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  1. #11
    filghy2 Professional Poster
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    Default Re: Free Trade or Trade Wars? The problem with Tariffs

    Somebody needs to tell him that the leprechaun's pot of gold is (also) just a fantasy story. Kudlow's primary skill seems to be a capacity for making very confident predictions, and then being completely unfazed and refusing to learn anything when they turn out to be wildly wrong. Obviously the ideal economic adviser for Trump. Here's a few of his greatest misses.
    http://time.com/money/5197470/trump-...w-predictions/
    https://thinkprogress.org/larry-kudl...-f02ebf47c918/



  2. #12
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    Default Re: Free Trade or Trade Wars? The problem with Tariffs

    Again, thanks for the links filghy2, as I had never heard of Kudlow before, but he seems well known to Americans. I suppose it raises the question, what does the NEC actually do, does it affect economic policy? One of my favourites in the lists of things Kudlow got wrong is this justifying war to change the regime in Iraq:

    A couple of weeks later a final assault on Baghdad can take place. A small war, to use Wall Street Journal editorialist Max Boot’s lexicon, led by fast-moving special forces and leather-toughened Marines,

    Hmm...leather-toughened marines, somehow this conjures up strapping young fellows naked but for their leather chaps cavorting around the barrack room. Throw in a Mia Maffia or two and you have a clear link to HungAngels...



  3. #13
    filghy2 Professional Poster
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    Default Re: Free Trade or Trade Wars? The problem with Tariffs

    I'm not American Stavros, but I have lived there in the past. I know of Kudlow mainly from unfavourable mentions by Paul Krugman and some other US economists that I read. The NEC is supposed to be the main coordinating body for economic policy within the US administration. https://en.wikipedia.org/wiki/Nation...United_States)


    Last edited by filghy2; 04-10-2018 at 01:37 AM.

  4. #14
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    Default Re: Free Trade or Trade Wars? The problem with Tariffs

    Proof that the international economy is shaped by State Capitalism is again provided by the President of the USA who either does not believe in Free Markets or believes 'Free Markets' under State Capitalism are free -as defined by the President. The complete incoherence of this Idiot, the Idiots in the White House and the Idiots in Congress is illustrated by the pincer-movement of tariffs on the one side, sanctions on the other, but where Napoleon used it to win wars, this President is using them, and losing, because that is what he is, a loser.

    For two years this Idiot has been blaming China for the loss of American jobs that he says will return to America when he 'gets tough' with China, just as the other day he made it clear any European firm continuing to trade with Iran will face 'tough sanctions', yet on both he has just reneged on his own policy because it seems it doesn't return jobs to America at all, but if anything, destroys them. The man who agreed with France's racist and neo-nazi leader Marine Le Pen that today you are either a 'Patriot' or a 'Globalist', now seems to think Globalization might not be so bad after all.

    Thus, on the Chinese telecoms firm ZTE-
    In a surprise policy reversal, Donald Trump said on Sunday he had instructed his commerce department to help get a Chinese telecommunications company “back into business”, after his government cut off access to its US suppliers.
    The US commerce department last month blocked ZTE, a major supplier of telecoms networks and smartphones based in Shenzhen in southern China, from importing American components for seven years. The US accused ZTE of misleading US regulators after it settled charges of violating sanctions against North Korea and Iran.


    The problem is that US firms were supplierrs to ZTE-
    Trump’s reversal will likely have a significant impact on companies such as Qualcomm and Intel. American firms are estimated to provide 25% to 30% of the components used in ZTE equipment, which includes smartphones and gear to build telecommunications networks.

    So here is the President's commitment to his own policy, in his own words:
    Trump, who has taken a hard line on trade and technology issues with Beijing and campaigned relentlessly on protecting jobs in the US, tweeted on Sunday that he and Chinese leader Xi Jinping were “working together to give massive Chinese phone company, ZTE, a way to get back into business, fast”.
    “Too many jobs in China lost,” the president wrote. “Commerce department has been instructed to get it done!”
    (my emphasis)
    https://www.theguardian.com/world/20...any-zte-us-ban

    America First! America First!

    As for tariffs, how about this: proposed tariffs on China now threaten US agricultural jobs to the extent the USA might re-join the Trans-Pacific Partnership-
    President Trump’s potential trade war with China could hammer American farmers. Now Trump is scrambling to find ways to protect them, looking into reviving obscure Depression-era programs and potentially rejoining the free trade agreement he pulled out of during his first week in office.

