https://www.theguardian.com/commentisfree/cifamerica/2011/apr/06/imf-capital-controls
“In February 2010 the IMF changed its stance on capital controls because IMF economists’ own analyses found that, over and again, when developing countries used capital controls, they worked. Indeed, the IMF found that those nations that used capital controls were among the least hard-hit during the crisis.”
not sure including Canada and Mexico in the tariff initially gives the US anything in negotiations. if anything, it creates a sideshow and wastes NAFTA negotiators’ time as it is not a bargaining chip at all, but a starting point of mutual loss given that retaliatory tariffs from Canada and Mexico are implied. how is the US going to use it as a bargaining chip? we’ll stop taxing non-NA imports if you don’t go with our terms on NAFTA? the US should have said outright what you are saying if it is their intention. we are making the NA pool of money bigger and we want to capture most of the gains. that will be the main concession we ask from our NAFTA allies…
but it is trump so i guess i’m asking for way too much.
I realize it stirs things up, but this is all early days and I’m sure these discussions are already underway. We are net steel exporters to Canada and they’re our largest trade partner focus just needs to turn to NAFTA. Plus we haven’t seen the final 232 action yet (gets signed next week) which may just include these exemptions outright.
I normally don’t seek out Ben “War Crimes FTW” Shapiro but someone sent me this this morning and he riffs for awhile on trade:
[video:https://youtu.be/OarbHyBzP94]
Shapiro is just not smart. He starts with the losing money on trade thing. It’s actually false, people lose money on trade all the time. Clearly Trump is referring to the current account deficit which is what’s being referred to. What most rubes these days can’t grasp is that persistent current account deficits factually always end in a meltdown. There’s no way around it, the US has run one unaddressed for longer than they’ve run a fiscal deficit. He also ignores the fact that China has not been practicing free trade by any party’s reckoning and has steadily run protectionist policy against weak US policy. So you do have to address this issue. His example on the grocery stores is also lacking. Because he never addresses where you get your $$$ from.
His “trade deficits mean nothing” is just ignorant. I mean beyond ignorant, the dumbest thing I’m likely to hear in 2018. In global trade among the largest players it becomes a closed system. If X won’t trade back with you and you run a 30 year deficit. At some point, if you don’t stop trading, you become burdened, uncompetitive and will collapse because that deficit has to be funded somehow. Typically that’s through investment flows. Ultimately what you wind up with is transfer of assets via capital asset ownership to foreign countries. Taken to an extreme, eventually Country X would own all of your assets and you’d become an employee in a rent seeking system. That’s why perpetual reinvestment of Chinese trade surpluses into the US eventually come home to roost. Buffett actually addressed this awhile back.
https://seekingalpha.com/article/7385-warren-buffett-on-the-current-account-deficit
Regarding the steel industry, his view is selective and myopic. The steel industry only recovered last year because of 10-15% of Chinese capacity closures AFTER THE OBAMA ADMINISTRATION had the gall to levy 256% tarrifs on Chinese steel that are still in effect. He’s also missing the point that steel is necessary. His Israel commentary highlights this, sure they don’t produce steel, they also buy all of their defense products from us. What would happen if the US stopped supporting them in a conflict, how long would Israel last?
His markup math makes no sense either. He’s basically describing inflation.
C’mon man, be better than this. It’s Shapiro, Mr. Brietbart.
He really brings it home here LTJ with his inner Alex Jones:
I was dying when that part started. Levying Puerto Rico as an example to sell your food kits. Unbelievable.
I don’t really have a position on trade either way, it was made available to me because of the ferocity of his attack on Trump as an lol, and I thought it might be interesting to share. I’m now in a side argument with this person exposing all the fun Zionist bullshit Shapiro has spouted over the years since said friend seems inclined to excuse him.
This stuff is way above my paygrade anyway, I guessed B on every economics question on the CFA.
And South Korea, they have like a 30% tax on foreign electronics/appliances and such. Everyone here buys Samsung/LG, and it seems to be working great for KR. There’s a Korean version of everything “oh we don’t buy that here, just buy this brand, it’s almost the same and less expensive.”
Yeah, that guy isn’t as smart as people give him credit for, a lot of his economic analyses are pretty darn thin. Just made to “sound smart” to people who don’t know the topic.
