Tag: Trade Policies

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 War Consequences

Trump has declared a trade war on China (among others) and outcome is benefiting a country that he has used in the past…..Mexico.

Remember Mexico…that country that would pay for his damn silly border wall? They will not!

But since he has seen fit to declare this trade war Mexico will benefit the most.

The Trump Administration’s trade war with China has turned out to be a windfall for another country the president frequently berates: Mexico.

Consider Fuling Global Inc., a Chinese maker of plastic utensils that developed a lucrative business making paper cups and straws for U.S. restaurants. But President Trump upended all that with tariffs on $250 billion worth of Chinese imports, including paper products. So the company found an alternative, opening a $4 million factory in Monterrey, Mexico, that will soon begin shipping millions of paper straws across the border.

“We had to look for other ways to do business,’” said Fuling Chief Financial Officer Gilbert Lee. The move means the Wenling, China-based company will avoid the tariffs and make up for pricier Mexican labor with lower shipping costs. “Mexico is a very logical and advantageous location for us.”

https://www.bloomberg.com/news/articles/2019-03-27/who-is-winning-trump-s-trade-war-with-china-so-far-it-s-mexico

We keep waiting for the return of our manufacturing jobs (that will never return but we were promised) to all that cash that would return from offshore (to be fair some of the cash has come home but not enough)….

Trump’s trade war is not helping Americans in the least…..but Mexico will make out like the bandits they are accused of being (that is sarcasm not a pronouncement).

Siphon Off The Cash

Closing Thought–14Jan19

Well we watch the tube and the volatility of the markets….wild swings in losses and gains…..it is not normal.

And then there are the trade policies of our president…..his view of his tariffs are not anything like the views from financial pundits…..the news is not good from the tariffs…….out soy bean farmers think they are screwed even after the silly tariffs are removed….

With that said and reported……what about other sectors of our economy?

The financial magazine Forbes reports…..

President Trump likes to say that China and other countries are pouring money into the U.S. with the tariffs he has imposed. However, the countries that are sending goods to us aren’t paying the tariffs . The companies that import goods are paying them , which means U.S. companies need to raise prices (therefore a tax on consumers), lower their margins and have less profit (which also lowers the amount of taxes they pay to the government) or even go out of business.

The U.S. Treasury Department releases a monthly report, which provides how much in customs duties are received by the government (December’s is delayed due to the shutdown. so I have estimated that month’s result). Trump is correct that the payments have escalated in recent months. While they took a jump in the second half of fiscal 2018 (September) from the first half, they have almost doubled in the December quarter compared to the first half of fiscal 2018 before the additional tariffs were imposed.

First half of fiscal 2018: $3.1 billion per month

Second half of fiscal 2018: $3.8 billion per month

First quarter of fiscal 2019: $6.0 billion per month

Increase of 95% from the first half

Delta between $6.0 and $3.1 billion is $2.9 billion  The $2.9 billion monthly increase in customs duties over a full year is $35 billion, which is either passed on to consumers in higher prices or eats into company profits. This can potentially drive a company out of business such as a South Carolina TV manufacturer laying off 126 employees or a Missouri nail manufacturer laying off 200 of its 500 employees.

None of this “news” tracks with the bullsh*t fed to us by the “warrior from Wharton”……..(I still say this person did not get his degree legally…Daddy bought it for him)……these policies are doing NOTHING to make America Great again….NOTHING!

How About That Farmer’s Bailout?

In one statement…..It is Crap!

The Dear Supreme Leader has decided, in the past, that what the US needs is a good trade war to make everything okay for the future…..his trade wars and tariffs have hit our farmers the worst but not to worry the president has a plan to stop the bleeding of our farmers….a bailout!

SO now that it is in place how is it doing?  Are our framers making out okay?

American farmers are struggling to find storage for crops that would usually be sold overseas, with some being forced to leave produce rotting in fields as a last resort, as the trade conflict between the US and China continues.

Farmers in some US states are being forced into plowing their crops under — effectively burying them under soil in fields — as there is not enough room to store them in storage facilities, and they are unable to sell their products thanks to Chinese tariffs, Reuters reported on Wednesday.

https://www.businessinsider.com/us-china-trade-war-soybeans-left-rotting-thanks-to-lack-of-storage-2018-11

And the bailout?

Well $6 billion has been promised to our farmers to ease their pain and so far $838 million have been doled out….so things are better right?

Well let’s be honest……the plight of the American farmer still sucks!

President Donald Trump’s $12 billion bailout of farmers who had been hurt by his trade wars has been a massive bust politically — and a New York Times report has found that very little of it has gone to the struggling farmers who need it most.

According to the Times, the bailout program “has done little to cushion the blow” of the president’s trade wars, “with red tape and long waiting periods resulting in few payouts so far.”

