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bostonangler

Trump's trade war is economic suicide

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When President Trump imposed a 25 percent tariff on steel imports last month, America's largest nail manufacturer had little choice but to raise its prices. Mid Continent Nail Corporation quickly lost 50 percent of its orders as customers opted for cheaper suppliers. Within weeks, the firm had to lay off 60 workers. Up to 200 more might lose their jobs by the end of this month. 

If the tariff isn't lifted, the company could fold by September.

Mid Continent and its employees are early victims in Trump's trade war. There will be many more if the president continues to raise import costs and anger our trading partners.

 

Since the start of the year, President Trump has announced a string of new tariffs - which, let’s be clear, penalize Americans who buy imports. 

In January, he imposed tariffs on Americans who buy solar panels and washing machines.  In March, he directed the U.S. Trade Representative to levy $50 billion in additional tariffs on Chinese imports.  And then in June he applied tariffs of 25 percent on steel and 10 percent on aluminum.  

This escalation shows no sign of slowing. Trump just announced that his administration is preparing to impose another $200 billion in tariffs on Chinese goods, on products ranging from pickles and pastries to refrigerators and air conditioners. 

The U.S. economy is booming -- but it depends on trade.

To repeat: American consumers -- not foreigners -- will ultimately pay the bulk of the price for these trade obstructions. 

The economics are simple. 

Consider cars. Trump has long made clear that he wants Americans to pay higher prices for cars coming into the nation. On the campaign trail, he promised a tariff of 35 percent on "every car, every truck, and every part manufactured in Ford's Mexico plant that comes across the border."  This past March, he threatened to impose tariffs on Europe' automobile manufacturers. 

But even cars produced domestically will rise in price thanks to the president's economically illiterate trade interventions. As raw materials such as steel and aluminum rise in price, the cost of manufacturing each vehicle will rise. Manufacturers will pass those higher costs on to consumers.

Even beer and soda manufacturers are fretting about higher aluminum costs!  

The damage extends beyond our wallets and pocketbooks. As domestic manufacturing costs increase, the competitiveness of some American producers decreases. 

Consider American Keg Company of Pennsylvania. Already, the company laid off a third of its workers due to rising steel costs.  Or take General Motors. The automobile giant has announced it might have to lower wages and cut jobs. 

The energy sector will also take a hit. Because American steel companies don't produce the specialty pipes needed for many pipelines, new infrastructure projects will cost a whole lot more -- or be cancelled entirely.  

Plus, tariffs aren't a one-way street -- trading partners will hit back by imposing their own taxes on American exports. China has already announced retaliatory tariffs on more than a hundred U.S. products like beef, poultry, and automobiles – and has threatened to stop purchasing oil and natural gas from America.  The European Union, Canada, and Mexico plan to hit major American exports like whiskey and motorcycles.

The U.S. economy is booming -- but it depends on trade. Exports support 10 million U.S. jobs, imports support another 16 million,  and every single one of us has a life that's full of items manufactured abroad. 

Trump’s trade war means higher prices for American consumers, lower margins and less revenue for U.S. firms, and worse jobs for workers. It's economic suicide.

http://www.foxnews.com/opinion/2018/07/24/trumps-trade-war-is-economic-suicide.html

 

Better hurry up and buy a MAGA hat  before they go!

B/A

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U.S. President Donald Trump appears to be winning the trade war. China is reeling from the effects of trade tariffs imposed by the United States and may be facing a major slowdown in its growth that could be worsened by additional tariffs, analysts say.

China’s rock solid economy has already started showing cracks. Growth in its manufacturing sector has slowed, its stock market has tumbled and the country has faced “extremely complicated and severe” domestic and external conditions in the first half of the year, statistics authority spokesman Mao Shengyong said in a statement earlier this month. The country’s political leaders are also trying to roll back massive credit and debt expansion.

But that’s not just bad news for China. It could also spell disaster for American workers, U.S.-based companies and economies around the world.

James Barrineau, head of emerging markets debt at Schroders, argues that a slowdown in China carries global contagion risks. China is not only the world’s second largest economy — and the world’s largest measured by purchasing power parity — it’s also a top trading partner with almost every country on the planet and a major focus of U.S. policy making.

“If the market were to conclude that trade wars were causing significant stress in an economy of that size I think risk appetite globally would dry up pretty quickly,” Barrineau told Yahoo Finance in a phone interview.

