On The G7, Tariffs and Trade
The Market Ticker - Commentary on The Capital Markets
Logging in or registering will improve your experience here
Main Navigation
Display list of topics
Sarah's Resources You Should See
Sarah's Blog Buy Sarah's Pictures
Full-Text Search & Archives
Legal Disclaimer

The content on this site is provided without any warranty, express or implied. All opinions expressed on this site are those of the author and may contain errors or omissions.

NO MATERIAL HERE CONSTITUTES "INVESTMENT ADVICE" NOR IS IT A RECOMMENDATION TO BUY OR SELL ANY FINANCIAL INSTRUMENT, INCLUDING BUT NOT LIMITED TO STOCKS, OPTIONS, BONDS OR FUTURES.

The author may have a position in any company or security mentioned herein. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Market charts, when present, used with permission of TD Ameritrade/ThinkOrSwim Inc. Neither TD Ameritrade or ThinkOrSwim have reviewed, approved or disapproved any content herein.

The Market Ticker content may be sent unmodified to lawmakers via print or electronic means or excerpted online for non-commercial purposes provided full attribution is given and the original article source is linked to. Please contact Karl Denninger for reprint permission in other media, to republish full articles, or for any commercial use (which includes any site where advertising is displayed.)

Submissions or tips on matters of economic or political interest may be sent "over the transom" to The Editor at any time. To be considered for publication your submission must include full and correct contact information and be related to an economic or political matter of the day. All submissions become the property of The Market Ticker.

Considering sending spam? Read this first.

2018-06-09 07:00 by Karl Denninger
in Foreign Policy , 4880 references Ignore this thread
On The G7, Tariffs and Trade
[Comments enabled]

Trump has a point.

Macron and Trudeau will sanctimoniously decry the supposed death of free trade at the hand of Trump. In reality, they are defending a managed trade system that holds the U.S. at a disadvantage.

All of the other G-7 countries have higher tariffs on the United States than we have on them.

Yep.

Generally-speaking, the US has low to zero tariffs on darn near everyone -- well, we did until recently.  That's changing, and it's changing because other nations won't drop their tariffs.

EU nations generally levy a 10% tariff on US cars.  Ours is 2.5%.  Explain to me why we should allow that, when the entirety of the EU is considered a first-world nation and needs no special protection.

Canada tariffs a wide variety of agricultural products, from dairy to beef.  Some of the tariffs are outright confiscatory, including dairy at more than 200%.  Please explain to me how this is "free trade" and why Canada should have zero (or near-zero) tariffs on steel they wish to export into the US -- especially when some of it is being diverted from China to evade anti-dumping penalties we leveled against them.

Mexico has zero room to complain.  Well, except that their $3/hour wages to build cars are under threat.  Why do we allow that, if Mexico is an alleged first-world nation?  Isn't the truth that they're not -- they're a narco-terrorist wonderland that has exported unskilled labor and lawless gang members to the United States for decades, yet expects us to do nothing in reply?  Indeed they give safe passage to people from all over Central America through their nation illegally to get to the US, in direct violation of International standards which say that a refugee must apply for asylum in the first safe nation they reach.

If Mexico isn't a safe nation then (1) what are we doing trading with them and (2) why isn't there an impenetrable wall with snipers on the top of it to stop anyone who thinks they'll cross on over?  If they are a safe nation why aren't we insisting they follow the rules that govern all of the rest of us?  Make up your mind folks, oh, and while you're at it don't forget all the criminal gang members who are either affiliated with or directly from Mexico, some of whom our former Attorney General thought could use some more firearms to shoot people with!

If the G7 is about first-world nations doing business on equal footing, which is it's claim to fame, then let's insist that it be exactly that.  Those who are unwilling to live up to the rules can get out or be kicked out, but it's time to quit pussyfooting around and coddling jackasses who think America is their ATM machine to prop up whatever political fetish they have been afflicted with today, whether it be rapefugees or glo-bull-warming.

Oh, and while we're at it, force most-favored-nation pricing for all pharma and other medical products and services right here in the United States.  Any company that doesn't like that can get the hell out and we'll turn their former real estate into homeless shelters, after sending their executives to live for 30 years in a cell with a convicted serial rapist -- and no pants.

