Brain-Farts From AP: Tariffs
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.


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.

2019-05-14 07:00 by Karl Denninger
in Stupidity , 151 references Ignore this thread
Brain-Farts From AP: Tariffs
[Comments enabled]

This is not a news organization.

It is a propaganda outfit.

I wonder if the AP is in fact in the employ of Xi -- of China -- and thus ought to be compelled to register under FARA.

US farmers who sell to China feel pain of Beijing’s tariffs

DES MOINES, Iowa (AP) — China’s announcement Monday of higher tariffs on $60 billion of American exports — retaliation for President Donald Trump’s latest penalties on Chinese goods — hit particularly hard in the farm belt. China’s vast consumer market has been a vital source of revenue for American farmers.

Wait a minute....

We're told that tariffs imposed on Chinese imports are paid in full by American consumers.

Ok, so tariffs imposed on American imports (to China) are paid in full by Chinese consumers.


Or was that first statement a lie?

It matters.

A lot.

See, if tariffs by China on imports from American farmers hit the producer, that is, the farmer then the same thing is true the other way -- that is, Trump's tariffs ARE HITTING THE CHINESE, NOT AMERICANS -- which is exactly what the media says doesn't happen.

Yet the farmers say it does happen.


In fact one ought to wonder out loud if they're at least communist sympathizers or even worse, in the employ of the PLA or some other arm or affiliate of the Communist Chinese Government.

As I pointed out in my article the other day thus far in the current fiscal year Treasury has taken in about $20 billion more in tariffs than last fiscal year to this same point.  The entire sale of agricultural products to China grosses about $24 billion a year.  Some of that can and will be sold to other markets.

But, we could trivially take a good part of that tariff revenue, buy the products on the market from the farmers that the Chinese impose on our farmers in the form of a buyer's strike (which the media says doesn't happen coming the other way) and give it to third-world starving children for them to eat.

Our net cost would be zero, we'd feed starving children and remember, the claim that this cost (in the revenue collected) falls on the American consumer is a lie.  It has to be a lie -- that is, THOSE TARIFF RECEIPTS ARE COMING OUT OF OF CHINESE PRODUCERS, NOT AMERICANS, otherwise the claim that the farmers are paying for the Chinese tariffs is a lie, and that appears to be true.

So which is it?

Never mind that I can make a very clean argument that we ought to let a lot of farmers go bankrupt.  Land prices right now ridiculous on a cap-rate basis when it comes to arable, tillable land.  Why?  Because of real interest rates that are below GDP and thus people are paid to borrow instead of spending, along with the "promise" that "prices always go up."  No they don't and this lie has driven many smaller and family farmers out of business.  Bankrupt a bunch of farmers, including big ag businesses and land prices will fall like a stone as they should to the point that smaller, family operations will once again make sense.

And why is AP still standing as a so-called "news" organization after running what is blatant, obvious bullcrap like this?

Go to responses (registration required to post)

User: Not logged on
Login Register Top Blog Top Blog Topics FAQ
User Info Brain-Farts From AP: Tariffs in forum [Market-Ticker]
Posts: 3071
Incept: 2011-04-14

Report This As A Bad Post Add To Your Ignored User List
Since international trade is the be all, end all of existence these days, I would love to go back to the way things were originally.

Fund the Federal Government with import/export tariffs and eliminate all taxes on income along with repealing the 16th Amendment so that they cannot come back. You want to help the working man you say? Well, stop taxing his labor.


Here are my predictions for everyone to see:
S&P 500 at 320, DOW at 2200, Gold $300/oz, and Corn $2/bu.
No sign that housing, equities, or farmland are in a bubble- Yellen 11/14/13
Trying to leave the Rat Race to the rats...
Posts: 21
Incept: 2016-01-03

Report This As A Bad Post Add To Your Ignored User List
The Paulbots run this exact same line of BS too.

Tariffs Bad!!!

Just one of the reasons I gave that ship of fools the single finger salute long ago.
Posts: 11069
Incept: 2007-12-17

Saint Charles MO
Report This As A Bad Post Add To Your Ignored User List
Both the buyer and seller will pay part of the tariff. And both governments will subsidize part of the pain most likely. Simply the trade imbalances and intellectual property theft must be dealt with regardless of the pain. So sick of up folks.

