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message 1: by Michel (last edited Jun 18, 2018 10:14PM) (new)

Michel Poulin Trump has just announced that, if China retaliates in kind to the 50 billion dollars of punitive tarifs he slapped on select Chinese goods, then he will slap a further 200 billion dollars in tarifs on more Chinese goods. Unsurprisingly, China replied by saying that they would hit back the USA 'hard' if those extra tarifs are applied. It all looks like we are on the verge of a full trade war between the USA and China.

The true problem is that this is only one aspect of a near-global trade war that is about to explode in everybody's face, all thanks to Donald Trump. He has already slapped punitive tarifs against his closest allies, Canada, Mexico and Europe, plus targetted other countries as well (India, which just announced that it would retaliate, the same as Canada, Mexico and Europe have said they will do). Now, Trump supporters and officials say that they did that to get fairer trade deals from other countries. However, those supporters and officials may quickly find out that the only result of all this could be the creation of a global recession, with the USA becoming a World pariah in terms of international trade. Remember the Great Depression of 1929? Well, it was mostly caused by US protectionist policies, allied to unregulated banking practices and myopic economic policies. Right now, I am afraid that we are one step away from falling into a similar economic depression, triggered by an unnecessary trade war. So, what are your views on this?


message 2: by Scout (new)

Scout (goodreadscomscout) | 6184 comments Everybody calm down and look at what a good deal you've been getting from the U.S. for years. Consider what you have to pay now as a way to balance out those years of plenty. Look at this objectively, not as an attack.


message 3: by Philip (new)

Philip (phenweb) | 3079 comments Scout wrote: "Everybody calm down and look at what a good deal you've been getting from the U.S. for years. Consider what you have to pay now as a way to balance out those years of plenty. Look at this objective..."

Sorry Scout but what good deal was this? I must have missed it. If referring to NATO the US has free access to bases in the UK and its territories as it does in other NATO countries. It exchanges intelligence information too. The NSA in particular relies on many listening stations around the world in allied countries to "keep America safe"
Do you mean that US workers should be protected from the competing cheap labour rates in other parts of the world? Is the USA via this administration trying to roll back the tide of globalisation. Perhaps we could throw in the financial crisis caused almost entirely by US banks packaging bad housing debt as triple A rated derivatives.

The UK is supposed to be the USA's closest ally yet in the interests of "National Security" has had tariffs imposed on steel and aluminium. The very small amount the UK exports goes to the US Defence industry mostly in Aerospace and USAF planes. Not sure how this improves US Security?
This follows on from Tariffs imposed on Bombadier last year because they had the temerity to win a contract for a US airline over Boeing. Those tariffs were lifted but only after a court case and appeal.

As many have stated it's a funny way to treat friends and allies. Keep it up and the Trump administration may soon have neither. But then again he has a new best friend in NK to keep the US company


message 4: by Graeme (new)

Graeme Rodaughan The stock markets are unhappy with the announcement.


message 5: by Graeme (new)

Graeme Rodaughan I wonder if China will go 'nuclear,' and begin dumping their extensive hoard of US Treasuries.


message 6: by Nik (new)

Nik Krasno | 16087 comments I'm not sure trade wars and imposition of tariffs is a good way to deal with the problem, but globalization does give corporations an opportunity to buy cheap work elsewhere thus laying off its 'expensive' compatriots and sell back home expensive produce. As well as siphoning of the money into off-shores, there is siphoning of the jobs into the third world.
Take Norway for example, which has strong economy and repeatedly refused to join EU. Yes, they too were blamed for protectionism at the time: http://www.newsinenglish.no/2013/07/0...
I think the underlying problem needs to be addressed, but I'm not sure the tariffs are the best answer...


message 7: by Graeme (new)

Graeme Rodaughan Hi Nik, what would you articulate as the underlying problem?


message 8: by Nik (new)

Nik Krasno | 16087 comments Imbalance in export of jobs and production facilities vs import of goods. Using of differences in costs of living and salaries, benefits corporations, but at the end backlashes at the rest of the population of yet seemingly wealthy west


message 9: by Michel (last edited Jun 19, 2018 08:11AM) (new)

Michel Poulin I believe, like my Prime Minister, Justin Trudeau, that the most insulting and aggravating point in all this was to be told that tariffs on steel and aluminum were put in place 'in the name of the national security of the United States'. Is Trump afraid that we Canadians would come to burn down the White House? Our soldiers bled besides American soldiers in WW1, WW2, the Korean War, Afghanistan and still do in Northern Iraq. Nice way to lose your friends, Donald!

