We can now see clearly to the outcome of Trump's Tariffs.
- Thread starter piezoe
- Start date
If you have any ecosystem, and you introduce a foreign species that has a 1 percent advantage of the others in it's niche, in a hundred years all competitors will be extinct. The US has to protect itself from unfair trade practices. Tariffs are a tool having been used throughout human history with great success.
Maybe Paul Tudor Jones... will wake a few people up.
This is what he wrote in 2010.
I note that protectionism worked for the US and it has worked gangbusters for China.
I also not as long as we have this peg in place the results will be distorted in China's favor and we will continue to lose our industries to their predatory practices.
https://dealbreaker.com/2010/10/ten...jones-had-an-acute-case-of-plantar-fasciitis/
“The pain you feel in your left foot is just the symptom,” Pete said. “If you treat it symptomatically and ignore the structural issue, you will never solve the problem.” I did not immediately grasp the full meaning of his words, but I followed his prescription,and in a few days the pain was gone. Some time later I realized that those words were probably the wisest I have ever heard from any human being, and that they apply to more than just the human body.
...
That so many Americans continue to accept this suppression of a variety of exchange rates against the dollar is probably a function of the fact that for so long this suppression provided benefits such as cheap goods and cheap credit. In addition, for a while, manufacturing jobs seemed to be replaced by jobs in the service economy and construction industry without any economic disruption or any rise in the unemployment rate. However, the bursting of the credit bubble exposed the true structural decay that had occurred in the US economy. But, like zombies, many Americans still cling to the naive belief that we can return to the good times of the 90s and the earlier part of this decade, unable or unwilling to recognize that those high times were a debt-driven anomaly.
This delusion is fueled by a myriad of financial pundits who warn about the dangers of disrupting free trade. They are quick to point out that the Ryan Bill is contrary to rules of the World Trade Organization. Incredibly, in the WTO’s rules of governance, there is not one reference in any of its documents to the underlying bilateral exchange rate between two countries when trying to reconcile trade differences. It is like trying to referee a World Cup match with a
soccer ball that only the players can see. In the case of a controlled or manipulated exchange rate, it is patently unfair if the currency of one partner is grossly misaligned, as the RMB/USD rate is.
Any serious attempt to address the structural imbalance is met with a chorus of boos from financial industry pundits who rail against “protectionism.” In discussions involving the Ryan Bill, these pundits have few qualms with lobbing into the mix, like grenades, those most dangerous of words: “Trade War.” They often invoke the specter of Smoot-Hawley, the infamous US tariff act that triggered a trade war in which American exports and imports were slashed by half, leading a number of economists to argue that its passage contributed significantly to the Great Depression. But what they fail to see, or neglect to acknowledge, is that in modern times there never has been free trade with China; the US has already been in a trade war for nearly two decades; and it is the only time in this nation’s history it surrendered without ever firing a shot.
The United States lost six million jobs, indebted itself to China by $1.4 trillion, and received in return a host of consumer goods, many of which now reside in landfills across the country.
“Trade War” is a very dangerous phrase. Clearly, China and the US are commercial competitors and not enemies. There is no reason for “combat” in any sense of the term. The Chinese have set the RMB/USD peg artificially low
because they believed it was necessary in order to shift from an agrarian to an industrial-based economy. The United States also protected its nascent industrial sector when it did the same thing in the 19th century. Developing a significant export-oriented manufacturing base was part of an ambitious plan to relocate hundreds of millions of rural Chinese to cities where they could obtain manufacturing jobs and pursue a better life. It worked. China’s coasts now burst with export-dependent factories and cities. But now and going forward, China’s export strategy is completely unsustainable. In the intermediate term, much less the long term, it is becoming clear that the main buyer of China’s exports—the United States—can no longer foot the bill. A much better policy would be finding the right balance between domestic demand and exports through a stronger currency. Brazil did this brilliantly between 2005 and 2007. Their currency appreciated 34% against the dollar yet the economy grew 2% more than the prior
three years and above what was thought previously to be the speed limit. The incoming Chinese administration of 2012 will be forced to contend with a population that has been relocated and retrained for jobs that may one day
disappear, much as they did in the United States, all because China engaged in a futile attempt to avoid an inevitable re-equilibration of exchange rates. After all, one way or the other, the real US and Chinese exchange rate will find equilibrium– either through nominal movement or through relative inflation rates.
Just as the Chinese elite have become dangerously wed to an unsustainable export-driven manufacturing model, the US elite have become indifferent to mercantilist assaults on the global trade framework. In mid-September, when the Bank of Japan intervened to suppress the value of the yen against the dollar, there was no response from America’s political, financial and media leaders. While these interventions might have been understandable six years ago, when Japan’s economy was relatively less well off than that of the United States, they are far from necessary today: Japan has an unemployment rate that is half that of the United States and it still runs a trade surplus. Nonetheless, Japan intervened to protect its export industry, and the United States, incomprehensibly, responded with not even a whimper, let alone a bang.
This is what he wrote in 2010.
I note that protectionism worked for the US and it has worked gangbusters for China.
I also not as long as we have this peg in place the results will be distorted in China's favor and we will continue to lose our industries to their predatory practices.
https://dealbreaker.com/2010/10/ten...jones-had-an-acute-case-of-plantar-fasciitis/
“The pain you feel in your left foot is just the symptom,” Pete said. “If you treat it symptomatically and ignore the structural issue, you will never solve the problem.” I did not immediately grasp the full meaning of his words, but I followed his prescription,and in a few days the pain was gone. Some time later I realized that those words were probably the wisest I have ever heard from any human being, and that they apply to more than just the human body.