I think its time we ask ourselves if we still know the freedoms that our founding fathers intended for us. Ronald Reagan 1964
Posts: 778
Incept: 2009-01-09

Report This As A Bad Post Add To Your Ignored User List
China really needs the US, especially due to the African Swine Fever outbreak.
'Even though China has imposed a 62% tariff on pork from the US, they imported a record 90,700 metric tons of product on 4/11/19' (last year on this date 77,732 metric tons)
What we really need is factual market reporting during this situation.
Posts: 860
Incept: 2012-04-19

South of Canada
Report This As A Bad Post Add To Your Ignored User List
Just more Orange Man Bad reporting. Nothing new. Granted I'll pile on the Trump for many things but the media can't bear to admit that even a broken clock is right twice a day. Why I usually watch the news with a strong BS filter.
Posts: 5703
Incept: 2009-03-19

Just North of Detroit
Report This As A Bad Post Add To Your Ignored User List
Too honest a discussion of international trade might make people apply some of the same principles to domestic regulation and its impact on business.
Posts: 5
Incept: 2010-06-10

Report This As A Bad Post Add To Your Ignored User List
My wife's family owns a farm and primarily plants soybeans and corn. They have not complained about tariffs once in the past two years and I even asked them about it. They are impacted by late spring rain far more than they are by tariffs. It's the rain that needs lowered here, not the tariffs. And it's likely the rain that is going to move the price of soybeans this year, also not the tariffs.
Posts: 1066
Incept: 2017-06-27

The People's Republic of New York
Report This As A Bad Post Add To Your Ignored User List
to hell with feeding the third-world poor. what happens when you feed a million starving third-worlders? you get three million starving third-worlders.

let's lower the cost of food for working Americans with those dollars. proper dietary intake keeps getting more expensive for working Americans. let the markets allow prices to drop if a segment disappears.

personally food riots would be a great way to end the Chinese future military threat along with a nice famine and death cycle. if you do not know that they represent a world military threat in the future, you might want to reconsider.

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)
Posts: 419
Incept: 2008-02-16

Report This As A Bad Post Add To Your Ignored User List
I agree with Megamomo. Maybe it was decided this was the best time to do this with all the flooding and cattle loss. I'm with White hat on what to do with the extra (assuming there is much). I think what is happening in EU is a direct result of the Feed Africa BS in the 80's and 90's. We fueled a boom that was not sustainable. They were starving because their culture could not feed that many people and it still can't. Feed them again and the crisis doubles down in twenty years.
Posts: 154
Incept: 2009-05-26

Report This As A Bad Post Add To Your Ignored User List
I agree with Whitehat. Please no more "feeding the third-world poor". We're breaking nature's balance (food doesn't grow in the desert, so maybe you shouldn't have 30 children Mr and Mrs third-worlder) and we get to deal with mass immigrant hordes from said third world.

Instead how about better food here? Not just soy & corn (i.e. carby poisonous crap) but some actual, high quality, nutritional stuff.

I was recently in Greece and the taste of the produce doesn't even compare with what we have here. And Greece has small amounts of arable land, but the farming there is still local, the soil is rotated often and the fruits/vegetables are seasonal. Meanwhile most american tomatoes taste like cardboard.

So yea, better food quality at home, no more just soy/corn/carby-crap, and no more feeding 3rd-worlders. Let them feed themselves in their own countries and maybe that way they can stop being 3rd worlders.
Posts: 50
Incept: 2013-03-08

Houston TX
Report This As A Bad Post Add To Your Ignored User List
Another thing to remember is that the price from the Chinese manufacturing floor to the retail shelf can easily increase that $40 widget at Best Buy might be sold for only $10....with the $30 difference going to feed a whole host of middlemen,overhead, and if you get lucky...maybe some profits.

So the import price increases 25%...from $10 to $12.50...even if 100% of that flows through to's just a 6.25% increase....and that's assuming the import is the final retail product.....and the retailer actually bothers to increase the price If it's just a could be no more than a rounding error.

I personally have a small business that imports a product line from China....we are holding tight for now....drawing down inventories rather than reorder at this point. In a few months I'll have to make a decision though and do a little haggling with my supplier...I'll probably start by proposing they eat the entire tarriff...and settle for half.

If that gets me nowhere....and I realize this is the point...we may actually look at some small scale manufacturing here in the US. I may still have to source some is likely impossible and find a 12V fan and water pump manufactured in the US... but Injection molding and problem at all. I lose tariff cost, shipping cost, my supply chain lag time shrinks from 4 months to 2 weeks and my working capital requirement shrinks by quite a bit as well.

Whatever happens...we'll be ok

Posts: 697
Incept: 2009-03-25

Report This As A Bad Post Add To Your Ignored User List
Collect more money, spend more money.

Repeat, until society collapses

Maybe, collect more money, spend less money might be an idea worth trying.
Login Register Top Blog Top Blog Topics FAQ