It would be a vast improvement over what we have now.

Go to responses (registration required to post)
 

 
Comments.......
User: Not logged on
Login Register Top Blog Top Blog Topics FAQ
Showing Page 1 of 2  First12Last
User Info On The G7, Tariffs and Trade in forum [Market-Ticker]
Brendangm
Posts: 43
Incept: 2013-01-31

United States
Report This As A Bad Post Add To Your Ignored User List


If the people who are conservative, would always click
on advertising on sites like Karl's THEN advertising
dollars would flow to the support of conservative
websites.

You wouldn't have to show part of your body versus
incoming fire, you wouldn't have to fill out paper-work,
or mow the lawn.

There's only so many dollars available for advertising.

100 million people following this procedure every day.

Just might change the world.

Whitehat
Posts: 493
Incept: 2017-06-27

The People's Republic of New York
Report This As A Bad Post Add To Your Ignored User List
One key issue is that Europe and many other parts of the world became accustomed to us in US being their garbage can, chumps, market, whatever. so you have a large segment of your population that is disenfranchised and possibly dysfunctional, send them here as we are your relief valve. this is referring to Europe majorly. it is such a pleasure to enjoy organized crime, shifting cultural norms, scams, schemes and this Eurotrash set the stage for broken culture that would welcome the third world **** starting with Mexico then every other **** show's unwashed masses. the nice Southern European **** of the twentieth century wrecked my community as they took over and are major employers of the Mexicans completing the cycle. mark my words, in three decades or less we will have a full scale Mexican mafia worse than the Italians and Russians could have ever been. we absorb a large portion of the world military costs regardless of what other people and us think is appropriate. Europe actually was screaming about this point in the 1990's when we were beginning to reconsider it. when we were beginning to stupidly think about socialized medicine in the early 90's the Europeans were screaming that our system was ridiculous and that we should be like them. regardless of how stupid our system was or is, their thinking was that they should be able to cross borders without nary a nudge to their preferred way of life.

yes, we made a lot of mistakes as a country in geopolitics, however if we demanded fair trade and took care of only ourselves and direct threats to us only, Europeans would live very differently and not have had the socialist paradise of the past forty years. they would not have the large vacations that they are preparing for this season among other things while we work ourselves to death for an ever changing raw deal. yes, Americans are a pain as tourists and this is disgraceful to use other countries as our recreation areas, however only a small percentage of our population can do this with any regularity or at all.

Europe knows how tenuous is their lifestyle, dependent to a large extent upon the foolishness of America for a century.

----------
There are two ways to be rich: One is by acquiring much, and the other is by desiring little.
snow, seasons, distance and dirt roads: SSDD
"Be not deceived; God is not mocked; for whatsoever a man soweth, that shall he also reap" (Gal. 6:7)
Brendangm
Posts: 43
Incept: 2013-01-31

United States
Report This As A Bad Post Add To Your Ignored User List

"Europe knows how tenuous is their lifestyle, dependent to a large extent upon the foolishness of America for a century."

German Oil Production: 46,590 barrels per day
German Oil Consumption: 2.4 Million barrels per day

source: globalfirepower

German strategic oil storage: about 70 million barrels
source: oilsandsmagizines
Vernonb
Posts: 2122
Incept: 2009-06-03

East of Sheol
Report This As A Bad Post Add To Your Ignored User List
All those tariffs create unfair trade puposefully. The European Union doesn't want fair trade as that would upset their internal VAT tax structure used by their governments to rip off their own people and to support the socialist EU systems. When fisherman can't support their own families with the catch from their own shores you know the system is evil.


Ever look at a the cost of some goods made internally in the USA vs a similar thing made and sold in Europe- ouch!

These vampires won't even let you send gifts to friends/family overseas without extracting their blood money in taxes on the items declared value.




Personally I'm ready for wall on the northern border too. We don't really need any other country to have a good quality of life. The US is full of natural resources and good farm land.

It is the gloabilist pillagers that need the resources from every country at the lowest costs - costs reduced primarily by wage and environmental arbitrage and in some instances in near slavery and child labor conditions. That cobalt in that rechargeable battery for such cars and phones is likely tainted with blood.

