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Effect Upon World Sales - including Bolt/Ampera
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Trade wars and tariffs are usually a bad idea. I don't follow politics much, but I agree with about 40% of what Trump does/intends, and disagree with about 60%. It's like he wants to undue the economic growth we've seen lately. Too bad we can't hear exactly what his advisors think.
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Trade wars are bad, but not responding to nations who are at war with us is worse. Having the world siphon off 3/4 trillion dollars each year while we passively sit back and watch is unsustainable and reduces the economic opportunities for all of us. You may have your millions that you want to protect, but we really should have some sympathy for those who are doing their best to provide for their family and achieve some level of prosperity. I'm willing to take a short term hit to better our future.
Let's take one example - China had a 25% tariff on our car imports, while their cars were taxed 2.5% coming into the US. In May, China agreed to lower that to 15%. Is that fair?
I'd like us to tell countries that we will be accommodating and will let them set the tariffs for their products sold in the US. Whatever the highest tariff is that they've set for our imports into their country, that's the rate that we'll tax all of their products. If they think that's unfair, eliminate/reduce their tariffs and we'll reciprocate. Let's make it a level playing field, and if we get our asses kicked, so be it. But something tells me we're still able to compete.
Let's take one example - China had a 25% tariff on our car imports, while their cars were taxed 2.5% coming into the US. In May, China agreed to lower that to 15%. Is that fair?
I'd like us to tell countries that we will be accommodating and will let them set the tariffs for their products sold in the US. Whatever the highest tariff is that they've set for our imports into their country, that's the rate that we'll tax all of their products. If they think that's unfair, eliminate/reduce their tariffs and we'll reciprocate. Let's make it a level playing field, and if we get our asses kicked, so be it. But something tells me we're still able to compete.
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Yeah, it's a tough one for sure. It's true that the American people have been swindled and our security compromised by terrible trade policy, but the time to have been tough about it was back in the '80s when it started. Over the last three and a half decades manufacturers have built out global networks and of course mostly taken advantage of dirt cheap Chinese labor. The net result is the American worker got screwed, but the American capitalist got rich.
The problem is, how do you undo this? Simply throwing a wrench in the cogs is likely not a smart move and will have lots of consequences. Trade wars will undoubtedly cause higher costs, lost profit, lost jobs and delays. If it goes on long enough, probably bankruptcy and companies leaving. It's hard to just change the rules to the game this far into the game.
In many ways, this is an ugly time we are living in right now and a long time coming. Many have seen this building for decades.
I remember conversations with friends and colleagues in the '90s. They exclaimed how wonderful globalization was going to be because developing countries would come up to the same standard of living we enjoyed in the US. I explained how fundamentally unsustainable the "American Dream" was on a global scale, and contrary to their claims, the American worker (and the middle class) would be decimated by competition with foreign workers being paid one-tenth what they were. They laughed at me, and happily went to their neighborhood Walmarts to buy cheap Chinese [email protected]
They're not laughing now...nor are their children. I'm not either.:|
Meanwhile, there's a robust and growing middle class...
...in China.
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A good first step in undoing the damage would be to insist on a level playing field between nations and for tariffs to be equitable on both sides of the border. We have the upper hand to drive change as countries running a trade surplus with us don't want to lose access to the US consumer. And from a decency perspective, it is indefensible for countries to treat our exports more harshly than we treat theirs while running a trade surplus with us.
I'm still hopeful this "protectionist" stance and push for equality could play out well, but the risk of things going wrong is definitely greater than zero if other nations decide they're willing to work against their own self interests and risk being priced out of the US market in order to stand up to the us.
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GM is not complaining, they are whining. Too bad. Globalism, open borders and a one world government suck!
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The risk is even greater with a President that is an idiot.
Even Canada which is part of NAFTA last I checked had a 250-293% tariff on various types of dairy products. How's that free trade. Fun to watch them squawk when turn about is fair trade. I agree that tariffs are bad news for the consumer, but what else can you do when they charge tariffs in the other country?
Protectionist tariffs never work... they start out with some industry complaining loudly to the government about cheap foreign products. The government obliges by artifically raising the cost of foreign goods and the home-town industries never seem to make their operations more efficient. Sugar is a great example. Sugar tariff from 1926 still in play today making granulated natural sugar cost more than it should. It was intended to protect some sugar farmers in Louisiana, but they just kept their prices high. The food industries side stepped the whole thing and we now have high fructose corn syrup to blame for kids getting fat.... but again, what are you do when other countries apply tariffs to your products? The only thing you can do is apply tariffs to their's.
