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Effect Upon World Sales - including Bolt/Ampera

4K views 22 replies 14 participants last post by  demart 
#1 ·
#2 ·
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.
 
#3 ·
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.
 
#10 ·
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?
 
#17 ·
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.
 
#19 ·
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.
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).
 
#4 ·
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.
 
#5 ·
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 cr@p.

They're not laughing now...nor are their children. I'm not either.:|
Meanwhile, there's a robust and growing middle class...


...in China.
 
#16 ·
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.
 
#22 ·
People who complain about everything made in China and manufacturing being shipped out of the U.S. need to understand two simple basic economic truths:

1. Trade balance (deficit or surplus) depends almost entirely on the county's savings rate. Countries with high savings rate will have a trade surplus (China, Germany, Japan - used to). Countries with negative savings rate (U.S.) will have a trade deficit. This is so, because the savings rate affects the value of the currency. U.S. has a negative savings rate because of the HUGE fiscal deficit by our federal government. Trump just made that deficit worse. This means that the trade deficit will increase in the next 5 years. Trade barries will not have any significant impact on this.


2. The other reason is the mismatch in tax systems between the U.S. and its trading parents. Almost all coutnries in the world have a VAT tax. Under the VAT tax regime, imports get slapped with a 20% VAT tax, and exports get a 20% VAT tax credit (assuming that it is 20%). So U.S. goods exported to other coutnries, even in the absence of any tarrifs, will be subject to 20% VAT tax, and foreign exporters to the U.S. will get a 20% VAT credit from their governments.

These two problems are entirely in the hands of the Congress. They can solve it, by reducing U.S. fiscal deficit, and modernizing the U.S. tax system. However, the latest Trump Tax Cut just made the problem worse, and will make the trade deficit worse.
 
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