Posts Tagged → tariff
Trump storms the Middle East
Awful lot of hand-wringing and anxiety over President Trump’s un-orthodox approach to the Middle East this week. Understandably. A lot is at risk if the president fails, and he is jumping head-first into a region that is already steeped in failure.
From the Sunna-Shia conflict that most recently showed up in Syria, where Sunni jihadists massacred thousands of Alawite (Shi’ite/Shia) men, women, and children, to the perilous position of all minorities (Jews, Christians, Yazidis, Druze, Coptic Christians) in a now overwhelmingly violent Islamic area, it just seems like the Middle East is a gigantic minefield where no matter where a person steps, the likelihood is high that an explosion will follow.
Into this minefield runs head-first our president, Donald Trump. His approach is probably completely different than anything done before by the West. It appears that Trump is forcefully grabbing everyone there into one gigantic bear hug, full of economic prosperity and political legitimacy. So long as they all participate on his terms.
Judging by the openly amazed smiles of the Saudi, Qatari, and Syrian leaders, as they stand shoulder to shoulder with President Trump, they are indeed surprised and also willing to be hugged. It remains to be seen if they truly understand what Trump wants from them, or if they think they can outwit him and get what they want, without having to give.
Yes, there is real risk with Trump’s approach, but if nothing is risked, nothing is gained. Qatar is funding a great deal of the pro-terrorism unrest on American college campuses right now, as Qatar has also been the source of most Sunni-oriented terrorism around the planet. Home to Islamic propaganda outlet Al-Jazeera and Hamas leaders living in luxury, Qatar has never been a huge friend of the West, but rather an antagonist who has used the West’s openness against it. So, accepting an airplane from Qatar to serve as a government-owned makeshift Air Force One, as Trump has done, and standing with the emir of Qatar as chums, has blurry optics, let alone the probability the plane is loaded with Chinese spying devices that will undermine American security.
But…what if Qatar can be turned from its evil ways? Huuuuge win for world peace!
And Trump trusts American security personnel to sweep the Qatari Trojan Horse gift plane for spy devices, of course, and any that are found will probably be held quietly in reserve, in the event that Trump needs to reverse course with Qatar. Which is a real possibility, as Trump’s tariff negotiations have revealed: Today you are in like flint, tomorrow you are out in the cold, but the following day you are allowed back in the house because you did the right thing. Thus far, Trump has masterfully played tariff and international trade policy like a maestro conducting a symphony orchestra.
Let’s hope Trump can do the same magic in the Middle East, because recognizing as legitimate the bloodthirsty, murderous jihadis in Syria (who most recently axe murdered a bunch of Druze), and negotiating a doomed-from-the-start nuclear deal with ever-lying Iran, carries enormous risk, as does having all kinds of separate American relationships with the Saudis et al that do not include Israel. If Israel sees Iran gearing up for nuclear blackmail or all-out war, then Israel will have no choice but to strike hard.
So, it appears that suddenly Israel is the wild card here, not the evil nuke-happy Iran or jihadist Syria or terrorism-enabling Qatar. And yet, everyone knows Trump is already in like flint with Israel….
What a strange pattern we have here, as President Trump weaves a creative new web to capture and finally hold stable the most difficult and unstable region on the planet. Let’s hope he is successful, and that a Pax Trumpica can finally happen.
Fair trade, not free trade
When I ran for Congress (at that time the PA 10th inhabited by Democrat Tim Holden, which included about all of Schuylkill County and parts or all of Berks, Lebanon, Dauphin and Perry counties) in 2009-2010, I remembered and repeated a phrase from my long ago 1980s political activism days in Centre County – Fair trade, not free trade.
Despite being fifteen years ago, this phrase caught on with our voter audiences. They really liked it, and many voters I met while campaigning had personal stories about their family’s various jobs in then-shuttered factories. And I was reminded of watching a high tech glass and industrial mirror factory close up shop in State College, PA, around 2000. It was the old Corning branch there on the Benner Pike. Literally sat there and watched the workers carefully, lovingly package up their machinery for its trip to the “new” factory in China. Some of the workers went over to train their Chinese counterparts, before returning to State College without a job.
