Blurryeyed wrote:
Quinn, so far the Trump tariffs are not hurting so much but there is potentiality for the damage that you are describing. What I am not sure that you understand is why Trump is doing this. Since WWII our trade deals with Europe have been a bit lopsided, after the war European economies needed to be rebuilt because they have been devastated by the war, the US made generous trade agreements that became the foundation for the trade agreements that are in place today. As the European economies advanced our trade agreements were never adjusted to insure that balance was established, those agreements have always favored Europe which probably went unnoticed because our economy was so strong, but over the last few decades we have moved much of our production capacities overseas, to China and other markets such as countries like Mexico, S Korea, Twian, Thailand, even Japan and Canada. When we began trade with China they were considered an under developed economy and our agreements again made concessions to China and probably through pressure by large corporations the agreements made with China were grossly in their favor, our large international companies probably didn't care so much because they would be producing their goods there and sending them back here or selling them into the Chinese market which eventually will be much larger than the US market for the same goods. Because of the classification of China as a developing market even the WTO gives China special considerations that often work to our disavantage.
What Trump is trying to do is to bring manufacturing back to the United States, he does not believe that we can simply become a consumer nation, having an economy heavily based on selling products made in other countries, this is a bit over simplied but we are running trade deficits that are approaching a trillion dollars each year, that money is building the economies of other countries while having the opposite effect on ours. We are losing our production capacities at the same time because we are relying on others to produce the goods we consume so even if we wanted to compete in those markets we have lost the trained and developed workforces to do so, a major concern for our country right now. Lastly a portion of the deficits will come back to us either as federal debt purchases of our treasuries as our treasuries are still considered to be good investments, or, they will come back to us assett purchases where we are selling American assets to foreign concerns. No matter how you count it up our trade deficits represent an export of American wealth and jobs and Trump is fighting to stop it
Tariffs are a lousy way to protect a country's industry and trade and long term they are not Trumps goal, he is trying to establish free trade between the US and her trading partners, you are correct in everything you say about Trump hurting the American consumer. Trump's goal is that these tariffs be temporary, he is attempting to limit access to the American market to pressure our trading partners to balance the agreements between our nations. If successful it will be good for the American workers and consumers both, but in the mean time it is going to be a rocky road, you are right, consumers will be hurt, producers will also be hurt, most visibly we have seen concern that soy farmers will be hurt, but there are many other unseen producers in many industries that will be hurt by these tariffs, but the same is happening with our trading partners, in fact the tariffs are hurting them more than they are hurting us, our economy is so much larger than any other economy in the world that access to our market is extremely important for our partners, secondly we are net importers so our partners will face tariffs on more of their products than we will on those we export.
In the end what Trump is trying to do for example is if China only pays an average of 2 1/2 % on goods coming into our markets then he is asking that we pay the same on our products moving into their markets, when he achieves this his tariffs will go away and hopefully our economy will see great growth.
Quinn, so far the Trump tariffs are not hurting so... (
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If the goal is as you say and is wise, a competent president might have started out with diplomacy with a threat of tariffs, and if that didn't work do what was required. Ready fire aim, hardly ever delivers the desired result.