Tag: Free Trade

War, Trade Or Otherwise

WE know that Donny is a one trick pony when it comes to global trade, tariffs and more tariffs….we are all well aware of the tariffs on Mexico and Canada which can be disastrous especially on food prices….but what about those tariffs against our ‘big’ enemy, China?

Donny the Man has doubled his tariffs on products from China (forget Temu)….and now China is firing back….

Some tough talk from China in response to President Trump’s tariffs: “If war is what the US wants, be it a tariff war, a trade war, or any other type of war, we’re ready to fight till the end,” foreign ministry spokesman Lin Jian said Tuesday night after Trump doubled the 10% tariff he imposed last month on most Chinese imports. The remark—which was shared in a post on X by China’s embassy in Washington, DC—came as leaders gathered in Beijing for the annual National People’s Congress, the BBC reports. “Intimidation does not scare us,” Lin said. “Bullying does not work on us. Pressuring, coercion or threats are not the right way of dealing with China.” More:

  • Fentanyl: Lin rejected White House claims that China is responsible for fentanyl flooding into the US. “The US, not anyone else, is responsible for the fentanyl crisis inside the US,” he said. “In the spirit of humanity and goodwill towards the American people, we have taken robust steps to assist the US in dealing with the issue.” But instead of recognizing China’s efforts, he said, the US “has sought to vilify and shift the blame to China, and is seeking to pressure and blackmail China with tariff hikes.”
  • Retaliatory tariffs: China announced new tariffs of up to 15% on a range of American food and farm imports Tuesday. The retaliatory tariffs are “very specific and directly targeted at American farmers, who are mostly in red states and mostly voted for Trump,” Neil Thomas at the Asia Society Policy Institute’s Center for China Analysis tells ABC News. “So China is trying to create pain where it matters for Trump, and it’s hoping to get Trump to the negotiating table.”
  • Growth target unchanged: On Wednesday, leaders at the National People’s Congress announced a growth target of around 5%, the same as the previous two years, despite a slowing economy and the looming trade war, AP reports. Officials said military spending would rise 7.2%. The legislature’s meeting will run for several days. The BBC describes it as a “rubber-stamp parliament, which passes decisions already made behind closed doors.”

Slowly those morons in DC are destroying what is left of the world trade network….tit for tat tariffs will provide the engine for a global recession or worse, a depression.

We can only hope that idiots come to their senses and find a way to work together and keep a vivant world trade intact.

But will they?

Side note–I see that Donny has paused auto tariffs on Mexico and Canada for 30 days….maybe someone should make up his mind for him.

I Read, I Write, You Know

“lego ergo scribo”

That “Free Market” Illusion

We hear a lot about “free markets” and “free trade” these days…well for many decades…..it has been the clarion call of conservs….

Let’s look at the term “free markets”…..

A free market economy is a type of economy that promotes the production and sale of goods and services, with little to no control or involvement from any central government agency. The economic system is primarily based on supply and demand. Order and power in a free market are decentralized, with individuals making all of their own voluntary economic choices.

In a free-market economy, firms and households act in their own self-interest to determine how resources get allocated, what goods get produced, and who buys the goods. A free market economy functions in the opposite manner as a command economy works, where the central government gets to keep the profits and choose how to use them.

Read More….https://www.intelligenteconomist.com/free-market/

That is what a free market world would look like if it were truly a free system…..it is not.

Let’s be honest……A pure market economy has no barriers to economic exchange: you can sell anything to anyone else for any price. In reality, this form of economics is rare. Sales taxes, tariffs on imports and exports, and legal prohibitions—such as the age restriction on liquor consumption—are all impediments to a truly free market exchange.

So free market is total BS.

Now comes the term “free trade”…..Free trade is a largely theoretical policy under which governments impose absolutely no tariffs, taxes, or duties on imports, or quotas on exports. In this sense, free trade is the opposite of protectionism, a defensive trade policy intended to eliminate the possibility of foreign competition.  

Free Trade has an ugly side…..

