Tag: Tariffs

Closing Thought–25Sep18

Our Dear Leader has been waging his trade war for a little over 2 months…..some are happy with the events……while others are finding it difficult to earn a living with the tariffs and stuff…..

Farmers are needing help…..and another industry is finding these tariffs a bit hard to swallow……

The American lobster industry is starting to feel the pinch of China’s tariff on US seafood as exporters and dealers cope with sagging prices, new financial pressures, and difficulty sending lobsters overseas, the AP reports. China is a major buyer of lobsters, and it imposed a heavy tariff on exports from the US in early July amid trade hostilities between the two superpowers. Exporters in the US say their business in China has dried up since then. Wholesale prices for live lobsters have also dipped a bit as dealers have lost markets. Prices in July and August were both slightly less than the same month in the previous year, business publisher Urner Barry reported.

One exporter, The Lobster Co. of Arundel, Maine, resorted to laying off four people, which constituted 25% of its wholesale staff, says Stephanie Nadeau, the company’s owner. “I can cut my variable costs and tuck my head in and see if this storm passes,” she says. “What they’ve done is made it so everybody is fighting over the remaining customers. Price goes down, margins go down.” China applied the tariffs to a suite of American seafood products, including tuna and crab. It made the move at a time when many Chinese are acquiring a taste for American lobster. China’s American lobster imports grew from $108.3 million in 2016 to $142.4 million last year, and the country barely imported any American lobster a decade ago.

Lagging prices may help the consumer but does little for the struggling fisherman……

Keep that in mind when you make that trip to your local Red Lobster”….who I am kidding….Americans have NO social conscience any more…it is all me,me, me!

 

Closing Thought–21Sep18

An American institution is heading for a fall.  American agriculture is heading for a fall.

It is time for the harvest!

I have been watching this sector of our economy closely….one because the new tariffs could have a lasting effect on the farming in this country…..I have written a couple posts recently….

https://lobotero.com/2017/12/18/closing-thought-18dec17/

https://lobotero.com/2018/07/25/the-coming-farm-aid/

The Wall Street Journal is also watching this sector and their insights are not very good for the coming year…..

The Farm Belt is hurtling toward a milestone: Soon there will be fewer than two million farms in America for the first time since pioneers moved westward after the Louisiana Purchase.

Across the heartland, a multiyear slump in prices for corn, wheat and other farm commodities brought on by a glut of grain world-wide is pushing many farmers further into debt. Some are shutting down, raising concerns that the next few years could bring the biggest wave of farm closures since the 1980s.

The U.S. share of the global grain market is less than half what it was in the 1970s. American farmers’ incomes will drop 9% in 2017, the Agriculture Department estimates, extending the steepest slide since the Great Depression into a fourth year.

https://www.wsj.com/articles/the-next-american-farm-bust-is-upon-us-1486572488

How sad that a true American institution is slowly withering away….the government will step in but it may be too late for it to save this way of life.

STOP Whining!

Our Dear Leader has finally imposed the tariffs that he basically promised while a candidate…..the agriculture sector in the US is starting to hurt those people that voted for Trump……and soon it will extend into the auto industry……

The lobster fishermen in New England are whining….potato farmers in Idaho are whining……cranberry framers are whining……soybean farmers in Nebraska are whining….are you getting the picture?

Time for these whiners to face reality…..they voted for the person that is slowly strangling them……they voted for the person that said what he had in mind as a new trade policy.

So these people need to STOP whining!

Take responsibility for the the shitty vote they gave the person that is killing their future….the control of that future.

Ignorance has consequences.

And the whining continues……this time it is over the turn that the Kavanaugh nomination has taken…..it seems that he has been accused (notice I used “accused”) of a drunken grope and possible rape attempt…..and the GOP has been whining about the timing of the information release……and then of course the Fat Man in the Oval Office had to inject his feelings into the debate….

President Trump weighed in Monday on the allegation against his Supreme Court nominee, Politico reports. “We want to go through a full process” to air Christine Blasey Ford’s allegation that, when they were high school students, Brett Kavanaugh sexually assaulted her, Trump said. If that “takes a little delay, it’ll take a little delay. It shouldn’t certainly be very much,” he said, per Breitbart News. But the president, speaking during an event at the White House in what Fox News notes are his first public comments on the matter, added that he was certain everything would “work out very well” as Kavanaugh is “as high a quality individual as you’ll ever see.” He said Kavanaugh has “never had even a little blemish on his record. The FBI has, I think, gone through a process six times with him over the years where he went to higher and higher positions. He is somebody very special.”

