (Alternatively if we'd created a joint venture with a chinese company none of that would have been an issue.) When we want to repatriate profits out of China, we have to put in a request to wire money that can take weeks to go through and is sometimes rejected for unspecified reasons forcing us to start over. When I or my partners are over there, half the internet is blocked behind the great firewall. When we're in the USA and trying to meet with chinese employees, platforms like skype give patchy and low resolution connections, while using chinese based video clients seem to work perfectly.

However, we wouldn't bother to put up with all this if we weren't still making money in the process. If it ever gets too bad, we'll close down the china business. But I don't think it is the American consumer's responsibility to sacrifice their economic wellbeing to make it easier for me, and people like me, to make more money in China.

KTG

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Oops looks like we spoke too soon.

U.S.-China Talks Broke Down Over Trump’s Demands on High-Tech Industries https://www.bloomberg.com/politics/articles/2018-04-10/u-s-china-talks-said-to-have-stalled-over-high-tech-industry

Looks like China was offering other parts of their economy to be open, but to keep doing their shady business practices.

It's the ol' bait 'n switch!

« Last Edit: April 10, 2018, 06:38:42 AM by KTG »

KTG

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However, we wouldn't bother to put up with all this if we weren't still making money in the process. If it ever gets too bad, we'll close down the china business. But I don't think it is the American consumer's responsibility to sacrifice their economic wellbeing to make it easier for me, and people like me, to make more money in China.

I would agree if the alternative would be to enforce the same practices on Chinese companies in the US as the US ones are treated there. But as long as things are uneven, I have a huge issue with it.

See below to see how we've been a bunch of suckers for some time now to allow this to go on.

https://www.cfr.org/blog/why-does-everyone-hate-made-china-2025

Quote
Equally problematic to Beijing’s goal of “self-sufficiency” and becoming a “manufacturing superpower” is how it plans to achieve it. Chinese officials know that China lags behind in critical hi-tech sectors and hence are pushing a strategy of promoting foreign acquisitions, forced technology transfer agreements, and, in many cases, commercial cyber espionage to gain cutting-edge technologies and know-how.

Just pisses me off no one has had the balls to confront this.

KTG

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To be fair, I think Obama's international policies were the weakest portion of his administration, but I'm curious about this assertion that Trump is somehow better. He describes his policy as "America First" and in practice it's involved a lot of pulling back, squabbling with allies and threatening to not participate. Sure, military spending is going up - slightly - but he's pretty much giving China and Russia more power in our absence.

I think Trump's style is one of shock first to get their attention, and then meet somewhere halfway. Everyone thinks he is crazy and that isnt a bad thing. The worst thing you can be is predictable, as that just allows others to plan for your response. But if you keep them off balance, you keep them on your toes, and they spend more time worrying about what you are going to do, and less time to plan for action.

And while the talking heads worry about the US's decreased influence in the world, this would have to assume that everyone suddenly forgets what Russia is like and what China is doing, and they are not. Everyone is suspicious and everyone works in their self-interest. And many of these countries, like the Philippines for example, are really just playing both sides: they want Chinese investment and tourism dollars, and protection by the US. If they go too far one way they lose the other. Its an old Cold War tactic and lots of countries played it between the US and Soviet Union. But Trump is right, there are allies of ours that are holding back on defense spending while spending lavishly on social programs (Germany). Germany can't repair their fighters as they are short on parts, so guess who has to deploy their forces to Poland or the Baltics? The US. And that costs money. Is Poland or the Baltics in our backyard, or theirs?

So many countries have been free riding, and that needs to stop.
« Last Edit: April 10, 2018, 07:30:40 AM by KTG »

Travis

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Not a single tariff has been enacted yet, this is just “art of the deal” negotiations about Obamas disastrous Trade agreement, and rectifying THEIR unfair and illegal trade activities. Long term it is sorely needed and LONG overdue.

Gotta give credit to Trump where it's due. 


"Xi said China would lower tariffs on auto imports, something President Trump recently tweeted about. He also said he would ease restrictions on foreign automakers' ownership of Chinese operations. Xi said he would open up the financial, shipping and aviation industries to more foreign competition. He also said China would beef up property rights as well as oppose monopolies."

Probably best to wait until the ink is dry before celebrating, yes?

HBFIRE

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Probably best to wait until the ink is dry before celebrating, yes?