Funny thing that President Trump’s tariff policy amounts to this exact summation of the more or less running bank account that every responsible nation keeps with all other trading partners. The fact that only most nations are tariffing American made goods at high rates, while enjoying very low tariffs on their products imported into America, is a sign of what ails us Americans: We think we can give give and give away everything we have, and we are too big to fail from it all. Which is nonsense.
Interestingly, we see the same argument about illegal immigration and endless government spending: No limits, America must take and absorb all of the costs that the world places on us…Everything is “free free free” except, of course, it isn’t free. These policies come with huge costs to Americans.
Free trade, as in giving away our trade imbalances for free, which enriches everyone else and impoverishes Americans, is a sign that our policy makers and indeed our own voters falsely believed that America is such a huge fountain of bounty and wealth that it can endlessly sustain this. What a silly and dangerous fantasy.
Sending our factory jobs, indeed our actual factories with all of their equipment and machinery, abroad to be re-born in China, Vietnam, India and elsewhere was nuts. It sent our means of production, our workers, our jobs, and our money out of America. All America got in return was maybe cheaper and junkier versions of what we had once made here, at a high quality. And yet this “free trade” thing picked up steam as big American corporations and their pet politicians began to take on a global view of trade. No longer were companies based in Delaware “American.” Rather, many of these companies’ senior leaders considered them to be global citizens that just happened to find a perch in America.
This off-shoring of everything America makes, grows, produces went on unchecked for a good thirty years, until everyone began to notice the downside, the cost. Just about every East Coast and Mid West state now has its own “rust belt” area. Areas filled with hulking, empty brick buildings and over-grown parking lots next to rivers and highways tell the sad tale of America’s economic downfall, and our nearing ruin.
Sure, we had a lot of government spending in the past twenty years to temporarily make up for the job losses, the depressed wages, the looming home foreclosures. But that spending is unsustainable. It is “robbing Peter to pay Paul.” It is simply printing Dollars for the sake of printing them. Less and less stands behind them. And yet someone standing way back there in the background was making a ton of money off of this screwy policy, while the rest of us Americans lost from it.
And so now we have a bold and very natural pro-America policy, the equalization of tariffs, making trade fair, not free, and the whole world is suddenly going upside down. My 401(k)! My dog’s retirement account! Oh my God, what will happen?
Folks, relax. Do a bong hit or have a glass of red wine. Our American world is not only not going to end, it is going to return to our glory days. Yes, it takes time, it will take time, so don’t be a bunch of prissy little Gen Z weenies demanding immediate gratification. America is worth fighting for, and these dueling tariffs are the opening salvo. Round One.
You know what is kind of oddly funny about that Fair trade, not free trade slogan? As apt as it is right now, I got that from some 1980s Centre County union workers, which trade or factory or coal mine they were in, I no longer recall. But they were right. And Trump is right. And we Americans are all aligned together on this to Make America’s Economy Great Again…
All together now, breeeaaathe…
No pain, no gain
The old gym motto “No Pain, No Gain” applies to the much-needed economic shakeup the Trump Administration is bringing to the entire planet. If we Americans do not put up with a little temporary pain and necessary readjustment now, for our own good, then we will enjoy no huge gain later on. It takes work to then earn and enjoy resulting benefits.
President Trump’s promise to American citizens was that he would return us to glory days, a golden age, which we richly deserve. Trump is correct that America has been the world’s piggy bank for decades, due to the huge tariff and trade imbalance. We should add that being the world’s piggy bank is an unsustainable and unfair arrangement paid for by the long forgotten American taxpayers, who see very few benefits in return for handing over their hard-earned cash to every Tom, Dick and Harry the American bureaucracy could dream up.
As we have learned over the past eight weeks from the Department of Government Efficiency (DOGE), trillions of American taxpayer dollars have been illegally mis-spent on millions of dubious schemes, ideas, organizations, and fantasies, many of which directly aimed at harming the United States. American taxpayers have been funding their own sworn enemies through agencies like USAID, DHS, EPA, HHS, and the Department of Education.
In other words, domestic enemies here in America were running the federal government, and using our tax money to damage and destroy America. This egregious situation is only in addition to the lopsided international tariff arrangement that has grown out of control since about 1920.
