Tariff Watch

[thm_w]

Why should the voters support NAFTA when the Canadians impose a 270% tariff on our dairy products?  How is that 'Free Trade'?  The US has gotten the short stick in all of these agreements.  The best thing Trump did was cancel the TPP and TTIP agreements.  All NAFTA accomplished was moving auto manufacturing jobs to Mexico.  How did that help the US?

I buy whey from US occasionally, and have not seen any hint of a tariff (but at consumer quantities). A lot of Canadians that live near the border also buy cheese and milk from the US tariff free as well.
https://www.dairyfarmers.ca/what-we-do/supply-management/myths-realities/canada-blocks-imports-of-dairy-products

I would prefer to have the tariff removed (if it is limited to bST free milk), but you make it sound like such a big deal when it is a small part of the big picture. Why potentially screw over 266 billion in exports, over a few billion?

Canada is currently our 2nd largest goods trading partner with $544.0 billion in total (two-way) goods trade during 2016. Goods exports totalled $266.0 billion; goods imports totalled $278.1 billion.

https://www.cbc.ca/news/politics/nafta-us-canada-trade-deficit-numbers-1.4524824

[shteii01]

Both of my NASDAQ and BRIC etfs are up today.  Looking forward to them "going to the Moon!"

[rstofer]

I would prefer to have the tariff removed (if it is limited to bST free milk), but you make it sound like such a big deal when it is a small part of the big picture. Why potentially screw over 266 billion in exports, over a few billion?

It's an attitude problem.  We charge the EU a 2.5% tariff on their cars coming into the US, they charge us 10% for our cars coming into the EU.  How is that fair?

So, we are the largest economy in the world, maybe it's time we recomputed some of these tariffs.  Match what is charged to us.  Note that Germany is willing to back off on that auto tariff if the EU will go along and the EU will go along because Germany IS the EU.  Maybe we won a little bit.  Not that it matters, the Europeans don't buy our cars anyway so changing the tariff is pretty meaningless.  Which is why they're willing to do it.

To me, fair trade would be no tariffs on anything.  No government support of any segment of the economy.  Compete fair and square.  But it doesn't work that way because there is always some group that wants to be defended.  The EU auto manufacturers, EU aircraft manufacturers, the Canadian dairy farmers, the US steel industry, the US timber industry, etc.

There should be a tariff on all US autos made in foreign countries and imported to the US.  This would be created to discourage our companies from leaving the US and continuing to get their product back in duty free after having killed off thousands of US jobs.  Trump is talking about this and I support it 100%.  Note that MANY foreign cars are at least assembled in the US.  BMW, Toyota, Nissan are built here but a LOT of American cars are built in Canada, Mexico and Europe.  If I had a 4 door Silverado it would have come from Mexico.  I have the US built 2 door model so I'm good.

https://www.hotcars.com/10-foreign-cars-made-in-the-us-and-10-american-cars-that-arent/

Either we have protectionist tariffs or we don't.  Half in and half out isn't working well.

Why do this?  Because we can't keep selling our country to China, one shipload at a time.  Funny thing:  Everybody was worried about Japan in the '60s and '70s.  They were buying up golf courses, high rise buildings, beach front property - and then they got hammered in a downturn and their economy has never recovered.  Their GDP growth has been essentially 0% since 2009:

https://tradingeconomics.com/japan/gdp-growth-annualized

In any event, the tariffs introduced so far are pretty harmless.  More symbolic than anything.  Kind of a shot across the bow.

Trump wants the US out of NAFTA - I agree 100%.  That treaty was a giveaway of US jobs and money.

There was a brief period between 1989 and 1993 when Canada and the US had no tariffs.  Now we have that 270% tariff on US dairy products to Canada.  Where did that idea come from?

https://www.washingtonpost.com/news/monkey-cage/wp/2017/02/15/what-is-nafta-and-what-would-happen-to-u-s-trade-without-it/

[Eka]

Funny thing:  Everybody was worried about Japan in the '60s and '70s.  They were buying up golf courses, high rise buildings, beach front property - and then they got hammered in a downturn and their economy has never recovered.  Their GDP growth has been essentially 0% since 2009:

https://tradingeconomics.com/japan/gdp-growth-annualized

It should be noted that Japan's workforce is aging, and shrinking in size. It's very hard to grow an economy when that is happening. If the US curtails immigration like many want to see happen, we will be in the the same boat.

