Truth About Tariffs

via GIPHY

Trump is the ONLY person who is claiming that China pays the tariffs. Even officials in his own administration admit that this is a tax which the importer in this country pays to our government. That importer either covers that tax by reducing their profit margin, or they pass that tax along to whomever is buying the goods. Often that tax is reflected in higher prices paid by the consumer.

Even Trump KNOWS that his claim is a lie because he has agreed to a program where IMPORTERS can apply for waivers. Those waivers relieve the importer from paying the tax that they would otherwise pay on the goods that they are importing from China. If China was in fact paying the tariff, why would there be ANY need to provide ANY importer a waiver?

Trump is claiming that he will be able to use the taxes which he is collecting from China to provide some relief from the business which US exporters are losing because of tariffs that China has placed on US goods, in particular agricultural products.

This is another LIE. Instead what he is really doing is shifting dollars around in our own domestic economy. He is taking dollars from importers but mostly paid by consumers and using it to prop up farmers who are being bankrupt by his trade policies. This is not a formula for economic success.

This is VERY dangerous stuff. That’s because a portion of the country believes these lies and supports a policy that has been proven ineffective.

The reason why the world has moved to multi-lateral rather than bi-lateral trade agreements is to avoid trade wars. That’s because trade wars sometimes lead to REAL wars as both sides try to ramp up leverage on each other or retaliate for what they perceive as an attack on their country.

In the case of China, we are dealing with our major global economic competitor who has recently taken a dramatic turn toward authoritarianism under Xi Jinping. Here’s how Bret Stevens characterizes them.

Domestically, it has shifted from one-party to one-man rule and become a surveillance state that locks up innocent people by the hundreds of thousands in concentration camps. Abroad, it snoops, steals, kidnaps, cheats, pollutes, undermines, corrupts, proliferates, and bullies. The goal of “Xi Jinping Thought,” the party’s new official dogma, isn’t stakeholdership. It’s dominance: “Why question the Communist Party,” goes its message, “when the alternative is chaos and corruption?”

Worse, they may already be facing internal problems which may become increasingly desperate because of a declining economy, exploding debt, aging population, shrinking workforce, and flood of its most successful citizens leaving.

Trump seems oblivious to all of this. Instead he has characterized this as a war of wills which he has to win in order to demonstrate that he is the Uber strong man in the world. In simplest terms his calculation is that he is better positioned to ride out the pain that his trade war is causing in this country compared to a defacto dictatorship where people don’t have a vote.

Even if Trump could somehow prove that trade wars result in better bi-lateral trade deals than would otherwise be available to us, it still doesn’t address core geopolitical issues.

Trump has been silent on the subject of human-rights abuses. His administration has shelved sanctions intended to punish China for mass incarceration of Chinese Muslims. Trump has failed to sanction the Chinese entities who are stealing our intellectual property. China is expanding its military and economic influence around the world. Trump is weakening or abandoning the military and economic alliances which would provide an alternative to those who might see some benefit to aligning themselves with China. Even longtime allies like Japan and South Korea are considering closer ties with China because of Trump’s America First policies.

The facts are that Trump has failed to deliver the significant economic benefits that he promised from his go-it-alone trade strategy.

The new NAFTA is not a whole lot different from the old NAFTA.  Lawmakers in all three countries refused to ratify the new deal unless Trump dropped the steel and aluminum tariff’s that he put in place to force Canada and Mexico to come to the table.  Trump had no choice, particularly given the pain that the China tariffs are causing.  He caved.

This outcome is virtually certain in all of the trade wars that Trump is engaged in, or may start in the future.  There are no winners because, in a global economy, everyone needs everyone else.  Virtually everyone is trading with everyone else.  There are very few countries that have a monopoly on a particular good or service.  There are also very few countries that can sustain themselves exclusively on what they produce domestically.  For example, the trade war was bad news for US soybean farmers, but great news for Brazilian soybean farmers who were happy to get a bigger share of the Chinese market than they had previously had.