The U.S. is ‘especially vulnerable’

That would be a major risk to U.S. markets, particularly stocks and other financial assets, as the benchmark S&P 500 index already is trading at historically high levels. Further, because Trump has antagonized and threatened tariffs not just on China but the European Union, Japan, Canada, Mexico and many of the world’s largest economies, the United States would be hit harder than other nations, the International Monetary Fund said last week.

“As the focus of global retaliation, the United States finds a relatively high share of its exports taxed in global markets in such a broader trade conflict, and it is therefore especially vulnerable,” IMF chief economist Maury Obstfeld said in a statement.

Trump has threatened to increase tariffs on more than $500 billion worth of Chinese imports to the United States — nearly the totality of what the Asian nation sends — which would far exceed the tariffs China can place on U.S. imports, simply because they import far less. But that doesn’t mean that China can’t retaliate.

Chinese officials said this week that they would not intentionally devalue their currency, which has fallen 5% since June to its weakest level against the dollar (USDCNY=X) in more than a year.

Even if that’s true, Chinese policy makers still have a number of options.

Liz Young, senior investment strategist at BNY Mellon Investment Management North America, says that there are more “hidden risks” than possible benefits for the United States and the rest of the world “if things start to really blow up in China with the trade war.”

ac5655153c9d8b823d3758b5d1062321
 
The value of the Chinese yuan against the dollar year-to-date in 2018. The yuan has fallen to its weakest level against the greenback in more than 12 months.

More

“They can put on some qualitative measures: They can delay [mergers between U.S. and Chinese companies], they can encourage their consumers not to buy U.S. products,” Young said via phone. “But those aren’t quantifiable, they would probably affect sentiment more than anything else.”

The danger of sentiment

Worsening sentiment could be a silent killer for the U.S. economy because many American companies are deriving significant revenue from their operations in China, said Linda Zhang, founder and CEO of Purview Investments, who grew up in China.

While import/export statistics show significantly more products coming from China into the United States than in the opposite direction, that total doesn’t account for much of the haul from U.S. enterprises that have set up shop in China and sell products locally. If Chinese customers were to turn against those companies – whether on their own or at the direction of the Chinese Communist Party – the hit could be substantial, she said.

 

A recent survey from financial research firm FactSet shows that the 20 U.S. companies in the S&P 500 with the highest level of sales in China totaled $158.4 billion during the most recently reported full fiscal year. Apple, the world’s largest company, reported $44.8 billion in Chinese sales that year and five U.S. companies, including Broadcom Ltd. and Qualcomm Inc., reported that more than half of their sales came from China. FactSet identified 62 companies with major sales in the country.

Anti-American sentiment in China could mean significantly reduced sales for these companies, which represent a major share of the U.S. stock market, potentially leading to a drop in stock prices and a bear market or a recession.

Seeking to get out ahead of these negative effects, companies would likely move more operations to China, Zhang said. More companies moving to China or to other countries outside the United States that aren’t involved in a trade war likely means more job losses in the U.S.

“Trade statistics often distort the global economic reality today,” Zhang told Yahoo Finance in an email following a meeting in Manhattan. “As China has become the most important overseas market for many American firms setting up operations there … such distortion of the trade reality becomes even more severe.”

 

 

Does the average American really understand what the impact of this so-called trade war will mean to their daily lives?

B/A

Edited by bostonangler
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WASHINGTON (AP) -- President Donald Trump is declaring that "Tariffs are the greatest!" and threatening to impose additional penalties on U.S. trading partners as he prepares for negotiations with European officials at the White House.

Trump is tweeting that trade partners need to either negotiate a "fair deal, or it gets hit with Tariffs. It's as simple as that."

The president writes that the U.S. is a "'piggy bank' that's being robbed." He notes that countries "that have treated us unfairly on trade for years" are coming to Washington to negotiate.

Trump is meeting with European Commission President Jean-Claude Juncker (zhahn-KLOHD' YUN'-kur) on Wednesday. The U.S. and European allies have been at odds over the president's tariffs on steel imports and are meeting as the trade dispute threatens to spread to automobile production.

 

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I think once the "free ride" ends the entire world economy will be better off. They have be slopping at our trough long enough.

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Just now, md11fr8dawg said:

I think once the "free ride" ends the entire world economy will be better off. They have be slopping at our trough long enough.

 

I hope you are right... Let's hope the world doesn't go out and find new partners to trade with... If the global economy leaves us behind we will become a third world nation...