The tariff situation is egregious by itself. All kinds of countries we Americans think of as “allies” have had heavy tariffs placed on importing American food and manufactured products, including milk and dairy, steel, etc. Many of these countries’ governments paid what minimal tariffs that the USA had in turn on products being imported into America, in effect buoying up their own private businesses.
America did not do that for our own businesses, and in fact America has had very low to no tariffs on most imports. And now after essentially handing over our own wealth and manufacturing sectors to foreigners for decades, we are tired of being the economic piggy bank or punching bag or host body for all of these takey-takey people around the world. It is hard to understand why Americans, particularly working and taxpaying Americans, support this large imbalance and wealth transfer from America to the world.
And yet, as we see, plenty of working Americans are arguing against tariff parity, and are setting fire to Tesla cars and dealerships as a form of protest against DOGE finding and eliminating waste, fraud, and abuse of taxpayer money. Do you have to be mentally ill to belong to that one political party? Do you have to be self destructive to be a voting member of that one political party?
Do you have to hate America, Americans, the rule of law, and everything great about America to belong to that one political party?
Why would any normal American belong to that one political party?
Just as DOGE is causing Americans to take a long hard look at federal government mismanagement, Trump’s tariff parity is going to cause a shake-up in our international trade relationships, no doubt. It is going to cause some re-arrangements of pricing and products we are used to having easily available to us. For example, cheap Chinese crap on Amazon is probably not going to be as cheap any longer. And yesterday the Princess of Patience and I went to look at a new car for her, and we see how the new tariff parity might effect car prices. We learned that those foreign-brand vehicles already ordered and in the pipeline are not subject to tariffs (our family is positively prejudicial in favor of Toyota vehicles).
Of course, foreign brand vehicles made here in America are not subject to tariffs, either, and many Toyota cars and trucks are made in America.
Long and short of this subject is give these policy changes time to work. Already America is seeing immediate positive responses from many foreign trading partners, who are lowering their own tariffs because they know that their own industries cannot afford to absorb Trump’s tariffs. They will lose their export markets if they lose American buyers. So just be patient, remember that this is all being done for your own good and your own bank account, and know that it will work out well.
Putting up with these changes is like making deposits into your bank account. You might feel like you are missing opportunities to party with your money in the short term, but in the longer term you will be very happy.
Trump’s America-First Economy Throws Beautiful Curveball to Wall Street
Trade wars were supposed to be a thing of the past, as America had settled into a long, slow decline and eventual death at the hands of our erstwhile trading “partners,” who had been sucking at the USA teat for fifty years. America underwrote the settlement of World War II for Europe and Japan, and suffered as a result. But we thought we were too big to fail, and so we persisted.
And for those of more modern thoughts and memories, recall that for eight years Obama had placed both of his hands on the foreign side of the trade scale in an attempt to accelerate this decline. That eight year stagnant situation, combined with explosive growth in government power and conversely diminished citizen power, while shipping our factories abroad with new rust belt towns popping up all over America was the “new normal.”
And why not end America’s supremacy like this? Under both major political parties America’s trade imbalances were so egregiously bad, so bad for American citizens, for so long, because everyone else was gaining. Officially buoyed up by post-WWII economic theory and political economy theory that placed great value on some vague, never-defined world-wide “stability,” all underwritten by Americans. In funding that stability through sacrifice of our national interest, the theory went, the world was a safer, better place. America was sharing its wealth, buying peace, by keeping everyone else busy making money. Well, let’s be honest here: America’s workers were shifting their wealth to China, and Mexico, and India, and Europe, and Canada, while Wall Street made money no matter what. Wall Street hedge funds betting on and therefore for the failure of American businesses, against American interests, for the misspending of our tax dollars, are the classic example of this bizarre arrangement.
And around this asymmetrical arrangement developed asymmetrical ways of analyzing, tracking, predicting, and valuing economic activity. Like the DOW and other Wall Street measures of economic health. They have been tracking signs of a stable American decline, a drip drip drip bloodletting, not true growth, but rather how much tax money can be wrung or coerced from The People and conveyed to big businesses, not measuring actual value created from investment in our people and their jobs, but rather value on paper or digital.
And then along comes President Trump and his America-first economy, which at its core is the valuation and promotion of you, me and every other American citizen.