I do not believe in a contrived interdependence (co-dependency) between nations. To be able to lend true assitance in a crisis (as wartime) a nation should stive to be as self-sufficient as possible. All external dependencies are weak links in the chain to be broken.







----------
"Mass intelligence does not mean intelligent masses."
Whitehat
Posts: 493
Incept: 2017-06-27

The People's Republic of New York
Report This As A Bad Post Add To Your Ignored User List
Quote:
German Oil Production: 46,590 barrels per day
German Oil Consumption: 2.4 Million barrels per day

source: globalfirepower

German strategic oil storage: about 70 million barrels
source: oilsandsmagizines


who protects Germany from threats to the East. they could never, ever begin to do so themselves and the cost would end their society. they import an amazing amount of their natural gas from this same threat and they have no source of petroleum resources within their borders. we are also a major market for their products. remember a bank of oil can be seized or destroyed by an aggressor.

----------
There are two ways to be rich: One is by acquiring much, and the other is by desiring little.
snow, seasons, distance and dirt roads: SSDD
"Be not deceived; God is not mocked; for whatsoever a man soweth, that shall he also reap" (Gal. 6:7)
Xqqme
Posts: 724
Incept: 2009-01-09

Ohio
Report This As A Bad Post Add To Your Ignored User List
you're preaching to the choir.
Bjonsson
Posts: 1209
Incept: 2010-03-10

Ventura County, California
Report This As A Bad Post Add To Your Ignored User List
The unfair tariff regime is an echo of Bretton Woods, and post-WW2 cold war geopolitics.

Political Economy 101. When your currency is being used as the main reserve currency for international trade, the implied quid pro quo is that you need to assume the role of "Buyer of Last Resort" when needed to stabilize this regime. The rationale is that the owner of the reserve currency does this because they have the unique ability to export inflation globally. It's a trade off.

And, geopolitically, we were allowing ally nations within the dollar trading bloc to protect some of their industry in order to help them rebuild and stay free of the communist orbit, much of this done by giving these nations privileged access to US markets.

Not saying this should apply anymore or that perhaps it should be revisited... just saying that there were specific political reasons for this, and that there are trade offs if this regime should be changed.

----------
"If you don't have borders... if you don't have laws... you don't have a country."
Rl1952
Posts: 5
Incept: 2016-07-27

Report This As A Bad Post Add To Your Ignored User List
It seems unlikely that there would be much change in Canadian agricultural tarrifs anytime soon. The US subsidizes its farmers with more than 20 billion a year and in Canada a disproportionate number of dairy farmers are located in Quebec. Politically speaking there's no resolution.
Tickerguy
Posts: 153223
Incept: 2007-06-26
A True American Patriot!
Report This As A Bad Post Add To Your Ignored User List
Well yes, America does. But so does Canada.

Then again who has the bigger stick? Try sending something made here in the US on a "one-off" basis to Canada and the recipient is likely to get hammered with a tariff at the point of entry that might reach or exceed 50%.

Coming the other way it frequently is zero. Hmmmm....

----------
Winding it down.
Quik49
Posts: 4631
Incept: 2007-12-11

Report This As A Bad Post Add To Your Ignored User List
He said....

We are like the piggy bank that everybody is robbing, he said. And that ends.

Yup....now let's see him follow through. I won't hold my breath.

----------
Long Vaseline....

Rl1952
Posts: 5
Incept: 2016-07-27

Report This As A Bad Post Add To Your Ignored User List
I can't speak to importing single items into Canada. Most goods crossing the border would face a VAT of 13.5 percent. I have bought online from the US without much problem. To think that Canada would submit to the 'bigger stick' is false. Won't happen.
Tickerguy
Posts: 153223
Incept: 2007-06-26
A True American Patriot!
Report This As A Bad Post Add To Your Ignored User List
Here's what most of these nations don't get.

What do they have that we don't, and that we actually need? Oh, and if we stop importing it, what percentage of our economy is harmed .vs. what percentage of theirs?

It was, for a while, oil. Oops -- not any more.

I know what people will say with regard to China -- rare earth metals. Well, we have plenty of them -- we just shut the mines down because there was Thorium in there mixed with them, it had no economic value, and it's a pain in the ass to deal with if you don't have something productive to do with it.... like, for example, stick it in a nuclear reactor and make power with it. Oops (again)....