Trump also said Blasey Ford’s accusation “should have been brought up long before.” “I wish the Democrats could have done this a lot sooner,” he said. “Because they had this information for many months, and they shouldn’t have waited until literally the last days. They should have done it a lot sooner. But with all of that being said, we want to go through the process. I’d like to see a complete process. I’d like everybody to be very happy. Most importantly, I want the American people to be happy. Because they’re getting somebody that is great. … We want to make sure everything is perfect, everything is just right.” Asked if Kavanaugh had offered to withdraw from consideration, Trump responded, per Daily Caller video, “Next question. What a ridiculous question.” He noted he has not spoken to Kavanaugh about the matter.

They are whining like the cowards they are……think back to when another guy was nominated for SCOTUS and the games played …..now does anyone think that there would not be a tit for tat?

Keep whining fools!  If the House goes Democratic then the paybacks have just begun……

Personally, I do not think these “paybacks” accomplish anything ……but I do understand why the Dems will be doing it…..and anyone with half a brain will understand it also.

Whining accomplishes nothing…..to avoid having to use the “whining gambit” then do the work of the nation and leave political games behind.

The voters are the worse whiners….I guess it is easier than learning the issues and voting for the benefit of the nation….not some party.

Economic News Round-up

Economics is one of those subjects that when it is mentioned most people glaze over….they could care less about the term as long as they are making money they are happy…..that is until someone mentions socialism then they have an opinion…..usually it is not well informed but it is an opinion.

I try to help my readers understand a wide array of subjects and I try to keep them as simple as possible so they can be understood.

In his attempt to “Make America Great Again” our Dear Leader has started with imposing tariffs on our biggest competitors…..and these tariffs are starting to effect our farmers…..

New trade data provides tangible evidence that some elements of President Trump’s trade wars are backfiring.

Prices for agricultural exports fell 5.3% in July, the biggest drop since 2011. The price of soybeans fell 14.1%, accounting for most of the overall drop. There were also small declines in the price of corn, wheat, fruit and nut exports. Overall export prices fell 0.5%, the biggest drop in more than a year, with agriculture causing most of the decline.

Beginning July 6, China imposed 25% tariffs on a variety of American agricultural products, including soybeans, corn, poultry and pork. Tariffs are a tax that instantly raise the cost of the targeted product, so $100 of soybeans would cost $125 with China’s 25% tariff. The tariffs have led some purchasers in China to cancel orders for U.S. agricultural products and seek cheaper commodities from other nations not subject to the new tariffs. Diminished demand pushes down prices and lowers farmers’ incomes.

https://finance.yahoo.com/news/trumps-trade-war-starting-hurt-us-farmers-184608387.html

How long will his tariffs plug away at our farmers?

Almost daily reports are to the people that the markets are setting new highs and corporate earnings are up and unemployment is hitting new lows and…….

But does that mean everything is alright?

The Lamestream Fake News Lyin’ Media is often accused of never reporting the good news when it comes to Donald Trump, American president. So here are some fair tidings: the stock market is mostly up! So are corporate earnings! GDP growth is strong! Unemployment is near historic lows! That includes black unemployment, although the president mostly uses the stat as a cudgel against accurate assessments of his rhetoric on race!

Now, it’s important to keep in mind that these findings are actually continuations of longstanding trends that began a few years into the Obama administration. Take the S&P 500:

https://www.esquire.com/news-politics/a22716745/donald-trump-economy-real-wages-stock-market-unemployment/

Wages is the big problem……while CEOs are raking in historically high bonuses and incomes the normal worker is not making the same ….their wages are stagnant and have been for decades…..

Some say the US is overdue for another “market correction”……

Economists debate, inconclusively, this question: Do economic expansions die of old age (the current one began in June 2009) or are they slain by big events or bad policies? What is known is that all expansions end. God, a wit has warned, is going to come down and pull civilization over for speeding. When He, or something, decides that today’s expansion, currently in its 111th month (approaching twice the 58-month average length of post-1945 expansions), has gone on long enough, the contraction probably will begin with the annual budget deficit exceeding $1 trillion.

The president’s Office of Management and Budget – not that there really is a meaningful budget getting actual management – projects that the deficit for fiscal year 2019, which begins in six weeks, will be $1.085 trillion. This is while the economy is, according to the economic historian in the Oval Office, “as good as it’s ever been, ever.”

https://www.zerohedge.com/news/2018-08-21/america-overdue-another-economic-disaster

Capitalism is always just one “correction” away from disaster…….

