Trump’s 757 and Trade Deficit Realities

The American Thinker ^ | December 13, 2016 | C. Edmund Wright

[expat_panama]

When Donald Trump goes shopping for large aircraft, which he does from time to time, there is one item at the top of his "non-negotiable" list. Trump insists on British-made Rolls Royce turbo fan jet engines. He doesn't need to worry much about the interior, or even the cockpit windshield when jet shopping, as those refinements can be redone after he buys. (Both were redone, in fact, on the Trump 757.) However, the engines must be Rolls...

...Certainly those American workers would want the Donald to "buy American...

...British engines were merely part of an even more massive American jetliner project, assembled by American workers, and sold by an American company, for an American profit...

...A Trump-style tariff placed on Rolls in the 1990s might have been cheered, but it would have likely prevented the company from having many of the seven thousand employees they now have in this country...

...this is how trade balance accounting works...

...first thing that happens to that ship carrying Chinese steel is that a highly paid American Harbor Pilot...

...this steel is just getting started. When it arrives at a plant, in America...

...bottom line is that manufacturing overall is not being "hollowed out" by trade...

...America actually manufactures more than ever today, but it simply requires fewer people...

...stop obsessing over China, Mexico and Japan. Focus on making the rust belt areas more like the booming South...

...his campaign focused more on threats and tariffs, and those were the very talking points that super charged many of his supporters. If the Trump administration can do the former, then in time no one will care about the latter, or about China, or Mexico. That would help make America great again indeed.

[expat_panama]

If someone gets a chance, please explain to the group why trade deficits are bad --but lets skip the nonsense about somehow all the dollars in the U.S. go to China and never come back.

[SMM48]

The author is a certified a-hole.

[Paladin2]

The Fed is more than hsppy to sell dollars.

[expat_panama]

Top'o'the Morning!  The S&P sagged a tenth of a % but the NASDAQ dropped 0.6% --not to worry, volume was weak.  That and our gold & silver are still sideways.  Futures seem to see stocks up +0.33% but w/ metals -0.53%

Everyone must be holding their breath for tomorrow's rate news, this morning it's just Export Prices ex-ag. and Import Prices ex-oil.

Elsewhere:

Keynes: Time for the Thinking to Rise from Dead? - Larry Elliott,Guardian
In Age of Trump Is Free Market Ideology a Bad Word? - Ray Keating,RCM
Here's What's Killing Low-Income Americans - Peter Orszag, Bloomberg
Trump Rally Is the Biggest Post-Election Since Hoover - Sue Chang, MW
Trump's Fiscal Package Promises More Expansion - George Perry, RCM
Social Security's 'Permanent Save' Is Massive Cuts - Michael Hiltzik, LAT
Saudi Will Never Be More Than Big Oil - Yoel Guzansky, Washington Times
Using the 'Magic Pill' to Humanize Free Trade - Russ Roberts, Medium

[NautiNurse]

He had me going just fine until this sweeping statement without backup:

...America actually manufactures more than ever today, but it simply requires fewer people.

Then I really started to question the other statements. The argument might be enhanced with more discussion about steel quality from China. Do the Chinese make better steel?

Longshoremen? Really? Of all the American workers, these thugs are some of the least defensible. Aren't these the goons who make about $125K for pushing a button every 20 minutes? The ones who foul up all the import works every time they walkout on strike?

On second thought, the author has got us to thinking. Good on him.

[McGavin999]

I was watching that Wall Street show on FOX the other day. I could not believe how ignorant those people are. What can’t they understand there is a difference between an American company that moves out of country specifically to get cheap labor and then imports it into America and a company that just imports.

Also nobody cares if they move to China to build stuff for China, we only care if they move to China and then want to market it here.

If these guys are too dumb to get this they are way overpaid

[Fai Mao]

The author also fails to mention that the 757 was then exported to other places. Thus Boeing is adding value to imports and then selling the item to someone else at a markup

Unlike Chinese steel which would not probably be re-exported.

[SkyPilot]

Says the author as he drives his British built Jaguar to work and texts on his iPhone made in China.

[knighthawk]

The RR Merlin is what the P-51 Mustang made it a winner, no one was complaining then!

[nclaurel]

Definitely he was on FR during the primaries insisting that he alone knew more than anyone. What a pompous jerk!

[USS Alaska]

The particular reason, be it price, quality, completion date or image, is moot.

No. the reason is not moot. Most china products are bought in the USA for one reason, price. And the reasons they are cheaper, reflect currency manipulation and import taxes and tariffs on our shipments to china.

It is legalized stealing from our country and its citizens.

If you choose to ignore this fact, I'm glad you are in panama, and take that asshole C. with you.

I was once a supporter of C. but he became so full of himself, that he rivaled bill christol for asshole of the year, 2016.

[nikos1121]

Anyone who has read the ARt of the Deal knows what Trump is doing. Does he sound like a guy who wants to put the screws to China by putting in Bradstad and Tillerson?

The ball is in our court to be competitive, and we can do that by not shooting ourselves in the foot with regulations and high taxes.

[libh8er]

The Rolls Royce Trent series engines are the quietest in their class and in performance comparable to the GEs. I remember the first time I flew in an A380 some years back. As the plane was accelerating down the runway with four Trent 900s at near full power, all I could hear inside was a faint whisper. I was very impressed.

[usafa92]

He is. C. Edmund is a certified Trump hater and has been banned from FR as a user.

[expat_panama]

...we only care if they move to China and then want to market it here...

There are a lot of folks who'd much rather have the Chinese themselves build the factory there and then sell the products to the U.S., but personally I'd rather the factory was built by, and production was supervised by Americans before resale to U.S. consumers.  imho the product would be much more reliable, probably cheaper too.

Tho I do understand that there are many points of view here and I may be wrong.

[bert]

He is quite accurate in his assessment. No isolationist claptrap that is intellectually deficient.

[expat_panama]

...Trump hater and has been banned from FR...

What are we saying here, that the FR needs to ban anyone who opposes buying foreign made jet engines?

[Former Proud Canadian]

And, now that electrons cost even less than paper, they are more happy then ever to do so. As much as $600 billion in US banknotes are thought to be in circulation overseas. This is a nice interest free loan to US citizens.

When you consider the financial turmoil and financial repression occurring overseas, the death of the US dollar might be greatly exaggerated. If you were living in Venezuela two years ago and were lucky or smart enough to convert your wealth to US dollars and stuff them under your mattress, you would be much better off today.

When citizens of large countries like India or China lose faith in their local currencies they turn to alternatives. Gold and silver are real money but the best currency alternative remains the US dollar.

[McGavin999]

Then Americans wouldn’t buy unreliable products. All we do by going there, building factories and selling to Americans is to undercut those very Americans and eventually eliminating the market. Unemployed people don’t buy as much as fully employed people, and if our unemployment hadn’t been expanded to years instead of months they would have found that out already. It’s called eating the goose that laid the golden egg.

I know there are labor problems here with labor unions, but at some point you have to put your country and her people first

[bert]

-—Do the Chinese make better steel?-—

Implicit in that statement is the assumption that steel is steel. In fact, there is steel and then there is steel. The difference is in the specification used by the maker that results in different properties of the end products. The difference is in the quality control of the manufacturing. The difference is the testing by the buyer to assure the specifications are met.

An American company does not just go on the street and hold up sign saying I want some steel. The company uses a process of purchasing that assures the desired quality is produced to what is an industry standard backed up by material test reports

The problem with Chinese steel is not making but rather buying.