    If Trump ends up actually reentering the Trans-Pacific Partnership, the colossal trade accord he abandoned on January 23, 2017, he would be reneging on one of his signature campaign promises and pulling off one of the most head-spinning policy reversals of his presidency. Trump won the White House on an anti-free trade platform and had spent months arguing that the deal would kill American jobs.
    https://www.vox.com/policy-and-polit...rade-war-china

    Blast from the past-
    The Trans-Pacific Partnership is an attack on America's business. It does not stop Japan's currency manipulation. This is a bad deal.
    https://www.washingtonpost.com/news/...=.4505fd9c3323


    So let's get this right:
    Tariffs protect American jobs- until they don't.
    Sanctions against North Korea and Iran protect the USA from external threat -until they don't.
    Tariffs will be imposed on China -or maybe they won't.
    Sanctions against Iran will be extended to anyone dealing with Iran -or maybe they won't.

    This isn't policy-making, its posturing, and the President looks like what he is, an Idiot.



  5. #15
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    Default Re: Free Trade or Trade Wars? The problem with Tariffs

    Ah well, no surprises. Just as the President ignored his so-called Allies on the Iran Nuclear Deal, he has decided to impose tariffs, and can do so because Congress allows him to, not least when the President can claim it is a matter of 'national security'. There is a rather cynical article about it here which I came across when wondering if the President has the power to impose tariffs without Congressional approval, but which opens up a different argument about how the US political system functions-

    So more and more over the past 80 years, authority over tariffs, as well as over all manner of properly legislative functions, has migrated to the executive branch, away from the legislative — even in instances (such as this aluminum-and-steel case) where there is no compelling or immediate foreign-policy mandate. Trump’s move is purely a play for aggrieved industrial workers, who should, in the constitutional schema, look to Congress and not the president for redress of their grievances.
    And this is exactly the problem with our government in 2018. Nobody looks to Congress for redress of grievances anymore, for it would be foolish to do so! Nobody respects Congress. Nobody likes Congress. Congress, at least to judge from its members’ constant campaigning against it, does not even much like itself. Congress has systematically shrugged power off its shoulders over the past 80 years, and it inevitably screws up the handful of authorities it retains, such as income taxes and “discretionary” spending. The legislature is manifestly incapable of managing the burdens of a modern economy.
    https://www.nationalreview.com/2018/...power-to-levy/

    A more interesting development will take place when the European Union makes a legal case against the USA to the World Trade Organization, as the American President will almost certainly ignore it on the basis that the WTO should not exist, and the USA will do what it can to destroy it. There are no rules now, and no international organizations to manage conflict between states, there is only the power of the USA, which is there to be challenged by anyone who thinks they can take them on. It is even possible that in the short term the USA will benefit, but why, in the longer term, should we trade with people who only base their deals on what is best for them, and treat their 'partners' like schoolchildren? On this basis, I wish we had a Prime Minister determined not to sign any trade deals with the USA, but look East to India, China, Korea and Japan as the 21st century will be an Asian century, as the Republicans bury themselves and their country into a grave of their own making.



  6. #16
    filghy2 Professional Poster
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    Default Re: Free Trade or Trade Wars? The problem with Tariffs

    Here's an idea that these other countries might consider - targeted sanctions against Trump businesses. https://www.vox.com/policy-and-polit...p-organization

    After all, isn't what what you should do with rogue states - target the regime rather than the people?



  7. #17
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    Default Re: Free Trade or Trade Wars? The problem with Tariffs

    The phrase spin doctors use if applied to the G7 meeting that has just ended, means that the 'Takeaway' from this Summit is that the USA no longer believes in them, that the G7 might as well be Gee, does it still exist?

    Theresa May's press conference last night confirmed that she clings on in desperation while senior members of her own Cabinet openly deride her management of Brexit. Meanwhile she insists that she has a good working relationship with the President of the USA even when he calls her a stuffy Schoolmistress, though she has (for comical reasons, if not entirely without reason) also been described as a Spokesman for the Ridiculous Jackets Association, wearing one for her press conference, something the President rarely if ever goes in for, even though he is the honorary Spokesman for the Ridiculous Handshakes Association.

    Not so ridiculous is John Bolton, who may have been the prime mover behind the G7 farce as he has been frozen out of the Singapore Sling and this was his chance to prove he is as ignorant of international trade as his Boss. There are dozens of articles available on the internet which will explain what a 'trade deficit' actually is, and why that word 'deficit' when transformed in the USA for the benefit of 'the people' into 'dairy' --or milk and cheese if Dairy is too obscure, itself obscures the complex nature of trade in which an apparent deficit in goods, can means a surplus in trade if the currency is the trade.

