• Welcome to DOSBODS

    Please consider creating a free account to be able to access all the features of the DOSBODS community. It only takes 20 seconds!

Sign in to follow this  
TheBlueCat

Trump, Tariffs, Comparative Advantage

Recommended Posts

So we now have a bunch of new trade tariffs in place and a trade war looks likely. This is a (rare) MSM article looking at the detailed likely impact of a particular one:

http://www.cbc.ca/news/politics/how-trump-wrote-a-cheque-for-600-million-to-canada-s-aluminum-producers-1.4686655

The reason I find it interesting is that 1) it's from a left wing source (the CBC is very much like the So-Called BBC), 2) it clearly demonstrates some basic economic principles and 3) it contradicts all those fucking idiots who seem to think that EU tariffs imposed on the UK after Brexit would somehow cause zero pain to the EU and automatically hurt us.

Share this post


Link to post
Share on other sites
7 minutes ago, satch said:

Mr Evil or Donald Trump as he is also known as wants to have a trade war and introduce nasty tariffs. Evil evil man ... he thinks it is unfair that the EU impose tariffs of 10% on cars from the USA but the USA only imposes tariff of 2% when BMW et al sell in USA. As Drunker and Tusk will point out he was only elected and not appointed and so has no right to make desicions such as these, evil evil man who has don't forget also reduced unemployement to an 18 year low in the USA, pure evil.

Why haven't you mentioned the horrible things he said about women ?

Share this post


Link to post
Share on other sites
48 minutes ago, satch said:

Mr Evil or Donald Trump as he is also known as wants to have a trade war and introduce nasty tariffs. Evil evil man ... he thinks it is unfair that the EU impose tariffs of 10% on cars from the USA but the USA only imposes tariff of 2% when BMW et al sell in USA. As Drunker and Tusk will point out he was only elected and not appointed and so has no right to make desicions such as these, evil evil man who has don't forget also reduced unemployement to an 18 year low in the USA, pure evil.

A masterful piece of sarcasm  

Share this post


Link to post
Share on other sites
56 minutes ago, satch said:

Mr Evil or Donald Trump as he is also known as wants to have a trade war and introduce nasty tariffs. Evil evil man ... he thinks it is unfair that the EU impose tariffs of 10% on cars from the USA but the USA only imposes tariff of 2% when BMW et al sell in USA. As Drunker and Tusk will point out he was only elected and not appointed and so has no right to make desicions such as these, evil evil man who has don't forget also reduced unemployement to an 18 year low in the USA, pure evil.

No argument with any of that - equal tariffs in both directions (preferably zero) is the way to go. The issue is - and this applies to dickheads like Trump as much as it applies to his equivalent on the left - that, due to compative advantage, they almost never have the effect that the people proposing them claim and, more often than not, backfire horribly. Adam Smith nailed this a long time back.

1 hour ago, Great Guy said:

TBH, I think Trump is right in putting tarriffs on Chinese steel. Why should American steel producers compete with Chinese steel producers that don't care about the environment?

It's the same in the EU. We bring in environmental taxes to make steel production greener. Chinese steel producers then undercut EU producers meaning we lose steel jobs and environmental pollution gets worse...

Somehow I doubt that environmental concerns are top of his mind!

Share this post


Link to post
Share on other sites
2 hours ago, satch said:

Mr Evil or Donald Trump as he is also known as wants to have a trade war and introduce nasty tariffs. Evil evil man ... he thinks it is unfair that the EU impose tariffs of 10% on cars from the USA but the USA only imposes tariff of 2% when BMW et al sell in USA. As Drunker and Tusk will point out he was only elected and not appointed and so has no right to make desicions such as these, evil evil man who has don't forget also reduced unemployement to an 18 year low in the USA, pure evil.

The reality is that EU ->US trade is mainly german cars, probably by a huge amount.

US spends most money on vacationing in europe.

And, as wider pount, germany has been getting a massive free ride on defense. Germany really takes the piss on nato spebding, and has done for over 25 years.