In fact, the Times estimates, just $838 million of the $6 billion worth of bailout funds that have been authorized so far has been paid out.

https://www.alternet.org/trumps-12-billion-bailout-farmers-hurt-his-trade-wars-has-been-massive-bust-nyt

Will the pain continue for the American farmer or will these tariff thingys do what they were promised to do?

My guess is the promises will not be met…..something that is a reoccurring trait of Trumpism.

NAFTA Vs USMCA

In 2016 Trump and I had something in common…..we both disliked NAFTA….the only difference was he could do something about it and I could only bitch about it.

US, Canada and Mexico have come to an agreement on trade and NAFTA…..

Canada and the United States reached a deal Sunday night for Canada to stay in a free trade pact with the US and Mexico. In a joint statement late Sunday, US Trade Representative Robert Lighthizer and Canadian Foreign Affairs Minister Chrystia Freeland said the agreement “will strengthen the middle class, and create good, well-paying jobs and new opportunities for the nearly half billion people who call North America home.” The new deal, reached just before a midnight deadline imposed by the US, will be called the United States-Mexico-Canada Agreement, or USMCA. It replaces the 24-year-old North American Free Trade Agreement, which President Trump had called a job-killing disaster.

The agreement reached Sunday gives US farmers greater access to the Canadian dairy market. But it keeps a NAFTA dispute-resolution process that the US wanted to jettison and offers Canada protection if Trump goes ahead with plans to impose tariffs on cars, trucks, and auto parts imported into the United States, the AP reports. “It’s a good day for Canada,” Prime Minister Justin Trudeau said as he left his office. Canada, the United States’ No. 2 trading partner, was left out when the US and Mexico reached an agreement last month to revamp NAFTA. US-Canada talks bogged down earlier this month, and most trade analysts expected the Sept. 30 deadline to come and go without Canada being reinstated.

Of course Trump’s new replacement for NAFTA has a nice ring to it……USMCA

America’s free trade pact with Mexico and Canada may be alive, but the same can’t be said for the NAFTA moniker. Once the new deal was arrived at Sunday night its new name was announced: the United States-Mexico-Canada Agreement, or USMCA. President Trump weighed in on the name during a Monday press conference, saying, “It has a good ring to it.” It’s also “a great deal,” he said per USA Today, one that should “pass easily, really easily … in theory there should be no trouble.” Congress needs to approve the agreement, and it needs to be ratified in Mexico and Canada as well. As for how one should say the name, Trump didn’t read it as a word a la NAFTA but spelled the letters out: U-S-M-C-A.

CNBC reports that while much of the deal echoes that of NAFTA, there are pivots in terms of how the dairy and auto industries are handled: US dairy producers’ access to Canadian markets will increase, while Mexico and Canada scored a win in terms of an exemption on passenger vehicles, pickups, and auto parts from potential tariffs. CNBC has much more, including details on changes that will could up the price of cars made in Mexico, which could push more of these jobs north of the border.

NYTimes op-ed states that USMCA is worse than NAFTA…….

North American business leaders are breathing a sigh of relief after Canada agreed, at the 11th hour, to join the revised North American Free Trade Agreement between the United States and Mexico. But before they break out the Champagne, they should look at the details.

Although the revised deal brings much-needed modernization in areas such as e-commerce and intellectual property, the media spotlight on Canada has obscured a bigger problem for the region: Under the new terms, North American trade is headed off the rails and, perhaps along with it, political stability south of the border.

But leave it to the master of business, the grad from the Wharton School, to negotiate a deal that has LESS trade in it……

The United States, Canada, and Mexico have completed their renegotiation of the North American Free Trade Agreement (NAFTA). Being nothing, if not creative, negotiators named this revamp the “United States-Mexico-Canada Agreement on Trade,” or USMCA for short. While the namers get an F for imagination and creativity, they receive an A for self-evaluation skills, as they aptly removed the term “free trade” from the title. The USMCA does not advance free trade in the world.

There are more than a few labor and manufacturing provisions in this bill that will, no doubt, lead to higher prices for American consumers. There is a sourcing requirement, which mandates that 75 percent of automobile parts be produced in North America, otherwise that automobile cannot enter duty-free. Not only are the costs of auto parts already rising due to President Trump’s trade dispute with China, they will now rise even further due to the requirement that manufacturers use more expensive domestic parts that could have been imported more cheaply.

https://www.realclearmarkets.com/articles/2018/10/02/leave_it_to_trump_to_negotiate_a_deal_that_leads_to_less_trade_103433.html

Is that a technique known only to those that study at Wharton?

How to cut a deal where there is less trade than the previous deal.

A New Cold War?

Our Dear Leader went to the UN and made his feelings known.  First was the humor that was unintended but he made it sound like it was a humor set-up…..anything to make it look like it was his idea…..after his chuckle he then went before the UN Security Council and made another threat……

President Trump on Wednesday accused China of trying to meddle in the 2018 elections in a bid to keep him down. While opening a UN Security Council meeting, Trump put it like so, per the BBC: “In my remarks yesterday to the United Nations General Assembly, I laid out my administration’s commitment to building a more just and peaceful future. Regrettably, we found that China has been attempting to interfere in our upcoming 2018 election coming up in November against my administration. They do not want me or us to win because I am the first president ever to challenge China on trade. We are winning on trade. We are winning at every level. We don’t want them to meddle or interfere in our upcoming election.”