[JPortici]

Maybe we won a little bit.  Not that it matters, the Europeans don't buy our cars anyway so changing the tariff is pretty meaningless.  Which is why they're willing to do it.

yeah.. the only (new) american car i'd ever buy would be a jeep.
which is going to be manufactured in italy anyway 

[rstofer]

It should be noted that Japan's workforce is aging, and shrinking in size. It's very hard to grow an economy when that is happening. If the US curtails immigration like many want to see happen, we will be in the the same boat.

I don't think we're trying to throttle 'merit' immigration.  Immigrants with advanced education, language skills or other skill sets that may be in demand.  We need all the smart people with skills that we can get!

What we don't want is illegal immigration and immigrants with no advanced education or skill sets.  There just aren't going to be jobs at that end of the pay scale and, inevitably, the costs fall on the rest of society.

The US birth rate has been dropping for decades and is quite similar to Japan's.  It's not even at a replacement level.

https://www.google.com/search?q=us+birth+rate

https://www.huffingtonpost.com/entry/key-reason-birth-rate-declining_us_5b0725cfe4b0568a88097feb

[shteii01]

To add to rstofer.  People who invest money into US also get green cards, green card allows owner to apply for US citizenship after 5 years.  So.  Invest X today, get green card, apply for US citizenship in 5 years.

It should be noted that Japan's workforce is aging, and shrinking in size. It's very hard to grow an economy when that is happening. If the US curtails immigration like many want to see happen, we will be in the the same boat.

I don't think we're trying to throttle 'merit' immigration.  Immigrants with advanced education, language skills or other skill sets that may be in demand.  We need all the smart people with skills that we can get!

What we don't want is illegal immigration and immigrants with no advanced education or skill sets.  There just aren't going to be jobs at that end of the pay scale and, inevitably, the costs fall on the rest of society.

The US birth rate has been dropping for decades and is quite similar to Japan's.  It's not even at a replacement level.

https://www.google.com/search?q=us+birth+rate

https://www.huffingtonpost.com/entry/key-reason-birth-rate-declining_us_5b0725cfe4b0568a88097feb

[thm_w]

It's an attitude problem.  We charge the EU a 2.5% tariff on their cars coming into the US, they charge us 10% for our cars coming into the EU.  How is that fair?

So, we are the largest economy in the world, maybe it's time we recomputed some of these tariffs.  Match what is charged to us.  Note that Germany is willing to back off on that auto tariff if the EU will go along and the EU will go along because Germany IS the EU.  Maybe we won a little bit.  Not that it matters, the Europeans don't buy our cars anyway so changing the tariff is pretty meaningless.  Which is why they're willing to do it.

To me, fair trade would be no tariffs on anything.  No government support of any segment of the economy.  Compete fair and square.  But it doesn't work that way because there is always some group that wants to be defended.  The EU auto manufacturers, EU aircraft manufacturers, the Canadian dairy farmers, the US steel industry, the US timber industry, etc.

Yes that is true.

These relatively small industries (compared to the population of the country), have far too much influence and say. Dairy, auto, coal, whatever, somehow they are more important than the average citizen when it comes to written laws.

[ebastler]

These relatively small industries (compared to the population of the country), have far too much influence and say. Dairy, auto, coal, whatever, somehow they are more important than the average citizen when it comes to written laws.

Car manufacturing in Germany is not a "relatively small industry". Combined with all the suppliers of components, it is certainly one of the major industries, especially when it comes to exports. One can still argue whether they have too much influence on politics, but there is a significant economic impact behind it.

That being said -- the strange US move of having their ambassador invite the German car manufacturers' CEOs to propose a tariff deal did cause quite an outcry in politics. This is not how tariff "deals" are made over here.

[rstofer]

That being said -- the strange US move of having their ambassador invite the German car manufacturers' CEOs to propose a tariff deal did cause quite an outcry in politics. This is not how tariff "deals" are made over here.

Perhaps the ambassador didn't realize that all tariffs are decided in Brussels for the entire EU.  He might not have known that!  Or...

More likely, he is following Trump's orders to sideline the EU and go straight for the main players.

[DerekG]

There will not be trade war.

Hasn't it already started?

[thm_w]

Car manufacturing in Germany is not a "relatively small industry". Combined with all the suppliers of components, it is certainly one of the major industries, especially when it comes to exports. One can still argue whether they have too much influence on politics, but there is a significant economic impact behind it.