The Consequences Of Tariffs

I know that we get nothing but rosy news coming out of Dear Leader’s mouth….we hear how much better our economy will be when he wins his trade war with the world….we will have a strong economy, more jobs, better wages, yada yada…..

But you know that there are consequences for these tariffs that have been instituted…..think not?

As the China-US tariff volley continues—China on Wednesday announced a 25% tariff on an additional $16 billion worth of US goods in retaliation for our similar move, reports CNBC—the consequences have become real for one South Carolina company. The State reports TV-maker Element Electronics is citing the tariffs as the reason it is essentially closing its doors: It intends to shut down its Winnsboro plant and lay off 126 of its 134 employees, it said in a letter to the state’s Department of Employment and Workforce—though it does have a glimmer of hope.

The letter explains the tariffs hit television components from China that it relies on, and the layoffs will commence in October unless it can get its parts off the tariff list. CNN Money cites a tweet from the company that suggests optimism: It writes that as the “only USA assembler of televisions, we believe the inclusion of our parts on the list … is accidental and resolvable.” It’s working to have the parts removed from the list. The State notes the layoffs would be a big blow for Fairfield County, which counted Element Electronics as its biggest employer, having recently suffered the loss of a Walmart and a textile mill.

The longer these tariffs are in place the more damage it will do to the workers and the consumers of this country…..will the “art of the deal” win out?

Personally, I feel that Our Dear Leader is gambling and hoping that he is right in his economic views…..

I have been a devotee to economist Henry George since the 1980’s……and he touches on tariffs in his book ……..The problem identified by Henry George, in Protection or Free Trade, is that of poverty, and more specifically, wages and unemployment. What follows from that is George’s systematic and all-embracing dissertation of the effects that protectionist and free-trade policies have on the wealth of a nation and its individuals. Naturally, he arrives at a conclusion that is decidedly in favor of free trade — as opposed to protective prescriptions — as a surefire solution to the ills of poverty.

George develops his focal point early on by posing the essential question: Are protective tariffs helpful to those who make their living via labor? He considers this the “tariff question,” calling it the “great political question of the immediate future” (George 1886, p. 3). He does, in fact, dare to say that he approves of the ends promoted by the protective tariff advocates when the ends sought are the promotion of higher wages and prosperous employment.[1] Nevertheless, he maintains that his position is to objectively determine whether or not protective tariffs are in fact favorable to those ends.

https://mises.org/library/henry-george-and-tariff-question

I would say that if more people knew of Henry George and his theories then we could do away with a lot of noise around trade and tariffs…..but that may be asking too much for it would require reading……a technique that is slowly disappearing……

Turn The Page!

Trade And National Security

Our Dear Leader has decided that the way to extend what is left of his legacy is by declaring a trade war on allies and foes alike……but what does this do to our national security?

The US has a military advantage around the world……if so then what will these trade wars do to that advantage?

Is the United States undermining the foundations of its military advantage by initiating trade wars with most of the known world?

The connections between trade and innovation are complicated, but generally speaking freer trade tends to generate more technological innovation than autarky, although much depends on the specific legal and structural conditions under which trade is conducted. During the Cold War, the United States derived immense military advantage from the global trade system that it constructed. This trade system tied the world’s most powerful economies to the United States with private and public binds, and also ensured that American producers would find consumers. While the system had drawbacks (exposure to international shocks, limitations on national economic policy) it provided a sounder basis for long-run economic growth than the autarkic policies undertaken by the Soviet Union and its Eastern European subject states.

https://thediplomat.com/2018/07/trade-wars-are-not-good-for-the-us-military-advantage/

Alright let’s say that you agree with Dear Leader’s stand on trade wars and tariffs……can we justify tariffs from a national security point of view?

Economists nearly unanimously support open and free trade among nations.1 The arguments for free trade are not new, dating back at least to Adam Smith’s famous book An Inquiry into the Nature and Causes of the Wealth of Nations in 1776 and David Hume’s series of essays, On Commerce and On the Balance of Trade in 1752. Free trade increases wealth in a nation by promoting the division of labor, thereby increasing the quantity of goods and services in the economy. This increased division of labor benefits people in two main ways. First, it expands the range of goods and services available to people. For example, many spices that are not native to the United States would be unavailable without international trade. Second, it allows people in a nation to buy goods of a given quality that are made more cheaply—that is, produced with fewer or cheaper resources. In short, free trade allows people to minimize their own use of scarce resources to achieve their desired ends.

https://www.econlib.org/library/Columns/y2018/MurphyJtariffs.html

Let me hear what my readers think……both pro and con on tariffs are welcome.