It wants to sell to the world but keep the money and let someone else pay for the police.

Share this post


Link to post
Share on other sites
Posted (edited)

I mentioned this on the Brexit thread. There is a delicious irony that most of those howling about Trumps tariffs in the UK are likely also  to be Remainers. Most don't seem to realise that the EU Customs Union is essentially a zone protected by tariffs designed to give member states a trade advantage over non members. If it was not there would be precious little point of being a member.  It also locks in certain trade advantages for countries like Germany who get to run massive trade surpluses both inside and outside the Eurozone by protecting their European markets while getting the rest of the EU to bat for them at the WTO. As most of the arguments for Brexit are predicated on the advantages of Free Trade then those who slag off Trump for imposing tariffs and then argue that Brussels is entitled to lock the U.K. out of European markets are being revealed to both hypocritical and logically incoherent. They can't have it both ways. If the EU is right to punish Britain by imposing tariffs on its imports then Trump is perfectly entitled to do the same thing to the EU. If Trump is wrong then the whole Eurozone tariff argument falls as well. 

As the UK runs a persistent trade deficit in goods it is probably in its interests to buy cheap whatever the source which is why we would be better off outside the EU.

Edited by Virgil Caine

Share this post


Link to post
Share on other sites
6 hours ago, satch said:

Mr Evil or Donald Trump as he is also known as wants to have a trade war and introduce nasty tariffs. Evil evil man ... he thinks it is unfair that the EU impose tariffs of 10% on cars from the USA but the USA only imposes tariff of 2% when BMW et al sell in USA. As Drunker and Tusk will point out he was only elected and not appointed and so has no right to make desicions such as these, evil evil man who has don't forget also reduced unemployement to an 18 year low in the USA, pure evil.

Yes, clearly Trump is a 'low information' President of the United States

Share this post


Link to post
Share on other sites
6 hours ago, Great Guy said:

TBH, I think Trump is right in putting tarriffs on Chinese steel.

My mechanical engineering colleagues complained a couple of years back about how poor quality Chinese steel was and hard it was to machine

Share this post


Link to post
Share on other sites
5 minutes ago, JackieO said:

My mechanical engineering colleagues complained a couple of years back about how poor quality Chinese steel was and hard it was to machine

The Japanese stuff was like that too back in the day. The problem was that they had very high import tariffs on steel but produced very little of their own (not much iron ore there) and relied a lot on recycled steel which, at least 30 years ago, was hard to produce to the same quality as stuff made from the raw ingredients. Another example of why tariffs almost never produce the intended effects.

Share this post


Link to post
Share on other sites
Posted (edited)

Just in case anyone is in any doubt about how tariffs on non  EU countries goods are at the heart of the single market the heavily pro EU FT sets it out clearly here

https://www.ft.com/content/1688d0e4-15ef-11e6-b197-a4af20d5575e

Worth noting that even the German media have pointed the general disparity between EU and US tariff levels with the former being more protectionist than the latter

https://global.handelsblatt.com/politics/trump-may-point-eu-tariffs-ifo-says-899083

Despite all the threats and MSM articles you can guarantee that the EU is terrified of a trade with the US where it is likely to be the big loser.

Edited by Virgil Caine

Share this post


Link to post
Share on other sites
18 hours ago, JackieO said:

My mechanical engineering colleagues complained a couple of years back about how poor quality Chinese steel was and hard it was to machine

 I just done what would normally be a simple cheap job but what was supposed to be nothing more than carbon/mild steel section required cobalt cutting tools at a huge cost which i worked out it was costing over £35 to drill each 26mm hole and there were well over a 100 of them ,this was charged back to the supplier of the fabrication along with the labour costs as it was rectifying their fuck up ( they were 16mm holes) ...i suspect they will be doing a bit of QA on the steel they buy in the future 

Share this post


Link to post
Share on other sites
10 hours ago, Virgil Caine said:

Just in case anyone is in any doubt about how tariffs on non  EU countries goods are at the heart of the single market the heavily pro EU FT sets it out clearly here

https://www.ft.com/content/1688d0e4-15ef-11e6-b197-a4af20d5575e

Worth noting that even the German media have pointed the general disparity between EU and US tariff levels with the former being more protectionist than the latter

https://global.handelsblatt.com/politics/trump-may-point-eu-tariffs-ifo-says-899083

Despite all the threats and MSM articles you can guarantee that the EU is terrified of a trade with the US where it is likely to be the big loser.