That being said -- the strange US move of having their ambassador invite the German car manufacturers' CEOs to propose a tariff deal did cause quite an outcry in politics. This is not how tariff "deals" are made over here.

For germany yes you are right, ~20% of industry revenue is significant: https://www.gtai.de/GTAI/Content/EN/Invest/_SharedDocs/Downloads/GTAI/Industry-overviews/industry-overview-automotive-industry-en.pdf
US and Canada, its a small fraction, 1-2% of GDP.

[shteii01]

There will not be trade war.

Hasn't it already started?

Nope.
We are not going to drive Chinese from US, Walmart will still bring shiploads of stuff from there.

China will not stop importing food from US.  They might get larger portion of it though third parties to make it look like they are not buying it from us directly, but in the end they still need that food.

Let me tell you how sad Chinese situation is.  Even Russia! is now planting soy beans, to sell to China. 

[all_repair]

Maybe we won a little bit.  Not that it matters, the Europeans don't buy our cars anyway so changing the tariff is pretty meaningless.  Which is why they're willing to do it.

yeah.. the only (new) american car i'd ever buy would be a jeep.
which is going to be manufactured in italy anyway 

Over here, all cars have the same tax.  People buy basicallyJapanese and German cars.  Korean
share is climbing, and those with tighter budget goes for Chinese cars.  Perception of American car is not fuel efficent, not cheap, not reliable, not most powerful.  But google, microsoft, facebook, AWS, etc are huge success.  The deficit in trade is covered or exceeded by surplus in services, as a whole is we are like EU that US still enjoy some surplus.  Trump sold the trade deficits, but not tell on the service surpluses, and make believe that all the past US trade teams were stupid that sold US away.   If US is running account deficit with the whole world, where do they get the money to waste on the wars.  The money wasted on wars are the rest of the competitors saved. 

[Bassman59]

It should be noted that Japan's workforce is aging, and shrinking in size. It's very hard to grow an economy when that is happening. If the US curtails immigration like many want to see happen, we will be in the the same boat.

I don't think we're trying to throttle 'merit' immigration.  Immigrants with advanced education, language skills or other skill sets that may be in demand.  We need all the smart people with skills that we can get!

What we don't want is illegal immigration and immigrants with no advanced education or skill sets.  There just aren't going to be jobs at that end of the pay scale and, inevitably, the costs fall on the rest of society.

So, what about all of the Americans lining up to work in the fields, picking the crops that feed this country?

{crickets}

[rstofer]

So, what about all of the Americans lining up to work in the fields, picking the crops that feed this country?

{crickets}

And there is no reason we don't have a 'Guest Worker' visa.  Many other countries have such a thing and the idea is to have people working during the picking season (farming) and back home during the growing season.  But no!  For some reason, the idea is unworkable according to our duly elected representatives.

[shteii01]

Maybe we won a little bit.  Not that it matters, the Europeans don't buy our cars anyway so changing the tariff is pretty meaningless.  Which is why they're willing to do it.

yeah.. the only (new) american car i'd ever buy would be a jeep.
which is going to be manufactured in italy anyway 

Over here, all cars have the same tax.  People buy basicallyJapanese and German cars.  Korean
share is climbing, and those with tighter budget goes for Chinese cars.  Perception of American car is not fuel efficent, not cheap, not reliable, not most powerful.  But google, microsoft, facebook, AWS, etc are huge success.  The deficit in trade is covered or exceeded by surplus in services, as a whole is we are like EU that US still enjoy some surplus.  Trump sold the trade deficits, but not tell on the service surpluses, and make believe that all the past US trade teams were stupid that sold US away.   If US is running account deficit with the whole world, where do they get the money to waste on the wars.  The money wasted on wars are the rest of the competitors saved.

You say: "over here".  Where is the over here?

My first car was Japanese.  My second was Korean.  My third is also Korean.  I did not buy American simply because they were at least 2k more than anything else of the same class.

However, I kinda understand what you are saying about American cars.  Where ever you are, you are not alone in not buying American cars.  Did you hear that Ford will stop selling small cars in US?  That came out a week or two weeks ago.  All those Ford Fiestas and I think Focuses are going away, possibly forever.

[rstofer]

Did you hear that Ford will stop selling small cars in US?  That came out a week or two weeks ago.  All those Ford Fiestas and I think Focuses are going away, possibly forever.

