Posted on 03/08/2018 10:37:31 AM PST by reaganaut1
The European Union on Wednesday released its target list of retaliatory tariffs on American exports worth $3.5 billion if President Trump pushes ahead with his steel and aluminum tariffs. This is how Mr. Trump’s trade irruptions could imperil American exporters and become a destructive spiral.
The EU is acting with some restraint—for now—in crafting a narrow list of items on which to impose tariffs, including bourbon, orange juice, corn, ladders and motor boats. None are vital to European industry, but they are politically shrewd in targeting exports from states represented by Republicans on Capitol Hill. The point is to punish voters in states Mr. Trump carried in 2016 and Republicans running for re-election this year. Too bad Europe can’t impose a tariff on Wilbur Ross and Peter Navarro, the architects of this fiasco.
The danger for the EU is that this will inspire Mr. Trump to indulge his schoolyard impulses and hit back at the EU again. “The European Union has been particularly tough on the United States. They make it almost impossible for us to do business with them,” Mr. Trump said at a White House presser with Swedish Prime Minister Stefan Löfven. He’s also threatened tariffs on European cars.
Since White House aide Gary Cohn soon won’t be around the White House to explain how unconnected to reality this is, we’ll try. It is not “almost impossible” for American companies to do business in Europe. The bilateral trading relationship between the U.S. and the combined EU states is the largest in the world. In 2016 American companies sold goods worth $270 billion in the EU and services worth $231 billion. America has a bilateral trade deficit in goods with the EU—$147 billion in 2016—but a services surplus of $55 billion.
(Excerpt) Read more at wsj.com ...
They are “dumping” if the foreign government is subsidizing the cost of production to below the cost of US producers (where it might otherwise be the same without that intervention), and then selling that material under the cost of US production of that same commodity in the US with the sole purpose to drive US production out of business?
How is the consumer benefitted when there is a loss of a competitor, thus reducing choices, and how are prices more stable when the offending government withdraws those subsidies once the US based competitor has left the market?
There are four options:
1) the US producer needs to cut prices to compete and remain profitable. This means lower the cost of production, which includes government regulation.
2) Apply tariffs to normalize those prices for the US producer to compete.
3) Subsidize the US producer
4) allow the US producer to cease operations. An example: https://www.forbes.com/sites/timworstall/2013/12/23/the-last-lead-smelter-in-the-us-closes-because-the-hippies-won/#78f0664d642b
If there are certain strategic materials that need to be produced domestically because of unreliable supply lines or trading partners (wars embargoes, etc.), how are the best interests of the United States served?
The real word is not made of pure economic theory where everything operates in a noble manner for the betterment of humanity.
I lived through the OPEC embargo of 1973 and the following fiasco and turmoil in the economy. There are domestic enemies like the democRATS and Obama who wish to damage the USA and limit our ability to wage wars to even defend ourselves.
At some point, our trading partners need to be brought to heel, that if they want unfettered access to our markets then they need to be just as open with theirs. What do you think ISO-9000 was, or the CE mark ? ISO was not a quality program or anything else, other than a way to keep US products out of the EU, Same with the CE mark. They are hidden tariffs on US businesses to comply with those “standards” and payoffs to the EU to get those certifications.
f Canada and Mexico want exceptions, fine, let them each negotiate whatever deal they can instead of pretending that the NAFTA scam was carved in stone by God Himself.
And you number for aluminum is way off : Just one of many articles explaining the import/export of steel and aluminum. Notice that aluminum imports are 60% of the US market, much worse than the situation in steel.
Well, I agree with Milton Friedman about not getting heartburn over so-called “trade deficits”. Having more imports than exports is not on its face a bad thing necessarily. Shoot, look at Hong Kong’s history - an investment and economic giant on a rocky precipice - they didn’t have any natural resources, imported everything, and the free market with no tax turned them into an economic powerhouse.
I think if we take care of business by kicking our mostly unconstitutional government out of our marketplace affairs, we’ll soon be back humming as the greatest economic power in the world.
There’ll probably always be those who will have the Pavlovian reactions to inflammatory terms like “trade deficits” and “unfair trade practices” thinking we need government “solutions” like tariffs, but I think countries who have the freest market come out on top regardless of what other nations do. Let the supply and demand of the free market in the voluntary self interested cooperation between buyers and sellers set the price points You’ll come out ahead in the long run.
But I would assert their economy is a "House of Cards" and it wouldn't take all that much for it to collapse.
True.
However, those nations that are getting made have some rather strict trade laws also.
It is also a criteria for the Dudly Do Right #nevertrumpers that camp out on CNN mini me sites like The Right Poop.
Their bowels are still in an uproar along with Hillary on why Trump won.
I thought the entire premise of the EU was compete with USA capitalism?
Looks like their socialism still sucks ass.