Trump will of course claim that he won the trade war, but there is precious little in the new plan that he can point to which will justify the economic pain his policies caused.  The new NAFTA deal has already been criticized for weak environmental protections, weak unfair labor practice rules, and language which allows US pharmaceutical companies to continue to charge higher prices in this country for drugs that are available at much lower prices in Mexico and Canada. 

Finally, though it is clear that Trump’s policy is ill conceived, we still don’t have an answer to the question of why Trump continues to lie.

All we can do is speculate. But often the simplest answers prove to be the closest to the mark. The simple answer is that Trump is lying because he can. He has successfully created an atmosphere where his core supporters believe everything that he says and discount any criticism as politically motivated.

Trump campaigned on the tariff lie. He knows that if he told the truth about how tariffs really work his base would reject his plan. If he told his base that they should be willing to accept significant increases in the cost of consumer goods and farmers should be willing to accept the risk that they will go out of business before the deals get done, in return for some much better deal in the future, he would be accepting accountability for all of the pain that he is currently causing.

Hopefully, those in his base who are dealing directly with the harsh economic realities that tariffs are causing them have figured out that he is lying. Hopefully they, their families, and their friends will finally realize that they can’t afford the cost of another conservative Supreme Court justice. If so, democracy will render an appropriate judgement on the Trump administration in 2020.

18 Responses to “Truth About Tariffs”

  1. Keith says:

    And yet GDP stunned at 3.2%… I could go on and on about the “harsh realities” Go ahead and run against the economy.

    China has been at war with us for decades. At least he’s engaged in the war, something past presidents have not engaged in.
    And they are hurting worse then us.

    He’s a carnival barker Jeff, heed my advice and treat him as such. Go watch the movie “The greatest Showman.”

  2. Keith says:

    https://youtu.be/oYraLI04WiU

    Insightful conversation.

  3. Jeff Beamsley says:

    And yet GDP stunned at 3.2%… I could go on and on about the “harsh realities” Go ahead and run against the economy.

    I’m not “running against the economy”. Just recognizing the fact that Trump is not telling the truth about tariffs. As a result of not telling the truth, the damage that they are causing to the economy is largely being ignored by his supporters. Your quote about 3.2% is a good example. One of the reasons for the 3.2% growth was importers filling their warehouses with goods in anticipation of the tariffs making those same goods more expensive. This is clearly not sustainable.

    “Businesses were building inventories like crazy. That is not going to last,” said Ben Herzon, executive director at Marcoeconomic Advisers. “The first-quarter number is overstating the strength of the economy.”

    and

    U.S. consumers are likely to be the key factor in whether the economy has a normal, subpar or extraordinary year since consumer spending drives about 70 percent of growth. Spending on goods and services was relatively weak at the start of the year. While overall growth came in at 3.2 percent, final sales to U.S. purchasers, a measure of domestic demand, was 1.4 percent.

    Ford just announced it was laying off 7,000 white collar jobs and some expect up to 23,000 more layoffs as demand weakens.

    From NPR.

    Bankruptcies for farmers in the Midwest have risen sharply. Some farmers have been hit by a trifecta of bad circumstances: trade tariff disputes, continuing low crop prices and extensive flooding.

    China has been at war with us for decades. At least he’s engaged in the war, something past presidents have not engaged in. And they are hurting worse then us.

    You posted an interview with Steve Bannon who referenced some comments with Tom Friedman. Friedman did acknowledge that he was happy to see Trump confront China. What he criticized were Trump’s methods. When asked what he would have done, Friedman said he would have signed the TPP (top priority), worked with our European allies to create a coalition of the willing, and negotiated a reset of trade relations with China in secret. Guess who was doing exactly that? Obama

    Friedman went on to say that negotiating in public is a HUGE mistake. Wasting time on aluminum and steel tariffs was also a big mistake. Alienating our allies was a big mistake. Turning this into a machismo war of nationalist will is not the way to solve the problem.

