Trump's Tariffs

[Carnal_Flower]

What is the Orange Blob ranting on about and trying to do?

Can someone explain this in layman's terms?

 

[Voider]

He's saying that all other countries of the G-7, especially Canada and France(also Japan), have been acting unfairly(in terms of trade) to The U.S. for a long period of time. That's why he's imposing huge tariffs on goods from China, and threatening others to with the same.

Ironically, there's a lot of debate about the whole thing, and many Asian countries(such as India, China, and Japan) think Washington is just isolating itself now, because it's mounting more losses after their own companies(Asian companies/firms) export goods to the U.S.

While Trump might seem to be protecting Washington from harmful trade partners, from the point of view of the other countries, it looks like a cowardly act of protectionism. And also isolating Washington for the time being, purely for it's own benefits. That's why France says that they're okay with a G-6 without Washington's membership in it.

 

[FEELINGLUCKYPUNK]

Americans pay for Canadian socialism with the tariffs and barriers Canadas sticks us with.

 

[oggbashan]

President Trump promised in his election campaign to do something about America's Rust Belt. The tariffs on Steel and Aluminium imports are one way of supporting US industries from low-priced products from other countries (particularly China). There is a worldwide surplus of production of Steel and Aluminium. China is probably dumping cheap steel on the market instead of closing uneconomic factories.

BUT - despite promises and agreements on Free Trade between countries, there are already tariffs and barriers on US products entering many countries including the EU and Japan. They are often higher than on imports into the US from those countries. President Trump is saying 'That is unfair'. There is some truth in that.

However, it isn't as simple as he has said. US regulations on some imported products e.g. cars make it more expensive to produce them than for other markets.

Agriculture is another can of worms. The EU (and UK) will not accept any chickens or chicken products produced in the US. Some US producers do not have the same hygiene standards for chicken production as in the EU and rely on washing chickens with bleach to remove the contaminants. While that is acceptable in the US it is unacceptable to the EU (and EU consumers) who insist that chickens should be reared healthily without the need to wash them with bleach. There is a Europe-wide campaign to tell politicians that people will NOT accept US chickens and products unless the US meets EU hygiene standards.

It is a response similar to the problem British beef producers had with Mad Cow disease. We could have inoculated the cattle against Mad Cow disease but no one knew what impact that inoculation might have on humans. The EU (and US) wouldn't accept British beef until Mad Cow disease was eradicated. It was, by mass slaughtering and disposal of tens of thousands of cattle.

The EU Common Agricultural Policy subsidises EU farmers. That means that they are competing unfairly against the US and the rest of the world.

Japan makes it difficult for outsiders to export into Japan not just by tariffs but by one-sided regulations making imports into Japan meet higher standards than local producers.

China? They make it very awkward for companies wanting to sell in China. They underprice and undervalue their exports making them far cheaper than they should be. They also exploit the rules of the UPU (Universal Postal Union) by making the cost of sending a package from China to the US or EU much cheaper than the same weight of package sent internally in the US or EU. US Mail and European mail companies HAVE to deliver the package even though they make a substantial loss on every Chinese delivery.

So - Trump isn't starting a trade war. That war already exists. What he is doing is concentrating minds about some dubious practices that obstruct free trade.

Will he succeed? That's another question.

 

[someoneyouknow]

^^^^^ No clue what they're talking about.

Putting tariffs on steel will not, and has never, helped our industry. What it does is raise the cost of those industries which are passed on to consumers. Those consumers then consume less items because of the increased. Result: lost jobs.

Those who fail to learn from history and all that.

 

[Carnal_Flower]

So I've heard, but what does he mean by "acting unfairly?" And "using the US as a piggy bank?"

What's he bleating on about with this "230%" from Canada?

I admit it, I find this topic so boring to investigate myself. Looked up trade deficit and it's so complicated. As usual with him he's probably taken one random statistic from a whole bigger picture. He seems pretty convinced about this "US has been taken advantage of" and I'm wondering what relation to reality that has.

ALL presidents from Washington to Obama have apparently let the world walk all over us in terms of "unfair, imbalanced" trade. It "stops now!" What is he bitching about?

He's saying that all other countries of the G-7, especially Canada and France(also Japan), have been acting unfairly(in terms of trade) to The U.S. for a long period of time. That's why he's imposing huge tariffs on goods from China, and threatening others to with the same.

Ironically, there's a lot of debate about the whole thing, and many Asian countries(such as India, China, and Japan) think Washington is just isolating itself now, because it's mounting more losses after their own companies(Asian companies/firms) export goods to the U.S.

While Trump might seem to be protecting Washington from harmful trade partners, from the point of view of the other countries, it looks like a cowardly act of protectionism. And also isolating Washington for the time being, purely for it's own benefits. That's why France says that they're okay with a G-6 without Washington's membership in it.

