Reuters reports Mexico Wants Steel Dispute Ended Before New NAFTA Signed.
> Mexico wants to end to a tariff dispute over steel and aluminum with the United States prior to signing off on a reworked trade agreement with its northern neighbor, Mexican Economy Minister Ildefonso Guajardo said on Thursday.
Sound familiar?
It should.
Trump bragged about deals with the EU that only existed in Trump’s head. When the EU actually agreed to Trump’s proposal to end all tariffs on cars, Trump said it was not enough.
When Trump bragged about a deal with Mexico, I asked “What deal?”
It turns out there is no deal. Within hours of the announcement, Mexico insisted that Canada be part of the deal or it would need to rework the deal.
Canada has demands.
And now Mexico has more demands.
Game Book
The way the game is played today is to make a deal, then make new demands while still pretending there is a deal.
Don’t blame Canada or Mexico.
They both read the “Art of the Deal”. More importantly, both Canada and Mexico are doing to Trump, what Trump did to them.
Winning
We can call this whatever we want, but no one is winning from this nonsense.
Mike “Mish” Shedlock
Trump is STUPID unless Trump demands that as a condition to a trade deal with Mexico they agree to STOP all migrants going through Mexico from Guatemala, Honduras, El Salvador, Nicaragua and other countries to USA and either send them back home or take their asylum application in Mexico and give them asylum in Mexico if they assess that they are entitled to such.
Also Trump should demand that Mexico builds a wall on their southern border to STOP the drugs pouring to Mexico and then to USA. Wall on Mexico’s southern border would CRUSH Mexican cartels influence and profits so Cartel violence would also drop so it is a mystery why Mexico has NOT build such a wall themselves, either they are incompetent or get funding from cartels. Wall on Mexico’s southern border would also stop most migrants so it would make it easier for Mexico to stop migrants going through Mexico to USA.
Unless Mexico agrees to those two things Trump should put a 10% tax on all remittances from USA to Mexico and tell them that there is NO trade deal.
Trump should also build the promised wall on US-Mexico border and make it bigger than the Chinese wall so people would come see it as a tourist attraction “visit Trump’s wall, there are sightseeing points on top of the wall and golf courses, water parks and amusement parks and luxury hotels on US side of the border, Welcome”
Mexico can’t even stop mass killings by organized crime in their country… you really thing they can stop mass human migration?
Yes they can STOP all migrants going through Mexico to USA.
Most come on top of trains most of the time so fencing all train stations properly and putting 10 guards each station will take care of most of it.
STOP the trains if there are people of the roof couple times on the route and arrest all of them and either give them a bus ride back to Mexico’s southern border or take their asylum claim in Mexico.
For those going through whole of Mexico by walking have police check their papers and put them on buses and drive them back to Mexico’s southern border or take their asylum claim in Mexico.
For those going through whole of Mexico by car have police check papers during every traffic stop and put migrants with Guatemalan ID etc. on buses and drive them back to Mexico’s southern border or take their asylum claim in Mexico.
Prosecute the Mexicans giving them rides as people smugglers and confiscate their cars.
For those going through whole of Mexico by bus have the bus company check their papers before boarding the bus and deny boarding if NO Mexican ID or visa to live in Mexico.
Mexico could STOP mass killings in Mexico and STOP the power of cartels by building a wall on Mexico’s southern border to stop the flow of drugs but they do not do it either because Mexican politicians are incompetent or then they are getting paid by the cartels.
US govt. spent over 2 trillion dollars overseas to establish anarchy throughout the middle east and Afganistan. With this spending we obtained no new resources or security or even improvement in humanitarian conditions. This money is still floating around outside the US. It will be difficult to balance trade, even with punishing tariffs, when the government is wasting such vast sums far exceeding what even the most competitive US producers can manage.
Good! Each party to a negotiation has its own aims, and through a process of give & take, they end up with a deal. The problem the US has had is that the Swamp Creatures — whose arrogance is matched only by their stupidity — thought that the process was the US gives, and everyone else takes. That is a large part of why we have ended up with an unsustainable trade deficit — which needs to be fixed.