  • It causes job loss through outsourcing: Tariffs tend to prevent job outsourcing by keeping product pricing at competitive levels. Free of tariffs, products imported from foreign countries with lower wages cost less. While this may be seemingly good for consumers, it makes it hard for local companies to compete, forcing them to reduce their workforce. Indeed, one of the main objections to NAFTA was that it outsourced American jobs to Mexico.
  • It encourages theft of intellectual property: Many foreign governments, especially those in developing countries, often fail to take intellectual property rights seriously. Without the protection of patent laws, companies often have their innovations and new technologies stolen, forcing them to compete with lower-priced domestically-made fake products.
  • It allows for poor working conditions: Similarly, governments in developing countries rarely have laws to regulate and ensure safe and fair working conditions. Because free trade is partially dependent on a lack of government restrictions, women and children are often forced to work in factories doing heavy labor under slave-like working conditions.
  • It can harm the environment: Emerging countries have few, if any environmental protection laws. Since many free trade opportunities involve the exporting of natural resources like lumber or iron ore, clear-cutting of forests and un-reclaimed strip mining often decimate local environments.
  • It reduces revenues: Due to the high level of competition spurred by unrestricted free trade, the businesses involved ultimately suffer reduced revenues. Smaller businesses in smaller countries are the most vulnerable to this effect.

(thoughtco.com)

There you have it “Free Markets” is an illusion….”Free Trade” is an illusion……all made up benefits to make it more appealing to the workers which are continuously scorched by the lies of the oligarchs.

We have come to a point in our nation’s public discourse where there is a widespread realization that many of the economic policies pursued and promoted by our political, business and media elites have failed us in multiple ways. We have heard our trade policies called “Free Trade” and “Free Market”, but those statements were often dishonest.

When crafting these agreements, our elites have been responding to incentives which are beneficial to their institutions but detrimental to the well-being of American citizens.

Traditional conservatives have been observing and asking about these policy failures for some time and have been met with name-calling and general denigration. During this current pandemic crisis, the magnitude of the failure of these misguided agreements and policies has become unavoidably obvious.

The Illusion of ‘Free Markets’ and ‘Free Trade’

Be Smart!

Learn Stuff!

And Join a Union and fight for your rights and your life….being a passive spectator will NEVER give you the end that you seek.

I Read, I Write, You Know

“lego ergo scribo”

The Free Trade Con

As Americans we pretend that we are down with the concept of Free Trade…..but in reality there are very few voters who know what the term means and we voted a dim wit into the presidency with the promise of more “Free Trade”…….

First let us define “Free Trade”…… Free trade is a policy to eliminate discrimination against imports and exports. Buyers and sellers from different economies may voluntarily trade without a government applying tariffs, quotas, subsidies or prohibitions on goods and services. Free trade is the opposite of trade protectionism or economic isolationism. (Trump shot that concept in the ass!)

Politically, a free-trade policy may be the absence of any trade policies, so a government doesn’t need to take specific action to promote free trade. This hands-off stance is referred to as “laissez-faire trade” or trade liberalization. Governments with free-trade agreements do not necessarily abandon all control of import and export taxation. In modern international trade, few free trade agreements (FTAs) result in completely free trade.

If you have a hard ti me with this concept we can get more simple……

https://youtu.be/sLoL99lIJzU

From the start of these “Trade Agreements” like Clinton’s NAFTA and then it went on from there….I had to write about them as well….

https://lobotero.com/2016/12/09/what-about-nafta/

https://lobotero.com/2018/10/03/nafta-vs-usmca/

The promise of a better trade economy from the dolt in the White House has done little to expand the concept of “Free Trade”…..and the GOP can NO longer claim to be the party for Free Trade as long as they enable the policies of this president…..

The whole idea of a “new” NAFTA is a con and the American people need to be aware of this con…..

Approval of the North American Free Trade Agreement (NAFTA 2.0 also known USMCA) will do little to reverse the problems of the NAFTA trade agreement of 1994. Nothing in the proposed replacement agreement will prevent job outsourcing, nor is there any part of the agreement that would reverse our current agricultural trade deficit. So what’s the deal with the “Motorcade for Trade” tour?

The 2018 Census of Agriculture documents the occurrence of a clear shift in farm size. Small and medium sized farms are exiting production while the number and overall size of larger farms continues to increase. We are told growth is inevitable in any business if they wish to succeed, because growth goes hand in hand with efficiency and profit.