Philip, about that Bombardier contract that Boeing went against in court (and lost), Boeing was not even presenting one of its planes as a valid candidate for that contract and had zero stakes in it. It was a pure case of hubris and jingoism on the part of Boeing.


message 10: by Michel (new)

Michel Poulin We are now facing the start of a potentially devastating trade war between the USA and pretty much the rest of the World. Will the US Congress, particularly its Republican members, finally find enough backbone to oppose Trump and his band of toadies and block those tariffs?


message 11: by Philip (new)

Philip (phenweb) | 3079 comments Michel wrote: "We are now facing the start of a potentially devastating trade war between the USA and pretty much the rest of the World. Will the US Congress, particularly its Republican members, finally find eno..."

Not if there is perceived pork in the barrel


message 12: by Nik (new)

Nik Krasno | 16087 comments Michel wrote: "in the name of the national security of the United States ..."

Unnecessary propaganda style.
As of the essence, as I can see some Canada tariffs on US products do exist: https://www.export.gov/article?id=Can...
I'm not voicing any opinion at this stage, just trying to understand: does imposing tariffs contradict NAFTA?


message 13: by Ian (new)

Ian Miller | 11801 comments Michel raises the possibility of a 1927 style slump. The current situation is not the same, but I think the danger is great and comes from a different source. First, in 1927, a huge problem was that money was being hoarded, and at the time the dollar was on the gold standard. Now, the Fed simply prints more. There are several trillion dollars lying around in offshore accounts doing nothing as part of tax avoidance schemes. Similarly, the US runs a huge deficit but a lot of the government deficit is to itself, so it is probably not a huge issue.

For me, the biggest problem is the flood of derivatives and "financial products" out there, as in 2007. In 2007, a crash was thought to be impossible from them because housing was safe - people paid off their loans eventually. What was overlooked was too many houses were sold to people who could NEVER pay them off. The problem now is too many of the derivatives are based on the fact the economy will keep growing, or at worst, lose a few points. Trump's trade war will end up with a major downturn in industrial production and a major increase in prices and so the assumption behind many of those derivatives will fail. Who knows what will happen, but I bet soon people will be betting against them.

Most countries have some sort of protectionism. Both Canada and the US restrict entry of farm products to a quota system. The EU has quotas. They US also has another restrictive practice, although I am not sure it is deliberate - very slow border controls. Goods can be stuck on the border for an enormous amount of time if they are not being imported by a US company, especially if there is some minor flaw in the paper work. I suspect this is more a case of insufficient officers there than anything else.

The US balance of payments deficit seems to me to have three causes. The US has exported most of its moderate to low-tech manufacturing to China, Indonesia, etc, and a very few get very rich off the profits, but the many workers are left in junk jobs; the US spends huge amounts of money in various military deployments around the world - if it brought those home, it would save a lot of money; finally, the US devotes a lot of its manufacturing effort to high tech stuff that it then refuses to export. It is true the likes of China do not respect intellectual property to anywhere near the extent they should, although ignoring others' IP rights was how the US got industrialised in the 19th century.

My view is Trump has some genuine concerns, although the US also has some bad practices so it is not blameless, but the trade war is not the way to go about fixing things. There is certainly a danger of a major depression.


message 14: by Graeme (last edited Jun 19, 2018 03:24PM) (new)

Graeme Rodaughan The root cause of the trade deficit/balance of payments issues is the fact that the US Dollar is also the world's reserve currency.

REF: Wiki: Triffin Dilemma: https://en.wikipedia.org/wiki/Triffin...

Trade Wars aren't going to fix the root cause, but may well accelerate the fall of the US Dollar from reserve currency status and its replacement with something else.

Noting that monetary system changes are typically associated with war. (1914, shift off the Gold std, 1944, Bretton-Woods, US off the Gold std in 1969 height of the Vietnam war).


message 15: by Ian (new)

Ian Miller | 11801 comments I don't think wars are necessary - the changes are forced on people through bad economic conditions. WW1 forced change because too much of the economy was needed for war production, and of course at the end Germany had an economic collapse. WW 2 came about because too much of Europe was in an economic disaster zone, and I think the US came off the gold std because there was simply insufficient gold.