Agree.  Still, getting China to even start talking like this imo is a good sign and shows they are at least not taking a hard stance.   We may not get what we want/demand, but getting any kind of change will be at a minimum a small victory.  This is more than our last president did wrt China trade by a massive margin.    We have someone who knows the art of negotiation.
« Last Edit: April 10, 2018, 10:08:48 AM by dustinst22 »

nereo

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Probably best to wait until the ink is dry before celebrating, yes?

Agree.  Still, getting China to even start talking like this imo is a good sign and shows they are at least not taking a hard stance.  This is more than our last president did wrt China trade by a massive margin.    We have someone who knows the art of negotiation.
China talks like this all the time.  Under Obama, under W, under Clinton... we can go back to Nixon if you want. I don't see a different response here than what we've gotten from China before.
Meanwhile they are going ahead with the WTO.

As for the negotiation - it's unclear what the US is actually asking for - the WH has said it will outline a list of demands but it hasn't yet done so. He mentioned intellectual property but then focuses mostly on the trade deficit. Some argue that this 'chaos' is actually a strategy, others would say its just chaos derived from a lack of focus and constantly changing economic advisors.

maizeman

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In my experience, the culture in China really frowns on saying no directly. So the version of no you get is "let's talk more about it" and you can keep talking for weeks or months but be no closer to a yes.

HBFIRE

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In my experience, the culture in China really frowns on saying no directly. So the version of no you get is "let's talk more about it" and you can keep talking for weeks or months but be no closer to a yes.

Well their first response was a hard line "okay we'll add tariffs to 100 B of US goods".  To see them completely remove that off the table and start talking negotiation is revealing.  China has more to lose and they know it.  They've had it good for a LONG time and don't want to lose what they have (basically stealing our IP and previous presidents allowing it).

maizeman

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Their first response was $50B in tariffs on US goods. The $100B in tariffs was what our president counted with on Chinese goods.

At this point I think the best thing is to wait and see what happens. After that either you or I can resurrect this thread to tell the other "I told you so."

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Kind of a side note, but I wonder why US oil subsidies aren't mentioned as a job killer.

The US spends trillions each decade attempting to secure the Persian Gulf for oil shipments, our taxes on motor fuel have been frozen for many years and have fallen in net inflationary terms, we give away offshore mineral rights (and increasingly onshore on state/federal lands), the government seizes the property of people on pipeline routes, and taxpayers eat the cost of road repairs and expansion from their income taxes rather than from a consumption tax on fuel. The net result is an oil price much cheaper than what the market price would be in a world where these policies were not in place.

As a result of subsidized petroleum, it became economical to burn tens of thousands of gallons of the stuff to send huge freighters across the ocean to exploit the wage differences between countries. Manufacturers in the US went out of business because their own government was spending their own tax dollars to suppress the price of the oil so overseas competitors could economically ship competing products from around the globe at an enormous environmental cost.

Had we let the Middle East alone and taxed oil as a proxy for the cost of building and maintaining all our roads, it would be prohibitively expensive to ship many bulky or low-value-density products all they way from China and a lot more US factories would still be producing those kinds of goods. Also, our national debt would be about half its current amount. Yet, because it would cost $80-100 to fill up one's (much more efficient) car in such a world, this is considered a political impossibility.

So we blame the people we buy our goods from.
That was an interesting side note to read.  It does make you wonder about a lot of big ag, big pharma, big oil, etc. type of policies.  Many externalities in all directions.

With the price of oil/gas in the U.S., I wonder if the amount of subsidization was lower, like if there was $5 gas instead of whatever European prices are.  I bet U.S. domestic infrastructure and society in general would be a lot more mustachian.

Also unless I missed it, 3 pages on a tariff thread and no direct mention of deadweight loss yet?! :-)

ChpBstrd

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/\ That's because people don't think of tariffs as a sales tax. Change the phrasing and a lot more people would be against it. Yet it is the exact same thing from a consumer's point of view.

The main difference is the subsidy of less efficient producers.

Stachless

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Thinking of a tariff as a sales tax implies that the tariffs would be applied to all items evenly...which would defeat the point of the tariff.

maizeman

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Thinking of a tariff as a sales tax implies that the tariffs would be applied to all items evenly...which would defeat the point of the tariff.

A tariff on all imports uniformly is essentially a border adjustment tax: https://en.wikipedia.org/wiki/Border-adjustment_tax

Which is how Trump/Paul Ryan were originally said they were going to fund the tax cuts, instead of just more deficit spending like what was finally implemented.