Farmers are told they must become more efficient and adopt economies of scale and that rationale is often accepted since farm prices are seemingly always on the decline and less income per unit of production means more units of production are required if one wants to survive. This same logic is applied to most jobs: factory workers must produce more, teachers must teach larger classes, etc.—all for the same low wage.

https://www.commondreams.org/views/2019/04/17/dont-fall-hype-free-trade-agreements

Voters need to know that a con job is a con job and this BS is at beast “snake oil” for the mindless.

Trade Wars Cometh

Just last month Pres. Trump let it be known that he would enforce tariffs on steel and aluminum……the first shots were fired in the new trade wars…..these will effect Americans in several ways….cost of cars and even their addictive sodas…..but what will Asia do in response?

The Bangkok Post had an op-ed on this situation……

Over the past five decades or so, Asia’s economies have relied largely on an export-oriented development model to support rapid economic transformation and growth. But with US President Donald Trump fulfilling…

In the past year, Mr Trump has withdrawn the US from the Trans-Pacific Partnership (TPP), renegotiated its free-trade agreement with South Korea, and raised “safeguard” tariffs on imported washing machines…

https://www.bangkokpost.com/opinion/opinion/1439051/how-asia-can-tackle-us-trade-wars

China has made it official that it will respond…it has notified the WTO of its intentions…..

The notification came in a WTO document that was dated last Thursday but posted only after the Easter public holidays.

It came after China said late on Sunday that it has increased tariffs by up to 25 per cent on 128 US products, escalating a dispute between the world’s biggest economies.

China has now fulfilled its legal duty to notify the WTO and other member states of its retaliatory measures.

http://www.scmp.com/news/china/diplomacy-defence/article/2140113/china-will-give-good-it-gets-trade-war-united-states

The great Trade Wars of the 21st Century have begun….

This is the warning shot of the end of the “Pax Americana” (a bit melodramatic)…..do not know what that means then stay tuned for I will cover the “Pax” in an upcoming post.

Free Trade Or Fair Trade

Just the other day Pres. Trump signed his EO on tariffs on steel and aluminum imports  in doing so he has started a debate on free trade….many do not see his tariffs as good for the notion of free trade and still others think that free trade is a cornerstone of conservatism…..but is it, that cornerstone?

The American Conservative spotlights this in a recent article….

According to a recent analysis in the New York Times, President Trump’s “isolationist” trade policy is “at odds with longstanding conservative orthodoxy about the benefits of free and open markets.” The reader is further told that the president is under pressure from his working-class base, which is obstreperously demanding that protectionist taxes be placed on imported steel and aluminum.

I say not so fast.

The Times presents the GOP base’s supposed impatience with free trade as a departure from almost sacred Republican beliefs, and free trade itself as a permanent conservative characteristic. Their evidence is that large corporations favor free trade while labor unions have generally been more protectionist.

http://www.theamericanconservative.com/articles/free-trade-shouldnt-be-a-litmus-test-for-conservatism/

TAC also takes a look, a historic look, at tariffs…..

America’s first great protectionist political figure was Alexander Hamilton, George Washington’s treasury secretary. And compared to later mercantilist politicians in our history, Hamilton wasn’t even that much of a protectionist. His original U.S. tariff bill imposed an average taxation level of just 8.5 percent on imported goods. And Hamilton argued that any protection encompassed in those duties, as opposed to revenue requirements, should be discontinued as soon as protected industries established themselves in the American economy.

Hamilton’s opponents, the early American free traders, feared he had created a monster, while northeastern industrialists, particularly in Pennsylvania, predictably argued that protection should be substantial and permanent to ensure national prosperity.

http://www.theamericanconservative.com/articles/americas-tumultuous-history-with-tariffs/

It is too early to tell if the Trump tariffs will be good for the country or not…..steelworkers union seems to think it will be but many economists see it doing the opposite for the country.

Trump has already exempted some countries from his tariffs….that right there tells me that he is not serious.  If you are going to impose tariffs then it should be on all involved not a select few.

Time will tell whether good or bad.

