Mona Cheran Continues Her Criticism Of DJT and Those “Consevatives” That Support Him
- Thread starter Ponca Dan
- Start date
Actually I appreciate the back and forth that takes place on this board. I have striven always to keep in line with the topic, and have endeavored to be polite at all times and respond to those objections to my comments in a straight forward manner. It is ironic in a way. I began this trek several days ago, and the first response was something along the lines of “who has shown support for tariffs?” Several days and dozens of posts later we have seen the answer. Like Rush Limbaugh I’m not going anywhete until everybody agrees with me!
A foreign investment in a US plant does NOT add to our trade deficit. Investment is not trade. Any investment in US GDP is positive regardless of who the investor is. Production from a US plant consumed in the US is trade neutral. Production from a US plant exported reduces trade deficits. Trade accounting 101
@Ponca Dan
I agree with you that these tariffs are not very good right now, but probably for a different reason. Your red flags that all tariffs are disaster in the making is simply silly. The average tariffs across all product groupings puts North America and European Union at a range between 1.2 and 1.8%, whereas the other 80 or so countries, China included, range from 3.5 to 8.0. So the starting point is that places like China ALREADY are protectionist and using unfair trade practices.
Adding tariffs into the headwinds of huge trade deficits can actually be effective and positive.
However, the reason I believe these tariffs at this moment are not good is different. If we had oodles of excess capacity and high unemployment virtually 100% of economists would say the tariffs would be wise.
But the US is currently at full capacity and full employment. Any strain on supply when already at full capacity/employment could be quite inflationary....and the real reason these tariffs may not be a good idea.
But it is NOT because of all of the red herrings you have floated in these threads, such as retaliation threats and trade war threats. Those are all Baker Mayfield and not relevant. We still have the number one consumer economy in the world. Our consumers are the reason people will always do business with us. And whether it is Trump or Obama or Clinton, conservative or liberal....it will matter not.
I agree with you that these tariffs are not very good right now, but probably for a different reason. Your red flags that all tariffs are disaster in the making is simply silly. The average tariffs across all product groupings puts North America and European Union at a range between 1.2 and 1.8%, whereas the other 80 or so countries, China included, range from 3.5 to 8.0. So the starting point is that places like China ALREADY are protectionist and using unfair trade practices.
Adding tariffs into the headwinds of huge trade deficits can actually be effective and positive.
However, the reason I believe these tariffs at this moment are not good is different. If we had oodles of excess capacity and high unemployment virtually 100% of economists would say the tariffs would be wise.
But the US is currently at full capacity and full employment. Any strain on supply when already at full capacity/employment could be quite inflationary....and the real reason these tariffs may not be a good idea.
But it is NOT because of all of the red herrings you have floated in these threads, such as retaliation threats and trade war threats. Those are all Baker Mayfield and not relevant. We still have the number one consumer economy in the world. Our consumers are the reason people will always do business with us. And whether it is Trump or Obama or Clinton, conservative or liberal....it will matter not.
Ponca, I get the 2% thing, my point was/is if they produced a better pipe/coated pipe that number would be higher. As I’ve personally seen and heard very few pipeline folks in the US are going to buy what they perceive as garbage.
Check out “Sino-Iron Pipeline,” and that will give you a general idea of just one gigantic project that went worse than sideways because of crappy Chinese Pipe. The two companies involved were Citic-Pacific Mining & MCC, both Chinese companies as well.
I totally understand your point. My only point is that buyers didn’t need the government to tell them not to buy Chinese pipe, regardless of how cheap it may be. The market is handling the situation very nicely. It doesn’t need Trump to authoritatively forbid them from buying it. And if the Chinese pipe was of high quality, and was being sold at a cheap/competitive price, it should not be the concern of any government bureaucrat.
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Thank you for your thoughtful reply. I have a couple of responses/questions.
If unemployment was high why would imposing tariffs on imported raw materials be a good thing? If materials costs rise for an American manufacturer due to tariffs how could that manufacturer justify hiring new people? I disagree with you that economists would think tariffs are a good thing under the circumstances you provided.
I agree/understand that American/European tariffs have been low compared to other countries. I would argue that’s a primary reason America and Europe have become so wealthy, generally wealthier than the high tariff countries. Why would we ever want to emulate their lack of success?
It is my understanding that tariffs are just another ploy to tax the citizens of a country. How is it beneficial for consumers to pay higher prices for goods?
Japan tried the mercantilist method back in the 60’s and 70’s, and fell into a recession that lasted decades. I remember very well the panic drummed up by politicians and the media that we would be swallowed by the Japanese horde.
I’m sure I have overstated my case as regards the potential negative effects of Trump’s tariffs. Certainly I hope so. I have attempted to use qualifiers such as “could cause” or “may result in.” I don’t know what will happen. I don’t know how much prices are going to rise. The statements that autos will only go up by $150 or so strike me as ingenuous. I hope those numbers are correct, but I have my doubts.
Anyway, thank you again for your reply. You have left me with a lot to ponder!
If you don’t mind I have another question. You say tariffs are an acceptable remedy when a country suffers high unemployment. During the Great Depression unemployment was very high, so the Smoot Hawley tariffs were enacted. Unemployment remained very high throughout its tenure. Why did those tariffs not work?
First of all, you only used half of the quote. High unemployment AND huge excess capacity. The point being prices will never rise due to tariffs due to the excess capacity.
Second, the Great Depression wasn't just the US. It was global.....and the word GREAT doesn't do it justice. What were you supposing those tariffs would do? Your argument on multiple threads was that tariffs cause prices to rise and consumers to pay more. Why didn't you bring up the fact that the tariffs in the Great Depression caused prices to deflate further. Didn't suit your argument? I've never proposed that tariffs would solve any economic growth issues. I've only stated (and proven) that your argument that they will always cause inflationary price increases is not always true. Further, I started by saying these particular ones could be inflationary.....BUT NOT because of your reasons (trade retaliation and trade wars etc....), but because we are at full employment and full capacity, leaving no wiggle room.
