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The Media Is Lying To You About Trump’s China Tariffs
Interesting reading. Jim Cramer (of all people) wrote another piece discussing "the other side of the story" complete with short term investing ideas for people so inclined...
President Trump has decided that the U.S. simply shouldn't do business with China and if you do you are going to have to pay the price.
Your brief "bio" indicates some of your educational background includes Cambridge and Oxford, with my presumption being the well known higher education schools in England.
From Forbes, and an apparent self-bio: Contributor Brett Arends Most people are surprised that I used to be a management consultant at McKinsey & Co. So am I. (So were some of my colleagues at McKinsey, for that matter). Today I'm a columnist for the Wall Street Journal and MarketWatch. I've appeared on 60 Minutes, the NewsHour on PBS and numerous other radio and TV programs. I've also been a Fleet Street tabloid journalist, a research assistant at the London School of Economics, a Chartered Financial Consultant, and an extra on the stage at Covent Garden. I was educated at Oxford and Cambridge universities, and I’ve written three books nobody has read.
I reviewed his current twitter feed, and another article he posted in about the same time frame as this dribble writing about what the implications of tariffs are and would be to the U.S.; is a write about diets and the health benefits.
I can think of several folks here who are able to write a precise overview of tariff impacts with the same number of words. His write blames the media for misdirection and yet he doesn't mention the misdirection from the verbal statements of Trump, Kudlow and other associates.
Sidenote as to the real tariff impacts: A budget minded married couple I know had to replace unreliable 15 year old clothes washer and dryer. This was in November of 2018. I happened to discover this and noted that they should do this now, if within their budget; as the new steel tariff was going to cause a price increase. When arriving at their local appliance store; the owner had already posted a large sign on the door stating that most appliance prices would increase 10% after Jan. 1, 2019. Their $1,200 dollar purchase was indeed going to cost $1,320 after Jan. 1.
Lastly, I won't be taking his investment advice any time soon. @Ted . This is your normal copy/paste with a link post. Have you no comment to add about the validity of this misinformation???
The tariffs are simply a means to an end. The president is trying to get China to start buying more of our stuff. He knows the so-called Middle Kingdom, which now has the second-biggest economy in the world, responds to incentives more than to nice words. These tariffs give China an incentive to open up.
How much more of "our stuff" is China going to buy based on a tariff when they can manufacture many things locally for 1/4th the labor cost?
Like the previous posted, as far as I'm concerned you are no longer a part of the MFO family, and therefore not entitled to any kind of response !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Well, after all, Uncle Sam needs income from whatever source possible to send money to @Ted for not growing stuff. $15 billion here, $15 billion there... pretty soon this starts to add up.
Here is a little info from "Trump is taxing Americans to support farmers struggling from his trade war" that may serve to generalize a couple of the comments:
....here we see the calculus laid bare: Farmers get $8.52 billion of the $18 billion paid in tariffs by consumers through April...It’s important to remember that farmers are central to Trump’s political rhetoric and a key part of his base.
Hopefully this link works for those who do not subscribe to the Washington Post:
"Consumers are now paying $8.8 billion more a month, Weinstein estimated, an average of about $70 a month per household — in line with the Trade Partnership estimate. Since November — and assuming that May and June are costlier to consumers — the monthly cost to consumers looks like this." This looks like a lot of hot air not an estimate!!
Last year, the U.S. government established a program meant to provide economic support to farmers affected by the trade war. A spokesman for the Agriculture Department confirmed the total amount paid out by that program as of Monday was $8.52 billion, with payments most heavily going to producers of soybeans, corn, wheat, cotton and sorghum.
But here we see the calculus laid bare: Farmers get $8.52 billion of the $18 billion paid in tariffs by consumers through April.
I recall this tariff implementation with President Reagan's actions to save a dying Harley Davidson in 1983. HD in the '70's had become known for quality problems and were having their butt's kicked by quality bikes from Japan.
A snippet from the NYT article, and the full article, should be readable from this link.
--- The action, which becomes effective in 15 days, affects large highway motorcycles with an engine displacement of more than 700 cubic inches,the only market in which Harley-Davidson now manufactures. It would raise the current tariff of 4.4 percent to 49.4 percent in the first year of the five-year program. ---
THIS tariff is of the type that had the common usage of protecting a company, no matter the reason. One might look at this as the old fashioned tariff practice.