 

B/A

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I will add the importance of the US having a steel industry....you can replace many thing with technology...but steel  is a production foundation of any industrial nation that plans to keep moving forward....MD...in total agreement!  CL

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Arnold Schwarzenegger had admiring comments regarding Republicans AND called out the Economic "Girlie Men"!!! :twothumbs:

 

 

Edited by Synopsis
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Trump proposes to drop all tariffs between Washington and the EU

Trump proposes to drop all tariffs between Washington and the EU

 25 July 2018 12:51 PM
Direct US President Donald Trump suggested that the European Union and the United States to drop the tariffs of all common tariff barriers, hours before the meeting with the President of the European Commission.

Today, US President, European Commission President Glenn Claude Juncker will meet to discuss common trade issues.

"The European Union will come to Washington tomorrow to negotiate a trade agreement, and I have an idea in this regard," Trump said in a twitter comment on his personal account on Twitter.

Trump suggests that the European Union and the United States drop all tariffs, barriers and financial support, "which will eventually lead to a so-called free market and fair trade."

 

1024.jpg

The US president said he hoped the EU would do so "we are ready ... but they are not."

Last month, the United States began applying steel and aluminum tariffs to the EU by about 25 percent and 10 percent, respectively.

The US president also threatens to impose tariffs on US car imports by about 20%.

For its part, the European Union has applied 25 percent tariffs on some imports of steel products. 

According to press reports, the EU is planning a new list of US imports for protectionist measures if talks with the US president fail.

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He also is doing a "Bailout"... Just like bailing out the banks, the car makers, etc... Washington is nothing but a siphon of taxpayer money.

 

B/A

Edited by bostonangler
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20 minutes ago, bostonangler said:

He also is doing a "Bailout"... Just like bailing out the banks, the car makers, etc... Washington is nothing but a siphon of taxpayer money.

 

I think any economic downside is relative to your perspective. Whether you have (your) skin in the game or not. 😂

 

Edited by adhoc10
Rephrase for clarity
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Trump's trade war is economic suicide

🤣😂That's why we have a GDP over 4% and record employment across the board.🤣😂

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Republicans denounce Trump plan for 'welfare' for farmers hit by tariffs

 
Trump to offer U.S. farmers billions to ease trade pain

 

In attempting to patch things up with farmers hurt by the trade war he initiated, President Trump managed to anger both from farm-state Republicans who say their constituents would rather sell their crops than collect a government subsidy — and representatives of non-farm states saying, “How about us?”

Trump on Tuesday announced a $12 billion bailout for American farmers whose export markets have been hit by retaliatory tariffs from China.

“You have a terrible policy that sends farmers to the poorhouse, and then you put them on welfare, and we borrow the money from other countries,” Sen. Bob Corker, R-Tenn., told reporters in Washington Tuesday. “It’s hard to believe there isn’t an outright revolt right now in Congress.”

Alaska Sen. Lisa Murkowski also bristled about singling out farmers who are already feeling the negative effects of Trump’s escalating trade war with China and the European Union.

“What about the manufacturing sector? What about the energy sector? The oil and gas industries?” Murkowski said Tuesday. “Where do you draw the line? I’ve got some real concerns.”

Already miffed by the president’s actions on trade, adding subsidies for farmers is seen by many Republicans in Congress as making an unfortunate situation worse.

“This trade war is cutting the legs out from under farmers and White House’s ‘plan’ is to spend $12 billion on gold crutches,” Sen. Ben Sasse, R-Neb., told the New York Times. “This administration’s tariffs and bailouts aren’t going to make America great again, they’re just going to make it 1929 again.”

Sen. Ron Johnson, R-Wis., also broke with the president over the targeted assistance to farmers. 

The president, meanwhile, pushed his $12 billion plan at a speech in Kansas City, Mo., before the Veterans of Foreign Wars, just hours after he assured Americans that his own Republican colleagues were mistaken about tariffs.

Trump warned his audience “what you’re seeing and what you’re reading is not what’s happening,” and that “farmers will be the biggest beneficiary” of his implementation of tariffs. 

“Watch,” Trump said. “We’re opening up markets. You watch what’s going to happen. Just be a little patient.”

So far, the Trump administration has imposed tariffs on $34 billion in Chinese goods, inviting retaliatory tariffs from Beijing on imports, including U.S. soybeans and pork. Trump has also threatened to levy duties on another $500 billion on Chinese products, a move that would likely result in stronger actions by China.