Mish does a good job of pointing out the unsustainable pension fund deficits in Illinois and beyond. Those deficits will end in tears. Huge unsustainable trade deficits are the same — if we don’t fix them soon, they too will end in tears, not just for the US but for all the exporters too.
And remember this is the real world. Look at World War II — the Brits got their asses kicked at Dunkirk; the US got its ass kicked at Pearl Harbor; the Soviets really got their asses kicked almost all the way back to Moscow. There will always be setbacks along the way to an eventual successful outcome.
Dunkirk? Hitler allowed the British to retreat largely unscathed, instead of decimating them… Pearl Harbor? Read a little about what was known in advance, and why almost all the newer ships were out at sea.
Decimate refers to the old Roman practice of killing every 10th man in a legion that had failed; the Brits lost about 12% of their manpower at Dunkirk — it was indeed decimation. But the bigger loss was almost 100% of their vehicles and equipment.
Pearl Harbor — the US lost about half the ships in port, and more than half the aircraft, and over 2,000 men.
Of course, in both cases the losses would have been much larger if the Germans and Japanese had followed up aggressively. But this is the real world, and everyone makes mistakes.
If Dunkirk and Pearl Harbor sound like Allied successes, then there would have been a job waiting for you in the US Trade Representative’s Office in the Bush, Clinton, or Barry administrations.
The bigger point is that in the real world problems don’t get solved smoothly in 30 minutes with time for commercial breaks. It takes a struggle to reach worthwhile goals. Anyone who expects that correcting the unsustainable US trade deficit is going to be a smooth operation is not paying attention.
Arrogance matched by stupidity? Sounds like the Great Leader at work. The guy who drives up the USD every time he opens his mouth and then keeps complaining about the effects of the higher USD. He has no idea how trade deficits or tariffs work.
Actually USD was HIGHER while Obama was president the last years being mostly over 0.90 euros per dollar 2015-2016.
When Trump became president dollar zoomed up to 0.95 euros per dollar shortly but then started a long lower slide where dollar ended up all the way to 0.80 euros per dollar.
Lately dollar has perked up a bit and is at 0.86 euros per dollar but still LOWER than what dollar was mostly during Obamas last 2 years in 2015-2016.
China and Japan have a policy of keeping Yen and Yuan close to where dollar is so changes in dollar just cause them problems since they want to keep things as steady as possible to enable their mercantilist economic model of exporting lots of stuff to USA (and Europe) working.
Only basket cases in currencies have been total crazies like Venezuela, racists like white-hating South Africa and through and through corrupt leftist controlled countries like Brazil and strogmen crushing dissent like Turkey and Erdogan.
In Turkey’s case the crash has been caused by excessive dollar and Euro debts for Turkish companies and individuals that created a self-perpetuating trap when Turkish currency dropped a bit which caused problems in repaying or even managing the dollar and Euro debts so the Turkish currency crashed some more since now the companies and the Turkish banks were all in danger of becoming insolvent and bankrupct.
Erdogan has handled the situation by inventing conspiracy theories and blaming USA instead of firing every Turkish bank regulator who thought it would be a good idea to let Turkish companies and Turkish consumers take dollar and Euro nominated debts because the interest was lover.
There is ALWAYS a crisis sooner or later when there is heavy borrowing in foreign currency for some country’s companies and/or consumers.
I thought trade wars are good, and easy to win?
When there are huge imbalances between trade then trade wars are easy to win just by stopping the imbalance through tariffs but the trick is to tariff all products.
Trump made a MISTAKE in his steel and aluminum tariffs in that he did NOT increase tariffs also on products made from steel and aluminum and this lead to US nail company for example losing customers because tariffs increased the cost of steel since they could no longer import low priced China dumped steel to make nails but foreign nail manufacturers could buy that cheap dumped steel outside of USA and make nails outside of USA and then export their nails to USA which led to the USA nail manufacturer losing market share.
Current offshoring of jobs and bringing millions of illegal immigrants and millions of low wage legal immigrants to USA economic model with huge trade imbalances where USA is always losing is ONLY POSSIBLE because of the Fed and through the hiding of the effects of offshoring jobs, bringing millions of illegal and legal low wage immigrants to USA and importing much more products than we export behind continually increasing levels of consumer debt, company debt, state debt and government debt…
So… trade wars aren’t good and easy to win?