More later........chores call on a warm, sunny spring day in Michigan.
@Gary Its my impression the word calculus was used in the sense of "a particular method or system of calculation or reasoning". The general point I take away is the "cost" of the US tariffs ends up being borne by domestic consumers by way of higher prices (and importers by way of lower profits) on the goods subject to the US tariffs. The new agricultural subsidies in effect redistribute $'s from US consumers to US agricultural producers.....
1. Item "x" arrives from China and has a 25% tariff applied and paid for by the importer. 2. The tariff duty is paid to the Customs Dept., a sub bureau of the Dept. of Commerce. This money finds its way to the Treasury/general fund. This money is apparently available for whatever use. 3. Item "x" may be a finished product such as a plastic toy; and may be a machine part such as a ball bearing or an assembled bearing set that is part of a front wheel spindle set for a John Deere grass mower built in the U.S. 4. At some point, the importer has a few choices. Eat all of the higher cost and impair their profit margin; eat some of the cost and hope to retain enough of a profit to continue their business model or pass through the higher cost to whomever purchases the item. 5. If the majority of the higher cost is passed to the next purchase level, at some point these folks will have to determine how much of this cost is passed along and eventually becomes a new, higher cost item at the consumer retail level.
Another consideration based upon a 25% or whatever price markup, is a consumer will pay more in excise, possible other federal, state and local taxation on the new retail price. The new, higher price has now risen a bit more.
In spite of the verbal crap being spewed; the end user/consumer will pay the tariff.
I'm sure I'll think of something else as soon as I return to yard work. Oh, well.
@catch22- Jeez catch, I'd like to share my thoughts, but @Ted has decreed that "you are no longer part of the MFO family, and therefore not entitled to any kind of response" (see above) so I really can't. Maybe someday he'll change his mind and allow the rest of us to talk to you. Hold on while I check on something...
@Ted: Can you please clarify whether no one can respond to catch22, or just MFO members? If it's just MFO members then maybe I can talk to him after all, since you also kicked me out some time ago.
... even when nations have objectives that are in conflict, it is important to seek compromise, to avoid inflammatory rhetoric and to confine rather than enlarge the areas where demands are being made.
Hi @davfor I didn't intend to step upon what you had written with some of my redundant words. I had already set a draft and should have checked for newer comments prior to posting. Regards, Catch
The BS I am referring to is the statement that each one of us is paying $ 70.00 a month in tariffs - that would be $ 700.00 a month in China goods. There's no way I purchase this amount - even in six months. - Simple math
Hi @Gary I can not vouch for the results of the study performed that brought forth the $767 amount for a family of four tariff impact. This number, per the study; is the initial baseline and does not include the most recent tariff actions. You may choose to read the below linked report to help determine what number is real or not. And, I have no clue as to the political bias or not from this organization. Perhaps you will be able to discover this status and keep us posted.
@catch22 You didn't. You just went further "into the weeds" than I did with my short comment. The government collects the tax (tariff) $'s. But, as you indicated, much of the "cost" of the tariffs is effectively borne by consumers by way of higher retail prices. In economist speak, the details regarding who ends up suffering the most depends on the "elasticity of demand" and related factors for the goods subject to the tariffs.
by Rothalpy to a WaPo article on the trade war: "As an American Patriot, I just want to say I am happy to pay a tariff on the things I buy so that the government can give that money to farmers to pay them to not grow beans they can't sell to China, so that the prices of beans stay high so that the meat I buy stays costly to make sure those tariffs really hit my pocketbook and reduce my consumer spending so it triggers a recession. Wait, what? Oh, typo there. As an American Idiot...."