Yeah, a lot of this “analysis” floating around from Econ 101 text books shows an incredible lack of understanding of 1) how other countries have been running protectionist trade policies at the US expense for decades (to great success, btw) 2) the basic risks of running persistent current account deficits 3) no understanding of the steel situation.
You have to think long term because right now that’s where Asia’s head is at they’re running circles around complacent and willfully ignorant western populations that are setting themselves up for serious hardship in 10 years if they don’t start working to correct the deficits today. It’s the same clueless arrogance that was persistent throughout the peripheral EU population before reality reared its head. Does raising a tariff on steel fix everything? No, but you do have to start chipping away at policy and trade agreement changes to restore balance, because all of that free trade drivel only applies if all parties are adhereing to open market standards. These people must have missed the other 99% of class when SOE’s, subsidies, forced JV’s and technology transfers, capital controls and closed financial markets were covered.
China: “Here America, lets open up manufacturing trade on a subsidized basis so you can smile and nod dumbly and distract yourself with cheaper t-shirts and bobbles and run a CA deficit. Meanwhile we’ll fund the deficit by slowly gaining disproportionate stakes in your capital assets, bar you from directly investing in our own country, cut you off from the currency and lock out services trades (which are your advantaged area) then convince you this is all academically sound.”
America: “Ok, so the t-shirts and widgets will be cheaper right?”
im curious. if given the choice between tariffs or a sales tax. what would you all prefer?
ales tax cause i dont spend i be savin
holla for a dolla
[video:https://www.youtube.com/watch?v=scOWoUruKCY&list=RDscOWoUruKCY]
this is an excellent song
so eu is thinking of levying a 3% digital tax on tech companies such as fb et all. they are making the right threats/counters!
I don’t know about that. Trump doesn’t give a f about Tim Cook and his California cronies. The 3% tech tax is because the EU taxes everything, and they decided they don’t have enough “import tax” on these foreign provided services.
true. but actually thinking about it. perhaps there is genius to trump’s madness.
consider a tit for tat war.
eu taxes digital. our digital companies with high margin, high growth, is lucrative for them, but these cos are cash rich and will survive.
trump tariffs manufacturity industry. many of their companies that depend on us demand will be dealt a major blow! many in us will be forced to buy american, and the us manufacturing industry will benefit from the scale of increased domestic demand.
Importantly though, the EU sales tax on tech is not limited to US companies (includes European companies) and has publicly been in the works for over a year. It’s getting press now because of the context and the fact that US has a larger tech presence.
End of the day what this really does is make Trump’s point. Everyone else levies these things and the US sits by idly, selling cars to China? 25% rate. EU? 10% rate. They sell to us? 2.5% Everyone else has been engaging in this stuff for decades while we sit by. WTO agrees, stating that US currently imposes lower import tariffs on average than most countries in the world (2.4% vs 3% for EU and 4.4% for China). The result is predictable.
Also, I would like to point out to MLA that the exemptions have occurred as I outlined before so at this point trade war remains outside probability.
They should do what CN has done and just ban all this creepy 1984 Ameri-tech stuff.
The tariffs that will cost Trump the most politically would be on cars, manufactured goods, or commodities like steel. These are the industries whose workers helped push Trump to election victory, or are generally political hot topics. Commodity or manufacturing taxes are hard to use against the US, since the US net imports most of these things. Taxes on cars tend to hurt politicians in the foreign countries, since 1) car import taxes are already very high in other countries, sometimes up to 50% to 100%, and 2) they are direct taxes on the consumer.
On top of that, the US is the #1 trade partner of most countries, or close to that. This means that unless those countries form a trade union, the US can essentially cripple those economies, with only little negative effect to itself. Imagine if the US suddenly embargoed Equador or some little country. The US consumer would not notice anything, but the other country would be in some difficulty.
In general, trade war is bad for everyone. However, if you were a bully President who wanted to push other people around, trade is the obvious thing to use.
Hmm, let’s just step back and really look guys. Brexit, Trump, protectionism, nationalism, USG default looming, global debt pumped to the max, valuations are nuts, late-stage progressivism crumbling the social structure, CN/NK/RU tensions increasing. Everything is pointing to a 1 in 80 year WW3 / global collapse type event to relieve the pressure build up. Time to have defensive strategies in place.
I don’t necessarily believe that. That’s CFA propaganda, saying that ON PAPER efficiencies and profits are maximized, which is good for some (us, the blue city corporatists). It fails to take into account other factors, and other interests.