...
That so many Americans continue to accept this suppression of a variety of exchange rates against the dollar is probably a function of the fact that for so long this suppression provided benefits such as cheap goods and cheap credit. In addition, for a while, manufacturing jobs seemed to be replaced by jobs in the service economy and construction industry without any economic disruption or any rise in the unemployment rate. However, the bursting of the credit bubble exposed the true structural decay that had occurred in the US economy. But, like zombies, many Americans still cling to the naive belief that we can return to the good times of the 90s and the earlier part of this decade, unable or unwilling to recognize that those high times were a debt-driven anomaly.
This delusion is fueled by a myriad of financial pundits who warn about the dangers of disrupting free trade. They are quick to point out that the Ryan Bill is contrary to rules of the World Trade Organization. Incredibly, in the WTO’s rules of governance, there is not one reference in any of its documents to the underlying bilateral exchange rate between two countries when trying to reconcile trade differences. It is like trying to referee a World Cup match with a
soccer ball that only the players can see. In the case of a controlled or manipulated exchange rate, it is patently unfair if the currency of one partner is grossly misaligned, as the RMB/USD rate is.
Any serious attempt to address the structural imbalance is met with a chorus of boos from financial industry pundits who rail against “protectionism.” In discussions involving the Ryan Bill, these pundits have few qualms with lobbing into the mix, like grenades, those most dangerous of words: “Trade War.” They often invoke the specter of Smoot-Hawley, the infamous US tariff act that triggered a trade war in which American exports and imports were slashed by half, leading a number of economists to argue that its passage contributed significantly to the Great Depression. But what they fail to see, or neglect to acknowledge, is that in modern times there never has been free trade with China; the US has already been in a trade war for nearly two decades; and it is the only time in this nation’s history it surrendered without ever firing a shot.
The United States lost six million jobs, indebted itself to China by $1.4 trillion, and received in return a host of consumer goods, many of which now reside in landfills across the country.
“Trade War” is a very dangerous phrase. Clearly, China and the US are commercial competitors and not enemies. There is no reason for “combat” in any sense of the term. The Chinese have set the RMB/USD peg artificially low
because they believed it was necessary in order to shift from an agrarian to an industrial-based economy. The United States also protected its nascent industrial sector when it did the same thing in the 19th century. Developing a significant export-oriented manufacturing base was part of an ambitious plan to relocate hundreds of millions of rural Chinese to cities where they could obtain manufacturing jobs and pursue a better life. It worked. China’s coasts now burst with export-dependent factories and cities. But now and going forward, China’s export strategy is completely unsustainable. In the intermediate term, much less the long term, it is becoming clear that the main buyer of China’s exports—the United States—can no longer foot the bill. A much better policy would be finding the right balance between domestic demand and exports through a stronger currency. Brazil did this brilliantly between 2005 and 2007. Their currency appreciated 34% against the dollar yet the economy grew 2% more than the prior
three years and above what was thought previously to be the speed limit. The incoming Chinese administration of 2012 will be forced to contend with a population that has been relocated and retrained for jobs that may one day
disappear, much as they did in the United States, all because China engaged in a futile attempt to avoid an inevitable re-equilibration of exchange rates. After all, one way or the other, the real US and Chinese exchange rate will find equilibrium– either through nominal movement or through relative inflation rates.
Just as the Chinese elite have become dangerously wed to an unsustainable export-driven manufacturing model, the US elite have become indifferent to mercantilist assaults on the global trade framework. In mid-September, when the Bank of Japan intervened to suppress the value of the yen against the dollar, there was no response from America’s political, financial and media leaders. While these interventions might have been understandable six years ago, when Japan’s economy was relatively less well off than that of the United States, they are far from necessary today: Japan has an unemployment rate that is half that of the United States and it still runs a trade surplus. Nonetheless, Japan intervened to protect its export industry, and the United States, incomprehensibly, responded with not even a whimper, let alone a bang.
Wow. You have come a long way. You’re almost a mean democrat now.
You obviously have been taking notes. There’s nothing wrong with growth. Good for you.
I realize the shipped sailed... but I believe that Trump won because most the people in this country realize we must make the ship return to our port...
The problem is that the Captain(s) of the ship still owns most of the media and most of congress. Most democrats and many republicans think they are resisting trump when what they are doing is preventing a party which represents most Americans for gaining power.
Trump was the symbol. That is why the establishment and deep state want to take him down.
Its why the democrats and the establishment worked with the media to demonize the tea party.
The last thing they want is for Bernies people and Turmps people to realize that accept for abortion... they pretty much want and could have the same thing. We have enough wealth to feed the poor house and educate everyone and have low taxes and a good economy. Its not an either or.
The problem is that the Captain(s) of the ship still owns most of the media and most of congress. Most democrats and many republicans think they are resisting trump when what they are doing is preventing a party which represents most Americans for gaining power.
Trump was the symbol. That is why the establishment and deep state want to take him down.
Its why the democrats and the establishment worked with the media to demonize the tea party.
The last thing they want is for Bernies people and Turmps people to realize that accept for abortion... they pretty much want and could have the same thing. We have enough wealth to feed the poor house and educate everyone and have low taxes and a good economy. Its not an either or.
Let's take a look at Canada's reaction to protectionism...
Oh, your economy and currency is tanking...
Loonie dips below 77 cents US as Bank of Canada cites trade fears in interest rate decision
http://www.cbc.ca/news/business/bank-of-canada-rate-decision-1.4565579