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1. President Donald Trump’s so-called “trade war.”
Many call the American effort to obtain either tariff parity or a reduction in the roughly $1 trillion trade deficit and 50 years of consecutive trade deficits a “trade war.” But then what do they call the policies of the past half-century by Europe, Asia, China, and others to ensure asymmetrical tariffs, pseudo-health and security trade restrictions, and large surpluses?
A trade peace? Trade fairness?
2. Do nations prefer surpluses or deficits?
Why do most nations prefer trade surpluses and protective tariffs?
Are Europe, Asia, China, and others stupid? Are they suicidal in continuing their trade surpluses and protective or asymmetrical tariffs?
Is the United States uniquely brilliant in maintaining a half-century of cumulative trade deficits? Do Americans alone discover the advantages of a $1 trillion annual trade deficit and small or nonexistent tariffs?
Why don’t America’s trading partners prefer deficits like ours — given we supposedly believe they are either advantageous or perhaps irrelevant?
3. Would our trade partners prefer to trade places with us?
Would our trade partners prefer to have America’s supposed benefits of a $1-trillion trade deficit? Would the United States then “suffer” like they do by running up $200 billion annual surpluses?
4. What if wages went up at the rate of the stock market?
What would now be the reaction of the stock market if over the last decade wages had increased at the rate of stocks — and the stocks at the rate of wages?
5. Is Wall Street’s panic based on what might happen — Or what is happening?
Is Wall Street’s meltdown a fear of what might happen in the future? Or is it reacting to March’s latest jobs report that there were 93,000 more jobs created than predicted? Was the Wall Street panic predicated on reports of much lower oil prices? Did the furor arise over the March inflation report that the annualized inflation rate dipped to 2.6% per year?
6. Is the frenzy caused by the Trump economic agenda?
Is Wall Street’s worry that Trump’s impending tax cuts, more deregulation, greater budget cuts, and continued efforts to eliminate budget deficits and reduce national debt will stall economic growth?
7. What about North American neighbors?
If the U.S. was running a $63 billion-plus trade surplus with Canada, refusing to meet its NATO requirements to spend 2 percent of GDP on defense, and instead spent only 1.37%, would Canada become concerned?
If Mexico were running a $171 billion trade deficit with the U.S., if Americans in Mexico were sending over $60 billion per year out of Mexico to the U.S., and if American drug dealers were making $20 billion by selling fentanyl and opioids to Mexico, would Mexico be angry?
8. Is the Trump agenda bad economic news?
Is the current panic over tariffs amplified by Trump’s other policies?
Is the sudden end of 10,000 illegal entries a day bothering Wall Street?
Are the media furious that the Red Sea is suddenly navigable again, the Houthis in Yemen curtailing their attacks?
Is the outrage due to the targeting of approximately $200 billion in budget cuts or plans to shave off $500 billion from the annual budget? Does the conundrum arise because Trump is sanctioning Iran, unapologetically supporting Israel, and seeking an end to the Ukraine War?
9. Was the Biden record preferable?
Should Trump try to match former President Joe Biden’s $7 trillion addition to the national debt? Should he return to allowing 12 million illegal aliens into the country? Was the 2021 Afghanistan pullout a good model? Is Wall Street worried that Trump may copy the Biden New Green Deal, his electric vehicle mandates, and more green regulations?
10. Why the negotiations and why now?
Why are 70 countries now wishing to negotiate tariffs with America either down to zero or reciprocally to the same rate as ours?
Is that a good thing? If so, why did our trade partners not wish to lower their trade barriers far earlier?
Did they suddenly and spontaneously decide they were acting unfairly and, on their own prompt, now want to make amends?
What’s next?
If there soon is a rush of nations to cut a deal with the U.S. and not to be left out of the American market, will there follow another hysterical Wall Street spasm — but not to sell, but instead to buy stocks at bargain prices?
Trump. He has the whole world reacting to him instead of opposing him. They want to oppose him but just can’t figure out how. They’re all dancing like puppets. The guy says or does this or that and everybody starts jigging around.
I bet he sits in the White House laughing to himself a lot.
He knows all these countries want and need access to the big American market. They also know he’s serious that if they don’t get onboard they’ll be cut out. For them that can’t happen. So he pressures and they will respond, argue, dispute, negotiate but in the end an agreement will be made that will be better than before.
Here in Canada we were one of only two countries to actually place tariffs in response, the other being China. How stupid. So many here are anti-American and think we are superior morally, politically and culturally than Americans and would rather confront than look at reality. The reality is that something like 85% of our exports are to the USA, conveniently right next door. If we get shut out of the American market we are dead, dead as a doornail. But we have things the USA needs and so we can talk. But we have to talk, not demand. We are the weak sister. But being next door we are in an advantageous position that any other country would love to be in. Trump knows this. But while other countries line up to talk, we are at the end of the line, when we should have been first.
A strong America in economy, military, politics is in the best interests of Canada. But most people I know here don’t think that way. Am I the stupid one?
The tariffs on your agricultural products are huge. But like you noted, a country should look after itself. Nobody else will. 🙂
“If we get shut out of the American market we are dead, dead as a doornail. But we have things the USA needs and so we can talk.”
The U.S. has been blessed with natural resources. But we stupidly stopped making things. We need to bring back manufacturing and eliminate foreign dependence upon everyone – including Canada.
Eggs have gotten cheaper and we don’t need Canadian cheese, chicken or bacon that’s ACTUALLY HAM – but it is good on pizzas.
Thanks KH !!! I don’t know if you remember but H. Ross Perot warned us about all these things in the 1990s I think it was. I didn’t know anything about him but I had a neighbor who was enthusiastic about him and told me about him.
