Taxpayers just collateral damage in trade war

Bok cartoon from three days ago seems prescient.

Since farmers may be hurt by China slapping retaliatory tariffs on American farm goods, President Trump is now talking about extending $12 billion in emergency aid to farmers, The Wall Street Journal is reporting this morning.

WSJ explains:

China, in response to a series of U.S. tariffs, has levied duties on $34 billion of U.S. products, covering 545 categories, ranging from soybeans, pork, chicken and seafood to sport-utility vehicles and electric vehicles.

The farm goods were chosen to hit U.S. states that supported Mr. Trump just months ahead of the midterm elections, according to people with knowledge of Beijing’s plan.

Planned relief for U.S. farmers follows a series of tweets from the president earlier Tuesday in which he hardened his stance on trade ahead of a visit this week from European Commission President Jean-Claude Juncker.

Trump tweeted this morning:

So what happens when the feds print money? Inflation, of course, which eats into the value to your paycheck and savings.

Aren’t tariffs great?

Robert Samuelson wrote recently in The Washington Post that the Smoot-Hawley Tariff Act of 1930 may not have caused the Great Depression, but it certainly did not help end it.

“One crucial lesson of Smoot-Hawley is to leave trade policy alone — that is, don’t resort to protectionism — in any economic crisis that doesn’t automatically involve trade. Protectionism may make things worse and, possibly, much worse,” the columnist writes.

Protectionism discourages trade by raising the price of traded goods, Samuelson explains, thus exports and imports suffer and could lead to defaults by debtors, of which there are far too many right now, which could trigger a panic.

Those who do not remember history …

23 comments on “Taxpayers just collateral damage in trade war

  1. Rincon says:

    Thank you, Thomas, for actually objecting to something Trump has done. Nice to see that you don’t think he’s perfect in every way.

    From what I understand, most economists feel that other countries subsidizing their exports to us are actually subsidizing us too. Although people can see the lost jobs from protectionism, they fail to see the new jobs created because our citizens have more money to spend due to paying less for imported goods. If our industries were truly harmed, the dollar would drop because foreigners would demand a premium for accepting our money.

    If we truly are getting a raw deal from other countries, then tariffs might be a reasonable response, but I have yet to see any serious analysis of trade dynamics to show whether or not that is happening. Typical of journalism in this country. They aren’t fond of writing articles requiring more than an hour of research. In this age of the Internet, they probably can’t afford to.

    Why did Trump not exempt Canada? After all, we do not have a trade deficit with them. Maybe Putin told him to?

    I don’t find shielding farmers from the effects of the trade war to be greatly objectionable – the money collected from the tariffs would help pay for it – but if he shields farmers, then he needs to shield ALL of the businesses suffering lost sales. Why the uneven playing field? Pandering to his base perhaps? Nah, someone as fair minded as Trump would never consider something like that, right?

  2. There is less money collected from the tariffs if there is less trade due to the tariffs.

  3. Anonymous says:

    Rincon I’m reminded of the lessons republicans shouted so loudly about so relatively few years ago:

    “The gov’ment” shouldn’t be choosing winners or losers”

    Hear any of that lately?

    Me neither.

    Odd.

  4. Steve says:

    Trumps tactics are not well liked by conservatives at all, they are accepted because, as you liberals loved to tell us, he’s the president get over it and to quote your favorite president “elections have consequences, we won”
    Well, in this case “we” means something a bit different but the truth is we conservative people are willing to wait it out and see if Trump really has the gonads to get it done.

    You libby types are crying crocodile tears like crazy.

  5. Anonymous says:

    Thomas that’s all well and fine I suppose but I’m more interested in action.

    From Trumps forcing electric companies to but coal, to trumps refusal to answer question from various media, to condemning various media, to granting interviews to various media, to Trumps policies subsiding farmers, to trumps policies exempting his own properties from the immigration law, this tin pot banana republic dictator has demonstrated that he’s ALL about picking winners and losers in the economy and yet, nothing from the right, nothing but crickets from an action perspective.

    And I’ll note that while this article, attacks tariffs, of course not a single harsh word for either the man that has instituted the tariffs, or the party in control in Congress for doing NOTHING, to stop those tariffs.

  6. Anonymous says:

    Let’s take a look at the difference between “The National Reviews” opinions about the last administration choosing winners and losers in the economy, and their “handling” of this administration shall we?

    According the The National review then, Obama needed to be imprisoned for various alleged criminal frauds that he was committing on the American tax paying public (apparently they neglected to consult with recent Supre Court nominee first because “I’m certain” Brett would have told them that a president cannot do anything wrong while he’s in office, or certainly that he cannot be held accountable for any such allegations in an actual court)

    Course, their opinion about Trump choosing winners and losers is more…nuanced. Fact, they believe that not only is he justified, that this country (or at least SOMEONE in this country (Ivanka maybe?) will actually benefit by these courageous acts.

    Interesting “right”?

    https://www.nationalreview.com/2018/05/donald-trump-tariffs-debate-national-security-economics/

    https://www.nationalreview.com/2011/09/solyndra-fraud-andrew-c-mccarthy/

  7. Anonymous says:

    Some interesting takes on choosing winners and losers in the last administration, along with similarly interesting commentary on the people supposedly taking these dastardly actions.

    Guess some animals are more equal than others though eh?

    https://4thst8.wordpress.com/2012/01/24/fairness-in-the-economy-is-in-the-eye-of-beholder-or-the-holder-of-power/#comments

    https://4thst8.wordpress.com/2011/09/30/crony-capitalism-continues-with-solar-power-handouts-in-nevada/#comments

    https://4thst8.wordpress.com/2012/01/25/more-fracking-lies-from-obama-everything-good-comes-from-the-government-what-bottom-sediment/

  8. Steve says:

    Found a nerve!

