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Trump’s Obsession With Tariffs Is A DISASTER For The Economy

Mac Slavo
June 13th, 2019
SHTFplan.com
Comments (26)

Either President Donald Trump has a deep misunderstanding about the trade policies that enhance an economy or he is deliberately trying to send the country into a recession.  Trump’s obsession with tariffs is proving disastrous in every important way.

The trade deficits are up, main street Americans and their businesses are paying billions to fund the tariffs, and farmers have rotting crops they can’t export to China. That doesn’t sound much like the utopian “booming” economy the mainstream media is selling us. Additionally, there are perhaps millions of Americans jobs that depend on imports and trade.

Yet Trump’s behavior continues to be odd surrounding his tariff obsession. Yesterday, President Trump bizarrely took a piece of paper out of his pocket, flashed it at reporters, and claimed it was the secret to an immigration deal with Mexico. Trump wouldn’t show it to reporters, saying that he couldn’t, because if he did, it would be analyzed. as if examining the details of any such agreement would somehow render it useless.

But a picture snapped by a Washington Post photographer appears to show some sort of agreement between the United States and its southern neighbor, though it remains unclear exactly what it entails. Trump claims the deal was a result of his tariff threat: “Without the tariffs, we would have had nothing,” he said according to a report by Reason.

When did taxing the American consumer become the answer to all politicians’ problems? Is there really nothing else Trump thinks he can do? He can’t possibly be so naive he believes foreign countries actually pay tariffs right? Don’t worry; those were rhetorical questions.

The Mexican government continues to insist that there is no secret component to an immigration agreement with the United States. And Trump’s acting chief of staff, Mick Mulvaney, said today that the public may never see the secret deal, according to CNBC.

Regardless of Trump’s reasons, he’s doing damage to an already bleeding economy. The tariff obsession is a bizarre and counterproductive one and should serve as a warning about the ways in which Trump’s deep misconceptions about trade continue to threaten the country’s economic health.  If he isn’t confused, he’s damaging the economy on purpose and we aren’t sure which of those is worse. It really can’t be anything else. This isn’t the “4D” chess or anything, it’s global trade and the most basic economic principles of supply and demand still apply.

“Without tariffs, we would be captive to every country,” Trump said during the call, “and we have been for years.” He went on to complain about the size of America’s trade deficit, saying, “We lose a fortune with virtually every country. They take advantage of us in every way possible, and the U.S. Chamber is right there with them.”

He portrayed tariffs not only as a way to bring other countries in line but as a tool for economic growth at the expense of foreign rivals. “We’ve picked up trillions of worth since I’ve been elected. China has lost many, many trillions of dollars. They’re way behind. They were going to catch us,” he said. And he essentially refused to accept that tariffs function as a tax on American consumers, because of the control that China’s government exercises over its economy.  –Reason

Trump’s approach to trade is delusional. He’s created a war inside his head that bears little relationship to the destructive reality he is forcing Americans to endure. Unfortunately, he doesn’t seem like he’s willing to admit that starting a trade war was a bad idea and an utter failure.

H/T [Reason]

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Author: Mac Slavo
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Date: June 13th, 2019
Website: www.SHTFplan.com

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26 Comments...

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  1. DWEEZIL THE WEASEL says:

    He may be delusional. But, the NAFTA and other “Free Trade” policies were no panacea. I would not get too worked up over this, given the latest events(a false flag) in the Persian Gulf. This corrupt, syphilitic country, which is run by the MIC and a very controlled MSM, is steering us towards war with the Iranians. Let’s hope, for the sake of our boys and girls over there, this does not happen.
    America went through this once before. The anti-war movement in this country was huge after September, 1939. FDR and his minions changed all that. The documentation is out there, if you are interested. History does not repeat itself, but it does rhyme(H/T to Mark Twain).

    • durangokidd says:

      Tariffs are taxes. Taxes are the policy by which DC manipulates consumer behavior. It’s why you receive a tax deduction for your mortgage payment; encouraging you to buy a house. The government wants you to buy a house.

      You do not have to pay taxes (read tariffs) on goods and services provided by other nations who produce the same product or service; or for those similar products made in America.

      Tariffs on Chinese goods are designed to stop you from buying products made in China. The Chinese economy is not reciprocal to American firms. They have Tariffs against US, require an American firm to have a Chinese Partner, and insist that American firms hand over their technology and trade secrets to those Chinese Partners (most of whom are CCP owned). They are also limiting capital flows and profit repatriation ALL of which are contrary to WTO Rules & Regulations and inclusion within the IMF.

      The following is a post I made the other day which is worth reposting:

      In other news, real news, Zero Hedge has a great article documenting what I have been telling this community for months; that the increase in the Trade Deficit post TRUMP TARIFFS was an attempt by wholesalers & retailers to take advantage of the PAUSE and load up with stock while the Chinese appeared to be negotiating in good faith. They weren’t.

      https://www.zerohedge.com/news/2019-06-12/trade-war-nightmare-causes-logistical-hell-los-angeles-ports

      I can’t wait until the Chinese crawl back on their hands & knees begging TRUMP to lift the TARIFFS, willing to sign the deal they originally negotiated. Better yet, they don’t and the house of cards they call an economy crashes under massive debt and leverage. Then 500 million Chinese take to the streets !!! LMFAO !!! 🙂

  2. repr sleepr says:

    I’ve got mixed emotions on the tariffs. Some are working and some ain’t. Just the talk of tarriffs made the Mexicans come around on the border control. With the Chinks, only time will tell. Hopefully that time will be advantageous for us.