Ask any worker whose job was outsourced, or any business owner who couldn’t compete with foreign competitors, who used cheap labor and government assistance: who pays the price when there are no tariffs. Or look at the U S towns that died when their factories closed. I’m a far left liberal, who loves Joe Biden, and bought Elizabeth Warren’s book, who just might vote for Trump if he is the only one who is going to fight cheap imports. (My wife would kill me)
...Well... Interesting-er and interesting-er: William Weld, former Massachusetts Governor ran as Veep candidate a while back. He says he will "primary" the Trumpster. ("Primary" as a verb, there.) I know some Lefties here in Mass. who are Independents, and could choose a Repugnant Party ballot--- just to be able to vote for Weld. I don't bet it will keep the Trumpster off the ballot here, but it is a strategy... We kinda like uncle Charlie Baker, though I did not vote for him. We have a strange schizophrenia here with the politics. Baker is rather a Centrist. And he owns a soul and a conscience--- unlike The Donald. I gotta vote for someone who is not among the "un-dead," who actually casts a shadow.
The thing is, there is no stopping globalization, rightly or wrongly, alas and alack, and in any case, this is not the approach. There are lots of things to do, and lots of consensus about it as well, and this is not that. No one disputes that China has been a bad actor in many regards. (I have a sib who is expert in this area, and he may even have advised Warren in the past, so I try, not always successfully, to keep up.)
David: Just my opinion, but I believe the experts will be found to be wrong on this issue. I find it interesting that Thomas Freedman, who wrote a book on globalization, believes that we have a major problem with China.
Freedman's work seems pretty solid, although his mid-east predictions have sometimes missed the target. Then again, who has ever been able to predict the mid-east, other than the probability that there will be trouble there about almost anything at almost any time.
Comments
Your brief "bio" indicates some of your educational background includes Cambridge and Oxford, with my presumption being the well known higher education schools in England.
From Forbes, and an apparent self-bio: Contributor
Brett Arends
Most people are surprised that I used to be a management consultant at McKinsey & Co. So am I. (So were some of my colleagues at McKinsey, for that matter). Today I'm a columnist for the Wall Street Journal and MarketWatch. I've appeared on 60 Minutes, the NewsHour on PBS and numerous other radio and TV programs. I've also been a Fleet Street tabloid journalist, a research assistant at the London School of Economics, a Chartered Financial Consultant, and an extra on the stage at Covent Garden. I was educated at Oxford and Cambridge universities, and I’ve written three books nobody has read.
I reviewed his current twitter feed, and another article he posted in about the same time frame as this dribble writing about what the implications of tariffs are and would be to the U.S.; is a write about diets and the health benefits.
I can think of several folks here who are able to write a precise overview of tariff impacts with the same number of words.
His write blames the media for misdirection and yet he doesn't mention the misdirection from the verbal statements of Trump, Kudlow and other associates.
Sidenote as to the real tariff impacts: A budget minded married couple I know had to replace unreliable 15 year old clothes washer and dryer. This was in November of 2018. I happened to discover this and noted that they should do this now, if within their budget; as the new steel tariff was going to cause a price increase. When arriving at their local appliance store; the owner had already posted a large sign on the door stating that most appliance prices would increase 10% after Jan. 1, 2019. Their $1,200 dollar purchase was indeed going to cost $1,320 after Jan. 1.
Lastly, I won't be taking his investment advice any time soon. @Ted . This is your normal copy/paste with a link post. Have you no comment to add about the validity of this misinformation???
Take care,
Catch
Yet Arends says: How much more of "our stuff" is China going to buy based on a tariff when they can manufacture many things locally for 1/4th the labor cost?
well, this has been my understanding all along, thanks to the media, and no thanks to any official contrary (false) 'explanations'
Hopefully this link works for those who do not subscribe to the Washington Post:
https://washingtonpost.com/politics/2019/05/14/trump-is-taxing-americans-support-farmers-struggling-his-trade-war/?utm_term=.56ac1cc45d2a
I see simple math and BS - not calculus
"Consumers are now paying $8.8 billion more a month, Weinstein estimated, an average of about $70 a month per household — in line with the Trade Partnership estimate. Since November — and assuming that May and June are costlier to consumers — the monthly cost to consumers looks like this." This looks like a lot of hot air not an estimate!!
Last year, the U.S. government established a program meant to provide economic support to farmers affected by the trade war. A spokesman for the Agriculture Department confirmed the total amount paid out by that program as of Monday was $8.52 billion, with payments most heavily going to producers of soybeans, corn, wheat, cotton and sorghum.