Here A Tariff, There A Tariff

The word of the week….both this week and last is….TARIFF.

And as I always do I will look into the history of this country to explain the term of the week…….

The year was 1930 and the Congress enacted the Smoot-Hawley Act.

Okay what the Hell was the Smoot-Hawley Act?

The Smoot-Hawley Act is the Tariff Act of 1930. It increased 900 import tariffs by an average of 40 to 48 percent. Most economists blame it for worsening the Great Depression. That means it also contributed to the start of World War II.

In June 1930, Smoot-Hawley raised already-high U.S. tariffs on foreign agricultural imports. The purpose was to support U.S. farmers who had been ravaged by the Dust Bowl.

Rather than helping, it raised food prices for Americans who were already suffering from the Depression. It also compelled other countries to retaliate with their own tariffs. That forced global trade down by 65 percent.

Smoot-Hawley showed how dangerous trade protectionism is for the global economy. Since then, world leaders advocate free trade agreements that promote increased trade for all participants.

Our president has decided that he likes the idea of imposing tariffs on steel ans aluminum….and no matter which party one aspires to there is few that see any good coming from tariffs (my favorite part of this is to listen to a lying bitch thumping the cheap drum to the positive works that these things will do).

“Trade wars are good,” tweeted U.S. President Donald Trump, “and easy to win.”

And just like that, we’re back in the thick of it: Trump, looking to Make America Great Again, has threatened to use section 232 of the Trade Expansion Act of 1962 to impose tariffs of 25 per cent on steel imports and 10 per cent on aluminum, suggesting it’s a matter of U.S. national security. That would have a heavy impact on Canada, as it is the number-one supplier of both steel and aluminum to the United States. Of course, those proposed levies may just be more bluster for the ongoing NAFTA negotiations; indeed, Trump has said that a “new and fair” NAFTA deal would prompt the U.S. to consider an exemption.

But several things indicate things could be serious, including the Dow’s initial slump in reaction and many Republicans’ frenzied opposition to the decision. More worrying, even, is the fact that it’s entirely consistent with the rhetoric Trump campaigned on—namely, getting blue-collar workers in distressed industries back on the job with protectionist measures.

http://www.macleans.ca/opinion/what-we-can-learn-from-a-disastrous-1930-u-s-tariff-on-canadian-goods/

Some think that it will cost jobs……With economists warning of a potential 146,000 American jobs lost due to the proposed tariffs, Business Insider reveals the US states that could be hit hardest, including Louisiana, Connecticut, and Missouri.

There are some that think that this is just a tactic the president is using to keep the Rust Belt in his sphere of influence and that he will roll everything he has said back……an election ploy for the mid-terms.

We can hope that is his play but some of us do not think he is that clever.

I will do something that my Right wing brethren seldom do…..To be fair…..there is some positive news about the tariff thing…..

US Steel Corp says it will soon restart a blast furnace in Illinois that has been cold for over two years thanks to the 25% tariff on imported steel announced by President Trump last week, Politico reports. US Steel President David Burritt blames “unending waves of unfairly traded steel products” arriving in the US for the poor fortunes of steel workers in Granite City. He believes the planned tariff will turn that around. Restarting the blast furnace at Granite City Works will take up to four months. And while some believe Trump’s tariffs on steel and aluminum will be political winners, many experts are predicting harm to the US economy.

Finally…… Noah Smith at Bloomberg writes the tariffs could be a “self-inflicted wound” for Trump. He says tariffs typically don’t end up improving American industries. Rather they prevent industries from figuring out how to keep pace with global competitors, may lead to their products being seen as shoddy, and might hurt US manufacturers.

Has the GOP become an anti free trade party?

What say you?

Geopolitics Of Trade In Asia

Fearless Leader has taken to Tweeter and in so many characters has crapped on everything he was suppose to have covered with our allies at the meeting in Vietnam……..there is a new geopolitical spin to the trade in the coming years….

