Speaking before the election, Mr Trump’s senior trade adviser, Dan DiMicco, the former boss of Nucor, a big steelmaker, set out several actions the president will take in his first 100 days. These include starting to renegotiate trade pacts such as the NAFTA accord with Mexico and Canada (and threatening to pull out if they won’t play ball). Every future trade agreement, among them the Trans-Pacific Partnership (TPP) between America and 11 other Asia-Pacific countries, and the Transatlantic Trade and Investment Partnership (TTIP) with the European Union (EU), will be put on hold. “Whether they go forward depends on whether we can return to balanced trade, and whether they add to GDP growth,” Mr DiMicco said. “The era of trade deficits is over. It will be: let’s talk, but otherwise we put tariffs on.”
Mr DiMicco cited the decision by Ronald Reagan (a favourite of Trump supporters) to impose a 45% tariff on Japanese motorcycles in the 1980s: “That brought people to the negotiating table.” Yet it seems implausible that trading partners will stand idly by should America raise tariffs. A trade war would come as protectionism is already on the rise. The World Trade Organisation predicts that global trade this year will grow less quickly than the world’s GDP for the first time in 15 years.
The Peterson Institute for International Economics (PIIE), a think-tank, has estimated the impact of Mr Trump’s trade policies under three scenarios, ranging from “aborted trade war”, in which Mr Trump is forced to lower tariffs within a year of imposing them, to a “full trade war” with Mexico and China. In the former case, global supply chains are disrupted and 1.3m private-sector American jobs are lost; in the latter, the damage includes the loss of 4.8m American jobs and would spill over into the services sector, too. Adam Posen of the PIIE says Mr Trump’s trade policies would be “horribly destructive”.
Anyone who thinks that tariffs are the answer a) have not learned from history (Smoot-Hawley); and b) do not understand macroeconomics.
All huge tariffs do is raise prices hugely - which hurts those that can least afford the rises the most...i.e. the poor/lower middle class.
And those you target with tariffs will just go to their trading partners and force them to put huge tariffs on American exports...which costs U.S. jobs. And since America tends to export high tech items and import lower tech ones/commodities...the net result will be more low tech jobs in America at the cost of less high tech jobs - and prices for almost everything much higher.
There is a reason no POTUS in decades has been for massive tariffs...because they all knew it was self-defeating.
If Trump thinks huge tariffs will help America...he is dreaming.
I agree with everything in this post.
The highlighted part is the key thing here.
Those unemployed low tech workers whose jobs have been off-shored, automated are the reason Trump won this election.
They see a $360 billion trade deficit with China and wondered why some percentage of those Chinese goods aren't made in the USA.
They see a $60 billion trade deficit with Mexico and wondered why some percentage of those Mexican goods aren't made in the USA.
Trump addressed these workers' anger and carried the day.
We'll see how these workers feel about Trumponomics in 4 years.
And I agree with everything in this post.
Woo-hoo....we agree on everything!!!!
Marry me!!!
Massive consumption is bad for the planet, and the way we have been doing it lead to massive income inequality and thus social strife. We have already passed peak international trade Trump or no Trump.
If you own shipping stock consider selling.
We have huge tariffs on Chinese tires, solar panels, and iron right now as we speak. So does Europe. Europeans and Chinese have had tariffs on our products for decades. There is no apocalypse, the rivers are not running red with blood, locusts have not descended upon us, and it is not raining frogs. Your establishment paranoia is bollocks.Anyone who thinks that tariffs are the answer a) have not learned from history (Smoot-Hawley); and b) do not understand macroeconomics.
All huge tariffs do is raise prices hugely - which hurts those that can least afford the rises the most...i.e. the poor/lower middle class.
And those you target with tariffs will just go to their trading partners and force them to put huge tariffs on American exports...which costs U.S. jobs. And since America tends to export high tech items and import lower tech ones/commodities...the net result will be more low tech jobs in America at the cost of less high tech jobs - and prices for almost everything much higher.
There is a reason no POTUS in decades has been for massive tariffs...because they all knew it was self-defeating.
If Trump thinks huge tariffs will help America...he is dreaming.
We have huge tariffs on Chinese tires, solar panels, and iron right now as we speak. So does Europe. Europeans and Chinese have had tariffs on our products for decades. There is no apocalypse, the rivers are not running red with blood, locusts have not descended upon us, and it is not raining frogs. Your establishment paranoia is bollocks.
Wow...you clearly do not understand macroeconomics or even history (Smoot-Hawley). A couple of tariffs means nothing...that goes on all of the time. But blanket tariffs against EVERYTHING a country imports to America...that is ENTIRELY a different animal. And you honestly cannot see that? Okaaaaaaay.
And if I am 'paranoid'...than so is Reuters, Time, Forbes, CNBC and just about every economist with a working brain.
Instead of guessing, why don't you show me unbiased, factual proof of how I am wrong? And for every idiot economist you can find who agrees with you...I can find 2 respected economists who don't.
