Just Enough Of What You Need To Know About Trump's Tariffs/Trade War!
Here's the thing about the GOP: IT SHOULD NOT WORK. There should not be a party made up of corporate oligarchs and the very working people they screw. But like all good marriages, it endures because the partners agree to overlook each other's faults. For instance, the workers ignore the lies about reopening factories and coal mines because they get to carry a machine gun around while protesting the last abortion provider in their state. And the business owners ignore all the Pitchfork Hoedown campaign promises about GETTING TOUGH WITH CHINA because they know it will never happen, and they're going to get a blank check to rape the environment and pillage labor laws. WIN WIN.
The problem arises when we elect an unstable lunatic who doesn't know the rules, and he actually follows through on the nonsense he spewed on the campaign trail. Enter Donald Trump and his idiotic announcement on Thursday that he'd be enacting tariffs of 25% on imported steel and 10% on aluminum, which sent the stock market plunging.
When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!
— Donald J. Trump (@realDonaldTrump) March 2, 2018
But what even is a tariff?
It's just a tax -- if you want to import a ton of steel for $700, it'll cost you $875 now that Trump has tacked on $175 in border taxes. It's a blatant effort to jack up the price of imported steel to benefit domestic producers. And maybe you think propping up the American steel industry is a great idea, BUT it violates all kinds of treaties that we as a country have signed and ratified. So instead of renegotiating those treaties and losing the protections of NAFTA, KORUS and the World Trade Organization, Commerce Secretary Wilbur Ross and the crackpot Director of the National Trade Council, Peter Navarro, cooked up a national security justification for the tariffs.
We have to protect the American steel industry they said, FOR THE TROOPS! What if a war breaks out, and we can't build tanks!
Only no one at the State, Defense or Treasury departments is onboard with this bullshit because we have plenty of domestic capacity for wartime needs. But more importantly, we're not going to war with Canada, Brazil, South Korea and Mexico, our top four sources of imported steel!
BUT Y THO?
Well! Remember that wifebeater Rob Porter? His job was to keep the wackjobs out of the Oval Office. In particular, he was supposed to stop Peter Navarro from sneaking in to whisper his crank theories into the old man's ear. This is a guy who the National Review referred to as Trump's Nutty Professor. He wrote a book called Death By China: Confronting the Dragon. He's one of Bannon's flunkies, and with Porter gone, he seems to have sneaked back in.
Via Axios,
[Gary] Cohn tried to argue that these tariffs would ruin Trump's record-setting stock market streak and wipe away benefits of tax reform. But Trump kept saying Cohn was a "globalist" while he himself was an economic nationalist. [...]
Navarro argued that Trump needed to protect the domestic industry, promote American jobs and show the world we were going to be tough on trade and this was the best way to do it. Porter argued tariffs would hurt the manufacturing industries that use steel and aluminum as inputs, tax American consumers, roil global markets, alienate allies and lead to retaliation.
Trump sat and watched the fight. He occasionally interjected, saying things like "I need to take care of my base," "You can't have a country without steel," and "Peter, what do you say to that argument?" By the end, Trump told Porter he didn't realize he was such a "globalist."
We note that none of this has anything to do with national security. And as usual, Trump is saying the quiet part out loud on Twitter.
We have large trade deficits with Mexico and Canada. NAFTA, which is under renegotiation right now, has been a bad deal for U.S.A. Massive relocation of companies & jobs. Tariffs on Steel and Aluminum will only come off if new & fair NAFTA agreement is signed. Also, Canada must..
— Donald J. Trump (@realDonaldTrump) March 5, 2018
...treat our farmers much better. Highly restrictive. Mexico must do much more on stopping drugs from pouring into the U.S. They have not done what needs to be done. Millions of people addicted and dying.
— Donald J. Trump (@realDonaldTrump) March 5, 2018
So we're setting fire to NAFTA to solve the opioid crisis. GOT IT.
Axios and the Times have speculated that Trump is isolated and losing his shit now that Keith Schiller, Hope Hicks and the rest of Babysitters Club are out of the White House. Is he lashing out at his limpdick son-in-law and Globalist Gary with these tariffs? Eh, maybe. Or maybe he's a demented old bat with a childish understanding of economics who still thinks it's 1957 and if we just pull up the drawbridge, all the factories will reopen. Prolly that one, TBH.
So, now what?
Well, now we all laugh at Wilbur Ross pretending that he just stopped off at his local 7-11 for his regular lunch of canned soup and Budweiser.
I'm told these are things poors consume. I'm here to reassure the poors that they will still be able to consume these things. I will now open a can and consume these nutrients to show solidarity to the poors. No I won't, never mind. These cans are so heavy. Where am I? pic.twitter.com/TB9njIc5FI
— Rex Huppke (@RexHuppke) March 2, 2018
Then we wait for the fallout. Will American steel manufacturers kick up production and hire more workers, or will they just raise the price to $874/ton -- still $1 less than the imports --- and thank Navarro and Ross for the extra profits?
Speaking of Ross, this guy knows damn well that the tariff isn't going to be a boon for American workers. Via the Northwest Indiana Times:
Ross restarted idled steel mills in East Chicago, Burns Harbor and Riverdale but cut employment, wages and benefits. He for instance eliminated more than 500 jobs at the Acme strip mill in Riverdale, according to Times archives. ISG also eliminated thousands of jobs from Cleveland-based LTV and Pennsylvania-based Bethlehem.
Now there's a man who sticks to the GOP script!
So American consumers will likely pay more for cars and canned goods once the price of steel goes up. Canada, Europe and Mexico are already making noise about retaliatory tariffs on motorcycles, airplanes, and soybeans. Because if we don't follow the rules, why should they? And that's the real fallout from Trump's off-the-cuff tariff decision. It erodes the US's ability to enter into agreements with other countries because they simply don't believe that we'll do what we promise. Even if Mnuchin, Mattis and Cohn manage to distract Trump long enough to avert an outright trade war, the damage to the country's credibility and reputation will still last a generation.
SO MUCH WINNING.
Follow your FDF on Twitter!
[ Axios / Northwest Indiana Times ]
The tweets show that the tariffs were about extortion in negotiations rather than the excuse of security. Canada could present this evidence to the WTO - the security excuse is bogus and the tariffs are illegal.
Of course that does not solve the problem. The issue is what do you do when another party in a negotiation brings extortion to the table?
When one side is using extortion your choice is either to capitulate or leave the table.
Many can debate this but the NAFTA talks are down to a single question -- which is worse for Canada capitulation or walking away from NAFTA for now? To assume there is some third way at the moment looks unrealistic. Such a third way could come from a reaction in the US to Canada walking away. It could come only when Trump is no longer president. It will not come from any other source.
Perhaps Canada has to accept that NAFTA is over until Trump is gone. The alternative is a renegotiated terrible NAFTA Canada could be stuck with for a generation at least. Short term pain might be less expensive as extreme as it may be.
Really means (((globalist))).