U.S. to collect 25% tariffs on Chinese woodworking equipment starting July 6

[Simon MacGowen]

On a lighter note, here's my NAFTA resolution proposal.....we get Mexico to move Cinquo de Mayo back a couple of months, move it, Canada Day and Independence Day to July 2, and the entire continent take the whole week off, with trade balanced evenly among Guacamole, beer, and BBQ related products.

With one more condition: All other goods crossing borders during that week will be tariff-free!

Simon

[Joe Jensen]

This is so beautiful...on paper. It worked seamlessly as if soybeans were sold by the US govt to Saudi Arabia govt by contract and not a business transaction between two private businesses, one in US and in Saudi Arabia. In the scenario you painted, some mystery businessman would buy million metric tons of soyabeans from US farmers and then resell them to China which would take them because China had no alternatives or would like to help the US farmers during a trade war with America (one in three rows of soyabeans ends up in China currently)!

Brazil, not the US, is the largest exporter of soyabeans in the world and China does have an option if it decided to shut out a lot, not all, of imports of beans from America.

We can not look at tariffs or trade wars in one dimension. China is not a sitting duck, waiting to be shot just because you think your tariffs will and theirs won't.

I understand the trade deficits with China need to be fixed, but I don't understand how applying the same attack strategy on the allies would help the cause when the focus should be soley on China.

Simon

One more datapoint. The European Union applies a 10% tariff on cars imported from the US. The US has a 2% tariff on cars coming into the US from Europe. Why should we continue with this?

[Simon MacGowen]

One more datapoint. The European Union applies a 10% tariff on cars imported from the US. The US has a 2% tariff on cars coming into the US from Europe. Why should we continue with this?

Then raise the tariff for cars from Europe, but not at the same time when you are dealing with your biggest economic foe which is China. When you stack China with Euro, Canada, Mexico, Japan and South Korea, you are not the lion you think you are in the cage. Timing is everything. Focus is a strategic edge. I feel sorry for the Commerce Secretary who has not one but multiple battle fronts to tend to.

Simon

[Joe Jensen]

Then raise the tariff for cars from Europe, but not at the same time when you are dealing with your biggest economic foe which is China. When you stack China with Euro, Canada, Mexico, Japan and South Korea, you are not the lion you think you are in the cage. Timing is everything. Focus is a strategic edge. I feel sorry for the Commerce Secretary who has not one but multiple battle fronts to tend to.

Simon

I am just making counterpoints. IF the US is finally going to level the trade and IP enforcement playing field, now is the right time. We have been told for years to no longer expect GDP growth at the 3% level, and that growth below 2% is the "New Norm". Q1 numbers showed a GDP growth rate over 3% and Q2 numbers are reportedly going to show a GDP growth rate of nearly 4%. We now have more job openings that people seeking jobs, and the last 2 months were 2 of the 4 months since WW2 to have unemployment under 4%. If anything the economy may be overheated. If you are going to correct trade unfairness this would be a good time to do it, rather than when the economy is weaker.

https://www.realclearpolitics.com/vi...ld_war_ii.html

[Simon MacGowen]

If you are going to correct trade unfairness this would be a good time to do it, rather than when the economy is weaker.

This, I agree.

A more preferred approach in my opinion is to deal with China first, and then the rest, OR deal with the rest, and then China. There are pros and cons with either approach, but both are still better than the current approach, lumping all your traditional allies with the #1 source of your trade imbalances. The current approach is the exact opposite of "Divide and Conquer."

Simon

[John Patric]

One more datapoint. The European Union applies a 10% tariff on cars imported from the US. The US has a 2% tariff on cars coming into the US from Europe. Why should we continue with this?

True but tariffs are not generally like for like so the EU might be buying US wheat and the tariffs on cars is to to try and even out a deficit. One thing I notice is that all the talk is about goods and no consideration is given to services when talking about trade imbalances.

[Joe Jensen]

True but tariffs are not generally like for like so the EU might be buying US wheat and the tariffs on cars is to to try and even out a deficit. One thing I notice is that all the talk is about goods and no consideration is given to services when talking about trade imbalances.

