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This is like dodging a major bullet. If I had to pay 25% more for my Dos Equis, Clase Azul tequila and limes it would have put a major dent in the family budget.
I did a piss poor job of analyzing this situation. Honestly, if someone who has more insight into the mind of Trump than I do would care to comment on any of the following, it would be interesting to know your thoughts. I'm not being sarcastic.
1. If a number of members of the Republican Party hadn't disapproved, do you think we'd be on the road to 25% tariffs? Put another way, was Trump's main goal from the outset to use the threat of tariffs on Mexican exports as leverage for cooperation on immigration, and not to do something like "bring jobs back to America?"
2. What do you think Trump's end goal is for Chinese tariffs? Is he using them as leverage to try to get the Chinese to play fair? Or does he want to shut off their imports regardless of what they might agree to regarding our access to Chinese markets and intellectual property protection? Do you think we'll have the 25% tariffs on Chinese products as long as Trump is president?
3. There are 395 immigration judges and a backlog of 800,000 immigration cases. Why hasn't or can't Trump get the Justice Department to appoint a few thousand new immigration judges and start sending a lot more fake refugees back to their countries of origin?
This is like dodging a major bullet. If I had to pay 25% more for my Dos Equis, Clase Azul tequila and limes it would have put a major dent in the family budget.
My alcohol consumption already puts a dent in my family budget. And I rarely purchase spirits from Mexico. Usually from the US or Canada. Oh, and Belgium beer. That’s good stuff.
My alcohol consumption already puts a dent in my family budget. And I rarely purchase spirits from Mexico. Usually from the US or Canada. Oh, and Belgium beer. That’s good stuff.
By Brett Arends
Published: June 6, 2019 1:20 p.m. ET
Reports of Mexico and China trade wars causing Americans financial pain are greatly exaggerated
Can people please stop talking complete, unmitigated claptrap on the subject of President Donald Trump, Mexican tariffs and the U.S. economy? Is that too much to ask?
The panic over the last few days about possible Mexican tariffs is even more ridiculous than the panic we had last month about the China tariffs — and that was bad enough.
Trump’s new tariff threat will send prices soaring for U.S. households, according to the doomsayers. They’ll cost hundreds of thousands of jobs. They’ll crash the stock market. They’ll crash the economy.
Really? No doubt this is why the Dow Jones Industrial Average DJIA, +1.02% plunged 350 points in a panic last Friday. And the Dow’s performance since then, through Wednesday? Up around 600 points.
The Standard & Poor’s 500 SPX, +1.05% is now higher than it was last Thursday, just before Trump shook his little fist at the Mexicans. And it’s not just popular stocks such as Apple AAPL, +2.66% , Netflix NFLX, +1.05% and TSLA, -0.70% . U.S. industrial stocks — as represented by the S&P 1500 Industrials index — are up 3%. The stocks of automobile-components companies are up almost 5%. Small-company stocks, often a useful barometer for the Main Street economy, are up about 1.5%, whether measured by the broad Russell 2000 RUT, +0.72% or the narrower, higher-quality S&P 600 index SML, +0.71% .
Sure, a few days’ worth of stock-market action doesn’t mean much for the long term. And the stock market isn’t America. But, then again, apparently it was an Infallible Omen of Doom when the stock market fell last Friday. You see how that works?
Whether or not these tariffs are a sensible policy is another matter. But anyone claiming they will cost households a small fortune and wipe out vast numbers of jobs is relying on some heroic assumptions — or, as noneconomists call them, guesses.
U.S. imports from Mexico came to $372 billion last year, according to the federal government. So slapping a 5% tariff on them amounts to a federal tax hike of … er … $19 billion. Total federal taxes last year: $3.3 trillion. So we’re talking about a 0.6% tax hike.
But the Mexican peso USDMXN, -0.0616% has already reacted. It has weakened by 2.7% against the U.S. dollar DXY, -0.50% in a few days — wiping out more than half of that cost increase.
Meanwhile, anyone hoping to buy a home, or refinance a home loan, also just got a nice cost saving. The trade tensions have sent long-term interest rates tumbling. Average 30-year mortgage rates have declined to 3.89% from 4.01% in just a few days, according to Mortgage News Daily. The interest savings from that move alone on an average new-home loan comes to about $300 a year. According to Bankrate, 30-year mortgage rates are now about their lowest since the summer of 2017.
Oh, and then there’s the matter of that $19 billion in tariff revenues. To hear some people, you’d think it just vanishes. Maybe it gets trucked to a Great Secret Money Bonfire — possibly in Area 51 — where it gets torched. (Along with the money raised from the China tariffs, money spent by companies on stock buybacks, and so on.)