Triffin is right, but the US has the peculiar ability to pay back its debts with, er, newly printed dollars. It is interesting the Keynes anticipated this problem, but his solution would get nowhere because it involved government intervention, and the US considered such socialism to be the next best thing to the dreaded communism.


message 16: by J.J. (new)

J.J. Mainor | 2329 comments Graeme wrote: "The stock markets are unhappy with the announcement."

Except for the NASDAQ here in the US...it's still setting records every day...guess technology is either immune from the war or seen as the last safe haven for now...


message 17: by J.J. (new)

J.J. Mainor | 2329 comments Graeme wrote: "I wonder if China will go 'nuclear,' and begin dumping their extensive hoard of US Treasuries."

Some of us wondered when/if this would happen before Trump ever took office...It's why Republicans were talking about the danger of the debt during Obama's tenure...too bad all but the Freedom Caucus changed their mind once the Republicans were back in control...


message 18: by J.J. (new)

J.J. Mainor | 2329 comments Michel wrote: "I believe, like my Prime Minister, Justin Trudeau, that the most insulting and aggravating point in all this was to be told that tariffs on steel and aluminum were put in place 'in the name of the ..."

Not quite. National security was given as the reason in hopes the WTO wouldn't rule against the US when someone inevitably files a complaint. They might rule against us under whatever reasons any other President would have given us, but if there is even the slightest possibility this issue relates to "national security," the WTO might be afraid to strike the tariffs down and put a country at risk.


message 19: by Scout (new)

Scout (goodreadscomscout) | 6184 comments Political maneuvering, not meant to be an insult, although I can see why it would be perceived that way by Canadians.


message 20: by Ian (new)

Ian Miller | 11801 comments In NZ, the politicians said nothing, probably on the basis that anything they said was hardly likely to influence Trump. As for "national security" the average comment here was "Yeah, right."


message 21: by Alex (last edited Jun 24, 2018 10:11PM) (new)

Alex (asato) One component of the "trade wars" that I haven't seen mentioned was China's theft of IP:

EDIT: Ian mentioned this.

https://www.nytimes.com/2018/06/22/te...

Now, I'm behind the US putting in some kind of sanctions (be they tariffs or otherwise) and I was behind the POTUS on that, but now with the POTUS's demand for free reign to make an allegedly "comprehensive deal" with China and a lighter penalty on ZTE (which itself stands penalized by the US for IP theft), I have to say that I'm pretty disappointed.

In fact, I'm pretty much aghast how the POTUS practically gave away a bargaining chip (the cessation of joint US-ROC military exercises). I mean, what did we get in return?

And then to put up tariffs on our friends and allies--not to mention who are democracies--who have stuck with us through thick and thin and yet go easy on totalitarian regimes in weak deals is just beyond logic--unless he's just looking out for himself, post-presidency.


message 22: by Graeme (new)

Graeme Rodaughan Alex wrote: "unless he's just looking out for himself, post-presidency...."

Hi Alex, I'm honestly not clear how current events would assist Trump post presidency. Can you please explain further.


message 23: by Alex (last edited Jun 24, 2018 10:15PM) (new)

Alex (asato) Ian wrote: "For me, the biggest problem is the flood of derivatives and "financial products" out there, as in 2007. In 2007, a crash was thought to be impossible from them because housing was safe - people paid off their loans eventually. What was overlooked was too many houses were sold to people who could NEVER pay them off. The problem now is too many of the derivatives are based on the fact the economy will keep growing, or at worst, lose a few points. Trump's trade war will end up with a major downturn in industrial production and a major increase in prices and so the assumption behind many of those derivatives will fail. Who knows what will happen, but I bet soon people will be betting against them."

This analysis is quite incisive. And what kind of value does financial services really add to the economy?
This all adds up to a picture of a broken American meritocracy. The U.S. does a great job of finding the ablest students and giving them a top-notch education, but it then employs many of these capable, well-trained individuals in low-value or even counterproductive roles. The civil service and the educational system sink slowly into inefficiency as skilled people flee for the higher salaries of the finance industry and monopolistic companies.
https://www.bloomberg.com/view/articl...


message 24: by Ian (new)