    Just to close the circle on this, Friedman would like to see Trump defeated in 2020. Here’s his recipe for that.

    Yes, we need a Republican who will do the most high-minded, patriotic thing I can imagine today — fall on the Trump grenade. That is, run against Trump from the right in the national election as, say, a libertarian — who could oppose Trump for his tariffs, his piling up of the national debt, his opposition to immigration and his immorality. This could siphon off just enough Republican votes for Trump to lose close races in Wisconsin, Michigan, Ohio, Pennsylvania, Nevada and Florida. We need a Republican who will do to Trump what Ralph Nader did to Al Gore in Florida in 2000.

    Second, we need some dutiful people to bear witness. There is now a club of people who have served at the top of Trump’s administration in the past two years who either quit, because they would not bend, or were forced out after Trump could bend them no longer: Mattis, Don McGahn, H.R. McMaster, Rex Tillerson, Gary Cohn, Kirstjen Nielsen, John Kelly, Jeff Sessions and Reince Priebus. (We also need to hear from Robert Mueller.)

    We need them all to bear witness to the dishonesty, indecency and dysfunction they saw while serving Trump and to his unfitness for high office. We can’t wait for their memoirs or anonymous, ineffective leaks. They don’t have to take sides left or right. We need them to side with the truth. That is the essence of acting honorably.

    Finally, most important, we need a Democratic candidate who can appeal not only to Democrats but also hold the independents, moderate Republicans and suburban women whose votes shifted the House to the Democrats in the 2018 midterm elections and whose support will be vital for any Democrat to win the presidency.

    I happen to agree with him and almost on cue Justin Amash took the first steps toward becoming that Libertarian candidate.

    He’s a carnival barker Jeff, heed my advice and treat him as such. Go watch the movie “The greatest Showman.”

    I’m sorry but his actions are not harmless. He may be a carnival barker, but only in the same way that John Wayne Gacy was a clown. IMHO, he is doing great damage to our country in virtually every way imaginable. Discounting that damage by suggesting that he is simply an misguided blowhard and flimflam man is delusional.

  4. Keith says:

    https://apple.news/AIPRIEUQhTdG9GLFh9MKFkw

    “Toxic whiteness.” IN IOWA!!!!
    Does this guy have a brain???
    This is the nonsense that allows republicans to win.

  5. Jeff Beamsley says:

    https://apple.news/AIPRIEUQhTdG9GLFh9MKFkw

    “Toxic whiteness.” IN IOWA!!!!
    Does this guy have a brain???
    This is the nonsense that allows republicans to win.

    https://www.nytimes.com/2019/05/25/world/asia/trump-japan-north-korea.html

    “small weapons” IN JAPAN !!!!
    Does this guy have a brain???
    This is the nonsense that allows Democrats to win. 🙂

  6. Keith says:

    Lol 😂
    Nice 👍🏻

    Though Trump was clearly de-escalating the situation.
    You’re guy was escalating the toxic whiteness issue.

    I heard recently this;
    Comey read a list of things Hillary did wrong then went on to say he didn’t believe she did them intentionally so gave he a pass. Mullar found Trump did nothing wrong but the dems believe he intended too so they’ll go after him.

    Hope you’re well sir!

    Here

  7. Jeff Beamsley says:

    I heard recently this;
    Comey read a list of things Hillary did wrong then went on to say he didn’t believe she did them intentionally so gave he a pass. Mullar found Trump did nothing wrong but the dems believe he intended too so they’ll go after him.