Actually, if Uncle Sam levies $19 billion in extra taxes on imports from Mexico, then he has extra money that he can recycle back into the U.S. economy through spending, or tax cuts. How much? Try $19 billion.
Meanwhile, anyone hoping to buy a home, or refinance a home loan, also just got a nice cost saving. The trade tensions have sent long-term interest rates tumbling. Average 30-year mortgage rates have declined to 3.89% from 4.01% in just a few days, according to Mortgage News Daily. The interest savings from that move alone on an average new-home loan comes to about $300 a year. According to Bankrate, 30-year mortgage rates are now about their lowest since the summer of 2017.
Interesting way to think about it. The market thinks the economy is going to suck because of trade tensions, therefore interest rates will be lower, and therefore people will save money on their mortgages. That's all well and good. Except that if your business sucks (e.g. farmers) or you lost your job (people who work for companies that use a lot of steel) or you have to pay more for some goods (all of us), then that mortgage is going to be harder to pay.
Interesting way to think about it. The market thinks the economy is going to suck because of trade tensions, therefore interest rates will be lower, and therefore people will save money on their mortgages. That's all well and good. Except that if your business sucks (e.g. farmers) or you lost your job (people who work for companies that use a lot of steel) or you have to pay more for some goods (all of us), then that mortgage is going to be harder to pay.
i find your stance on this issue to be a contradiction in terms. on the one hand you admit (because i asked you directly) that trade with China is unfair to the US. presumably you would have said the same for Mexico and Canada but Trump had redone those. Yet you claim doing anything about unfair trade is wrong? how so? would you do nothing and continue to allow these unfair trade issues? Why?
what would you do if you were Trump? and don't say "nothing" because that's not an answer. it's a cop out to the status quo that keeps unfair trade in place at the detriment to all US consumers.
I did a piss poor job of analyzing this situation. Honestly, if someone who has more insight into the mind of Trump than I do would care to comment on any of the following, it would be interesting to know your thoughts. I'm not being sarcastic.
1. If a number of members of the Republican Party hadn't disapproved, do you think we'd be on the road to 25% tariffs? Put another way, was Trump's main goal from the outset to use the threat of tariffs on Mexican exports as leverage for cooperation on immigration, and not to do something like "bring jobs back to America?"
2. What do you think Trump's end goal is for Chinese tariffs? Is he using them as leverage to try to get the Chinese to play fair? Or does he want to shut off their imports regardless of what they might agree to regarding our access to Chinese markets and intellectual property protection? Do you think we'll have the 25% tariffs on Chinese products as long as Trump is president?
3. There are 395 immigration judges and a backlog of 800,000 immigration cases. Why hasn't or can't Trump get the Justice Department to appoint a few thousand new immigration judges and start sending a lot more fake refugees back to their countries of origin?
Mexico crisis shows the limits of Trump's brinksmanship
Quote:
A person familiar with the negotiations under former Homeland Security Secretary Kirstjen Nielsen confirmed New York Times reporting that much of what Mexico agreed to do this week was already on track months ago. In March, for instance, Mexico secretly pledged to deploy troops to the southern border during a meeting in Miami with Nielsen, and had agreed to the new asylum procedures back in December.
This one hit a little close to home. I like all the questions. In my opinion, if the rest of the party HAD marched in lock-step with his majesty, then yes, ""weed" be on the road to 25% tarrifs". But he over played his bluff. My question is- how many in the corrupt old party already knew most of the "deal" had been arranged? My guess is slim to none.
Too many constituents depend on trade with Mexico. The jobs aspect is second only to catering to agribusinesses who would feel the pinch. Then the punch of the whopping 25%. The farmers need the pickers. Without the pickers, there is no produce. No production.
This is my admittedly limited view. And only my opinion.
This is my admittedly limited view. And only my opinion.
It's good when a man accepts his limitations.
On the road and pushed through via the final 25% tariff threat are certainly different things. Did the threat pave the road to the end. Certainly appears so.
As with Tiny, and a whole lot of people, the insight to his majesty's mind and motivations is very limited. Even to his cabinet.
All I know is: there would be a shit load of small restaurants and big-chain food industries that would crumble trying to stay afloat.
Remember that the cost goes to the consumer. And these goods aren't renewable. Immediately. They go to waste. Like your money. I'm talking about perishables.
So the means justified the ends? Did the bluff work? The jury is still out.
As with Tiny, and a whole lot of people, the insight to his majesty's mind and motivations is very limited. Even to his cabinet.
All I know is: there would be a shit load of small restaurants and big-chain food industries that would crumble trying to stay afloat.
Remember that the cost goes to the consumer. And these goods aren't renewable. Immediately. They go to waste. Like your money. I'm talking about perishables.