  3. Anonymous says:

    Nice to be a rich guy making money in the stock market unlike all those blue collar people who lost their job when it was sent to Mexico or China.

    You want Schumpeter’s “creative destruction”? Maybe you should suffer the destruction. You should have the illegal aliens in your neighborhood – staying, not doing landscaping.

    This is economic warfare, and as long as China and our Fed can manipulate interest rates and currency values THERE IS NO FREE MARKET. Tariffs is just another and very minor distortion in an era of zero or NEGATIVE interest rates. I’d rather have good paying jobs here so we could afford to pay a little more for items rather than everyone be on welfare or disability here and not even be able to afford stuff from the dollar store.

    The key is not how much a dollar can buy, but how much a typical hour of LABOR can buy. If I have to work 2 hours in a factory to buy clothes, but two days at a restaurant, I’m better off with the factory even if the price tag is higher.

    So what if the Billionaires and you lose all their wealth, you can always #LearnToCode.

  4. Clown World says:

    All these years of political commentary, and you were still unfamiliar with this management style.

    “He’s created a war…”

    That’s his approach.

    “…the destructive reality he is forcing Americans to endure.”

    Both sides.

    Anywhere, there is moral equivalency or a balance of powers or a crossroads, there is a sort of traffic signal or an engineer. Where there is team vs. team, there are judges and a referee.

    They don’t sweat or sprain any tendons.

    Players don’t call the score.

    The harder you try, the more eager you are, the more they think they’ve got a live one.

    This works like ‘the apprentice’.

  5. Stuart says:

    Today’s hysterical installment of “The Sky is Falling” by Mac “Chicken Little” Slavo who understands absolutely nothing except click bait.

    “The Art of the Deal” – Trump wrote the book and he’s playing it perfectly. Keep your eye on the objective. With the Mexicans it’s about getting them to play ball on the border. With the Chinese it’s about industrial espionage. None of it is about “The Economy”.

  6. Capt Barty says:

    Before Trump’s “Art of the Deal,” there was Herb Cohen, who conducted negotiation seminars and wrote books on the subject. No doubt Mr. Trump attended one, though he likely was still in college when Mr. Cohen started. One of Mr. Cohen’s maxims in the seminars was: “If you do not have power, but you think you have power, you have power. If you have power, but do not think you have power, you do NOT have power.” That his seminars were called “Power Negotiation” should come as no surprise.

    I think President Trump is approaching the tariff issue somewhat wrongly. It looks to the outside to be vengeful, I’d rather simply play the game by their rules. “You say our goods are tariffed at X%, OK, your’s are tariffed at the same.” It’s amazing how upset and angry people can get when taking their own medicine. That’s where the power negotiating would come in. That, and a Serapi, for those who remember Cohen or his books.

    To be fair, I don’t know the fine details of the goods and percentages, and establishing a parity could be difficult: for example, they tariff our cars, but they don’t ship us cars to tariff. But, I think we can come up with a defensible formula, perhaps an average.

    Don’t go too far or unjustifiably tariff too much, remember “Smoot-Hawley.” But, I am very strongly supportive of the President putting America first, and not just making , and keeping us the suckers of the world.

  7. True Grit says:

    Lets have no barriers what so ever and no rules what so ever
    to any kind of trade shananegans cooked up by the Chinese and American retailers like Walmart, Home Depot, etc…
    Then we can close the rest of our factories and be totally dependent on China. Don’t worry, They’ll be kind and fair, They have our best interest at heart!
    And as long as we’re at it, lets open the border and bring on the mongrel hordes. More parasitical savages can only be good for our country.

  8. cranerigger says:

    Come on Mac, give the trade-tariffs a chance. They normally don’t work in two days. FAIR TRADE is the goal. China and other nations have taken advantage of the USA for decades – we finally have a President negotiating for American CITIZENS – don’t give up without a fight (Don’t give-up, PERIOD).

    The Congress-critters representing the USA for decades gave away the store. Now we need to set it right.

  9. Brian says:

    If the food prices (and availability) are affected by the tariffs and the flooding in the midwest and gasoline prices rise at the same time because of Iranian disruption of the oil supply, there are going to be a lot of American families who will really be hurting. Hope all of you are ready!

  10. The Deplorable Renegade says:

    This economy will eventually collapse with or without tariffs. I’m still stacking and hope everyone else is too.

  11. Navy Vet says:

    While we may pay some higher prices here and there, I honestly don’t see tariffs affecting me much. One thing that needs to be considered, which I believe Trump did, is who’s going to be hurt more in a tariff war.