He probably would’ve been a good President. He was a businessman like Trump. Both of them are very straightforward and logical.
Some things we have that would be harder to replicate would be all the electricity the northeast states get. Also Canada provides 20% of what oil the USA imports and this oil is sent to USA refineries that are specifically designed to take that grade of oil. Replacing that might not be easy. We also sell it at a reduced rate. So these two things are important to Trump’s policy of lowering energy prices. And it’s no doubt easier to continue with this trade than it would be to replace it internally, so why screw with a good thing.
Then there are things like rare earth elements. We need to coordinate to get mining and processing done in NA, not just China. I know of several good deposits we have that need development, as I discovered one of them. I was actually thinking of writing Trump during his last term to suggest he or the USA buy one of the easiest to access and that could produce for 50 to 100 years. There is some sort of coordination in these critical elements between the countries but nothing seems to be working fast enough. Governments!!
And Canada also has lots of other critical elements, lots of wood and fish, other farm products. But our protectionism is not helpful overall. The entire country gets expensive milk and dairy to basically support the Quebec dairy industry. The Autopac meant we subsidized high paying jobs and more local taxes in southern Ontario only. Everyone else had to pay more for a car than they should have. So our trade agreements don’t always serve everyone, in fact they screw most of the country regionally.
But we are right next door. That is important. Canada needs to negotiate now. Every time something like this happens people cry we must diversify our trade, but we never do, as the USA market is the biggest and it’s right next door, and the one everyone wants access to. we’ve always had good access. Don’t eff it up!.
Some douchebag politician already threatened to withhold electricity from America. How did that work out? WE DON”T NEED IT. We’re wasting our money on it. We can produce our own.
And Oil? No country on the planet has more than America.
Rare Earth elements? Again, America is number one.
Lots of wood and fish? Less than the USA. You do have more worthless tundra and frozen wastelands, though.
But you are a reasonable guy and America and Canada are neighbors with a lot more in common than America and Mexico.
Cheers.
You’re not, but we have plenty of them that I fear will re elect the Liberals. I sure hope I’m wrong.
I’m sure there are MANY Canadians who would love to be CITIZENS of Our 51st State and get out from under the COMMUNISTS entrenched there! Hopefully everyone sees that the IMBALANCE cannot and WILL NOT go on! Canada is suffering from their inept/insane leadership – it didn’t improve with the latest change!!
Trump was a buffoon (in the noble sense of the word) in another life.
There is a genius in his mind.
A Tariff on China and UN/CFR/Globalists
Trump and the Trumpists must be the bad guys, the “neo-Platonists” are the good guys, and they’re going to bring us the ideal city on earth…
Better than Jerusalem!
HA HA HA!
They’re disconnected even from anything that comes from Mesopotamia. Just to tell you.
They’re nothing but the ghosts of their own utopias.
Plato was right. Just look a at how stupid D-Bag American voters are and who they elect.
I see we have a stupid D-Bag here.
“Free Trade” is a religion for economists today. It requires total subservience to the masters. The various global and economic variables throughout the world make it impossible to have a one size fits all situation. Any variance releases shrieking and screaming all over but not independent thought. Independent thought might unveil the fact that the stock market is no different than Las Vegas.
Also the first thing trotted out is “Smoot Hawley” tariffs created the great depression. The depression began with the ’29 crash. Smoot was in ’32 I believe. Ouch! Lastly the “roaring 20’s” was a great economic time. It had a large tariff but things were shipping out to Europe continually.
That’s a good one. Its Mercantilism masquerading as Free Trade. They have all kinds of subtle and clever Mercantilist tricks embedded In their economies that they’ve been inserting for decades.. Because of that there is no practical alternative now to putting tariffs on them.
I should have thought of that a long time ago. They never believed in free trade. They just cloaked their Mercantilist polices in a disguise of Free Trade.
Unilateral free trade is a pipe dream. It has to be bilateral. That’s what Trump is trying to accomplish.
The “trade deficit” – as the accountants will point out – is only half of a financial transaction.
The other half is the purchase of treasuries or some other American asset.
Hence – according to the pencil sharpeners –
the “trade deficit” is simply a function of economic efficiency which transfers the balance of “stuff” transferred to the “trade surplus” partner while the “trade surplus” partner becomes saddled and/or blessed with financial assets that were traded away for the “stuff.”
Now if this “balancing” act sounds like Bravo Sierra – and you drive through American cities and look at the rusting shells of what was once the planet’s most powerful industrial machine ever created …
Yeah, you’re right.
I seriously have not heard a single wonk hit the nail on the head. They cannot describe what the trade deficit actually represents, how it was created, or what it costs.
To the extent any of the wonks think it has something to do with reality – it’s always blamed on automation and/or the subhuman deficiencies of Americans.
Indeed it’s almost bipartisan. The Left, of course, makes it clear that the subhumans are only poor white trailer trash (i.e. – my people before I left their tribe and tried being an engineer),
but the Establishment Right is hardly better. They suggest we’re all subhumans – not just Whitey. Oh, how noble.
The “trade deficit” is quite real: It means we lose manufacturing jobs, but replacing Americans with Chinese is only the bottom of the pyramid.
By destroying the widget makers, all of the opportunities and businesses (and much much more) disappear.
This is why most American manufacturing today only exists because of national security and government contracts. Oh, yes, the vast majority of ‘widget’ makers are not directed tied to these two elements, but – my own home town is an excellent example – but for national security and/or government – nothing would happen here.
Seriously – the whole county depends on the secret defense contractor at the secret base doing secret stuff. Without it, nothing would be here.
That’s not a healthy economy. It’s not a result of “free trade.”