Closing Thought–27Jul18

The US has a suicide rate that is anything but envious…..our vets kill themselves….our homeless commit suicide……our bullied teens feel suicide is their only out….suicide is all too “popular” in our society……

There is a sector that is having its trouble with suicide and it is a sector that one would never consider as  problem……our farmers.

Suicide is exploding in America – and the increase isn’t confined to celebrities like Kate Spade and Anthony Bourdain. Suicide rates have risen by an astonishing 30% since 1999, with suicidal people citing relationship stress, financial difficulties and other issues as the underlying cause.

But suicide rates have increased for some professions more than others. According to CBS, farmers are facing the highest suicide rate of any profession in the US. The suicide rate for people in the field of farming, fishing and forestry is 84.5 per 100,000 people – more than five times that of the broader population. And with retaliatory tariffs from China and the European Union set to further undermine US crop prices, a bad situation could be about to get worse. Meanwhile, the Federal Reserve is raising interest rates, making the loans on which farmers depend increasingly expensive.

http://theantimedia.com/farmers-america-killing-themselves/

Please do not think I am blaming any of this on current policies…the problem goes deeper than that…..

This is a problem that has a cure but our current system will never end the spiraling problem….plus if the tariffs do much damage the rate may even increase…

Please have a good weekend….I will see you guys tomorrow….chuq

 

The Coming “Farm Aid”

It will not be Willie Nelson and John Mellenkamp…..no music….no foot long hot dogs…..no crappy beer on tap……

The story making the rounds is the tale of the American farmer and how he/she is losing markets and money thanks to the policies of Our Dear Leader……but not to worry….there is relief coming from DC…..

President Trump showed off a new campaign hat on Monday—it’s green with yellow letters, reminiscent of the John Deere logo, and it reads “Make Our Farmers Great Again,” notes Politico. (See Agriculture Secretary Sonny Perdue sporting one here.) The message is a calculated one as the White House seeks to ease farmers’ concerns that a US trade war will hit them hard. On Tuesday, the White House put the word out that its efforts will go well beyond hats, however—it’s rolling out $12 billion in emergency aid to farmers, especially those dealing with dairy, pork, and soybeans, reports CNBC. Details:

  • The money: It will come partly from a program set up in the Depression to help farmers called the Commodity Credit Corporation, reports the Washington Post. Because it’s an existing program, congressional approval isn’t necessary. Trump had asked Perdue to explore options months ago, and more details are still to be released.
  • Short-term: Perdue said the “one-time” program would help farmers dealing with “illegal retaliation” to US tariffs, reports the Wall Street Journal. “This is a short-term solution that will give President Trump and his administration time to work on long-term trade deals.”
  • The politics: The rollout comes as Trump travels to Missouri, Illinois, and Iowa ahead of the midterms, states where the agricultural community has voiced concern about the fallout of retaliatory tariffs from other nations. “The farmers will be the biggest beneficiary,” Trump said of his trade disputes in Missouri on Tuesday, per USA Today. “Just be a little patient.”
  • Criticism: The new plan isn’t sitting well with members of Trump’s own party who are worried about the longer-term picture. “What is our future down the road?” asks Senate Agriculture Committee chief Pat Roberts of Kansas. “We are trying to make the point that we don’t want aid, we want trade.” Nebraska Sen. Ben Sasse: “This trade war is cutting the legs out from under farmers and White House’s ‘plan’ is to spend $12 billion on gold crutches.” But it wasn’t only politicians: “This proposed action would only be a short-term attempt at masking the long-term damage caused by tariffs,” Brian Kuehl of the trade group Farmers for Free Trade tells the New York Times.
  • ‘Welfare’ theme: Sens. Bob Corker of Tennessee and Rand Paul of Kentucky both hit upon the same phrase in their criticism: “If tariffs punish farmers, the answer is not welfare for farmers—the answer is remove the tariffs,” Paul tweeted. “Our farmers have been in nonstop, saying they want trade, not aid, and now they’re being put on welfare,” said Corker. “Hopefully soon this ill-thought out policy will end.”

No end in sight: Most stories point out that the emergency aid is a good sign that Trump doesn’t intend to stop the trade disputes anytime soon. He extolled them again on Tuesday morning with a “Tariffs are the greatest!” tweet. And in Missouri, he said, “What the European Union is doing to us is incredible, how bad. They sound nice but they’re rough.”

