So just why did you decide to never take a Macronomics course in college?
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Trump's Planned Tariffs on Imported Steel and Aluminum Would Likely Apply to Apple Products
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So just why did you decide to never take a Macronomics course in college?
Two different scenarios, but thanks. I’ll keep my tin foil hat in my back pocket just in case.
Trump is right when he said any tariffs should benefit us. He was wrong on everything else. AKA a broken clock.....
is this a tariff on the value of the metal, or is it a tariff on the value of any finished metal products?
The unibody chassis of a mac book is made from a comparatively small quantity of aluminium. But the machining process substantially raises the value of the aluminum part.
The unibody chassis of a mac book is made from a comparatively small quantity of aluminium. But the machining process substantially raises the value of the aluminum part.
It's really not that hard to grasp this is a bad idea and then moving on to bash the moron who proposed it. One who has people jumping ship faster than anything we've seen in recent memory. Bush and Obama had turnover rates below 7%, Trump is over 30%, working for the WH is suppose to be an honor, this man has single-handedly turned it into career suicide. Working for or joining his administration is like playing a game of Russian roulette. That speaks volumes.
As far as his tariff talk, consumer choice is a market force, and the "right wing" which was all about free enterprise and capitalism right up until like, 10 minutes ago, used to oppose government regulators stepping in to say "No no consumers, you're all wrong, in fact we're going to impose a penalty on you and raise prices to punish you for not doing what we, the Government, would like you to do."
That is what a tariff is in practice. Cheering interference and regulation because of who says it is really, really dumb. You're the dumb side now. The left was fighting really hard to be the dumb side, and you snatched it away from them. Congrats.
That’s all well and good, only not everyone was playing by the same rules, even among the ‘west’ - Germany for example has consistently refused to stimulate its consumer economy and is instead running an absolutely massive, toxic trade surplus which is unbalancing the world economy. It wouldn’t abandon this policy even when The US, Britain, Canada etc (predominantly anglosphere countries btw) were voluntarily racking up debt to help the world economy not go into an even deeper recession/ depression. Germany just swept up all the money and greedily piggybacked off of our efforts. Even Obama repeatedly clashed with Merkel over it, only he was either too weak to actually do anything about it, or his hands were tied by the fragile state of the world economy. Hopefully Trump will finally right this wrong.
Germany's trade surplus shrank last year. It's also not the result of "lets stick it to everyone" or some mercantilist government policy. They save, which is what happens when you have an aging population (Japan is the same). They have traditionally been a export heavy country which helped them get back on their feet and rebuild.
Given the scale and length of time they have been running it and the vociferous refusal of the German government to even contemplate policies that would encourage more German consumer spending I would say it very much is a deliberate and greedy policy choice from Berlin. The Japanese run a much more modest surplus, even further dampened by the fact the size of their economy is bigger so relative to GDP it's not unbalanced in the way the German one is. Being a strong exporter is one thing, but it should not be achieved at the expense of others through unfair policy choices. Again, hopefully Trump will make Merkel reconsider - the easy way or the hard way.
So far it is on the raw materials alone. The perverse outcome will be that U.S. manufacturers who depend on imported steel and aluminum will be put at a competitive disadvantage with overseas manufacturers of the same goods. The only way to fix this brutal unintended consequence is to track down and carve out exceptions for each instance where this occurs. Maybe these businesses can be pinpointed before they are bankrupted. Probably not.
I'm amazed that no one here has yet to mention that Trump's chief economic advisor Gary Cohn has quit over Trump's tariff idea. Now you can say that as a former Goldman Sachs securities banker he doesn't have much cred for caring about the little guy, but I'm sure he want's what's best for the American economy... in fact cnbc is quoting J.P. Morgan chief Jamie Dimon as saying:
Now if that doesn't tell you what big business in America thinks of the plan, well then I'm not sure what it will take other than Trump himself saying it's a bad idea.
Debatable. We don't make enough steel to meet our needs and many American companies rely on foreign steel.
No one likes this tariff.
Yup.
So imagine in a company's distribution line.. Let's say for example, Boeing or Airbus (despite the fact that both use carbon-fiber reinforced metal in their aircrafts) now have to either jump in line for as much domestic steel as possible (which may not be feasible or available to them), or pay the tariff for sourcing it from outside North America. Because of the tariff, they can simply pass that cost onto whatever airline purchases that aircraft, who in turn will pass that cost onto the passenger to make up for the extra money spent for the tariff. Our prices go up.
