Trade War

[Pete F.]

If the goal of Trump’s trade war is to move more jobs back to the USA, given that we are close to full employment, how does that gain us anything? Where will more workers come from? What’s the plan?

[Got Stripers]

http://www.latimes.com/business/la-f...605-story.html

With birth rates dropping and borders being shut down, Trump tower rooms aren't going to clean themselves.

[detbuch]

Originally Posted by Pete F.

If the goal of Trump’s trade war is to move more jobs back to the USA, given that we are close to full employment, how does that gain us anything? Where will more workers come from? What’s the plan?

The employment participation numbers can go up.

[wdmso]

The U.S. debt to China is $1.19 trillion as of March 2018.

I think Trump is playing this the way he played contractors who he owed money ... he'll wont pay them in full... use what he owes as ransom to get what he wants .... But this is china not some company of 1500 employees who may fold Just so they can walk away with something

Who will he blame if it goes South ?? He is gambling with house money.. if China folds he'll be like Grandpa who just won big on a scratch ticket ...

Just look the GOP hasn't had the white house in 8 years they win one election and its the greatest comeback of all times? and we are in what year 2

[detbuch]

Originally Posted by wdmso

The U.S. debt to China is $1.19 trillion as of March 2018.

I think Trump is playing this the way he played contractors who he owed money ... he'll wont pay them in full... use what he owes as ransom to get what he wants .... But this is china not some company of 1500 employees who may fold Just so they can walk away with something

Who will he blame if it goes South ?? He is gambling with house money.. if China folds he'll be like Grandpa who just won big on a scratch ticket ...

Just look the GOP hasn't had the white house in 8 years they win one election and its the greatest comeback of all times? and we are in what year 2

Yeah, yada, yada, yada . . . You're obviously smarter than Trump. Keep up the good work.

[spence]

Originally Posted by Pete F.

If the goal of Trump’s trade war is to move more jobs back to the USA, given that we are close to full employment, how does that gain us anything? Where will more workers come from? What’s the plan?

I don't think there really is a plan. Trump seems to believe that all multinational trade deals are designed to screw the USA so just break them all. He's so confident in this assumption he has no issue making up false data to justify his behavior.

While there are some legitimate issues to address I really don't think he understands how the global economy works and the potential damage to US interests. Not sure he really cares though either, seems like as long as he's wheeling and dealing and the fans are hooked on the spectacle he thinks he's winning.

[The Dad Fisherman]

Originally Posted by Pete F.

If the goal of Trump’s trade war is to move more jobs back to the USA, given that we are close to full employment, how does that gain us anything? Where will more workers come from? What’s the plan?

Isn't one of the complaints being bandied about lately been that unemployment numbers look good but the jobs are low wage jobs?

Wouldn't the jobs coming back to the US be more in the vain of skilled labor/Manufacturing jobs.

And if there are more jobs than people to fill them, wouldn't that cause employers to pay more to secure labor for those jobs, thus raising the average wages being paid.

Wasn't that another complaint that everybody was harping on as well.
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[spence]

Originally Posted by The Dad Fisherman

Isn't one of the complaints being bandied about lately been that unemployment numbers look good but the jobs are low wage jobs?

Wouldn't the jobs coming back to the US be more in the vain of skilled labor/Manufacturing jobs.

And if there are more jobs than people to fill them, wouldn't that cause employers to pay more to secure labor for those jobs, thus raising the average wages being paid.

Wasn't that another complaint that everybody was harping on as well.
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If you move manufacturing from a cheaper country to the US it's just going to shift the burden onto the consumer unless it's something Americans really can produce better. But, in the US manufacturing tends to favor automation over labor so you may have higher skilled jobs but there are less of them. Retaliatory tariffs also mean less US exports for the goods produced here. The global economic growth has been largely led by emerging nations, you're just going to box yourself out of those markets.

And we're still waiting for the wage growth from tax cuts and full employment to materialize.

[Pete F.]

Originally Posted by The Dad Fisherman

Isn't one of the complaints being bandied about lately been that unemployment numbers look good but the jobs are low wage jobs?

Wouldn't the jobs coming back to the US be more in the vain of skilled labor/Manufacturing jobs.