Regardless of what other countries are doing, our goal should be voluntary, open, and free supply and demand in marketplace.
Forcing higher prices on incoming goods just penalizes the American consumer and lowers our standard of living and don’t at all attack the core economic issues (the federal government) that hinder our competitiveness in the marketplace.
There’ll always be customers for high quality, low priced goods. We don’t need tariffs to accomplish that.
Hong Kong is China's duty free port for the wealthy leadership and technocrats in the good graces of the leadership along with something of a safety valve for small time smugglers bringing in baby powder, chocolates, and whatever else the government chooses to ignore.
Looking at something and saying it's exceptional without taking note of the exceptions that created that exception is absurd. At best an inability to think the situation through and at worst a straw-man argument which is exactly what Friedman acolytes use it for, a straw-man argument.
The US grew into an industrial powerhouse with tariffs as the primary source of Federal funding. Not only did they protect US industry, relying on tariffs rather than income taxes limited the power of the Federal government.
People talk about the inequity of the income tax and how Congress is out of control saying "we have to get back to the Constitution". You can't get there from here as unless the 16th and 17th Amendments are repealed.
I'm a free trader, but the status quo for “free trade” is hardly free trade, it's screw the US to help prop up the EU welfare states and develop the Third World on the backs of American consumers.
A few years ago I watched a very innovative American company get run out of business by Chinese competition selling a copy of their product in the US at retail prices for finished imported knock offs for less that the American companies cost of raw materials.
That's the reality of the world we live in today.
How does that process “raise prices”?
Give me a break.
That is the most absurd thing I have ever heard and it is directly contradicted by both history and practical experience.
Dumping is about the only conclusively documented economic model there is.
It is not even restricted to international trade.
Back in the days of Monopolies and Robber Barons it was SOP for huge economic players with unlimited assets to dump their products on the market at prices below the cost of manufacturing in order to drive the competition out of business to create a working monopoly and then increase the price of that product to as high as the market would bear as a sole supplier
We are seeing this play out across the board with Chinese products and it can be argued that China's entire currency manipulation strategy to keep its currency exchange rates massively undervalued is the monetary policy analog to dumping.
We also have recently seen Saudi Arabia try to kill the US domestic fracking industry with oil price manipulation . The Saudis failed in the attempt, but they were able to drive a number of fracking companies into bankruptcy and then acquire the assets at fire sale prices
The economic misnomer “dumping” confuses the issue by implying a unilateral act that is somehow forced on the other party.
But we know that isn’t how the market works. No seller takes a dump truck, backs it up to a warehouse with no demand for his payload, and “dumps” it. That is stupid. Market transactions require bilateral voluntary agreements between buyers and sellers.
Here, if there was no demand in America for goods from China, then no one would pay to have them shipped and sold here. The DEMAND in America for goods from China drives the SUPPLY. It is a bilateral agreement. That is not what the misnomer “dumping” implies.
Hong Kong’s success was not due to political force from the U.S. It was due to their free market economy that was essentially tax free. Hong Kong became an economic powerhouse (before China reclaimed it) by voluntary, unencumbered transactions in their marketplace.
Current trade deficits exist because previous Presidents, worshiping globalism, surrendered on trade instead of fighting for America.
So, sure, someone else paying the extortion money, buying off the people threatening you, and guaranteeing the original large investors won't lose money, are all absolute proof that effin' magic is the reason for their success.
Well, I am in the market for a new Ford F-150...
It is widely accepted that free market and absence of income or so-called “corporate” tax were the major reasons for Hong Kong’s accumulation of wealth, “scholars” and peripheral political maneuverings notwithstanding.
Believe what you want, but America in the 1800’s along with Hong Kong in the 1900’s are just a couple of examples of the wildly successful creation of wealth when the market economy is allowed to run without any significant government interference.
>> Back in the days of Monopolies and Robber Barons it was SOP for huge economic players with unlimited assets to dump their products on the market at prices below the cost of manufacturing in order to drive the competition out of business to create a working monopoly and then increase the price of that product to as high as the market would bear as a sole supplier <<
You appear to be taking obsolete economic history lessons from Ida Tarbell and the assorted leftwing journalists and academics who followed in her footsteps.
But in fact, starting back in the 1950’s, careful economic research by Aaron Director and his acolytes like John Magee at the University of Chicago Law School showed that the once-widely-accepted model of “predatory pricing” — as supposedly practiced by Standard Oil and other “robber baron” companies — was supported neither by logical analysis nor by hard evidence. Moreover, the findings of those scholars and their students still stand. They have never been refuted by careful research.
So you may bash “monopolies and robber barons” to your heart’s content. But you won’t find any support among free-market thinkers like Milton Friedman, Thomas Sowell, Walter Williams and similar leading lights of the pro-market, pro-capitalist and pro-liberty persuasion
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.