The Germans will be shiting themselves and if Brexit was being negotiated properly the Germans would retreating faster than an Italian tank

Share this post


Link to post
Share on other sites
24 minutes ago, Long time lurking said:

The Germans will be shiting themselves and if Brexit was being negotiated properly the Germans would retreating faster than an Italian tank

It would be really interesting to see a detailed analysis by sector. E.g. the car manufacturers may or may not be concerned as they  have a few options as to where to produce that won’t be too badly impacted. 

Share this post


Link to post
Share on other sites
Posted (edited)

The Ricardo comparative advantage stuff is mostly self serving neo liberal cr*p.  It was hypothesised many centuries ago in a different and simpier world.  But even then, Ricardo did not expect the UK to cede both wool and what ever else it was to Portugal despite their alledged comparative advantage.  And the US developed very nicely sans international trade.  The idea has some merit but is only slavishly and simplisticaly followed in a slighty peverse way by self serving neo liberals.

BTW, a large chunk of the US trade deficit is US firms importing offshored production to an increasingly impoverished consumer base, impoverished because.....they lost their well paid jobs due to offshoring!  Sure, they all retrain and take new industry jobs, or so the false narrative goes.  Sure, that's working well innit!

More of the b'tardisation of economics by the self servers.

Edited by No Duff
It was cloth (wool) and wine.

Share this post


Link to post
Share on other sites
On 03/06/2018 at 04:01, Virgil Caine said:

Just in case anyone is in any doubt about how tariffs on non  EU countries goods are at the heart of the single market the heavily pro EU FT sets it out clearly here

https://www.ft.com/content/1688d0e4-15ef-11e6-b197-a4af20d5575e

Worth noting that even the German media have pointed the general disparity between EU and US tariff levels with the former being more protectionist than the latter

https://global.handelsblatt.com/politics/trump-may-point-eu-tariffs-ifo-says-899083

Despite all the threats and MSM articles you can guarantee that the EU is terrified of a trade with the US where it is likely to be the big loser.

I wonder why no US President did this earlier? Why would you not want your country to have the best trade policies to protect your own people?

Share this post


Link to post
Share on other sites
2 minutes ago, Game_of_Homes said:

I wonder why no US President did this earlier? Why would you not want your country to have the best trade policies to protect your own people?

Because they are not in the business of protecting their own people would be my guess. Rather, they are in the business of ensuring that wealth trickles up the globalist elite. 

Trump is in a completely different camp and I would think views his role as president similar to what you seem to do.  That’s why they are all oot to get him.  They are running scared.  Terrified. 

As Gandi stated,

First they ignore you,

then they laugh at you,

then they fight you,

then you win.

we are at the fight stage I think....
 

 

Share this post


Link to post
Share on other sites
25 minutes ago, One percent said:

Because they are not in the business of protecting their own people would be my guess. Rather, they are in the business of ensuring that wealth trickles up the globalist elite. 

Trump is in a completely different camp and I would think views his role as president similar to what you seem to do.  That’s why they are all oot to get him.  They are running scared.  Terrified. 

As Gandi stated,

First they ignore you,

then they laugh at you,

then they fight you,

then you win.

we are at the fight stage I think....
 

 

I agree. It's very Orwellian that Trump is seen as the personification of evil even though he is more like Emmanuel Goldstein and how the populations of the West have been brainwashed into thinking things like patriotism, protectionism and a general sense of identity and culture are bad (but only for certain demographics) and the whole structure of Western Enlightenment values are being eroded. I mean, what was the point of all those wars, all those deaths if all this progress is going to evaporate in the space of a few years. It's so depressing.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.