And if there are more jobs than people to fill them, wouldn't that cause employers to pay more to secure labor for those jobs, thus raising the average wages being paid.

Wasn't that another complaint that everybody was harping on as well.
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Sounds about right but when a new business comes to an area, I always hear that the new business creates x jobs but support and supply for the new jobs creates x times y jobs.
This is interesting, I found these while looking for the support and supply factor.
https://www.bloomberg.com/view/artic...p-s-tough-talk
https://www.bcg.com/publications/201...ica-again.aspx

[Jim in CT]

Originally Posted by Pete F.

If the goal of Trump’s trade war is to move more jobs back to the USA, given that we are close to full employment, how does that gain us anything? Where will more workers come from? What’s the plan?

More workers can join the workforce who aren't currently working. And the more demand there is for labor, the higher the price (wages) will be. That's usually considered to be a good thing.

[Jim in CT]

Originally Posted by wdmso

Just look the GOP hasn't had the white house in 8 years they win one election and its the greatest comeback of all times? and we are in what year 2

The 'comeback', is where the GOP is right now (and where they will be when Kennedy gets replaces with a reliable conservative on the SCOTUS), compared to where they were in January 2009, when Obama got sworn in, and the dems had a filibuster proof majority in the senate, and controlled the house. It has been a huge comeback since then, you have to admit that.

[Jim in CT]

Originally Posted by spence

If you move manufacturing from a cheaper country to the US it's just going to shift the burden onto the consumer unless it's something Americans really can produce better. But, in the US manufacturing tends to favor automation over labor so you may have higher skilled jobs but there are less of them. Retaliatory tariffs also mean less US exports for the goods produced here. The global economic growth has been largely led by emerging nations, you're just going to box yourself out of those markets.

And we're still waiting for the wage growth from tax cuts and full employment to materialize.

"If you move manufacturing from a cheaper country to the US it's just going to shift the burden onto the consumer "

I see. So you want all the manufacturing jobs brought back here, you want them to pay wages that will allow American workers to be comfortable, but you don't want prices to increase. You people like to shift the goalposts around, don't you?

"And we're still waiting for the wage growth from tax cuts and full employment to materialize"

If you are indeed waiting for that, I have great news for you. Wages up, tax rates down. Hard not to like that. Unless your agenda is something other than what you claim that it is, perhaps??

https://www.usatoday.com/story/money...-far/36579285/

[Pete F.]

Originally Posted by Jim in CT

More workers can join the workforce who aren't currently working. And the more demand there is for labor, the higher the price (wages) will be. That's usually considered to be a good thing.

Are the Unemployment numbers that the White house has been touting fake or alternative facts?
https://www.washingtonpost.com/news/...=.e6605715ac81
I thought they magically became true as soon as Trump was elected.

[spence]

Originally Posted by Jim in CT

I see. So you want all the manufacturing jobs brought back here, you want them to pay wages that will allow American workers to be comfortable, but you don't want prices to increase. You people like to shift the goalposts around, don't you?

Not sure you're responding to my post.

If you are indeed waiting for that, I have great news for you. Wages up, tax rates down. Hard not to like that. Unless your agenda is something other than what you claim that it is, perhaps??

Jim, you're link is citing a Glassdoor report. Do you know what Glassdoor even is?

Might want to look at the actual government statistics...

https://www.bls.gov/news.release/empsit.nr0.htm

Good wage growth has typically been 3.5% which we're well below.

[wdmso]

Originally Posted by detbuch

Yeah, yada, yada, yada . . . You're obviously smarter than Trump. Keep up the good work.

your kool aid cup needs a refill

https://www.cnbc.com/2018/04/05/chin...trade-war.html


http://www.chicagotribune.com/busine...505-story.html


https://www.reuters.com/article/us-u...-idUSKCN1GE2ZS

[Jim in CT]

Originally Posted by spence

Not sure you're responding to my post.


Jim, you're link is citing a Glassdoor report. Do you know what Glassdoor even is?

Might want to look at the actual government statistics...

https://www.bls.gov/news.release/empsit.nr0.htm

Good wage growth has typically been 3.5% which we're well below.

"Not sure you're responding to my post"

Then let me clear it up, I was responding exactly to what you posted...that if manufacturing jobs come back, prices will have to increase. I thought liberals wanted manufacturing jobs to come back?