    Just as the President is going to Singapore to discuss de-nuclearization without a scientist with expert knowledge of nuclear physics (not needed because the President will make up his mind in 5 seconds on meeting the Wise Leader of Pyongyang), so this is a President without a basic understanding of international trade, but who does know that if the G7 leaders don't fall on their knees to adore him, it is because they are against him, and if they are against him, they are against the USA. Far better deal to deal with Autocrats and Mass Murderers. Why?

    It is John Bolton, Wilbur Ross and the others who think they have the edge, but their friends on Wall St must be banging their heads against the wall, maybe even the street, unless this is all part of a short-term strategy to smash the WTO and the co-operative system of international trade that succeeded Bretton Woods, but which the USA has now decided -like the EU- is an obstacle to their version of 'free trade'.

    But it is a gamble, based on their view that the USA is holding the best cards in a poker game. But does it? And do you want to gamble the rest of your life on one deck of cards?

    The New York Times rundown on trade deficits is here-
    https://www.nytimes.com/2018/06/09/u...e-deficit.html



  8. #18
    filghy2 Professional Poster
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    Default Re: Free Trade or Trade Wars? The problem with Tariffs

    Quote Originally Posted by Stavros View Post
    There are dozens of articles available on the internet which will explain what a 'trade deficit' actually is, and why that word 'deficit' when transformed in the USA for the benefit of 'the people' into 'dairy' --or milk and cheese if Dairy is too obscure, itself obscures the complex nature of trade in which an apparent deficit in goods, can means a surplus in trade if the currency is the trade. [/URL]
    The ultimate absurdity of all this is that the US has to run a trade deficit if it is borrowing from the rest of the world or, equivalently, that the rest of the world wants to hold US dollar assets. That is why there is no evidence that trade measures have any effect on trade deficits.

    The recent tax cuts will increase US government borrowing, which means the US will also certainly need to borrow more from the rest of the world. Yet Trump's objective is to use trade barriers to eliminate trade deficits with other countries. That suggests we'll be looked into an endless cycle where Trump keeps pushing up tariffs in a vain attempt to offset the effects of his own policies.

    The only way the US trade deficit might fall is some combination of two things - a loss of confidence in the US dollar and a US recession, in which private sector borrowing falls to more than offset increased budget deficits. Ironically, that is probably where things will end up if Trump continues along his current path, though it will hardly 'make America great again'.



  9. #19
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    Default Re: Free Trade or Trade Wars? The problem with Tariffs

    When the US walks away from the World Trade Organization, it may propose as an alternative the United States Fair and Reciprocal Tariff Act, or FART, in short.

    I guess that sums up the administration, both in terms of its economic intelligence, and its use of the English language.

    https://www.theguardian.com/us-news/...ugh-washington



  10. #20
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    Default Re: Free Trade or Trade Wars? The problem with Tariffs

    The announcement today that the US Government is to double its tariffs on imports of steel and aluminium from Turkey prompts the question: is the US using tariffs as sanctions? Indeed, could it be that in fact Tariffs are not these days an economic instrument in the balance of trade, but as sanctions, a weapon of war being used by one state to punish another?

    It has not been stated explicitly, but the US Government has been in conflict with Turkey, not over steel or aluminium, but the detention of Pastor Andrew Brunson, who has been alleged by Turkey to have been involved in the 2016 attempted coup, being at one and the same time a member of the 'Gulen movement' while supporting the Kurdish independence party the PKK. His appearances in court have often lasted all day and have stretched the boundaries of credulity, but this is Turkey under Erdogan where the rule of law is figment of the imagination.

    One also wonders at the bizarre situation in which the USA threatens anyone trading with Iran with sanctions of its own, in spite of the fact that it is only the US that has pulled out of the Iran Nuclear Deal, a deal that has the legal force of a Security Council Resolution, therefore meaning that anyone who feels obliged to obey the USA is in fact violating international law.

    It seems to me that this is further proof of the incoherence at the heart of US policy, or it is another step toward the demolition of multinational institutions and international law, with the USA, hand on hips, guns locked and loaded, standing outside the Last Chance Saloon, daring the rest of the world to 'do something about it'.

    Meanwhile the US seems committed to spend unaccounted billions of dollars it doesn't have, on a space war force it doesn't need, while the deficit sails past $10 Trillion.

    https://www.theguardian.com/world/20...oubles-tariffs

    Who's next for a round of my tariffs can beat your tariffs? And does anyone in Congress care?

    Info on Andrew Brunson here-
    https://en.wikipedia.org/wiki/Andrew_Brunson

    https://edition.cnn.com/2018/07/29/p...ned/index.html



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