So the means justified the ends? Did the bluff work? The jury is still out.
and you know that how? where's your proof? just nothing but a THT suffering from TDS.
you do know that tariffs work both ways, yeah? yet you seem to think they only affect US consumers and business. They affect the nations that we impose tariffs on also.
you really should leave the US since you clearly hate America. send us a post card from whatever socialist utopia you go to.
Oh sorry .. there isn't one! you'll just have to accept capitalism yeah?
i find your stance on this issue to be a contradiction in terms. on the one hand you admit (because i asked you directly) that trade with China is unfair to the US. presumably you would have said the same for Mexico and Canada but Trump had redone those. Yet you claim doing anything about unfair trade is wrong? how so? would you do nothing and continue to allow these unfair trade issues? Why?
what would you do if you were Trump? and don't say "nothing" because that's not an answer. it's a cop out to the status quo that keeps unfair trade in place at the detriment to all US consumers.
So what would you do, President Tiny?
Here's what I wrote the last time you asked the same questions about China:
Quote:
Originally Posted by Tiny
A typical Chinese factory employee works 12 hours a day, six days a week for $8000 a year doing mindless, repetitive work we don't want to do. His company, which operates in a fiercely competitive environment and is less profitable than American businesses, sells stuff to us really cheap. So they send us things like televisions, clothes and kitchenware. And we send them paper, U.S. dollars. They give us our dollars back by investing in our government debt and overpriced real estate. They're getting fucked. We're making out like bandits.
It would be great to see American companies have better access to Chinese markets and better protection for their intellectual property. If that were Trump's aim, he should have teamed up with the Europeans, Australians, Canadians and various Asian countries to open up China, instead of slapping our allies with tariffs on iron and aluminum (and soon autos) and abandoning the Trans Pacific Partnership. As it is, if we impose high tariffs on Chinese goods (which btw is a bad idea), they just sell what they were selling to us to the Europeans or whoever.
Finally, a lot of economists believe we'd be better off with no tariffs, regardless of what other countries are doing. That makes our companies leaner, meaner and more competitive, and we put our resources towards the things we do best, making us more productive and prosperous. When government imposes tariffs, it's playing favorites. You end up with fat, lazy businesses run by crony capitalists, shielded by tariffs from competition from other countries
If I were Trump, why wouldn't I necessarily respond to trade barriers and other restrictions on free markets in other countries by doing the same thing here? Because if they're going to shoot themselves in the foot, there's no reason we should too. We're better off with free markets. Try and refute this:
Quote:
Originally Posted by Tiny
Here's a list of the most prosperous countries in the world and their average tariff rates on goods. You can reproduce using the links below. I'm using the IMF list for GDP per capita adjusted for purchasing power. Where you see **, it means the country is sitting on huge oil wealth, and would be prosperous no matter what tariffs it charges.
1. Qatar 3.37% **
2. Macau 0.00%
3. Luxembourg 1.79%
4. Singapore 0.07%
5. Brunei 0.50% **
6. Ireland 1.79%
7. Norway 3.13%**
8. United Arab Emirates 2.82% **
9. Kuwait 2.96% **
10. Switzerland 1.31%
11. Hong Kong 0.00%
12. United States 1.66%
13. San Marino No data
14. Netherlands 1.79%
15. Saudi Arabia 4.45% **
16. Iceland 1.47%
17. Taiwan No data
18. Sweden 1.79%
19. Germany 1.79%
20. Australia 1.18%
Do you see a pattern? Kick out the oil states and all the most prosperous countries in the world have average tariff rates of 1.79% or less. The average tariff for the USA before Trump's changes was 1.66%.
As to Canada and Mexico, no, I don't think trade with them is unfair. Yes, by your and Trump's standards, trade with Canada is unfair because they charge lower overall tariffs than we do and we export more goods to them than they export to us. So we're fucking them. But you're wrong, that's not the case. Canada, Mexico and the USA are all better off because of trade among themselves, and with other countries.
you do know that tariffs work both ways, yeah? yet you seem to think they only affect US consumers and business. They affect the nations that we impose tariffs on also.
Absolutely they affect all the countries. Everybody loses in a trade war. This is something Donald Trump doesn't understand, because all his life he's viewed business as a zero sum game. For every winner, there's a loser. Both sides can't benefit in a business deal. So he's fucked his suppliers, his customers, his investors, his partners, and his banks. He's also fucked the U.S. taxpayer, by generating a $900 million tax loss by stiffing the bondholders in his Atlantic City casinos and then using their losses as deductions on his tax returns for many years afterwards.
Business doesn't have to work that way, and trade absolutely does not work that way. Lower your tariffs and you're better off. See the table of countries in my post above.