Ford is losing money on small sedans.  Nobody wants to buy them, the market is in SUVs.  That will hold as long as gas prices stay modest.

Electric cars are getting all the attention.  Every manufacturer is doing something with electric cars.  FWIW, the 2017 Chevy Bolt is a great all-electric car.  I'm biased, I have one...

[DerekG]

All those Ford Fiestas and I think Focuses are going away, possibly forever.

At least the Ford Fiesta's that are imported into Australia are built in Thailand. The diesel engines for them are made in Europe.

[CatalinaWOW]

Agree on perception of cars from various countries.  One of the interesting things is that the time constant of this perception is measured in decades, partly determined by Nyquist.  When people only buy a car every few years it takes a long time to change perceptions.  US cars were absolutely terrible in the 70s-80s.  Have been steadily improving since, and there is some evidence that current US cars are as good or better than any in the world.  But that (if true) has only been so for a handful of years.  Not nearly long enough to move the needle from decades of mediocrity.  That same thing works in reverse.  Certain German cars are riding the past hard, and if uncorrected will eventually find their reputation lagging.

[Bassman59]

So, what about all of the Americans lining up to work in the fields, picking the crops that feed this country?

{crickets}

And there is no reason we don't have a 'Guest Worker' visa.  Many other countries have such a thing and the idea is to have people working during the picking season (farming) and back home during the growing season.  But no!  For some reason, the idea is unworkable according to our duly elected representatives.

Our duly-elected representatives, especially those who are in the party that considers itself the “party of business,” are feckless morons. (And I’m being kind. Many of them are actually malevolent.)

[IanMacdonald]

The really amusing thing is the way the EU leaders create the biggest closed trade zone on the planet, then cry foul when Trump does likewise.   

Er, OK, well now you see what it's like from the other side of the fence.

[rstofer]

All those Ford Fiestas and I think Focuses are going away, possibly forever.

At least the Ford Fiesta's that are imported into Australia are built in Thailand. The diesel engines for them are made in Europe.

Those would be the same engines that can't pass the environmental requirements and have 'cheat' code in the ECU?  Volkswagon, BMW, those guys?

It's telling when German cities are banning diesel cars...

[schmitt trigger]

Agree on perception of cars from various countries.  One of the interesting things is that the time constant of this perception is measured in decades, partly determined by Nyquist.  When people only buy a car every few years it takes a long time to change perceptions.  US cars were absolutely terrible in the 70s-80s.  Have been steadily improving since, and there is some evidence that current US cars are as good or better than any in the world.  But that (if true) has only been so for a handful of years.  Not nearly long enough to move the needle from decades of mediocrity.  That same thing works in reverse.  Certain German cars are riding the past hard, and if uncorrected will eventually find their reputation lagging.

There is this Spanish saying: "Crea fama y echate a dormir. "
In English, Make your reputation and you can go to sleep.

That reputation can be either good or bad. And it applies to individuals, to corporations, even to countries.

For instance, let's say you have two very similar products; one made in Germany and the other made in China.

Without reviewing or checking anything else, in the mind one would immediately assume that first product is expensive but high quality, the second cheap and poorly done.
This assumption may not be entirely true, but for better or worse that is the reputation they have got.

Japanese products used to have a piss-poor reputation. It took them decades of very hard work after WW2 to remove that reputation.

[MT]

Dumpf has not won anything, nor the other sides, trade wars is like an eye for an foot group battle in a closed 4 by 4meter room using hand grenades! Sit and count percentage tariffs, punishments when global trade is entirely interconnected and inter tangled the MAGA and MIA is just a angel dust dream, oligarchs the winners and middle class and below the pieces on the global chess board sacrificed at will, at any time , for any reason, even stupid and the morbid.

Politics is just a bad expensive theatrical play for the grey masses at their expense. 
The reason for this so called trade war is entirety US domestic.

Doesn't every political leaders win support by creating fictional enemies or to render domestic threats?

The ancient saying goes: You get what you asked for, ie you get what you vote for, disregard wheter its
psychopath Killary or Dumpf, or Boris Johnsson or Nicolas Sarkozy, failures lies not at psyco politicians
but voting people.

So its estimated by science the planet population consists of 2.5% psychopaths, start deal with that
maybe but just maybe things can change to the better.