 

[phrodeau]

So I've heard, but what does he mean by "acting unfairly?" And "using the US as a piggy bank?"

What's he bleating on about with this "230%" from Canada?

I admit it, I find this topic so boring to investigate myself. Looked up trade deficit and it's so complicated. As usual with him he's probably taken one random statistic from a whole bigger picture. He seems pretty convinced about this "US has been taken advantage of" and I'm wondering what relation to reality that has.

ALL presidents from Washington to Obama have apparently let the world walk all over us in terms of "unfair, imbalanced" trade. It "stops now!" What is he bitching about?

There's a 270% tariff on US dairy products in Canada. The dairy industry has always relied on massive government intervention to be solvent, and that goes for the US, too.

 

[oggbashan]

^^^^^ No clue what they're talking about.

Putting tariffs on steel will not, and has never, helped our industry. What it does is raise the cost of those industries which are passed on to consumers. Those consumers then consume less items because of the increased. Result: lost jobs.

Those who fail to learn from history and all that.

Not what I'm talking about, but what President Trump is talking about.

Whether he is right, or whether it will work?

That is another question.

 

[Carnal_Flower]

Ok, the picture is coming into focus. very interesting, thank you

Dumb Question: What would "free trade" ideally look like--no tariffs and subsidies?

President Trump promised in his election campaign to do something about America's Rust Belt. The tariffs on Steel and Aluminium imports are one way of supporting US industries from low-priced products from other countries (particularly China). There is a worldwide surplus of production of Steel and Aluminium. China is probably dumping cheap steel on the market instead of closing uneconomic factories.

BUT - despite promises and agreements on Free Trade between countries, there are already tariffs and barriers on US products entering many countries including the EU and Japan. They are often higher than on imports into the US from those countries. President Trump is saying 'That is unfair'. There is some truth in that.

However, it isn't as simple as he has said. US regulations on some imported products e.g. cars make it more expensive to produce them than for other markets.

Agriculture is another can of worms. The EU (and UK) will not accept any chickens or chicken products produced in the US. Some US producers do not have the same hygiene standards for chicken production as in the EU and rely on washing chickens with bleach to remove the contaminants. While that is acceptable in the US it is unacceptable to the EU (and EU consumers) who insist that chickens should be reared healthily without the need to wash them with bleach. There is a Europe-wide campaign to tell politicians that people will NOT accept US chickens and products unless the US meets EU hygiene standards.

It is a response similar to the problem British beef producers had with Mad Cow disease. We could have inoculated the cattle against Mad Cow disease but no one knew what impact that inoculation might have on humans. The EU (and US) wouldn't accept British beef until Mad Cow disease was eradicated. It was, by mass slaughtering and disposal of tens of thousands of cattle.

The EU Common Agricultural Policy subsidises EU farmers. That means that they are competing unfairly against the US and the rest of the world.

Japan makes it difficult for outsiders to export into Japan not just by tariffs but by one-sided regulations making imports into Japan meet higher standards than local producers.

China? They make it very awkward for companies wanting to sell in China. They underprice and undervalue their exports making them far cheaper than they should be. They also exploit the rules of the UPU (Universal Postal Union) by making the cost of sending a package from China to the US or EU much cheaper than the same weight of package sent internally in the US or EU. US Mail and European mail companies HAVE to deliver the package even though they make a substantial loss on every Chinese delivery.

So - Trump isn't starting a trade war. That war already exists. What he is doing is concentrating minds about some dubious practices that obstruct free trade.

Will he succeed? That's another question.

 

[phrodeau]

Ok, the picture is coming into focus. very interesting, thank you

Dumb Question: What would "free trade" ideally look like--no tariffs and subsidies?

Any industry under government control would wipe out competition around the world. Socialism wins.

 

[oggbashan]

Any industry under government control would wipe out competition around the world. Socialism wins.

If the government prices the products below the cost of production.

But cheap labour would win for most assembled products, unless the productivity per worker is very high because of efficient use of automation.

US grain producers would beat most competitors because of low labour costs and high use of machinery.

Any product needing hand working would be produced where labour is cheapest.

Cost of raw materials would also affect trade. High grade ores mined by open cast methods would replace any deep mining. Countries without natural resources would be at a considerable disadvantage.

 

[Blue]

What is the Orange Blob ranting on about and trying to do?

Can someone explain this in layman's terms?

The US still produces 2/3rds of their domestic steel and aluminium but Trump seems to ideally want the US to be an autarky with domestic surplus in steel and aluminium production so he's introduced large tariffs on states and regions which account for some of the largest portions of US steel/aluminium imports to try and incentivize manufacturers of products that use steel and aluminium inside the US to use domestically produced metals rather than cheaper imports, by making the metals more expensive to import than buy from US producers. Which will ultimately boost US metal manufacturing growth.