    Hope it’s not the last one!

  9. Bill says:

    As the WSJ article stated, “The farm goods were chosen to hit U.S. states that supported Mr. Trump just months ahead of the midterm elections, according to people with knowledge of Beijing’s plan.”.

    Query: Is this interfering in a U. S. election? China is obviously trying to influence the voters in farm states.

    In my naivete, I wonder if any tariff equitable could be considered equitable unless was equal on both sides. So, if China has a 25% tariff on U. S. Cars and our tariff is less or non-existent, then how is that fair? If Canada has about a 300% tariff on our dairy products, and we have zero or less on theirs, how is that fair and equitable.

    So that I understand the argument, we must accept these inequities because it is good for……………….. Please fill in the blank for me.

  10. WSJ: As Nebraska Republican Senator Ben Sasse put it, “This administration’s tariffs and bailouts aren’t going to make America great again, they’re just going to make it 1929 again.”

  11. Steve says:

    Looks like the EU caved and now we are hearing about zero tariff trade. That will really test China and the LNG bit is going to good for our energy sector while it takes away from Russia.

    I think a few R heads joined in the head explosion counts today. And this has some positive for Dean Heller too.

    Now what was that bit TownHall had about predictions?

  12. Bill says:

    I am only half facetiously asking whether Beijing’s policy, directed at Trump voting farm states amounts to “election interference” by a foreign nation? That seems a bit more egregious than feeding information through face book sites.

    BTW, seemingly great news from about trade concessions from the EU. Perhaps China’s soybean boycott will be off set by the EU action. Wouldn’t it be nice if we could get to zero tariffs by all nations?

    Still don’t like Trump’s hyperbole and bombast but I put that aside when I see results. So far, in the short time he has been in office, the Results are remarkable.

  13. ANN SCARFF says:

    The “trade wars” seems to have become a chirp/repeat phrase. I have yet to see how conglomerate international corporations with extensive presence in every country in the world play into the GDP ramifications of Trump’s tightening of tariffs. Tighten one border, the accounting shifts within the GloCo to another location. Simple.

    The macroeconomics based on ‘trade deficit’ policy prior to international flight and open travel are such old news I wonder if they really still apply.

    Now that would be a story.

  14. Rincon says:

    Just a small clarification: “If Canada has about a 300% tariff on our dairy products, and we have zero or less on theirs, how is that fair and equitable.” It is true that Canada has a 300% (actually 270, but who’s counting) tariff on dairy products, but there is a zero tariff until dairy imports reach a threshold. Up to the threshold, there is no tariff at all. We actually have a trade surplus with Canada, not a deficit. You might want to pick an example from a nation that is actually creating problems for us.

    In fairness, you might also want to mention the 25% tariff we placed on light duty trucks in 1964. It’s still active. So we’re hardly angels ourselves. https://en.wikipedia.org/wiki/Chicken_tax As I mentioned before, until someone publishes something more analytical than the banal play by play that we always get from our media, we can’t possibly know whether we are more victims or perpetrators. One thing is for sure: Trump is the absolute worst source of information.

    Just pointing it out for balance. The Conservative Propaganda Machine would never make this kind of thing clear.

  15. Rincon says:

    Slightly off subject, but here’s another item you might not hear from the Conservative Propaganda Machine: “In what CNN calls “another serious escalation against the press by the Trump administration,” one of its White House reporters was banned from a press event Wednesday, apparently because she asked questions that President Trump didn’t like. ”

    “White House press secretary Sarah Sanders confirmed that Collins had been banned from the Rose Garden event for “shouting questions” at the earlier meeting and refusing to leave. Other journalists who were present, however, say Collins, who can be heard on video here, was respectful and spoke at the same volume as any other reporter.”

    “Fox News also condemned the move, with president Jay Wallace saying the network stands with CNN “for the right to full access for our journalists as part of a free and unfettered press.” http://www.newser.com/story/262474/white-house-bans-reporter-for-asking-inappropriate-questions.html

    Trump’s just testing the water. The ultimate goal is to allow access to only reporters friendly to the administration. Other despots have this perk; why not Mr. Trump?

  16. Anonymous says:

    Rincon I figured you’d be interested in some even more recent news.

    “President Trump on Thursday vowed that the government would investigate Twitter for allegations that the social media giant has suppressed content from some conservative accounts.

    “Twitter ‘SHADOW BANNING’ prominent Republicans. Not good. We will look into this discriminatory and illegal practice at once! Many complaints,” Trump tweeted.”

    http://thehill.com/policy/technology/398943-trump-government-will-look-into-twitter-for-shadow-banning-republicans

    I wonder whether the government, threatening to use it’s incredible powers against private companies in this fashion constitutes choosing winners or losers, or socialism, or something Orwellian, or interference with free speech and free markets, or tyranny of the majority/minority, or possibly it’s alright because it’s well…a republican?

    Any regular contributors here care to help a poor feller out?

  17. Free speech for all. But Twitter should be able to decide how to operate its for-profit forum.

  18. And if someone wants to call out Twitter for being biased in its handling its forum, that’s fine too.

  19. Anonymous says:

    So the gov’ment, “calling out” a private business, by threatening to “look into” the “illegal” conduct is acceptable to you Thomas?

  20. Trump can call it illegal, but that doesn’t make it so. What is “look into” anyway? At least he hasn’t sicced the IRS on them.

  21. NYT: “The special counsel, Robert S. Mueller III, is scrutinizing tweets and negative statements from the president about Attorney General Jeff Sessions and the former F.B.I. director James B. Comey, according to three people briefed on the matter.”

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