Foreign Minister Wang Yi, China’s representative on the Security Council, responded with a denial, reports CNN: “We do not and will not interfere in any countries’ domestic affairs. We refuse to accept any unwarranted accusations against China, and we call on other countries to also observe the purposes of the UN charter and not interfere in other countries’ internal affairs.” Trump was later asked what proof he had. “Plenty of evidence,” he replied, though he didn’t offer any. The AP reports a Chinese delegate “shrugged” when the remarks were translated in the General Assembly.

It will be China this time…..will it be the talk of the town as the Russian thing for the 2016 election?  Somehow I doubt it.

But as long as we are talking China.

Our Dear Leader has a massive hard-on for China and just keeps poking the dragon in the eye about trade…..

resident Donald Trump is making good on his pledge to escalate the trade war with China by imposing tariffs on US$200 billion of Chinese goods. The Chinese government, for its part, is already retaliating with new taxes on $60 billion of American imports.

If you’re curious why China’s sanctions don’t match Trump’s, there’s an easy explanation. As a number of commentators have correctly pointed out, Beijing is running out of American products to target. Americans bought $375 billion more stuff from China than the Chinese bought from the U.S. last year, which means Trump has a lot more to punish.

While this may mean that China’s leverage on trade is limited, it doesn’t mean that Trump can easily win this confrontation.

https://theantimedia.com/trump-trade-war-china-cold-war/

I do believe this situation will get uglier before it gets better….if ever.

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.

Did You Know North Korea Was Still There?

As usual the situation with North Korea is not very newsworthy these days….we have a SCOTUS duel, a op-ed that has the Dear Leader batcrap pissed and then there is the probes this and the probes that….and in all the drama the situation with North Korea soldiers on……

Since the MSM wants to sweep most of it under the rug (would that be a Persian rug?  Persia?  Ain’t that Iran?)…….

It seems that Kim wants a declaration of peace for the Korean Peninsula and Trump’s boyz are waffling……

White House and State Department officials are reiterating that they have no current interest in making a deal with North Korea that would involve a peace declaration ending the Korean War.

The State Department said on Wednesday that the US position is that “denuclearization has to take place before we get to other parts.” The administration has repeatedly said they believe Korean denuclearization will take years, and that they want “progress” before the 2020 election.

The Korean War began in 1950, and 68 years later, there has never been a formal peace treaty ending the conflict. North Korea has been seeking a peace treaty for decades, with the US always resisting such a deal.

(antiwar.com)

Another summit is coming to a screen near you……mind you what Barry Goldwater said about a “summit”…..”only summit meeting that can succeed is the one that never takes place”…..could that be accurate in this case?

South Korean officials announced on Thursday that a deal has been reached to hold a summit in Pyongyang from September 18-20. The summit is to focus on “practical measures” which could be taken for denuclearization of the Korean Peninsula.

South Korean national security adviser Chung Eui-yong told reporters that North Korea’s Kim Jong Un has “reconfirmed his determination to completely denuclearize,” and that he continues to have faith in President Trump.

The commitment to denuclearize is a major announcement, as US officials have been increasingly dubious about that, and complaining about the lack of quick progress. North Korean officials say Kim is frustrated by the doubts expressed in the international community about his will to preemptively denuclearize. He told Chung that he feels the good faith moves made by North Korea should be reciprocated.

(antiwar.com)

The trade war that Our Dear Leader has started with China has consequences……many have said the China has been a big help getting NK to the negotiating table….but for how much longer?

While the US has been pushing for diplomatic progress with North Korea to be met with even more restrict sanctions and restrictions, other countries have called for the UN to ease them. The US has blocked that, so far, but it isn’t stopping nations like China unilaterally easing limits on trade.

China has long been North Korea’s main trading partner, and while that trade ground to a halt earlier this year, a lot of it shows signs of picking up. Reports have China reopening coal trade, restarting frozen construction projects, and again allowing tourists into Pyongyang.

Analysts are suggesting that this “undercuts” US calls to keep escalating sanctions on North Korea, though there is also a case to be made that China is trying to ensure that it retains a major seat at the table if North Korea suddenly becomes an opened market with a lot of trade business.

(antiwar.com)

How much longer will China assist the process with this trade war looming large?

As one can see here is more going on on the Korean Peninsula than we are being told…..

A closing thought–President Trump tweeted to thank North Korea’s Kim Jong Un for his “unwavering faith,” promising that the two leaders would “get it done together.” This came after Wednesday’s reports that Kim, despite frustration at the diplomatic process, remains confident in Trump’s ability to progress things personally.