But here we see the calculus laid bare: Farmers get $8.52 billion of the $18 billion paid in tariffs by consumers through April.
Seems pretty straightforward. So where's the BS?
I recall this tariff implementation with President Reagan's actions to save a dying Harley Davidson in 1983. HD in the '70's had become known for quality problems and were having their butt's kicked by quality bikes from Japan.
A snippet from the NYT article, and the full article, should be readable from this link.
--- The action, which becomes effective in 15 days, affects large highway motorcycles with an engine displacement of more than 700 cubic inches,the only market in which Harley-Davidson now manufactures. It would raise the current tariff of 4.4 percent to 49.4 percent in the first year of the five-year program. ---
THIS tariff is of the type that had the common usage of protecting a company, no matter the reason. One might look at this as the old fashioned tariff practice.
More later........chores call on a warm, sunny spring day in Michigan.
--- My brief overview of the tariffs.
1. Item "x" arrives from China and has a 25% tariff applied and paid for by the importer.
2. The tariff duty is paid to the Customs Dept., a sub bureau of the Dept. of Commerce. This money finds its way to the Treasury/general fund. This money is apparently available for whatever use.
3. Item "x" may be a finished product such as a plastic toy; and may be a machine part such as a ball bearing or an assembled bearing set that is part of a front wheel spindle set for a John Deere grass mower built in the U.S.
4. At some point, the importer has a few choices. Eat all of the higher cost and impair their profit margin; eat some of the cost and hope to retain enough of a profit to continue their business model or pass through the higher cost to whomever purchases the item.
5. If the majority of the higher cost is passed to the next purchase level, at some point these folks will have to determine how much of this cost is passed along and eventually becomes a new, higher cost item at the consumer retail level.
Another consideration based upon a 25% or whatever price markup, is a consumer will pay more in excise, possible other federal, state and local taxation on the new retail price. The new, higher price has now risen a bit more.
In spite of the verbal crap being spewed; the end user/consumer will pay the tariff.
I'm sure I'll think of something else as soon as I return to yard work. Oh, well.
Your thoughts please.
Take care,
Catch
Regards,
OJ
https://www.washingtonpost.com/opinions/theres-a-revealing-puzzle-in-the-china-tariffs/2019/05/14/75df04de-7675-11e9-b3f5-5673edf2d127_story.html
... even when nations have objectives that are in conflict, it is important to seek compromise, to avoid inflammatory rhetoric and to confine rather than enlarge the areas where demands are being made.
I didn't intend to step upon what you had written with some of my redundant words.
I had already set a draft and should have checked for newer comments prior to posting.
Regards,
Catch
I can not vouch for the results of the study performed that brought forth the $767 amount for a family of four tariff impact. This number, per the study; is the initial baseline and does not include the most recent tariff actions.
You may choose to read the below linked report to help determine what number is real or not. And, I have no clue as to the political bias or not from this organization. Perhaps you will be able to discover this status and keep us posted.
Trade Partnership Worldwide study, tariff impact study
"As an American Patriot, I just want to say I am happy to pay a tariff on the things I buy so that the government can give that money to farmers to pay them to not grow beans they can't sell to China, so that the prices of beans stay high so that the meat I buy stays costly to make sure those tariffs really hit my pocketbook and reduce my consumer spending so it triggers a recession. Wait, what? Oh, typo there. As an American Idiot...."
As many know here; that summary describes the subject and ramifications very well.
Thank you for sharing here.
The thing is, there is no stopping globalization, rightly or wrongly, alas and alack, and in any case, this is not the approach. There are lots of things to do, and lots of consensus about it as well, and this is not that. No one disputes that China has been a bad actor in many regards. (I have a sib who is expert in this area, and he may even have advised Warren in the past, so I try, not always successfully, to keep up.)
This is from a year ago; there is much since, largely similar so far as I can sense:
https://www.brookings.edu/blog/order-from-chaos/2018/06/14/trumps-focus-on-china-trade-right-target-wrong-approach/
If you like getting into the weeds:
https://piie.com/blogs/trade-investment-policy-watch/will-us-china-trade-deal-remove-or-just-restructure-massive-2018
https://piie.com/blogs/trade-investment-policy-watch/trump-trade-war-china-date-guide