Wash/rinse/repeat for any auto manufacturer. Wash/rinse/repeat for any trucking company shipping goods from one distribution center to another, then to a store.
Regardless of what distribution chain used, the prices for the consumer goes up. Everyone else outside the US gets a better deal with other countries, and we're stuck with not enough jobs to keep up with the demand, and companies not wanting to dip into their profits to create those jobs, thanks to automation.
Congratulations, Trump.
BL.
Don't worry. It's an extortion racket, not a serious trade policy.
http://nymag.com/daily/intelligence...-back-trade-war-into-an-extortion-racket.html
http://nymag.com/daily/intelligence...-back-trade-war-into-an-extortion-racket.html
Yup.
So imagine in a company's distribution line.. Let's say for example, Boeing or Airbus (despite the fact that both use carbon-fiber reinforced metal in their aircrafts) now have to either jump in line for as much domestic steel as possible (which may not be feasible or available to them), or pay the tariff for sourcing it from outside North America. Because of the tariff, they can simply pass that cost onto whatever airline purchases that aircraft, who in turn will pass that cost onto the passenger to make up for the extra money spent for the tariff. Our prices go up.
Wash/rinse/repeat for any auto manufacturer. Wash/rinse/repeat for any trucking company shipping goods from one distribution center to another, then to a store.
Regardless of what distribution chain used, the prices for the consumer goes up. Everyone else outside the US gets a better deal with other countries, and we're stuck with not enough jobs to keep up with the demand, and companies not wanting to dip into their profits to create those jobs, thanks to automation.
Congratulations, Trump.
BL.
Aircraft manufacturers use a lot more aluminum than steel, but your example illustrates why Boeing can't simply pass the increased raw materials costs along. Boeing must remain competitive with Airbus and Airbus won't be paying these tariffs on their raw materials. Boeing simply becomes some combination of less profitable and less competitive. MAGA!
Have to notice how quickly the Trump amen corner disappears when actual substantive issues are discussed. No wonder why that happens.
Because it will. From that Benzo to the Bug to wanting a copy of Fillmore from Disney/Pixar's Cars is going to cost you a pretty penny/Euro now.
Earlier this morning, one of Trump's "staff" tried to pass off to NPR that this "will only amount to less than one half of 1 cent" for a can of soda or beer or soup, and avoided the question altogether of any durable goods, like cars, aircrafts, etc., as he didn't even want to think about what those manufacturers would do as far as passing on the additional costs to the consumer.
And to make it worse, this is going to hurt Red states more than it is lead to be, especially if other countries, particularly the EU, reciprocates with a tariff of their own, especially on things like.... bourbon, jeans, and motorcycles (in particular, Harley Davidson) - all of which are made in Kentucky. When they hurt them, all because of Trump's crock in the name of "national security" (something he's already contradicted himself on by exempting Mexico and Canada).
BL.
They’re already largely expensive rubbish - I suppose I’d still qualify with an imo, though there’s a lot of objective evidence if you look for it. The build quality and especially reliability is pretty average at best for VW group and Mercedes cars now. BMW group cars are arguably just still worth the premium, though I’d stick to a 5 series or above.
Germany is refusing to run a budget deficit while the economy is in good shape.
Something that should be dead obvious for any politician but somehow rarely happens around the world.
Sure some politics could be changed, but some things are simple outside the scope of what German government can do:
- German products either being so good or having such a good image
- The $ being overvalued due to it's reserve currency status
- Germans saving for retirement instead of maxing out 26 CCs
- high productivity
I’m not saying Germany needs to be running a trade deficit, but rather that it’s very selfish to be running such a big one in comparison to GDP and is unbalancing the world economy.
- Sure (though I’d argue at this point it’s largely a facade of reputation covering an average or poor product in terms of German goods) but how much you export isn’t the problem, it’s the muted imports that are.
- The Euro is kept ultra competitive by the Southern European economies, not only that, but because they are using the same currency, German exports are ultra competitive in those countries - it’s almost cheating by default. An in built advantage if you will. Then there’s the refusal of the German government to make the structural transfers and guarantees which are necessary with a currency union - it’s what the USA does to make the dollar work. Wanting all the benefits with none of the costs is selfish, as I say.