"Jim, you're link is citing a Glassdoor report. Do you know what Glassdoor even is?

I think I do. I also know that USA Today isn't a right-wing rag. It can't be correct if it's from Glassdoor? Then show me the flaw in their data, please?

It's not wrong, just because you desperately want it to be wrong.

[Jim in CT]

Originally Posted by spence

Not sure you're responding to my post.


Jim, you're link is citing a Glassdoor report. Do you know what Glassdoor even is?

Might want to look at the actual government statistics...

https://www.bls.gov/news.release/empsit.nr0.htm

Good wage growth has typically been 3.5% which we're well below.

I took a quick look at your link, didn't see anything in there about wages, must have missed it.

[Pete F.]

Originally Posted by Jim in CT

I took a quick look at your link, didn't see anything in there about wages, must have missed it.

In June, average hourly earnings for all employees on private nonfarm payrolls rose by
5 cents to $26.98. Over the year, average hourly earnings have increased by 72 cents,
or 2.7 percent. Average hourly earnings of private-sector production and nonsupervisory
employees increased by 4 cents to $22.62 in June. (See tables B-3 and B-8.)

[spence]

I love it. As the tariffs are predicted to crush farmers, Trump's response is to use taxpayer money via executive action to pay them off just before the mid-term election.

Just to get this straight, the government is going to buy and likely have to destroy food rather than just let China buy it and eat it.

[Sea Dangles]

Why would you love a failure such as this Jeff? Are you hoping for failure?
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[spence]

Originally Posted by Sea Dangles

Why would you love a failure such as this Jeff? Are you hoping for failure?
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I want an adult in the room.
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[PaulS]

Originally Posted by spence

I love it. As the tariffs are predicted to crush farmers, Trump's response is to use taxpayer money via executive action to pay them off just before the mid-term election.

Think about how many subjects can be discussed off of that sentence. Hiphopcrisy of the right, trade, tariffs, executive action, deficit spending, handouts. You can go on and on.
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[Sea Dangles]

Originally Posted by spence

I want an adult in the room.
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Be careful what u wish for
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[zimmy]

Originally Posted by Sea Dangles

Be careful what u wish for
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Remember this dangles?

"Let the hate fill you Zimmy,it feeds the flames of victory."
FEF!
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[Sea Dangles]

Pretty accurate Zim, even now.
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[zimmy]

Originally Posted by Sea Dangles

Pretty accurate Zim, even now.
Posted from my iPhone/Mobile device

Speaking of adults in the room, Tom was too hateful to even shake Nick's hand. He was originally a trump guy though, so...
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[Sea Dangles]

Go dry your eyes Zimmer
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[Pete F.]

from the Grumpy Economist
Trade War 1914
Posted: 31 Jul 2018 08:12 AM PDT
The analogy between our looming trade war and August 1914, when events quickly spun out of control, led to this opinion essay at thehill.com. It brings together some themes from recent blog posts, so faithful readers may find some repetition. For reasons of space, a desire not to personalize things too much, and not to strain real history vs. the the superficial stories we retell, I didn't overdo the 1914 analogy. But it's easy enough to do if you want to. The idea that opponents will quickly surrender, rather than stiffen their resolve, has proved wrong over and over again in history.
The trade war to end trade wars will end badly

104 years ago this August, the war to end wars broke out. It was a war that nobody wanted. The world stumbled in to it almost by accident, and then could not get out. “Wars are easy to win,” leaders thought. “We’ll be in Paris (or Berlin) by fall.” They were equally wrong, and equally befuddled once the trenches filled with bodies.

This August, the trade war to end tariffs looms, and the world seems to be stumbling towards an economic calamity that nobody wants, propelled by similar entanglements.



What is the objective? You can’t win a war unless you know what you want, and when to stop. That principle is truer of a trade negotiation. How can China or Europe agree to do what we want, if they have no idea what will be enough for us to call the war off?

Many free marketers hope that the President wants a world with no tariffs or trade barriers. To give him his due, our president is unpredictable, and has achieved some remarkable negotiating successes by appearing to be crazy. A world of no tariffs would be lovely. But I’m dubious this is the goal.

