On Friday, Treasury Secretary Steven Mnuchin halted a market selloff with a single word, “constructive”. That lie was exposed over the weekend. The trade talks with China are not constructive.
Trade Lie of the Day Today
Trade Lie of the Day Sunday
We are definitely not where we want to be. Trump wanted a trade deal did he not? Did he get one?
Trade Lie of the Day Saturday
The US does not collect tariffs. They are a tax on consumers and businesses.
Note that Trump’s economic adviser, Larry Kudlow Admits the Obvious: Trump is Wrong.
Lies of the Day Friday
Joke of the Day
Trump takes credit for performance of the Boston Red Sox.
Peter Schiff Rebuttal of Trump’s Position on Trade
I agree with Schiff on every point above.
Ka-Blam
Trump claimed there would be “money left over”after feeding the world’s poor to fund other needs.
“With the over 100 Billion Dollars in Tariffs that we take in we will buy agricultural products from our Great Farmers, in larger amounts than China ever did, and ship it to poor & starving countries in the form of humanitarian assistance. … Our Farmers will do better, faster, and starving nations can now be helped. … If we bought 15 Billion Dollars of Agriculture from our Farmers, far more than China buys now, we would have more than 85 Billion Dollars left over for new Infrastructure, Healthcare, or anything else.”
That’s the biggest lie of all. Effectively, Trump is in favor of a tax on US consumers to protect his political base in the agricultural states from his unwinnable trade war.
Note that Wisconsin Dairy Farmers Going Bankrupt in Record Numbers, Blame Trump Tariffs.
Beaten Badly?
Logic would dictate that you can only be beaten badly in a trade deal if the deal is closed.
Win-Win
Placing demands the other side will never agree with is not beating them badly.
Such foolishness by Trump is why he has not closed a single deal.
In Trump’s perverse world there is a winner and a loser in every deal. In practice, both sides have to believe they gain, or they do not make a deal.
Stop the Damn Lies
Trump’s trade lies prompted me to pen on Friday Dear President Trump: Stop the Damn Trade Lies.
The lies continue nonstop. More are certain to come.
In regards to Peter Schiff’s GDP rebuttal, I said the same things in Explaining the First-Quarter GDP 3.2% Surprise.
Mike “Mish” Shedlock
“Please let me know what ESSENTIAL items Americans are buying from China that they can’t live without, or can’t wait 6 months to get elsewhere.”
Why does it matter?
If we get them from Vietnam or Korea, the trade deficit just moves.
More tariffs? OK, US consumers pay more.
Paying more for less is not a good thing.
Meanwhile, China response (also hurting their consumers), is killing US farmers.
Mish
“Essentials?” This reminds me of what I’d long felt would be the “last straw” on Chinese tariffs – when fireworks and Christmas tree lights go up too much! It also hits your “6 month” “NEED” criteria – lest the holidays have to reverse. Maybe the fireworks can warm in winter…
Please let me know what ESSENTIAL items Americans are buying from China that they can’t live without, or can’t wait 6 months to get elsewhere.
B$500 rip off.
Come on, it’s not like we’re sending them $B500 worth of stuff and we’re getting nothing back but worthless promises… O wait, that is what we’re doing, except we’re sending them the worthless IOU’s.
The fed is going to cut rates any day now. This is a whole choreographed act to get the fed to lower rates so the economy keeps growing at 3% and we have 3% or less unemployment going into the 2020 election. Of course the media (and most millennials are more focused on the ‘outrage’ of the week, you know someone connected to trump that displayed ‘racist’ behavior and of course the ‘Russians’ who according to Wbz news radio in Boston ‘meddled’ in the 2016 election
“By the way if China doesn’t show up at the next treasury auction bad things will happen. They already devalued their currency in advance. “
Disagree with that. Treasuries will do very well in a recession
The fed already announced plans to target the long end of the curve. I expect short term rates to be back at 0% and 10 year at under 1.50% by end of this year
Pretty aggressive timing Nic, but possible.
The Fed will slash aggressively at the onset of a recession.
By the way if China doesn’t show up at the next treasury auction bad things will happen. They already devalued their currency in advance. The next step will be to sell some dollars while the dollars are high. China is a fake economy anyway. The beauty of central control is central control. People in China dont have false expectations. People in the US live based on treasured values like freedom and liberty and go broke in the process. MMT/0% rates arent far away.
China has been reducing its treasury holdings since November of 2013.
So – what, exactly, bad things will happen?
I think he likes to say the word tariff. The guy was a C student at UPenn (not wharton). We finally know Trump’s business success has been a big lie based on overstating values, getting loans based on those values and then taking writedowns on values and renegotiating loans. As far as I can see its constant renegotiation because he cant negotiate.
The American consumer could have afforded to fight this war in the 80s or 90s. But now that the horses are all out of the stable and the middle class is broke the last thing they can afford is higher prices. Are people really willing to pay higher prices for stuff ? We are going to find out. My guess is no and we nosedive into a recession by the end of summer. Xie has the luxury of time. Trump will simply be thrown out of office and Xie knows he has to deal with someone else.
Please let me know what ESSENTIAL items Americans are buying from China that they can’t live without. Within six months the same products could be available elsewhere.
I ask again, for all you anti-free trade folks, if tariffs are so powerful to promote US interests, would someone please explain to me CONCISELY why both democratic and republican presidents since Eisenhower have never used them.
WWII
Since Eisenhower?
Lie of the day.
Take a record stock market and go back a week for doom and gloom article.
Post a chart of the stock market from Jan 20, 2017. Oh – this is just a blip.
“The US does not collect tariffs. They are a tax on consumers and businesses.”
Only if choose you to pay it. And, FYI, this how America fully funded itself before the 1913 Federal income tax. Hey! Let’s take a Mish poll. Would you rather pay a forced income tax enforced by the corrupted IRS or some tariffs on some imported goods?
The economy (cough – China – cough) that has to import food/energy and must have a positive $500+ billion surplus in the balance of trade just to keep a lid on massive upheavals is going to lose big time.
China has been in an economic war with America for the last 20 years.
Trump knows this. You know this. Voting Americans know this.
And we are happy to finally be fighting back.
“China has been in an economic war with America for the last 20 years.”
China ought to change up their tactics a bit. For example, they should open up hospitals on the outskirts of every major US city, offer top tier medical services for nearly free, and see what happens to the large swaths of the economy that make a living off the largess. They could then do a similar maneuver with higher education. Academia would quickly educate us on the evils of indiscriminate immigration, I’ll bet!
Ridiculous comment.
“FYI, this how America fully funded itself before the 1913 Federal income tax. Hey! Let’s take a Mish poll. Would you rather pay a forced income tax enforced by the corrupted IRS or some tariffs on some imported goods?”
Income taxes are infinitely worse than tariffs. They are nothing but straight up theft, spying and harassing. So yes, compared to that, tariffs are not nearly as bad. But that doesn’t mean they aren’t bad. Stacking a small bad on top of a big one, doesn’t make the big one any smaller.
If Trump was funding government with tariffs, that would be a huge, huge boon. America would be much better off than it is being funded by arbitrary theft, spying and debasement. But he’s not. He’s stealing, spying, debasing, AND adding tariffs on top of that again.
And also, he’s applying tariffs in the single worst possible manner possible: Entirely arbitrarily. Having a 5-15% border crossing fee for all goods, is efficient, fair and as non distorting and justifiable as an activity tax can be. Running around making up tariffs on arbitrary people because that is what lobbyists for leeches on the make feel will allow them to leech best, is patently not.