- This is largely down to government policy. Germany used its dominant position to sit on the ECB not to reduce interest rates as fast as it should, and not to start QE until much later than it should have. These have the effects of keeping saving attractive to German citizens vs investing. Meanwhile the US, Britain and Canada encouraged a boom in spending to help stimulate world demand - Germany was happy to sit back and mooch. Hell, you even left bailing out Ireland to us when it should have been a Eurozone matter.
- Again high productivity has little to do with import rates, which are the real bone of contention.
Some other points to consider:
- Since WW2 (i.e. throughout the Cold War) Germany hasn’t had to spend much on its military as its security has been guaranteed by NATO (read the US, to a lesser extent France and Britain). By not spending at least 2% of GDP the state had much more money to invest back into industry (in the U.K. for example, spending up until the 1990s was 3%+ and 5% or more up to the 1970s).
- While you talk a good game on free trade, your government is much more protectionist and hands on with industry than it should fairly be - look how many big companies are owned or part owned by state governments, effectively making them immune from failure.
Thank goodness Trump has finally shown some backbone, let’s hope he slaps a nice meaty tariff on those (pretty shoddy in my experience btw) Audis and Mercs next to keep up the pressure. Your continental government style means you have a very weak government, I don’t think it will take too much to force Merkel to capitulate.
@Falhófnir
Trade deficit != budget deficit -> government only has direct impact on the 2nd
German export != only cars -> lots of of other areas where German product actually are superior
Southern EU countries either need to fix themselves or accept lower living standard -> wether that happens by reducing wages in € or inflating their own currency makes little difference (assuming they don't start fixing themselves)
Saving == investing -> when I buy a couple of Apple stock, I don't make Apple export more or get them to build new products, all I do is hand cash to the former owner of these stocks
If productivity is higher than demand you either end up huge unemployment or a trade surplus
Spare me the 2% nonsense, European part of NATO would be more then strong enough to deter any "ideas" and most of the actual security risks are down to the US f###ing around in place the had no business in
Big (partly) state owned companies:
- DHL -> partly privatized postal service
- DB -> partly privatized railways
- VW -> 25% owned by LowerSaxoni for some rather complicated historic reasons
So even if that was the reason for German success (which it isn't), why not try to copy it instead of destroying it.
If you think Merkel and her government being less noisy than Trump is a sign of weakness, your in for a surprise, cos capitulating to the US would not only create a massive public backclash but also invite others to try something similar.
Trade deficit != budget deficit -> government only has direct impact on the 2nd
German export != only cars -> lots of of other areas where German product actually are superior
Southern EU countries either need to fix themselves or accept lower living standard -> wether that happens by reducing wages in € or inflating their own currency makes little difference (assuming they don't start fixing themselves)
Saving == investing -> when I buy a couple of Apple stock, I don't make Apple export more or get them to build new products, all I do is hand cash to the former owner of these stocks
If productivity is higher than demand you either end up huge unemployment or a trade surplus
Spare me the 2% nonsense, European part of NATO would be more then strong enough to deter any "ideas" and most of the actual security risks are down to the US f###ing around in place the had no business in
Big (partly) state owned companies:
- DHL -> partly privatized postal service
- DB -> partly privatized railways
- VW -> 25% owned by LowerSaxoni for some rather complicated historic reasons
So even if that was the reason for German success (which it isn't), why not try to copy it instead of destroying it.
If you think Merkel and her government being less noisy than Trump is a sign of weakness, your in for a surprise, cos capitulating to the US would not only create a massive public backclash but also invite others to try something similar.
In Germany last year I asked some questions about reunification with the DDR, which from here appears to be nothing less than a political and economic miracle. I found those who I asked to be rather blasé about it. I know reunification wasn't without pain or consequences (some of them ongoing), but my conclusion overall is the German people simply expected their government to make it work. How different that is from the country we Americans live in today. So much of our government and politics is about the outright destruction of any concept of the common good for the purpose of gaining political advantage. And we have the right to complain about a nation that made the impossible look easy? Not in my book, we don't.
@IJ Reilly
Oh, rest assured there was plenty of talk about "rebuilding the wall ........ 5m higher" in WestGermany throughout the 90s and noone who has a basic clue would say it was or looked easy.
Oh, rest assured there was plenty of talk about "rebuilding the wall ........ 5m higher" in WestGermany throughout the 90s and noone who has a basic clue would say it was or looked easy.