The APEC Leaders’ summit meeting, which took place last week in Danang, Vietnam, crystallized the new geopolitics of trade in Asia. The leaders of the three largest economies in the world—the United States, China, and Japan—each redefined the roles their nation will play in sustaining, torpedoing, or adjusting the postwar trading order. Little is assured on how free trade and multilateral undertakings will fare as the three giants reposition themselves in their leadership bid. The only certainty ahead for us is that it will be a bumpy ride.

https://www.brookings.edu/blog/order-from-chaos/2017/11/15/the-new-geopolitics-of-trade-in-asia/

For instance Japan’s Abe would like to re-start the “Quad” from years past…..

The “Quad”?

In June this year, Japanese Prime Minister Shinzo Abe will have been in office for one-and-a-half years — a rare achievement for a Japanese prime minister in recent memory. Most of his time in office has been devoted to getting Japan’s economic house in order via “Abenomics,” and reinvigorating Japan’s domestic debate about defense issues, including collective self-defense, military spending, and national security strategy. Abe has given considerably less attention to taking the lead on bold international initiatives as he had done as a younger prime minister.

During his first term as prime minister, in 2006-2007, Abe initiated a Quadrilateral Security Dialogue (QSD) between Asia’s maritime democracies: Australia, India, Japan, and the United States. While the QSD drew these powers to the table early on, all concerned by the normative uncertainties posed to the regional order by China’s rise, it later fell apart. In particular, Australian Prime Minister Kevin Rudd pulled Australia out of the QSD because its participation in that dialogue imperiled the trajectory of its relations with China. China, for its part, wasted no time in protesting what it saw as an overt attempt at encirclement.

https://thediplomat.com/2014/05/shinzo-abes-quadrilateral-initiative-gone-and-forgotten/

The “Quad” idea died and now it will see a rebirth……

Ten years ago, an American, an Australian, an Indian, and a Japanese walked into a room in Manila. This was no joke. They were representing their governments at a quadrilateral meeting also known as “the Quad.” The initiative, meant to facilitate conversation and cooperation between the four maritime democracies in the context of the rise of China and India, lasted from mid-2006 to early 2008. Since it fell apart, analysts have perhaps spent more time discussing it than the officials did in implementing it.

Now, the Quad has been revived. A decade after that first exploratory meeting on the sidelines of the ASEAN Regional Forum summit in the Philippines in May 2007, officials from the four countries met there once again ahead of the East Asia Summit earlier this month. This revival will only be sustainable if it is not just a signal, but has substance. That will entail exchanging views on the strategic and economic landscape in the region, and practical cooperation. Moreover, the reunion will only last if the countries learn some lessons from its past failure. These include establishing suitable membership, tempo and agenda, explaining to internal and external audiences what the quadrilateral is and is not, and preparing for pushback from China.

https://warontherocks.com/2017/11/rise-fall-rebirth-quad/

This is an ambush for China and its rising influence in the world….but will it be successful?  Will Trump sign on or will he push his damn silly “America First” agenda that will leave this country in the mud of its own protectionist storm?

Keep in mind that protectionism is NOT patriotism……

President Trump has long wrapped his protectionist rhetoric in our flag, as necessary for America to “win” again. However, the idea that “good” American producers should be preferred over “bad” foreign producers for the good of our country gets backward who American consumers’ friends and enemies are when it comes to international trade.

That is a very important issue, as individuals share most in common as consumers. As Leonard Read, founder of the Foundation for Economic Education, wrote, “Consumer interest is the premise from which all economic reasoning should proceed.” That implies that since “my interest is progressively served by an increase of goods and services obtainable in willing exchange for my offerings … as a consumer, I choose freedom.”

https://capx.co/protectionism-isnt-patriotism/

Speaking of “Free Trade”.

We hear the term “free trade” almost daily….especially when someone is spouting off about trade and jobs it will create for us here in American…..but what about “free trade”?

Detroit carmakers get a lot of stick for their poor showing in Japan. Their Japanese sales have rarely exceeded token numbers and supposedly this is their own fault. They have apparently been so heedless of consumer needs that they haven’t even bothered to build cars with the steering wheel in the correct position for Japan’s drive-on-the-left roads. This “steering wheel” story has long enjoyed considerable credence among leading American opinion makers. Yet it is nonsense and does not stand up to even cursory examination.

