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
Last edited by Joe Jensen; 06-21-2018 at 3:07 PM. Reason: added link
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
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.
There is always more opposition to dealing with a problem than ignoring it. Dave
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.
"There is always more opposition to dealing with a problem than ignoring it." -- Dave Kumm
BINGO!!!!!!!!!!!!!!!!!!!!!!!!!!!!
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.
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.
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.
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
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