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This post was edited by markwu at 2019-8-15 19:02|
So he's at it again.
This time, delaying the 10% new tariffs on half of the second tranche of US imports from China, presumably 'for the Christmas shopping season'.
But for a number of reasons, that's a poor excuse besides a bald lie:
1.The items on which tariffs would be delayed until December 15th include cellphones, laptops and games consoles, computer monitors plus toys; in total about USD156 Billion of the targeted USD300 Billion of imports. Those that will still be hit come September 1st will include tools, apparel, some footwear items, even school supplies; total USD107 Billion. Other items like bibles and shipping containers will be removed from the targeted list, again presumably for “health, safety, national security and other factors.”
So his administration has just discriminated against its own US consumers based on what they buy for their needs.
In effect his new decision is saying consumer electronics are ok but productivity tools, clothing and supplies for schoolchildren are not.
Moreover, shipping containers are ok now that they are not a national security risk - but what about railcar carriages?
And of course, holy books are ok because his countrymen will need them cheaper in order to fend off by harder praying against the epidemic of insanity that has taken over his administration's foreign policy which is now deficiting their mental health besides wallet.
In other words, his administration is using federal power to indirectly influence their needs purchases at a time when the US economy is being bashed by volatility and uncertainty besides weakening production and investment even while it remains basically a consumption market.
2. This is what he said to try and rationalize his partial delaying of his earlier decision to hit all second tranche China goods with the proposed 10% on September 1st:
"We are doing this for the Christmas season, just in case some of the tariffs would have an impact on U.S. consumers. So far they’ve had virtually none. The only impact has been that we’ve collected almost $60 billion from China, compliments of China. But just in case they might have an impact on people, what we’ve done is we’ve delayed it so they won’t be relevant for the Christmas shopping season.”
There are however problems with his statements:
If 'so far' his tariffs have not hurt US consumers, why should they hurt US consumers from 'now until Christmas' that would require him to quickly relax his decision?
And if he thinks his tariffs on consumer products can hurt, why did he not think they could also hurt when he applied tariffs on the first tranche of imports, many of which being parts and tools needed to make consumer products?
Additionally, is he saying his tariffs hurting US consumers is ok after Christmas but not before? Failing as potus and casino-owner, is he now trying to be Santa-Claus?
Furthermore, if his trade planning is based on 'just in case' only, then he is just shooting in the dark; in fact the consensus in the US is that he doesn't know what he's doing.
And if his decision is based on just his 'hunches', can he explain - using his hunches - why the US retail sector has already shrunk and has started retrenching, why the US manufacturing sector has suffered two latest quarters of decline and is technically under recession, why US employers have started reducing their job openings, and why the US yield curve has inverted in a clear sign of impending recession?
If he can't, he should refer to his economic adviser, Navarro, who has demanded the full tariffs be imposed. But then again his Navarro has just shrunk half-in-size, in proportion to the half-sized tariff delay.
3. So, next year this time, Christmas will come again. Then what? Meanwhile from December 15 2019 to November 2020, will the 320 million US citizens have to tighten their belts because his tariffs remain a consumption tax on them?
4. At the same time, won't factory investors in Vietnam and Mexico be now worried their investments sunk to increase their productions are now at risk?
All of which is why the US citizens themselves have openly and with a single voice concluded:
He who has dared to wrongly call China a currency manipulator is himself actually guilty as a global market manipulator, changing his decisions to short the stock markets of the world, as has been seen from the various responses of the markets to his tweets and decisions.
And he has lied his tariffs are being paid by China. In the main, they are all paid by his US citizens - from manufacturers to servicers to consumers. Besides farmers. His policy towards China has backfired.
Elsewhere, westerners have written:
The US distributes disfavours, threatening global economical dIsruption “at little and temporary cost to itself”.
China distributes favours, aiming at global economic stability from which it’s positioned to benefit the most.
Trump promises to stop buying, stop selling, increase costs for everybody, and pay for it call by taking on trillions of new national debt. Once-healthy American farmers now can’t survive without government handouts.
China increases purchases of soybeans from Brazil, buys more from Russia and reduces tariffs on goods it needs from Germany. It has stopped taxing its exports and allows its currency to gradually devalue. Billions of Christmas shoppers the world over will be grateful, including in the US.
Hardly ever before have so many Americans been working so hard for so little money. The American middle class has been shrinking since the 1970s.
Never before have so many Chinese been able to look ahead with confidence that next year will be better for them than the last, as has been the case since the 1970s.
Hopefully this announcement is the beginning of a road to backing away from needless confrontation.
The use of tariffs as an offensive weapon is tantamount to a declaration of war. History provides many examples where such trade policies have led to war.
The 1930s and the Napoleonic era provide outstanding examples amongst others. The exercise of naked nationalism in this multi polar world is unacceptable.
The US is acting as a traditional imperialist power in much the manner of the late nineteenth century.
The global commercial, trade, and economic interties are too great and complex to be torn asunder without considering the consequences of ill considered actions taken unilaterally.
Indeed, there are storm clouds on the horizon. Total job creation in the 30 months since Trump took office is down 13.24% from the 30 months immediately before he took office:
Jan 2017 to July 2019 - 5.736 million
July 2014 to Jan 2017 - 6.611 million
And looking at just the last year, job creation is down 40% in the first six months of 2019 compared with the last six months of 2018:
Jan 2019 to July 2019 - 0.844 million
July 2018 to Jan 2019 - 1.402 million
The US budget deficit fell by 2/3 under Obama, but increased by 1/3 under Trump. That explains most of it.
And the US trade deficit has actually increased since he started his tariff salvoes.
The Art of the Deal was published by Trump in 1987.
“My style of deal-making is quite simple and straightforward,” he wrote.
“I aim very high, and then I just keep pushing and pushing and pushing to get what I’m after.”
The Art of War was written by Sun Tzu 25 centuries before The Art of the Deal.
“So it is said that if you know others and know yourself, you will not be put at risk even in a hundred battles,” writes Sun. But “if you only know yourself, but not others, you may win or may lose”.
No one should underestimate Trump. But MAGAlomania alone will not be enough if he underestimates others.
Cold war? -> cool war? ->sweet and sour war? ->cold wok.