Trade War History
- In January 2018, Trump imposed tariffs on solar panels and washing machines of 30 to 50 percent.
- In March 2018 he imposed tariffs on steel (25%) and aluminum (10%) from most countries, which, according to Morgan Stanley, covered an estimated 4.1 percent of U.S. imports.[
- On June 1, 2018, this was extended to the European Union, Canada, and Mexico.
There are too many retaliations and US escalations to report, but it all started in January of 2018 according to Wikipedia.
Legality
- Article 1, Section 8 of the Constitution: “Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises.” But Congress has repeatedly shifted its powers regarding tariffs to the president.
- Beginning in 1917 with the Trading with the Enemy Act of 1917 the president can impose any tariff while the nation is at war. The affected trade does not have to be connected to the ongoing war.
- Since 1974 the Trade Act of 1974 allows the president to impose a 15% tariff for 150 days if there is “an adverse impact on national security from imports.” After 150 days the tariff expires unless extended by Congress.
- In 1977 the International Emergency Economic Powers Act shifted powers even more towards the White House. The Trump administration claims that it gives the President the authority to raise tariffs without any limits during a national emergency of any kind*. Legal scholars disagree because the IEEPA does not mention tariffs at all and transfers no authority of tariffs towards the President*.
- Scholars warned that the Trump administration’s use of “national security” rationales for the tariffs could undermine the international trading order, as other states could use the same rationales for their own tariffs. The WTO allows states to take actions necessary to ensure their national security, but this provision has been sparsely used, given that it could be abused. Whereas national security reasons were cited for the tariffs, it has been noted that tariffs primarily harm American allies, not enemies; the United States imports very little steel and aluminum from China directly. Trade experts furthermore noted that the United States already produces more than two-thirds of its own steel.
“Trade Wars are Good and Easy to Win”
On March 2, 2018, Trump Tweeted “Trade Wars are Good and Easy to Win“
For nearly 18 months we’ve had repetitive escalations of such nonsense with no end in sight.
Understanding Trump’s Trade War Tactics in One Picture
The above image is the key to Understanding Trump’s Trade War Tactics.
How Long Can This Go On?
Given the charade has already lasted 18 months, inquiring minds have a question.
Q: How Long Can This Go On?
A: Until Trump seriously breaks global supply chains.
The latter may have started as per my post Major Supply Chain Disruptions Coming: Thank Trump
Any Trump Successes?
None. The latest trade report shows No China Progress, Deficit With EU, Canada, Mexico, Japan Rising
Q: Will Trump ever learn?
A: No
He rally believes “Trade Wars are Good and Easy to Win”.
But hey, enjoy the circular rallies.
Mike “Mish” Shedlock
Trump says this, Trump says that, is all I ever hear these days….excuse me but I am probably not deluded enough to believe that Potus can take all those decisions and measures on his fckn own without full consent of some party members, or from his wife for that matter. That being said, what will happen when a deal with China IS reached ? Business as usual, rates up dramatically, kicking the cans down dead end Debt Road again, heading for the cliffs anyway… or do fairy tales really exist ?
The regular folks couldn’t care less about the Chinese tariffs. So those Chinese tchotchkes are now $5.13 instead of $3.95? Who cares?
The people really getting punished are the monied interests who bet on Communist China and their superseding the United States in the 21st Century. They are being forced to eat as much of the tariffs as they can.
I hope the tariffs stay in place until they get choked out. Yeah. Fuck those guys.
Gold got taken to the woodshed. Talk about a beat down. Now that’s gonna leave a mark.
Sounds like “sour grapes”, pal. Gold and especially Silver were long overdue for a good correction, and it’s here. Good luck with your electronic 1’s and 0’s or whatever else you’re gambling with.
“China seizing the oil fields in Venezuela and getting them to work/function again would actually lead to a crashing of oil prices and a glut of oil on the world market.”
side with banana on this
While China does have interest in Venezuelan oil, they have become more cautious because the current government does not pay them back…
link to bloomberg.com
The one with real interest in Venezuelan oil (and the one that I think will protect them by force) is Russia
ttps://www.bloomberg.com/news/articles/2019-06-20/russia-squeezing-embattled-venezuela-for-tax-free-gas-expansion
Would Hitlary have been better in 2016, or ANY of the democratic candidates in 2020? The answer is a resounding, Hell NO!
With China it’s “pay me now, or pay me later”. Later will be more expensive.
China will seize the oilfields in Venezuela causing prices to soar over 180 dollars a barrel!Maduro owes Beijeng billions they can’t pay back and at 5-6 a gallon gas,Trump will kiss Xi ass to get any deal.
China seizing the oil fields in Venezuela and getting them to work/function again would actually lead to a crashing of oil prices and a glut of oil on the world market.
Indeed.
An excellent and balanced article. Full of data and history of how we got here.
And how big a task it is to fix this problem.
US Stock market up all of around 1% in the past 52 weeks. Hooray!!
ADP jobs numbers are back to what they were in Obama administration with most new jobs in healthcare and services. The Trump manufacturing boom is over. It was really a mirage anyway. The economic growth generated by the tax cut has been offset by the tariff war and slowdown in manufacturing. Expect higher deficits, more debt and slow growth for a decade. I’m calling it in the 1/1/1 decade. 1% growth, 1% interest rate and 1% inflation (though likely inflation will be closer to 2% and offset any growth).
Here we see one facet of the growth of the Imperial Presidency via the willful abdication of Congressional prerogatives.