It is virtually IMPOSSIBLE that a 45% tariff on all Chinese imports and a 35% tariff on all Mexican imports would not significantly raise prices in America.
A little, friendly advice...stick to what you know and don't guess when you do not - because clearly you do not understand international trade and it's effects on America.
You do understand there are significant tariffs on US products in China, Mexico, Canada, and Europe, right? The way you negotiate those down is by putting teeth into threats of the same treatment of their products.
American policy has been to accept unfair trade practices and trade deficits, maybe its time to rethink that.
I will say it again...tariffs on individual items are ALWAYS out there. It is SOP. But targeting a few items and targeting EVERY, SINGLE thing that a country imports to America are night and day.
Don't want to believe me? Fine.
Look up Smoot-Hawley and then Google/Bing 'Trump tariff plan' and you will find almost every, major economist (lib and con) stating what a lousy idea it is.
I will do it for you:
Trump's tariff plan could boomerang, spark trade wars with China, Mexico | Reuters
Everything Trump Says About Trade With China Is Wrong
Forbes Welcome
How Donald Trump's 25% tariff on China could start trade war - Apr. 18, 2011
Forbes Welcome
But if you want almost everything in America to cost more (in some cases - MUCH more) and if you want American high tech exporter jobs to wither...fine, back Trump's plan. If a few hundred thousand more, low tech jobs is worth it to you..fine. But then be sure to face the millions of poor/fixed income Americans whose precious dollars would then not stretch as far as they used to thanks to Trump's plan.
As I stated...it is virtually impossible to have a 35% tariff on ALL Mexican imports and a 45% tariff on ALL Chinese imports not result in large price increases in America.
And I challenge anyone to prove me (and virtually every respected economist) wrong.
Sure, if you assume he's going to go that far. I'm assuming he's going to renegotiate the deals. Any of the economists opine on what we should do about the 10% to 40% tariffs that exist on American goods?
Simple...put the exact same tariff on the same good that they export to America. No more, no less.
But first you have to prove the tariff.
But taking an atomic bomb to a problem when a sniper rifle is required is a recipe for disaster.
Bringing a pea shooter is a recipe for disaster as well and its what we have been using since Obama took office and hell, Bush and Clinton had the same sort of soft policy.
I will ask again...where is your evidence that a 45% tariff on ALL Chinese imports and a 35% tariff on ALL Mexican imports will not a) raise prices in America significantly and b) cost many U.S. high tech jobs for exported goods?
Because I have already provided 5 articles that say otherwise. And I can find plenty more from respected sources. Plus, history STRONGLY suggests that it would be a terrible policy.
No offense, but you seem to be listening to Trump's rhetoric and not researching the problem from an unbiased perspective. If you do, you will find that the VAST majority of those in the know agree with me and not with Trump.
NOBODY wins a trade war except the rich. That is Economics 101.
Why did an insufficient people vote for Hillary. That's the question. Why did the Dems stay-home and spectate?
Because they felt this election was not a "super-bowl event".
Have they got another "think" coming ... from what can be told by interviewing his so-called "advisors" this is what's coming. From here, the Economist: "Miffed with NAFTA"
Ouch ...
Anyone who thinks that tariffs are the answer a) have not learned from history (Smoot-Hawley); and b) do not understand macroeconomics.
All huge tariffs do is raise prices hugely - which hurts those that can least afford the rises the most...i.e. the poor/lower middle class.
And those you target with tariffs will just go to their trading partners and force them to put huge tariffs on American exports...which costs U.S. jobs. And since America tends to export high tech items and import lower tech ones/commodities...the net result will be more low tech jobs in America at the cost of less high tech jobs - and prices for almost everything much higher.
There is a reason no POTUS in decades has been for massive tariffs...because they all knew it was self-defeating.
If Trump thinks huge tariffs will help America...he is dreaming.
We have huge tariffs on Chinese tires, solar panels, and iron right now as we speak. So does Europe. Europeans and Chinese have had tariffs on our products for decades.
I agree with everything in this post.
The highlighted part is the key thing here.
Those unemployed low tech workers whose jobs have been off-shored, automated are the reason Trump won this election.
They see a $360 billion trade deficit with China and wondered why some percentage of those Chinese goods aren't made in the USA.
They see a $60 billion trade deficit with Mexico and wondered why some percentage of those Mexican goods aren't made in the USA.
Trump addressed these workers' anger and carried the day.
We'll see how these workers feel about Trumponomics in 4 years.
You do understand there are significant tariffs on US products in China, Mexico, Canada, and Europe, right? The way you negotiate those down is by putting teeth into threats of the same treatment of their products.
American policy has been to accept unfair trade practices and trade deficits, maybe its time to rethink that.
I see you aren't listening. I'm not saying he will do that. I'm saying he will threaten it. Your inflexibility and inability to consider alternatives is just making your argument look weak.
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