The problem with this is that US industry that utilizes the metals for consumer goods employs 80x more people than the steel/aluminium production industry and simply cannot sustain its current level of production of those consumer goods using only the cheaper domestic supplies. It necessarily requires imported metals to remain as productive, increasing the net cost of production by slapping tariffs on those imported metals will lead to a slowdown in the growth of those industries which will ultimately net-harm the US economy by reducing profitability in a larger portion of its economic output than it boosts.

If it were flipped around and metal production contributed so much more to the US economy than the industries that utilize it then Trump's decision would actually, as far as I can tell, be a very good economic policy. But it's not and he has his priorities all out of whack.

What happened at the G7 is Trump said in almost these exact words: No, you are not going to slap retaliatory tariffs on the US because if you do the US will stop trading with all your countries entirely. Basically threatening total global economic meltdown and the potential economic collapse of states that rely too much on the US to sustain their economies.
It's a bullyish tactic but really it's our faults for being so reliant on the US to the point that Trump can act like dictator of the world and actually have the required weight he can throw around to make the act stick.

Ok, the picture is coming into focus. very interesting, thank you

Dumb Question: What would "free trade" ideally look like--no tariffs and subsidies?

Pretty bad. Not cyberpunk corporate dystopia bad, but kind of bad.
Take a look at the example that other person gave about the EU import ban on US chickens and apply that to every other potential product you can think of.

Right now we at least have a kind of slightly moral-ish global economy where in the EU we at least say "ok we're not going to import cobalt from Myanmar because they tolerate slavery and we know much of their cobalt is dug out by the bare hands of child slaves". In a world without tariffs there is no such thing as effective country-scale boycotting or divestment of malicious trade practices and therefore no incentive to stop, say, utilizing slave labour. As just one example.

Sorry if this wasn't written very well.

 

[Oliver_Klozoff]

The Dumpster Fire is a moron. Anything said about him has to take that into account before all else.

The crux of the Trumpanzees' wailing about "tariffs" has to do with VATs (value added taxes), which are basically taxes added to the price of everything subject to them. For international trade purposes, the VAT is added to imports and refunded on exports ... which looks and sounds a lot like (a) tariffs and (b) export subsidies.

And this is the interpretation the Trumpsters -- particularly trade adviser Peter Navarro -- are running with.

For technical reasons that are difficult to explain, this is not the actual ultimate effect ... but for an administration whose reading comprehension is probably junior high level, understanding the reality is several bridges too far.

So instead they whine about tariffs and export subsidies.

Very unfair! Wah!

 

[phrodeau]

The Dumpster Fire is a moron. Anything said about him has to take that into account before all else.

The crux of the Trumpanzees' wailing about "tariffs" has to do with VATs (value added taxes), which are basically taxes added to the price of everything subject to them. For international trade purposes, the VAT is added to imports and refunded on exports ... which looks and sounds a lot like (a) tariffs and (b) export subsidies.

And this is the interpretation the Trumpsters -- particularly trade adviser Peter Navarro -- are running with.

For technical reasons that are difficult to explain, this is not the actual ultimate effect ... but for an administration whose reading comprehension is probably junior high level, understanding the reality is several bridges too far.

So instead they whine about tariffs and export subsidies.

Very unfair! Wah!

Correct me if I'm wrong, but isn't VAT charged at the end-user, and tariffs charged at import? So governments and other entities which might be exempt from VAT would need to pay tariffs?

 

[Oliver_Klozoff]

Correct me if I'm wrong, but isn't VAT charged at the end-user, and tariffs charged at import? So governments and other entities which might be exempt from VAT would need to pay tariffs?

VAT is applied at every step of exchange, so with a VAT of 20%, I might buy something from you for $6, of which you get $5 and the government gets $1, and then I turn around and sell it for $12, of which $10 comes to me and $2 WOULD go to the government, except that I get to deduct the $1 already sent to the government in my purchase from you, so the government just gets $1 additional. In the end, you get $5, I get $5, and the government gets $2.

So for imports, it would look very much like a tariff: if you're overseas when I buy from you, the same transaction applies -- I pay $6, of which $1 goes to the government and $5 goes to you.

Not entirely sure how the government's transactions are affected by VAT; in effect they would not pay it because even if they nominally did pay it, they would be paying it to themselves.

 

[GrandTeton]

VAT is applied at every step of exchange, so with a VAT of 20%, I might buy something from you for $6, of which you get $5 and the government gets $1, and then I turn around and sell it for $12, of which $10 comes to me and $2 WOULD go to the government, except that I get to deduct the $1 already sent to the government in my purchase from you, so the government just gets $1 additional. In the end, you get $5, I get $5, and the government gets $2.