Ian Miller | 11801 comments As an added comment on Alex' post, part of the problem was the US trained a whole lot of theoretical physicists and then found there were no jobs for them - or they did not want to pay them, and they went to the finance industry and built models that I don't think any economist really understands. There were a number of assumptions, such as the housing market will never collapse (not stopping to see whether everyone who had one could afford them). The net result was 2007. A further result is they are still there, making big money for themselves.


message 25: by Philip (new)

Philip (phenweb) | 3079 comments Off the press today Harley Davidson in response to new EU tariffs on US exports is shifting some Motorbike production from the US to Australia which would then be tariff free import to EU. So much for America first and of course those production plants are right in the so called heartland of Trump support.


message 26: by Michel (new)

Michel Poulin Like they say: payback's a b..ch!


message 27: by Scout (new)

Scout (goodreadscomscout) | 6184 comments Harleys made in Australia should be subject to tariffs when imported to the U.S.


message 28: by Michel (new)

Michel Poulin Scout wrote: "Harleys made in Australia should be subject to tariffs when imported to the U.S."

The question then becomes: where does this all ends? Or is it an unending game where everybody loses?


message 29: by Ian (new)

Ian Miller | 11801 comments It will be interesting to see what happens to aircraft. The Dreamliner may be assembled in the US, but a lot of components come from a number of other countries (as far as I know, not China) but most of those countries will be hit by Trump's tariffs. In answer to Michel's question, every consumer loses.


message 30: by J.J. (new)

J.J. Mainor | 2329 comments So when you import parts and materials, you get hit with the tariffs, and then when you export the finished product, you get tariffed again? I guess it could get crazy.


message 31: by Nik (new)

Nik Krasno | 16087 comments Don't know how applicable this is everywhere, but in some places/instances - when you import something for further re-export, one might be exempted from paying tariffs


message 32: by Michel (new)

Michel Poulin The problem is that the Trump administration itself can't yet figure out what exact rules will apply. Trump keeps changing his mind daily about his policies and declarations! Look at the present mess he created with the immigrants on the border.


message 33: by Ian (new)

Ian Miller | 11801 comments One real problem for people exporting to the US is that the ports etc will have a huge delay period for goods while the poor customs officials try to work out what the policy is.


message 34: by Michel (new)

Michel Poulin Yeah, like the confused mess the DHS, HHS and Border Patrol have to deal with right now, while everybody in Washington is busy covering their respective asses.


message 35: by Scout (new)

Scout (goodreadscomscout) | 6184 comments You've introduced the subject of the border. Here's one way to look at the border mess. The adult immigrants knowingly committed a crime when they entered this country illegally and, despite knowing this, they endangered their children by bringing them into the country.

Now consider that when an adult citizen of this country commits a crime, he/she alone is incarcerated. There's no allowance for his/her family members to stay together as a family unit.

Unless or until the law is changed, the adults coming into this country illegally are criminals and should have the same status as criminals who live in this country, where the government doesn't give a crap about their children or their families. Why should illegal immigrants be given special consideration?


message 36: by Ian (new)

Ian Miller | 11801 comments My view on the border is that it would be preferable for the families to be kept together, but Scout is correct in that if they come in illegally, that in itself is a crime. Every time I have come to the US, i make sure I have the right visa or whatever, and I don't see why everyone else shouldn't. You don't have a right to just enter another country unless that country gives you the right.


message 37: by Scout (new)

Scout (goodreadscomscout) | 6184 comments Thanks for considering my argument. I wondered if anyone would give it serious thought, considering the emotional coverage in the press.


message 38: by J.J. (new)

J.J. Mainor | 2329 comments And that's what makes it strange...the adults are basically incarcerated until a judge hears their case, so what people are asking for is to have the children locked up with their parents...we don't do that with citizens who commit crimes...our jails are not filled with innocent children who are kept in the prisons with their criminal parents. They're place with family, or, worst case, in foster care.

The whole thing was just a disaster from the start with a flood of people coming all at once and overwhelming our officials...


message 39: by Ian (new)

Ian Miller | 11801 comments What I don't understand is why they are not just turned back straight away? If they do not have the correct documentation, they have no right to be in the US.


message 40: by Michel (last edited Jul 02, 2018 06:10AM) (new)

Michel Poulin Ian wrote: "What I don't understand is why they are not just turned back straight away? If they do not have the correct documentation, they have no right to be in the US."