By demanding that America simply have equal trade with everyone else, and that it cease bleeding for the world’s benefit, and that we get as much coming in as we have going out or some approximation of that natural policy, President Trump has up-ended 75 years of screwy policy and screwy measures of success. It is that simple, and yet it is such a beautiful curve ball thrown to Wall Street.
Just look at how the tariffs on China have rattled Wall Street’s skewed measures of success, and stability. By America suddenly succeeding in the simplest way, and you and I having more opportunity, more money, Wall Street actually says our economy is down. Well, no, Wall Street, we the people are doing better, even if you are not. And isn’t it interesting that Wall Street was doing fantastic when Americans were degraded and doing poorly…
There’s an old saying that you’ll never beat the Irish, and in turn, you know you can’t beat Yankee ingenuity or will power, either. Americans will never be defeated, unless we decide to defeat ourselves. We came close, oh yes, we almost committed national suicide. But President Trump has shown us a better way, a way of national life.
It is a new day in America, and new beginning, Wall Street be damned.
Red oak and rain: Taking a strong economy for now while America fights for an even better future
Our present tariff battle with communist China has some personal pain associated with it, but I and everyone in business I deal with say we are ready and willing to put up with it for the long term betterment of America.
“I am just sitting here watching the rain come down,” says ‘D’, a young forester I have worked with for almost twenty years.
A super hard worker, risk taker, and fourth generation forester\logger (he is the first in his family to have a college degree, and in fact he has a Masters in Forestry), ‘D’ has a young family to feed and a great deal of investment in time, equipment, and standing timber that he cannot do anything with, or earn money with, so long as it rains.
With incessant rain like we had throughout 2018 and now well into 2019, most forestry operations stop. Marking timber on steep mountain sides, building roads into timber, cutting, skidding, and hauling timber just is not safe or environmentally possible in rain. Then, as a result, the sawmills slow down. They cannot get the trees they need to make the hardwood lumber products so much of America and the world require for flooring, cabinetry, moulding, doors, tables, furniture, etc.
But the rain is only part of the pressure on the timber industry.
Almost half of Pennsylvania’s hardwood timber economy is comprised of the red oak tree, which grows a beautiful wood used around the world. Until the tariff spat began last year, China was the primary destination for almost all of Pennsylvania’s red oak. China took our exported red oak logs and manufactured all kinds of wood products that they then sold back to American companies. When the tariffs started to bite in 2018, demand for red oak logs began to slow, because Chinese companies could not afford to compete on that new level playing field. Their own tariffs on manufactured American goods had protected them from competition, and so with tariffs on their products, their own manufacturing slowed down, and their decreased need for raw materials followed. A year later, the demand for red oak lumber has nearly died. Spectacular high quality red oak trees, that six months ago were highly sought after in a fiercely competitive free market, are now being turned into railroad ties and pallet wood (some wood workers specialize in making beautiful furniture from homely oak pallets; well, guys, get ready for a whole lot of very nice red oak pallets to become available).
Standing red oak trees have lost over half their value since this time last year, and as a result, roughly a third of Pennsylvania’s powerful hardwood lumber industry is at a stand-still, with landowners, foresters, loggers, and sawmills trying to figure out how to make up that lost productive time, and lost revenue, and to find another tree species to take the place of the red oak.
Back to the rain… the forest products industry can weather this storm, as well as the tariff tiff with China.
“It’s for the best, for a better America, a better economic future for all of us” says Mike, a heavy equipment operator from Renovo, Pennsylvania, to me this morning, as he finally found time to discuss a timber project we have together, and the China tariff effects on it.
Mike, too, is stalled out temporarily by the non-stop rains, and he is also bitten by the temporarily slow red oak market.
“It hurts, but we needed to do these tariffs,” says Mike.
“It’s sacrifice and pain now, so that America will have an even better economy in the future,” says ‘D’.
I feel the same way. Pain and sacrifice, risk taking and hard work, all for a better future for us and our children. We will all be creative and find ways to make a living; after all, overall the economy is very strong.
Carry on, Mister President. We understand what you are doing and why you are doing it. The tariffs hurt, but we support you. It is about damned time that someone in Washington, DC, gave a crap about our country and we people who labor out of sight in flyover country.
Logger “Pete” takes a breakfast break on his log landing. A tough, super hard working little Irishman from central Pennsylvania, it’s Americans like Pete who keep our economy going from the ground up