So for imports, it would look very much like a tariff: if you're overseas when I buy from you, the same transaction applies -- I pay $6, of which $1 goes to the government and $5 goes to you.

Not entirely sure how the government's transactions are affected by VAT; in effect they would not pay it because even if they nominally did pay it, they would be paying it to themselves.

Good description of VAT, but if Trump or his advisers thinks it's a tariff they're economically illiterate, since, unlike a tariff, it applies to domestic production as well as imports, as I'm sure you know. Trump doesn't listen to facts that he doesn't like, so I suppose the fact that he's wrong doesn't matter, except that the end result of a trade war with his closest allies will destroy a lot of jobs everywhere.

Free trade is an ideal that maximizes world utility in monetary terms - and it's already been clearly stated that it has little to do with important issues that are difficult if not impossible to measure in money. Tariffs are not the only trade barriers. In fact, non-tariff barriers as used by the US and a lot of other countries (China is a master) are much more effective retaliatory measures and a lot harder to identify and overturn. Full customs inspection of every truck crossing the border is a simple example.

A trade war would be a disaster, but unless the G6 stand up to Trump he'll simply overrun them. He isn't going to go away and he isn't going to learn. So you have to hit back, and like Canada, craft your response to create as much internal political trouble for Trump as you can. Trump sees that coming, which is why he and his toadies were so vituperative about Trudeau.

 

[phrodeau]

VAT is applied at every step of exchange, so with a VAT of 20%, I might buy something from you for $6, of which you get $5 and the government gets $1, and then I turn around and sell it for $12, of which $10 comes to me and $2 WOULD go to the government, except that I get to deduct the $1 already sent to the government in my purchase from you, so the government just gets $1 additional. In the end, you get $5, I get $5, and the government gets $2.

So for imports, it would look very much like a tariff: if you're overseas when I buy from you, the same transaction applies -- I pay $6, of which $1 goes to the government and $5 goes to you.

Not entirely sure how the government's transactions are affected by VAT; in effect they would not pay it because even if they nominally did pay it, they would be paying it to themselves.

Thanks for the details.

 

[DeYaKen]

What about the US consumer

This is probably the bit that will interest most Americans and it is something not being mentioned by the president.

Slapping tariffs on imported steel and aluminium will also increase the price of domestically produced material as US companies are not going to sell their product for less than the market price. This means that the price of all the products made from these materials will rise and the consumer will have to pay more. Imported goods made from steel and aluminium will be cheaper by comparison so US manufacturers will lose even more sales. Simple solution, slap import tariffs on manufactured goods. Result, reduced competition and increased prices. As the size of the snowball increases the consumer loses more and more.

This increase in price also transfers to manufactured goods that are exported, making US goods made from aluminium and steel more expensive on the world market. This can only damage US exports. So while you reduce your imports you also reduce your exports. Now here is the big part you make more money from the manufactured goods than you do from the raw materials so your overall deficit increases meaning the country has to borrow more to stay afloat.

But what about all the extra jobs that will force up wages and revitalise places like Pensylvania. If all steel and aluminium imports stopped it would only push up demand by half your current production, if you could do that overnight it would certainly help but you can't It takes years to resurrect a decommissioned Steel plant, almost as long as it takes to build one from scratch. The latter would be the preferred option since a new plant would be more efficient. So you have all those years of higher prices without the promised increase in jobs. Indeed since many of the existing plants are running below capacity much of the shortfall will be made up without an increase in capacity and no real increase in jobs.

i believe what you president is trying to do is apply a simple solution to a complex problem.

 

[JackLuis]

EU approves retaliatory tariffs against US as Trump’s trade war escalates

Action-Reaction!

From blue jeans to motorbikes and whiskey, the EU’s hit-list of products targeted for tariffs with the US reads like a catalogue of emblematic American exports.

Brussels first drew up the list in March when Trump initially floated the 25 percent tariffs on steel imports and 10 percent on aluminium, which also target Canada, Mexico and other close allies.

“The EU will exercise its rights on US products valued at up to 2.8 billion euros ($3.3 billion) of trade, as notified to the WTO,” the commission source added.

 

[oggbashan]

UK Harley owners will see resale values increase.

 

[Oliver_Klozoff]

It's like watching a big, dumb amateur trying to box with an elite although smaller professional: big wild swings that miss, countered by sharp jabs that land exactly where intended.

At the end of the first round the big idiot is gassed and covered with welts and bruises, and the pro is doing jumping jacks and push-ups in his corner so that he gets at least a little exercise, and he's making dinner plans with his girlfriend in the front row.