    Mueller: If it were clear president committed no crime, “we would have said so”

    I know that double negatives are sometimes difficult for people to parse, but what Mueller said is that by law he couldn’t bring an indictment against a sitting President. But it is possible for Congress to hold the President accountable for crimes and his report provides sufficient evidence that Congress should investigate the President on obstruction of justice charges.

    https://www.cbsnews.com/live-news/robert-mueller-statement-today-report-investigation-trump-2016-election-live-updates-2019-05/

  8. Keith says:

    Your prediction long ago was – They will not prove collusion but he will obstruct

  9. Keith says:

    Muller also said “that’s it, i have nothing more, there is nothing more, I’m done.” Case closed.

    So what of Mr Shif, Mr Bloomenthal? What of the other dems who said they had evidence? Just what were they referring to?

  10. Jeff Beamsley says:

    Your prediction long ago was – They will not prove collusion but he will obstruct

    Yup sticking by that. Whether he will ever be held accountable for that obstruction is a different issue, but ultimately I believe that his obstruction during the Mueller investigation and other acts of obstruction into some of the other ongoing investigations will be what costs him in 2020.

  11. Jeff Beamsley says:

    Muller also said “that’s it, i have nothing more, there is nothing more, I’m done.” Case closed.

    Only the White House and Trump’s congressional supporters are saying “case close”.

    Mueller said that his reports should stand on its own. The President DID obstruct justice. The rules of Justice Department prevented him from issuing and indictment. As a result, it is now up to Congress to do something with the information he delivered to them.

    He did say that his team didn’t find enough to make the case for collusion. That doesn’t mean that there wasn’t collusion. All it means is that they couldn’t find enough information to prove it.

    He could have said that same thing regarding obstruction of justice. He didn’t. So case clearly NOT closed. It is now up to Congress to continue the investigation and make their own decision regarding whether or not to bring a bill of impeachment.

    So what of Mr Shif, Mr Bloomenthal? What of the other dems who said they had evidence? Just what were they referring to?

    I don’t know, you’ll have to ask them. I can guess that they saw some of the same information that Mueller saw and came to the same conclusions that Mueller came to. There is a case there to be made.

    The political challenge is clear. There aren’t enough votes in the Senate right now to support impeachment. As a result, IMHO that appropriate strategy is to continue to battle against Trump to obtain information. As long as the courts continue to support the appropriate role of Congress regarding oversight, Congress will continue to get the information that they need to continue investigating. Fortunately Trump has created lots of opportunities for investigation and continues to create new ones every week. As long as the Dems can continue to expose new information that the country feels is relevant AND as long as those investigations are supported by the courts – This can easy run all the way up to the election. It does also keep open the possibility of impeachment IF new stuff is sufficiently serious to cause Senate Republicans to break ranks.

  12. Keith says:

    With regards to mr shif and bloomenthal…
    I was referring to their constant presence on cable outlets says “there is collusion.” They should be held accountable for what? Anything?

  13. Jeff Beamsley says:

    With regards to mr shif and bloomenthal…
    I was referring to their constant presence on cable outlets says “there is collusion.” They should be held accountable for what? Anything?

    Per CBS News.

    Attorney General William Barr said he does not think some Obama-era Justice Department officials who oversaw the Russia investigation committed treason.

    “Not as a legal matter, no,” Barr told CBS News chief legal correspondent Jan Crawford when asked if he believed senior officials in the Obama administration committed treason, an accusation Mr. Trump has repeatedly made.

    Trump should be held accountable for what? Anything?

  14. Jeff Beamsley says:

    https://twitter.com/protctdemocracy/status/1134089330576777216?s=12

    I’m curious what your reaction is to this video. This is not a fake video. All of these people ARE who they claim to be. They are both Republicans and Democrats. They all, plus 1000 more, came to the same conclusion.

  15. Keith says:

    So we’re going to use Barr? I’m good with that. No collusion no Obstruction. Done over. Barr also said in the same interview he is getting conflicting message as to the origin of the investigation.