To drive his point home that his critics were wrong and that “trade wars are good and easy to win,” Trump also pinned blame on a familiar target.

“Don’t believe the crap you see from these people, the fake news,” he said, spurring boos from the crowd aimed at reporters in attendance.

https://www.yahoo.com/news/republicans-denounce-trump-plan-welfare-farmers-hit-tariffs-205952800.html

 

 

B/A

 

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6 minutes ago, bostonangler said:

Sen. Bob Corker

 NOT A REPUBLICAN 

 

6 minutes ago, bostonangler said:

Alaska Sen. Lisa Murkowski

NOT A REPUBLICAN 

6 minutes ago, bostonangler said:

Sen. Ben Sasse, R-Neb

NOT A REPUBLICAN 

7 minutes ago, bostonangler said:

Sen. Ron Johnson, R-Wis.

NOT A REPUBLICAN 

 

These LOOSERS are R.I.N.O.s and establishment HACKS. 

THEY ARE ENIMIES of FREEDOM. And like all insane, lying liberals they want to enslave EVERYONE. 

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Just now, ladyGrace'sDaddy said:

 NOT A REPUBLICAN 

 

NOT A REPUBLICAN 

NOT A REPUBLICAN 

NOT A REPUBLICAN 

 

These LOOSERS are R.I.N.O.s and establishment HACKS. 

THEY ARE ENIMIES of FREEDOM. And like all insane, lying liberals they want to enslave EVERYONE. 

 

The Teflon is wearing off the Trumpster… He has demonstrated he is clueless about economics. Corporate welfare, increased spending and now bailouts... My dog is more conservative than he is... The only thing he is conservative about is the truth.

 

B/A

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Just now, ladyGrace'sDaddy said:

What color is the sky in your world?😂

 

I know the sky is blue, but if Donald told you it was purple I guess you would believe it, if you believe everything else he says... JMHO

 

B/A

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I find it very strange that everyone is complaining about the tariffs but when it was proposed that everyone should do away with tariffs on both sides the EU was absolutely no way.  The EU also has stricter regulations on what can be exported to them from the US making it impossible for many companies to market anything there.

 

So I guess they want to keep the 1 way trade agreements in place to benefit them and to hell with the US.

 

Karsten

 

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Just now, Karsten said:

I find it very strange that everyone is complaining about the tariffs but when it was proposed that everyone should do away with tariffs on both sides the EU was absolutely no way.  The EU also has stricter regulations on what can be exported to them from the US making it impossible for many companies to market anything there.

 

So I guess they want to keep the 1 way trade agreements in place to benefit them and to hell with the US.

 

Karsten

 

Of course she does. But what her and Shabby Wabby would really like to see is the complete and utter destruction of the United States of America. 

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2 minutes ago, ladyGrace'sDaddy said:

Of course she does. But what her and Shabby Wabby would really like to see is the complete and utter destruction of the United States of America. 

 

Maybe you'll stumble upon a clue while you're passing by all those farm fields.  :facepalm:

 

 

GO RV, then BV

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2 minutes ago, Shabibilicious said:

Maybe you'll stumble upon a clue while you're passing by all those farm fields.

 

He is clueless just like his fearful leader... Birds of a feather...

 

B/A

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1 minute ago, bostonangler said:

 

He is clueless just like his fearful leader... Birds of a feather...

 

B/A

 

Not completely, there's still hope.....sans the alt-right glasses.

 

GO RV, then BV

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I believe the snowman lives in Kansas... One would think he would be aware of how tariffs will affect his neighbors... I see how it is affecting Jack Daniels and Jim Beam... LOL

 

B/A

Edited by bostonangler
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Ding Ding Ding.... Tariffs as explained by the CEO of Cummins

 

 

In 1976, Cummins began operations at our engine plant in Seymour, a small town of about 20,000 people in southern Indiana. The Seymour Engine Plant now produces engines for equipment like locomotives, large boats and power generators that back up critical infrastructure like data centers and landmarks like Wrigley Field. Nearly 80 percent of the products that Cummins makes in Seymour are exported; in other words, the existence of this plant is a direct result of our company’s ability to access global markets.

Cummins employs about 1,000 people in Seymour, and we have invested more than $300 million into the plant in the past seven years, including a technical center that employs hundreds of engineers. In the past year, we have added nearly 50 employees. While other small towns are struggling, Seymour is thriving.