Canada is reasonably self-sufficient so they won't starve but the question remains "who gets the lion's share of the benefit?" Do you think a beer company cares if aluminum tariffs make the cost of a beer can go up by three cents? Somehow I doubt you'll be able to find that in the CPI in a few years -- but what you WILL find is the middle-class employment lift when the production of those materials returns to the United States, as it's suddenly profitable to run the mill instead of buying the below-cost dumped product from somewhere else.

Plenty of so-called "economists" say "if someone wants to sell below cost BUY ALL YOU CAN" because they're the stupid one. That's assuming you understand why they're doing what they're doing and have accounted for all the externalities. The fact is that you haven't because nobody with a reasonable degree of intelligence would do it in the first place which means they're not -- there is a hidden agenda and/or cost they're throwing on you that you're unaware of, whether it be an intent to ultimately INVADE YOU after you trash your industry or something far-more subtle. In short the so-called "classical economic models" that claim there is no harm or foul assume you're smarter than everyone else, and that's ALWAYS false.

Those who run such narratives should be eaten -- they're either too arrogant to survive or are intentionally committing sedition or worse.

When the person has a few letters after their name you figure out which is more-likely.

----------
Winding it down.
Rl1952
Posts: 5
Incept: 2016-07-27

Report This As A Bad Post Add To Your Ignored User List
Well autarky certainly has its champions both in Canada and the US. One of the original motives for the free trade deals was that the US wanted 'national treatment' for oil. Which is to say that in the event of an oil supply disruption the US would be treated as a Canadian domestic consumer. This no longer matters because of shale oil. I would say that NAFTA is dead since the steel and aluminium tarrifs are a de facto abrogation. So be it.
Tickerguy
Posts: 153223
Incept: 2007-06-26
A True American Patriot!
Report This As A Bad Post Add To Your Ignored User List
I can't find a single bad thing that's rooted in economic independence. Free trade should be about mutual benefit, not who can screw who via whatever means. To the extent it's the latter it's exploitation or worse, and is bad all the way around.

----------
Winding it down.
Orionrising
Posts: 63
Incept: 2017-01-26

Report This As A Bad Post Add To Your Ignored User List
Tom Clancy had it right in Debt of Honor, with the Trade Reform Act, which was a law they had passed to make our policys exactly mirror the trading partner.
Wa9jml
Posts: 158
Incept: 2017-04-29

DeKalb, Illinois
Report This As A Bad Post Add To Your Ignored User List
Back when I was cursed with owning a 1973 Triumph Trident motorcycle, I would often order parts from Norman Hyde in Britain. As, I recall, their catalog had 3 sets of prices in it. The first was for export to these United States, the second was for the UK, and the third was for export to the EU. The first set of prices were the lowest, because VAT was not assessed at all on them. Even paying for the shipping did not cost as much as was charged for the domestic sales. At least that is my memory. But, anything imported into the UK was subject to VAT right off the bat. This functions like a tariff, but is apparently not considered to be one by the Free Trade Ideologues.

Apparently, President Trump is aware that Free Trade is really nothing of the sort, and is trying hard to level the international trade playing field. All international trade should be reciprocal and mutually beneficial. I hope he is eminently successful in this endeavor.
Tickerguy
Posts: 153223
Incept: 2007-06-26
A True American Patriot!
Report This As A Bad Post Add To Your Ignored User List
Quote:
I can't speak to importing single items into Canada. Most goods crossing the border would face a VAT of 13.5 percent. I have bought online from the US without much problem. To think that Canada would submit to the 'bigger stick' is false. Won't happen.

So everything coming into Canada faces a tariff of at least 13.5% if it comes from the US.

I think we can stop with the horse**** about "no tariffs", the lies about a "North American FREE TRADE Agreement" and similar at this point.

----------
Winding it down.
Rl1952
Posts: 5
Incept: 2016-07-27

Report This As A Bad Post Add To Your Ignored User List
VAT taxes are levied at every stage of manufacture, deducting VAT paid on incoming goods. The end result is that the final consumer pays all the VAT. It's a tax on consumption rather than production. To confuse a VAT tax with a tariff just shows you haven't done your homework.
Tickerguy
Posts: 153223
Incept: 2007-06-26
A True American Patriot!
Report This As A Bad Post Add To Your Ignored User List
I'm not confusing anything; a tariff is a tax.

