The Great Patriotic Trade War Rages On, Even If the President* Doesn't Know What a Tariff Is
The latest dispatches have been delivered from the front lines of the trade wars which, as we know, are very easy to win, especially if you are a great businessman* who surrounds himself with All The Best People who, if we're lucky, can explain the concept of how tariffs actually work before he starts tossing them around like unpaid invoices. He Tweeteth:
We will be taking in Tens of Billions of Dollars in Tariffs from China. Buyers of product can make it themselves in the USA (ideal), or buy it from non-Tariffed countries.
That is not how tariffs work at all, as some of All The Best People were forced to admit on teevee on Sunday. From the Chicago Tribune:
"Yes, I don't disagree with that," said Larry Kudlow, the head of the president's National Economic Council, when Chris Wallace, host of "Fox News Sunday," asked him, "It's U.S. businesses and U.S. consumers who pay, correct?" Kudlow added, "Both sides will pay," but he stipulated that China "will suffer (economic) losses" from reduced exports to the U.S., not from paying the tariffs.
Kudlow's admission contradicts many of Trump's comments and tweets to the effect that Chinese companies pay the tariffs in what amounts, in the president's view, to a massive transfer of wealth to the United States from China. Yet almost no economist has agreed with Trump's view and fact-checkers routinely brand Trump's assertion false and point out that American importers of goods from China pay the tariffs.
Meanwhile, out in the trenches, the bombardment from this discombobulated policy shop continues to be regular and heavy. On Sunday night, El Caudillo del Mar-a-Lago reassured the nation via the electric Twitter machine that:
We will then spend (match or better) the money that China may no longer be spending with our Great Patriot Farmers (Agriculture), which is a small percentage of total Tariffs received, and distribute the food to starving people in nations around the world! GREAT!
I do not find it reassuring that the president* seems now to be cribbing from old Soviet propaganda posters. The farmers, great and patriotic and dedicated to (agriculture) though they may be, are not reassured by anything because they're getting killed out there. From the Des Moines Register:
"It's a physical and mental challenge," said Renner, a 43-year-old who farms near Klemme, a town of about 500 people west of Clear Lake. "A lot of us think it can't get any worse, that it can only go up from here. But that's probably not a safe bet," he said. Prospects for improved prices are dimming, experts say, with record supplies, disease sweeping through China's pig herd and cutting soy demand, and hope for a new U.S.-China trade deal slipping away. And the president is threatening to slap tariffs on another $325 billion in Chinese imports, covering everything China sells the United States.
Farmers, particularly soybean farmers, have been the tip of the spear when it comes to Chinese retaliation, and I'm not sure they can take much more," said Kirk Leeds, CEO of the Iowa Soybean Association. Escalating tariffs "undercut any remnants of optimism," Leeds said. "That's what's most devastating about this." "There are some marketers who believe we could see $6 soybeans," he said, adding that he hopes prices don't sink that far.
Here is where we remind you that, this past Sunday, the president*'s main economic adviser had to explain to the country and the world that the president* doesn't know how tariffs work. But, be reassured. The president* has another idea.
President Donald Trump tweeted Friday morning that U.S. farmers would be better off, with the government possibly buying $15 billion in goods to provide humanitarian assistance to needy countries. U.S. Agriculture Secretary Sonny Perdue tweeted Friday that the president directed the agency to “work on a plan quickly." In Iowa last month, Perdue said the government had no plans to provide another round of assistance to farmers.
Does anybody at Camp Runamuck ever talk to anyone else at Camp Runamuck? Can they just go away one weekend and have everybody introduce everybody else? Then, they can explain the policy to the president*. But it isn't just soybeans and corn that are taking a voyage on the U.S.S. Incoherent. Almost anything manufactured in this country is also along from the ride. From the Washington Post:
Though the bulk of my business comes from imported bikes, I also own and operate a factory in Manning, S.C., which produces one of our lines, BCA Bikes. When we opened our doors in 2014, initially hiring 47 employees, we were bucking a trend: More than 95 percent of all bicycles sold in the United States are manufactured in China. But with high employee turnover and labor costs there rising, we decided to make an investment in our long-term growth. Today, our factory is responsible for more than half of the roughly 500,000 bicycles produced in the United States each year. Before President Trump’s trade war, we had plans to grow even further.
Incoming!
Almost all of our parts are made in China: Saving money on their manufacture has enabled us to hire American workers and offer them good wages and excellent health benefits. We were already paying duties of 4 to 10 percent when the Trump administration announced in June 2018 that it would impose an additional 10 percent tariff on $200 billion worth of Chinese goods. We couldn’t simply shift and buy from makers in other countries. Our Chinese partners have decades of experience making the parts we need. We source very carefully, and we can’t afford to gamble on quality or safety...
Ever since our factory opened, I had planned to bring more phases of the manufacturing process home. We’d start by importing steel tubes and welding the bike frames ourselves; from there, we’d buy American steel and make the tubes. Our factory employs 125 people, but that could grow to 300, I thought: Eventually, we could build 1 million bicycles, right here in the United States.
The Great Patriotic Trade War rages on.
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