    Trump is Trump. He’s the guy who had the guided tour of the Whitehouse by President Obama and asked all these people full work here? To which Obama said “no you’ll have to staff on your own.” He’s called out the Chinese on trade war. Has it effected you? I don’t notice. Illegal immigration has to be brought under control. It’s a problem and everyone agrees. And by the way the terrible pictures everyone got upset about were prior to him.

    Bottom line we have to be united sooner rather then later. If so we can handle these issues including SS. However old white men are leading early on your side. I find that increasingly ironic, particularly given the dem national party recently announced only women moderators for their debates….

    Hope you first summer full time in Travers City is great!!!

  16. Jeff Beamsley says:

    So we’re going to use Barr? I’m good with that. No collusion no Obstruction. Done over. Barr also said in the same interview he is getting conflicting message as to the origin of the investigation.

    Why should we use Barr? He clearly misrepresented Mueller’s conclusions regarding obstruction. I’d prefer to use Mueller if you don’t mind.

    Happy that he was willing to contradict Trump with regard to the “legal” interpretation of treason. But that is scant comfort, since he is still willing to investigate the FBI on bogus claims.

    Barr is Trump’s Robert Bork. Bork was Nixon’s loyal soldier as acting AG until Nixon resigned. Bork replaced Elliot Richardson when Richardson resigned rather than fire special prosecutor Archibald Cox.

    As far as the origin of the investigation, the “conflicts” that Barr has heard are coming from the White House. This whole thing hangs on the conspiracy claim that the origin of the investigation including the FISA request was the Steele document. EVERYBODY involved has testified before congress under oath that the origin of the investigation was a conversation that George Papadopoulos had with an Australian diplomat where he claimed to know that the Russians were in possession of Clinton emails. When Russian hacking of the DNC and Podesta became public two months later, the diplomat contacted the FBI and told them about his conversation with Papadopoulos.

    Instead you have the White House suggesting that because a couple of people FBI texted that they were no fans of Trump, that somehow the investigation was tainted. Those texts cost the agent, Peter Strzok, his job.

    Trump attempted to use the same claims to discredit the Mueller investigation because it had a bunch of “angry Democrats” working on the investigation.

    That claims doesn’t appear to have influenced the Mueller investigation and it didn’t influence the FBI investigation either.

    Here’s Maureen Dowd’s view of Barr.

    Barr is not so much the attorney general as the minister of information. His interview with Crawford was tactically brilliant. Barr once more deftly took advantage of the fact that Mueller, with his impenetrable legalese and double negatives, has handcuffed himself.

    BTW during his testimony to the House Appropriations subcommittee, here’s how Barr responded when asked to defend the administration’s refusal to support the ACA in court.

    “I’m a lawyer. I’m not in charge of health care,” Barr told members of the House Appropriations Committee, as Democrats said the Trump administration’s position in a lawsuit risked depriving millions of Americans of their health insurance coverage and sharply raising the price of premiums for tens of millions more.

    The reason why this response was telling is that inside the White House, Barr is known to lobby against that position because he felt it was a weak legal argument and bad policy.

    Barr is supposed to be the lawyer for the people of the United States. He is in fact Trump’s lawyer and will do whatever Trump asks of him. When asked if he was concerned about history may view his choice, he said he didn’t care because he will be dead.

    As far as the rest, you remain firmly ensconced in your right wing bubble.

    He’s called out the Chinese on trade war. Has it effected you? I don’t notice.

    It has actually, but the only reason you haven’t noticed is because of confirmation bias. I’ve already posted about farmers going out of business. Here’s what Michigan farmers are saying.

    “We have lost market opportunities. We’re not shipping soybeans around the world like we normally would. We’re not shipping them to China. China was our biggest soybean consumer, and they’re not moving.”

    China was also the biggest opportunity for Michigan producers to sell pork, “and they’re not buying because of the tariffs,” Byrum said.

    “The new Chinese tariffs … it’s going to hurt even more.”

    and

    Kathy Maurer, financial and international marketing director for the Michigan Soybean Association, said, “China is our largest customer,” and she expects the impact of the recently announced tariffs to be “very dramatic.”