However, increased supply-chain costs because of the recent tariffs will raise the price of the products from Seymour. We may also face retaliatory tariffs, which could result in lost sales and restrict or reverse our growth.

International trade has been the single most important contributor to growth and hiring at Cummins for nearly two decades. Half of our business is outside the United States, and more than 20 percent of the 25,000 Cummins jobs in America are directly tied to international business. And when we are growing, it often means our suppliers are also growing.

Let’s be clear: a tariff is a tax, plain and simple. For Cummins, the impact of tariffs on steel and aluminum, tariffs applied to products we bring to the United States, as well as retaliatory tariffs imposed on products we export to other countries will be difficult to mitigate even with the benefits of tax reform. And this does not take into account the latest and additional proposed tariffs, nor does it include the indirect costs that, inevitably, will be passed through to us and other companies like us by suppliers.

Our supply chain, which has been developed and optimized over decades, cannot be reorganized in short order. We rely on more than 2,500 American companies for components and materials, but for certain components — such as cylinder blocks, connecting rods and electronic controls — there are very few suppliers anywhere. Our products are specialized — we make engines for large tractor-trailer trucks, garbage trucks, trains, construction and mining equipment, among other things — and our markets are much smaller than the American auto market, so we sometimes look beyond our backyard for suppliers.

One model of engine, for example, was developed in the United States but is manufactured in China for the Chinese market. A small number of those engines — approximately 5,000 — are exported from our plant in China to the United States, so they are considered subject to tariffs under the administration’s recent actions.

So this product — developed by American engineers and sold by an American company — faces a 25 percent tariff here at home and must compete against products from European and other Asian engine manufacturers that are not subject to the tariffs. This will make it very difficult for Cummins to compete, putting our ability to sell these engines in the United States in peril.

 

Given its size and standing in the world, China should modernize its trading practices and improve intellectual property protection, among other issues, and improve access for American and other foreign companies. To make this possible, the United States and its allies need a long-term strategy to apply joint pressure over a sustained period. We should work openly and transparently with the Chinese government and American businesses. Unilateral and escalating tariffs are not the answer.

These tariffs put us in a worse position now than when we started these negotiations, and we are concerned there is no end in sight. Because of this uncertainty, companies like ours are standing still, unclear on how and where to invest. Even an imperfect trade deal — one that gets us a bit closer to a level playing field — is better than no trade deal, and no trade deal is better than implementing tariffs.

Businesses face a real dilemma. Can they absorb the tariffs? Or do they pass the increased costs to consumers?

We see no upside in the implementation of tariffs. They are a tax, and the risky proposition of entering a trade war could slow down the economy. Even putting up short-term barriers with trading partners in China and Europe can cause long-term losses in market share, resulting in lost jobs in the United States. The mere threat of tariffs results in significant costs for Cummins that cannot be recovered.

As the leader of Cummins, I am charged with providing opportunities for shareholders, customers, employees and our communities and working with policymakers to create a healthy climate for business. What’s at stake is not just the company’s profits, but jobs in Seymour and other communities where we work, such as Rocky Mount, N.C., and Jamestown, N.Y. This is what concerns me most. American workers and their families will be the real casualties of a trade war.

 

Tom Linebarger is the chairman and chief executive of Cummins

https://www.nytimes.com/2018/07/25/opinion/trump-tariffs-hurt-manufacturing-jobs.html

 

B/A

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Trump secures concessions from EU to avoid trade war -Dow Jones citing EU official

WASHINGTON, July 25 (Reuters) - U.S. President Donald Trump has secured concessions from the European Union to avoid a trade war, CNBC reported on Wednesday, quoting a Dow Jones report that cited an EU official.

The EU has agreed to import more soybeans, lower industrial tariffs, and work more on liquefied natural gas exports, the report said.

Trump and the EU's chief executive, Jean-Claude Juncker, were expected to make statements at a joint event on Wednesday following a meeting on trade, White House officials said

 

 

Let's hope it's not fake news.

B/A

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2 hours ago, Shabibilicious said:

 

Maybe you'll stumble upon a clue while you're passing by all those farm fields.  :facepalm:

 

 

GO RV, then BV

Maybe you two should get a clue. 

 

2 hours ago, bostonangler said:

 

He is clueless just like his fearful leader... Birds of a feather...

 

B/A

 

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