Globalization was wonderful, for the top 20% in the U.S. and for most people in China.
He does seemingly idiotic things everyday, but he is far from anyone's idiot. Yep, continue on arrogantly underestimating this man in general, and his constituency in particular - and see where it leads.
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Very good point. As I say, I don't follow politics, so it may be the media spin that gave me the impression that Trump is pre-emptively raising tariffs in an attempt to level trade imbalances, and not in response to foreign tariffs.
A recent podcast I listened to explained that it's best to respond to foreign tariffs in kind. Game theory was used to reach this conclusion, with the worst strategy being to not respond to opponents taking advantage of you, and the best strategy being tit for tat. The other side of that coin is that we must also reduce tariff if other countries do so. This makes sense as the best strategy in a relationship is to reward good behavior, and punish poor behavior.
Trump is a crass egomaniac, but far from an idiot. As I say, I don't agree with many of Trump's agendas, but they are reasoned.
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Another reason for hope that another of the trade wars being waged against the US can be eliminated - The EU is now considering lowering their long-standing 10% tariffs on US autos...
https://www.cnbc.com/2018/07/04/eu-...nal-talks-to-cut-car-tariffs-report-says.html
https://www.cnbc.com/2018/07/04/eu-...nal-talks-to-cut-car-tariffs-report-says.html
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I used to be a free trader type, read "The Wealth of Nations" cover to cover (very hard read BTW), etc.
Then I had an epiphany.
"Every ----ing thing in this store is made in China"
Put me in the fair trade, reciprocal taxes camp. And BTW, NATO countries, contribute what you promised to the common defense, or we will assume you are really not that scared of the Russians.
Not going to be the world's chump anymore.
Then I had an epiphany.
"Every ----ing thing in this store is made in China"
Put me in the fair trade, reciprocal taxes camp. And BTW, NATO countries, contribute what you promised to the common defense, or we will assume you are really not that scared of the Russians.
Not going to be the world's chump anymore.
Baloney. The US subsidy to dairy farms runs into the billions per year. The US wants to dump its subsidized milk into Canada. If there were no subsidies and the price of milk in the US was the result of true supply and demand then I might agree. The subsidy exists, by the way, because there is way too much milk production and the price is too low to sustain the industry. Rather than directly subsidize milk as the US does, Canada restricts production and imports so that the price rises to a level that allows for profitable milk productions. Both systems are subsidies but the Canadian system is more transparent in that the price of milk actually reflects the cost of production needed to sustain the dairy farmers.
Well, I'm not sure what the argument is that a US citizen should be paid a lot if they can be replaced by someone in the third world with a 5th grade education. You can't restructure the world economy (nor should you) to cater to the weakest link in the chain. Unskilled labor has always had it hard. The solution is to get some skills and stop the hypocrisy. No one has been "left behind" in the last thirty years. Instead, a lot of people refused to "get on board" with the future and now want to kick over the playing board and believe the world economy will provide a good living to those who only aspire to be the butcher, baker and candle stick maker. Good luck with that.
By the way, my nephew (with only an AA degree) works in a high tech plastics manufacturing plant in the US. The high tech plant is in the Northeast. His company's mid-tech plant is in the South; their low tech plant is in China. He doesn't make a lot of money and works in quality control. He doesn't make a lot of money because of anything China does. It's because almost everything is done by computer and high tech injection molding and his degree is not technical. Those in his plant without a degree of any kind probably only make minimum wage. If you want to earn more you have to learn more.
Anyway, if any of you want to see what US products cost, buy a Speed Queen washer or dryer. I own them. They're great. But they're a lot more than other machines. You can also purchase American made high fidelity electronics. Just don't complain when a "basic" stereo setup runs you 5-10 k. Oh, and don't forget to buy only the Nikon and Canon cameras that are made in 1st World Japan. That's the Nikon D850 for you! Don't buy the affordable Nikon cameras that come from Thailand. Apple used to make its laptops in the US, then Sony made them, then they were made in Cork, Ireland, now they're made in China. 30 years ago they cost about 2,500 to 3,000. Today, adjusted for inflation, they are less.
Canada also does the same with maple syrup (The gov restricts production and imports so that the price rises to a level that allows for profitable operations).
I gotta admit you got a point there. I don't know specifics about dairy subsidies, but I do know the US subsidizes a lot of farming.
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