    Clearly, China gets hurt a lot worse than USA does. 18% of China’s GDP is exports to the USA. Recent news reports are already commenting that China is heading into recession as a result of lower exports due to tariffs.

    Trump is right on the tariffs and in blowing up the TPP which was going screw us even worse than we already were being screwed. China is always whining about being a poor country during these types of negotiations. If they’re so “poor” how did their economy grow 10X from 2001 to 2015? By open dumping of major commodity products into USA markets, that’s how.

    Then, we have the idiots in Congress(both houses) and all of the Dimbocrat Presidential candidates SIDING WITH FOREIGN COUNTRIES in trade negotiations. Nice, absolutely just effg nice that future presidential hopefuls would back a FOREIGN COUNTRY over their own on trade, should they become President.

    So who would be the real traitor then?

  12. So. statistically, it’s hard to tell what effect tariffs are having. US industrial manufacturing shrank 0.7% last month after rising 0.6% the month before. China’s manufacturing output grew 5.3% last month down from 8.5% the month before. Sounds pretty good for China…not so much for US.

    How many decades has it been since US manufacturing output grew 5.3%? Are any of these statistics accurate? Do tariffs even affect the US consumer if China devalues the yuan and thus strengthens the FRN? It makes Chinese imports even cheaper…perhaps even cheaper than with the add on tariffs.

    But cheaper goods isn’t the point of this trade war is it? It’s supposed to bring jobs back here. If imports are steady to lower in price and the importer still makes a profit, and the customer doesn’t have to shell out more money, no jobs will come back…because there is no profit motive to invest all that capital to rebuild US manufacturing.

    It’s difficult to see how this will play out.

    • rellik says:

      JRS,
      USA manufacturing cannot grow because we
      have strangled ourselves with rules, regulations,
      unions, and any number of Democrat lawsuits.
      Our entire problem is Democrats. We would be the worlds
      superpower in everything were it not for the lead ball
      and chain of Democrat socialists in our society.
      Capitalism is not compassionate, but it is effective.
      It is better to lead with a carrot than to follow and
      beat with a whip.

  13. rellik says:

    Everybody needs to keep in mind that
    Congress is the only people that can pass
    Tariffs( a Tax). In cases of national security they authorized
    the executive branch to enact Tariffs, and Congress
    can withdraw that with a simple vote, literally in
    a matter of minutes.
    Smoot-Hawley Tariff Act literally crashed our economy in the 1930’s. Democrats always know what is best for you NOT!
    Taxes designed to manipulate behaviors are always BAD!
    Trump is legally using a tool he was given.
    The government has way too many “tools”

  14. Like the tax reliefs which he braggingly said were coming— and where did the tax reliefs go? To Fortune 500 companies, according to Paul Craig Roberts!

    According to PCR website, Fortune 500 companies got billions in tax REFUNDS (paid no taxes!) while the average citizen got a huge INCREASE in the amount of taxes we had to pay!

  15. Kevin2 says:

    “Protection of our own labor against the cheaper, ill-paid, half-fed, and pauper labor of Europe, is … a duty which the country owes to its own citizens.”
    Daniel Webster

    “The wealth … independence, and security of a Country, appear to be materially connected with the prosperity of manufactures. Every nation … ought to endeavor to possess within itself all the essentials of national supply. These compromise the means of subsistence, habitation, clothing, and defence.”
    Alexander Hamilton

    “Free trade results in our giving our money … our manufactures and our markets to other nations. … It will bring widespread discontent. It will revolutionize our values.”
    William McKinley

    “Open competition between high-paid American labor and poorly paid European labor will either drive out of existence American industry or lower American wages.”
    William McKinley

  16. Clown World says:

    The occasional nickle, here-and-there, is pretty harmless.

    But, we are stuck in such ruts with our trading partners, that we can never efficiently change gears, if you just want to go shopping somewhere else, on an industrial level. It’s simple, to write this, but they just can’t do it.

    There’s too much waste and downtime, to catch up, if you make these people mad, all the time.

    I encourage the reader to make use of whatever is easy and convenient, for you, but never trust these people with your life.

  17. rednek says:

    Nafta, TPP etc…all lopsided trade agreements that result in the siphoning of trillions from the U.S.. We’re $22 trillion in the hole at this point. We have to stop bleeding money at some point.
    Our “business partners” could give a damn. As we have seen, they will continue to behave in the manner which does them the most good. In other words, ignore our immigration, drug, and customs laws. As long as we fail to enforce our laws, we will be taken advantage of.
    Tariffs are only one part of the overall strategy. Short term pain to set up our economy for the long term. IMHO

  18. Old Guy says:

    Well it seems that Trumps Tariff threat worked. It brought the Mexican Government around to Trumps way of thinking before it even went into effect. Time for the author of this article to eat crow. And then again this site has been touting a economic collapse for a long time. The economic collapse articles where prevalent long before Trump even started running for President. It wasn’t if there would be a collapse but when? And now when there is a few indications of economic problems its suddenly all the fault of Trump and his Tariffs? Seems like you want to have your cake and eat it also? In short another entirely bullshit article.