Maybe that would be the simplest solution by far and also the least cruel, compared to what is happening now. By simply returning illegal immigrants right away to Mexico, nobody has to be jailed and no children have to be separated. As long as that is made without unnecessary brutality and with a minimum of human decency (give some water and food to the immigrants), that could be a solution. Border Patrol agents would need to explain clearly to immigrants what the legal steps to immigrate are and where to apply, but in return the American consulate services in Mexico should be beefed up in consequence to deal in a timely matter with the various claims and the requests from asylum. Maybe a few special consulate services offices could be established very close to the border, in order to encourage legal crossing procedures.

Also, something that never seems to be mentioned, the Mexican authorities should be told firmly to better manage and patrol their side of the border. The problem there is that the Mexican police forces along and near the border are hopelessly corrupt and in the pay of the drug cartels and human traffickers networks. It would be high time that the Mexican government puts some backbone in its anti-crime program, but I frankly have very little hope about that: the situation in Mexico is well beyond redemption in my opinion.

One little side note: there would be a lot less illegals passing the border while carrying drugs if the American drug users would find the brains and the will to stop using drugs. Nobody forced them to start using drugs and they should bear responsibility for this problem, while the government should help those willing to try weaning themselves of drugs, instead of resorting to mass jailing.


message 41: by Nik (last edited Jul 02, 2018 10:14AM) (new)

Nik Krasno | 16087 comments Yes, a deportation - without further ado. Works in many countries


message 42: by Judith (new)

Judith Rand | 16 comments your comments regarding the Mexican border are so accurate and so simple. Why did not anyone think of just returning the illegal immigrants instead of separating parents from children. Let's hope the newly elected President will use his authority to make significant changes to the Mexican police forces at the borders.


message 43: by Ian (new)

Ian Miller | 11801 comments Unfortunately, law and order is not strong in Mexico, and the level of corruption and criminality, thanks to drugs, is so bad and so deeply ingrained that I doubt it can be cleaned up quickly with what is there. And Michel is correct in that the drug problem would go away if people in the US stopped taking them. Can't see that happening any time soon either.


message 44: by Alex (new)

Alex (asato) Graeme wrote: "Alex wrote: "unless he's just looking out for himself, post-presidency...."

Hi Alex, I'm honestly not clear how current events would assist Trump post presidency. Can you please explain further."


A little late and not quite all the way thought out, but my logic is that, for example, if ZTE (and thus China) are given a way out, then that could be viewed favorably for any post-presidency POTUS business dealings in the China real estate market. (Not that Xi or any other PRC official would necessarily reciprocate and I realize that it's a bit conspiracy theory, but there I've put my own biases on the table.)


message 45: by Scout (new)

Scout (goodreadscomscout) | 6184 comments Nik wrote: "Yes, a deportation - without further ado. Works in many countries"

I agree. Why detain Illegal immigrants and subject them to court proceedings? They will be found guilty. Then what happens? Make them pay fines? They have no money. Lock them up in U.S. prisons? Then taxes have to support them. The only thing that can happen is to deport them, and that can and should be done immediately, keeping families together. If that's seen as the sure result of illegally entering the country, maybe that will solve the problem. And Mexico can and should do more.


message 46: by Ian (new)

Ian Miller | 11801 comments Something is wrong here. A whole lot of people are agreeing with me ????


message 47: by Scout (new)

Scout (goodreadscomscout) | 6184 comments I definitely do. There's some reason for the way the government is doing things. All that remains is for them to see the error of their ways and agree with us :-)


message 48: by Graeme (last edited Jul 03, 2018 03:09AM) (new)

Graeme Rodaughan Michel wrote: " Border Patrol agents would need to explain clearly to immigrants what the legal steps to immigrate are and where to apply, but in return the American consulate services in Mexico should be beefed up in consequence to deal in a timely matter with the various claims and the requests from asylum. Maybe a few special consulate services offices could be established very close to the border, in order to encourage legal crossing procedures. ..."

An entirely sane proposal. ( your broader comment was also excellent. :-))

Noting that the US has at least 8 consulates in Mexico, legal immigration avenues could be facilitated.


message 49: by Michel (new)

Michel Poulin YAIY! WE HAVE A CONSENSUS!


message 50: by Nik (new)

Nik Krasno | 16087 comments Michel wrote: "YAIY! WE HAVE A CONSENSUS!"

Was worth arguing for a couple of years -:)
Such a consensus that I remember reading that even Mr. Trump said something to the degree that (some?) immigration laws were horrible


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