    “We are now currently in a fight for the family farm,” she said.

    The auto industry is hemorrhaging workers. Construction costs are way up and the recession flags are now flying on wall street. And now we’re talking about using the threat of tariffs to coerce Mexico into doing what Trump has not been able to do – reduce the flow of asylum-seeking immigrants coming from Central America.

    Illegal immigration has to be brought under control. It’s a problem and everyone agrees. And by the way the terrible pictures everyone got upset about were prior to him.

    It is not illegal to seek asylum in this country. Those are the numbers that are WAY up. It remains a problem because Trump does not want to uphold existing laws regard asylum seekers. He also continues to break the law with regard to detaining minors.

    Many of the nearly 2,000 unaccompanied migrant children being held in overcrowded U.S. Border Patrol facilities have been there beyond legally allowed time limits, including some who are 12 or younger, according to new government data obtained by The Washington Post.

    Though I am no fan of Kirstjen Nielsen, but she resigned rather than resume Trump’s child detention policies. Children are dying in these facilities and you don’t seem concerned.

    BTW, those “terrible pictures” did and do reflect current conditions. The administration has admitted in court that it does not have sufficient resources to provide humane care for the families being detained.

    It is a problem, but clearly not “everyone agrees” on the solution. I’ve already outlined the reforms that I think are reasonable with regard to immigration. I believe that immigrants are ESSENTIAL to our future. None of them want to take the risks that they are currently taking to get here. The two program we need are a reliable guest worker program sponsored by employers and a reliable amnesty program sponsored by those communities who are happy to welcome legal asylum seekers. The second program could work just like the first. Communities would apply for a certain number of families based on their capacity. Amnesty seeker BEFORE THEY LEFT THEIR COUNTRY, could put in their applications for being “adopted” by their sponsoring communities. They then would be assured that if they could get here (communities could take care of transportation too) their sponsor would take care of them until their amnesty case could be ruled on by a judge and would be responsible for arranging for a lawyer to assist them.

    Bottom line we have to be united sooner rather then later. If so we can handle these issues including SS. However old white men are leading early on your side. I find that increasingly ironic, particularly given the dem national party recently announced only women moderators for their debates….

    It’s way too early to suggest who the nominee is going to be, so please spare me the irony.

    As far as unity is concerned, I see no possibility of unity as long as Trump is in the White House.

    Hope you first summer full time in Travers City is great!!!

    Thanks. I hope you have a nice summer too.

  17. Keith says:

    Illbresponse mostly later.

    Have you seen the fake news distortion of Trumps comments about Princess Merlke? (Harry’s wife)

    Is the war with China just? Sincere question.

    And for the hundredth time I’m not in a bubble. Lol

  18. Jeff Beamsley says:

    Have you seen the fake news distortion of Trumps comments about Princess Merlke? (Harry’s wife)

    Nope. Don’t care. But if you have an article from a reputable news source (e.g. NYT, WashPost, or Christian Science Monitor) that you feel qualifies as “fake news”, please post it.

    Is the war with China just? Sincere question.

    If you mean the trade war, I’m not sure what you mean by “just”. I’ve already said that I share Tom Friedman’s view that China should be confronted, but not in the way that Trump is doing it.

    And for the hundredth time I’m not in a bubble. Lol

    When you suggest that credible news sources were printing “fake” pictures of detained kids on the border, that’s a message from inside the bubble. If you have proof that the NYT, WashPost, or Christian Science Monitor incorrectly described pictures that they printed, please post it.

    Otherwise, here’s an example of how credible media treat “fake news”. They report on it.

    https://www.nytimes.com/2018/05/31/upshot/liberals-immigration-children-border-misinformation.html

    This past weekend, some social media users circulated a photo they said showed children detained as a result of President Trump’s policies, but the image was actually from 2014.

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