The truth is that Detroit’s Big Three have always made plenty of cars configured for Japan. Indeed, as some of the first American corporations to go global, they have long catered to local needs around the world. But they have never been allowed to compete in Japan. In the words of Donald Trump, Japan does “things to us that make it impossible to sell cars in Japan, and yet, they sell cars [in the U.S.] and they come in by the hundreds of thousands on the biggest ships I’ve ever seen.”

http://www.theamericanconservative.com/articles/there-is-no-such-thing-as-free-trade/

Trade is the life line of a country’s economy….keep that in mind when you listen to the crap that Fearless Leader spouts in his speeches….we are screwed!

Why Americans Feel So Good

Trump came to office on the promise of the American economy will boom…he will ax crappy trade agreements….he will make the free market blossom for ALL Americans.

The stock markets are going well and Trump points to that as proof positive that he is doing what he promised.

It is true that markets are doing well……sadly the same cannot be said for the economy of this country….at best it is mediocre.

Then why are Americans pleased and satisfied with this situation?

A strange thing seems to be happening to the US economy. On surveys, businesspeople and consumers say the future looks bright. But recent economic activity hasn’t appeared very robust.

Andrew Ross Sorkin of the New York Times noted this in a recent article about mergers and acquisitions. A number of surveys have been reporting that chief executive officers are highly optimistic. For example, the website Chief Executive and the Wall Street Journal/Vistage Small Business CEO Survey both report a surge in CEO confidence since the 2016 election, while Business Roundtable’s CEO Economic Outlook Survey finds an average level of confidence.

But as Sorkin reports, M&A activity is at its lowest level since 2013, and has fallen 40 percent in the past two years. Share buybacks have also slowed. Those “hard” numbers indicate that whatever CEOs are saying on paper, they aren’t taking actions that signal confidence in the future of their businesses. Capacity usage, which fell slightly in May, is another indicator of that true business sentiment is far from giddy.

Source: Why Americans Feel So Good about a Mediocre Economy – ASHARQ AL-AWSAT English

It is typical….Americans have always been satisfied with mediocrity.

Towards a New Trade Policy

I have been looking at our trade policies recently……most are horrible for the worker and there is a consensus that we need to find a new and improved trade policy….

I have found a pretty good piece that covers this situation…..

International trade deals have lost their consensus support as more workers view them as anathema to good-paying jobs, requiring the U.S. politicians to rethink these strategies

On Jan. 23, President Donald Trump signed an order directing the U.S. Trade Representative to withdraw the country from the Trans-Pacific Partnership (TPP), the trade deal that the previous administration had spent years negotiating with eleven other nations around the Pacific Rim. This executive action represents a first step towards a controversial new direction in trade policy.

The TPP was already on life support, as the 2016 election campaign made it toxic with the majority of American voters. Bernie Sanders, Ted Cruz and Donald Trump all focused great energy on the trade pact as an example of the failed economic policies of recent decades. Even Hillary Clinton, despite her previous public support for the TPP and other trade agreements, was forced to come out against it, to fight off criticism from Sanders in the primaries, and Trump in the general election.

Source: Towards a New Trade Policy – Consortiumnews

I understand the need for economic growth….but I do not think it should come at the expense of the workers and the Middle Class.

Trump’s Trade Reforms

The election of 2016 trade and jobs were a focal point of many voters….and the rhetoric was aimed at those concerns so much so that a win was registered in trump’s column.

He promised to re-negotiate some trade agreements and eliminate others and this would help create jobs that most Americans desperately need and want….

All great campaign words but how will they play out in reality?

Trump’s proposals for high tariffs might sound good. But combined with policies that weaken unions, they’re not good for wages.

President Donald Trump claims he will use international trade policy to bolster the middle class and reduce income inequality.

“The great American middle class is disappearing,” he wrote for USA Today during his campaign. “One of the factors driving this economic devastation is America’s disastrous trade policies.”

That rhetoric resonated with many of the disaffected and downwardly mobile workers who had voted for Democrats in past elections. It seemed to echo labor’s longstanding criticisms of so-called free-trade deals.

Source: Trump’s Trade Reforms Will Not Increase US Wages

Yes, it is early in his reign and there is still time of sanity….the biggest question is…..will the middle class survive?  Or will those jobs actually materialize?