Your nation is of course entitled to impose said taxes. I'm well-aware of how a VAT works, but to claim it's not economically identical to a tariff (when a tariff is a tax) is disingenuous at best.

But the real issues are in agricultural products, which are flat-out confiscatory -- and utterly indefensible in a so-called "free trade" environment. Or shall we talk about softwood dumping? Naw, you don't want to do that either, right?

----------
Winding it down.

Ckaminski
Posts: 4685
Incept: 2011-04-08

Mass-Hole!
Online
Report This As A Bad Post Add To Your Ignored User List
Quote:
If the people who are conservative, would always click
on advertising on sites like Karl's THEN advertising
dollars would flow to the support of conservative
websites.


Clicks are meaningless. Only PURCHASES are. Clicks which do not lead to sales are useless. Impressions that do not lead to sales are impressions.

It's why the Patreon model is taking off. Artists and content makers were getting Boned by Youtube and other ad networks, so are moving to off-platform subscriptions instead.

If I could
Vernonb
Posts: 2122
Incept: 2009-06-03

East of Sheol
Report This As A Bad Post Add To Your Ignored User List
Quote:
It's a tax on consumption rather than production. To confuse a VAT tax with a tariff just shows you haven't done your homework.


Hmmm. Yes that consumption tax sounds good in theory but is NOT the real purpose of such tax implemention schemes.
----------------------
All taxes are ultimately paid by consumers.

VAT taxes are are just another way to hide taxes inflicted by government taxation into the products from the final consumers. Such costs might attract too much attention if people actually saw a line showing some additional fee of 15%-27% or higher especially if they were to again also being levied a sales tax on their end.

It's like stealing money from the populace by inflating currency which reduces the buying power of the currency. Instead you have inflated the price to produce an item to steal by taxation stealth! Heavens forbid if you are ALSO experiencing currency inflation at that same time. You are then double damned.

What is created is an overly burdensome system that now requires an army of administrators to handle (much like the American health care system) to further drive up the product costs and ultimately again the taxes. Yes they wanted to capture the revenue before the product was exported but damn there are limits to sensibilities and practicalities. It should be called the No-value-added tax as that is EXACTLY what government is doing.

What such governments have is an army of bureaucrats claiming to prevent potential tax fraud (loss of revenue to the government) that instead immediately consume the revenue and resources of the government and consumers. smiley

I could go on how these systems negatively affect inventory building, production, and other aspects but I am trying to be a bit brief.

--------------------
Anyway this is about tariffs (which are tax) but their is no way to honestly compete when the governments and leaders themselves become the sources of the deceptions and the people are too cowardly/stupid to fix/understand the situation.






----------
"Mass intelligence does not mean intelligent masses."
Spazznout
Posts: 1788
Incept: 2009-04-15

Columbus, Ohio
Report This As A Bad Post Add To Your Ignored User List
Wilbur Ross Talks Trump's Agenda at OECD Event May 30, 2018

Trumps is very open and clear with the objective. Listen to MR Ross. He speaks easy to understand no BS english.

https://www.youtube.com/watch?v=3RCYPNvn....

3RCYPNvnEo4

----------
"In a land without Rule of Law even a sane man who desecrates the state must be made to look crazy. "
Rubicon Jan. 9, 2011 blog post.
"Those who make peaceful revolution impossible, make violent revolution inevitable."

Cerich
Posts: 988
Incept: 2008-12-17

ga
Report This As A Bad Post Add To Your Ignored User List
Canada's bubble debt economy is predicated on imbalance in trading and protectionism... if trump follows thru the Canadian economy is ****ed.

Given that virtually 80% of the times my business has a customer demand I pay the duty after I shipped in the gambit that I will pay versus having them not accept the package and making me pay to get it back I'm having trouble caring.



Tickerguy
Posts: 153223
Incept: 2007-06-26
A True American Patriot!
Report This As A Bad Post Add To Your Ignored User List
Yep.

----------
Winding it down.
Login Register Top Blog Top Blog Topics FAQ
Showing Page 1 of 2  First12Last