Yes, during the G-7 summit he said, “…everybody take down your barriers. No barriers, no tax.” Yes, the cease-fire statement with European Commission President Jean-Claude Juncker said “We agreed today ... to work together toward zero tariffs, zero non-tariff barriers, and zero subsidies on non-auto industrial goods.”

But parse the latter carefully. “Non-auto” means protect cars and trucks, where we maintain a 25% tariff. “Industrial” means not agriculture. “Goods” means not services like banking, of which we exported $863 billion in the second quarter. “Work toward” means a vague long time from now.

And then the President reiterated his view that we “lost $817 Billion on Trade last year.” His view that importing more than we export, and letting foreigners invest the extra dollars in the US amounts to “losing” on trade is far more consistent than his recent free-trade conversion. And as long as the US saves less than we invest, the trade deficit cannot end. That goal is a recipe for endless war.

President Trump took a tour through Steel country. He did not say, “I’m glad you’re working. But in six months I hope to pull all these tariffs down, and see all of you unemployed and this mill shut down again. But don’t worry. Once we get China to defend intellectual property, Google, Facebook and Goldman Sachs will be making such a bundle in China it will be worth it for the country."

As this story illustrates, tariffs, once imposed, are devilishly hard to escape. Once our steel and aluminum industries and their workers get used to tariff protections, what President can take them away? Once the Chinese have retaliated with their tariffs, and their industries have grown used to protection, how can they take them away? The whole post WWII order was built around this difficulty — by creating multinational institutions, we slowly help countries to say to their protected industries, “look, it’s going to be hard, but we can’t be part of the world and protect you any more.” The result was the greatest increase in trade, and prosperity, the world has known. If Trump’s bluff fails — or if it was not a bluff to begin with — that accomplishment is lost.

Politics gets used to tariffs as well. Tariffs, and tariff waivers, and subsidies to counteract tariffs are handed out pretty much at the whim of the Administration. It won’t take long for politicians to figure out this is a great way to reward friends and to punish enemies. Once in place, that is another reason why ending the tariff war will be so much more difficult.

Wars go on without end when they sink into a cycle of revenge and retaliation. Trade wars too. China and Europe’s tariffs retaliate against ours. We retaliate against those. As in the great war, it gets much much worse before exhausted antagonists give in. “We can do stupid, too,” said Mr. Junckers on tariffs. And he has. Send the boys over the top into machine gun fire once again.

That’s where we are heading. After three or four rounds of retaliation and revenge, we have large tariffs and quotas, and so does Europe and China. The economy starts sinking, unemployment starts rising, and now it’s harder still to get rid of them. The multinational institutions that supported the low tariff world are destroyed. Politicians and political parties rediscover the usefulness of trade policy to demand support.

Historians debate whether individuals matter, or whether great forces of history sway events. Our trade war surely reflects the ideas and will of one person, our President Donald J. Trump. His Rasputins, Navarro and Ross, are only there by his will and invitation.

But why does he have this power? America is supposed to be a country of laws and institutions, exquisitely designed to constrain the power of one individual. Tariffs are a tax on imports. Why does the President have unilateral power to impose a tax? The president can't change income taxes.

The answer is, because the Congress handed him that power. In the wake of the Smoot-Hawley disaster, Congress gave the Administration wide latitude to impose tariffs and import quotas. Congress got to look protectionist, but count on Administrations not actually to do anything terrible. That gamble just failed.

Our trade law basically says that the Administration should impose tariffs if any industry is hurt. But what industry is not hurt by competition from abroad? The national security provisions under which the Trump administration is acting are even vaguer.

By now, both parties ought to be sick of the imperial presidency. Congress: Take back the power to impose tariffs. Or at least write reasonable statutes: that tariffs and quotas may only be imposed if consumers are harmed. If national security is at risk, let defense ask for money and choose whether it prefers a new aircraft carrier or an old steel mill.

Yes, I know, Congress is riven by partisanship and squabbling. Well, ladies and gents, if this is August 1914, you will look mighty silly when it’s over.

The rest of the world: If you recognize it’s stupid, don’t do it. Strengthen your multilateral institutions. Don’t turn Brexit into a mercantilist nightmare. TPP countries, enact a free trade zone. Ignore provocation rather than retaliate stupid with self-inflicted stupid. Grow, and let us beg to rejoin you.