True, we were told the administrations ultimate goal is to make all tariffs "like for like" meaning that all tariffs everywhere are equal.

[David Kumm]

There is always more opposition to dealing with a problem than ignoring it. Dave

[Alex Zeller]

Tariffs have been a problem for a long time and when people accept them, stop thinking about them is when pain is going to be felt when we are faced with trying to remove them. China is not going to remove it's tariff on new cars imported from the US without being forced to. The "chicken tax" tariff is one of the reasons why companies like Toyota now build vehicles in North America. China has a huge automotive market that is being fed mainly by cars being built in China because of the cost to import is just too high. With a Chinese lathe on backorder this could very well hit my wallet but I'm hoping that in the long run it'll balance things out.

[Ray Newman]

"There is always more opposition to dealing with a problem than ignoring it." -- Dave Kumm

BINGO!!!!!!!!!!!!!!!!!!!!!!!!!!!!

[Steve Schoene]

Alex. The tariffs stimulate increased domestic production purely because domestic manufacturers can charge higher prices. Completely unlikely that the expansion will encourage domestic prices to drop to anything close as inexpensive as before the tariff.

[Martin Wasner]

Last year I met a former manager of a cabinet door factory in Oregon (who is a direct competitor to me) that currently produces 5k - 6k doors/day. Last year alone, they installed 15 robotic arms with plans to continue that trend in every possible step in the process.

We were talking at lunch the other day what it would take to let mama Fanuc take over the whole works. From scanning and defecting rough lumber, to getting it ready to load in the truck. I'm betting stacks of millions. But, I wouldn't have to attempt to hire cabinet makers any longer, just delivery people and maintenance techs.

[Alex Zeller]

Alex. The tariffs stimulate increased domestic production purely because domestic manufacturers can charge higher prices. Completely unlikely that the expansion will encourage domestic prices to drop to anything close as inexpensive as before the tariff.

In part yes, but they are also being used to get China to drop it's tariffs on US goods. China has been playing this game for some time now and has learned how to force companies that want to sell in China to open up factories in China vs import. Once there it's real easy for the Chinese to get intellectual property used in the production of goods. This round of tariffs is meant to punish China for doing so. There's already a next round being planned 4 times the size of this one. Clearly the plan is to make China feel pain.

[Simon MacGowen]

True but tariffs are not generally like for like so the EU might be buying US wheat and the tariffs on cars is to to try and even out a deficit. One thing I notice is that all the talk is about goods and no consideration is given to services when talking about trade imbalances.

I mentioned about China having a weapon in its pocket to retaliate: controlling the number of tourists going to the States (they spend more money than any other tourists. Many Japanese shops (even when some of the goods they sell are made in China!) depend on the Chinese tourists to flourish). They can also send their students to other countries like Canada, the UK and Australia if they have to do that, which is a big big source of money for many university programs in the States. Many private boarding schools in the UK will be in trouble if China bans its citizens from sending their kids to study there.

Service wise (which is not part of the trade imbalances), China can inflict real pains on some sectors...but if that happens, we are talking about all-out war.


Simon

[Simon MacGowen]

There is always more opposition to dealing with a problem than ignoring it. Dave

I may have missed it, but I have not seen one single post in this thread that advocates taking no action.

It is irresponsible for any leader or decision maker to push the country into trade wars without careful planning and execution. People's career, jobs and lives are at stake here. You cannot go to a trade war with someone by saying some will suffer, but some will gain. Measures must be objectively evaluated and their consequences planned for. To rally the country and its citizens, you need to explain your strategy. I see no strategy here. If there is one, it is so fluid that it does not seem to exist.

If your auto sector benefits from a trade war, what about the farmers who could be hard hit? Do we have a relief plan in place to help the farmers before we fire the first shot? This is not a game or a redistribution of wealth. Yes, we see a long-term goal, but in the short-term, you have got to have measures in place to help you reach the long-term goal.

Simon