There you go…the answer to crippling tariffs……agriculture welfare!  WAIT!  According to dim wits that would be creeping socialism (Humor!)…..I believe  Our Dear Leader fell asleep in the Wharton School when they taught trade and tariffs……never fear he is a genius.  (wink wink, nod, nod)

More Tariffs On The Way

Closing Thought–20Jul18

Our Dear Leader has decided that his newest round of tariffs will be the auto industry…….seeing how his other tariffs have been so successful and widely loved…….

Having tangled with China on trade and angered US allies with steel tariffs, President Trump is primed for his next fight: autos. Trump’s latest plan is to consider slapping tariffs on imported autos and auto parts—a move he says would aid American workers but that could inflate car prices, make US manufacturers less competitive, and draw retaliation from other nations, the AP reports. The action has also begun to provoke a backlash among members of Congress. On Thursday, manufacturers, suppliers, car dealers, and foreign diplomats will line up to testify at a Washington hearing to try to head off auto tariffs.

After the hearing, the Commerce Department will decide whether to label imported vehicles and auto parts a threat to America’s national security and whether to recommend tariffs to the president. In announcing the auto investigation in May, Commerce Secretary Wilbur Ross had said, “There is evidence that, for decades, imports from abroad have eroded our domestic auto industry.” Yet even General Motors and other companies that build cars in America are opposed. They rely on imported parts that would be subject to the tariffs, thereby raising automakers’ costs. “There is no automaker that has 100% exclusively US-sourced parts,” says Brian Krinock, Toyota’s senior vice president for North American factories. “It is a global business with global operations.”

He, Trump, fired the first shot earlier when he put luxury German cars on a list to be banned…..and now this…..

Nothing more fun than a trade war…..nothing is more effective than a trade war (that is sarcasm)……

Agriculture Secretary Sonny Perdue belittled American farmers on Wednesday.

“It’s a little bit like weight loss,” Perdue said of the tariffs that are damaging the bottom line for lots of red state, U.S. farmers. “It’s going to be good to get there but it is a little painful in the meantime.”

Perdue referred to Trump’s reckless tariffs as “trade disruptions we’re experiencing,” as if they weren’t specifically manufactured and imposed by the Trump administration. His remarks echoed Trump’s dismissive rhetoric about how trade wars are “easy to win.”

“Wait a minute, ‘Trade disruptions we’re experiencing.’ That sounds very passive,” stressed Axios editor Mike Allen, as he interviewed Perdue. “In fact, it’s your president, it’s your administration, that’s disrupting trade.”

Trump has also suggested it’s the patriotic duty of U.S. farmers to bear the burden of an unnecessary trade war.

“They want to hit the farmers because they think it hits me — I wouldn’t say that’s nice,” Trump said of China, as it readied its response to Trump’s sweeping tariffs. “But I’ll tell you, our farmers are great patriots. These are great patriots. They understand that they’re doing this for the country,” he added.

“We’ll make it up to them. And in the end, they’re going to be much stronger than they are now.”

(shareblue.com)

So far the only people that see any benefits for these trade things are the President and his Boyz…..the rest of the economic sector does not see the same benefits as Our Dear Leader.

A New Round Of Tariffs

Here we go!

It is not over and promises to get worse……

The trade war has started……Trump’s admin has placed tariffs on China and our European friends…..and a new round has been put into place against China….

The US-China trade war is here—and it’s escalating rapidly. US authorities rolled out a list Tuesday of some $200 billion in Chinese goods that could be hit with 10% tariffs by September, Deutsche Welle reports. The list of more than 6,000 product lines includes food products and many consumer goods, raising fears that the escalation could raise prices significantly for American shoppers, the Wall Street Journal reports. China hit back with its own tariffs on $34 billion in American goods after the US brought in tariffs on the same amount of Chinese goods last week, and Beijing has signalled that it will continue raising tariffs dollar for dollar. No talks are scheduled to resolve the dispute, which the US side blames on unfair Chinese practices.

The latest US tariffs were condemned by Senate Finance Committee Chairman Orrin Hatch, among others, who called the move “reckless.” China Ministry of Commerce said it was shocked by the escalation, the South China Morning Post reports. “China is shocked by the US move and the Chinese government, as always, will have to react to defend the core interests of our nation and people,” the ministry said. Li Chenggang, assistant minister of commerce, likened the US to a “bull in a China shop” and said tit-for-tat tariffs would “inevitably destroy” US-China trade.

The predictions are that these tariffs will now effect every room of one’s house from the windows and doors to kitchen to bath room….so many household things are made in China and now it will be expensive…..

Something to think about……the attacks on China by Trump could be behind the NK flipping on the “deal” that was supposedly struck in Singapore.

Just a thought.