MarketWatch reports Trump Threatens Europe With Tariffs and Vows Veto as Senate Rejects Border Emergency.
As the U.S. and the EU struggle to iron out their differences on trade, Trump said, “they are willing to talk to us and if they don’t talk to us, we’re going to do something that’s going to be pretty severe economically. We’re going to tariff a lot of their products.” The president was almost certainly referring to imports of cars from the EU, a threat he has made in the past.
Trump made his comments to reporters as he met with Irish Prime Minister Leo Varadkar in the Oval Office. Trump also said on Twitter he anticipated a “large scale” trade deal with the United Kingdom, which is facing a delayed exit from the European Union.
Before the Senate voted on terminating Trump’s national emergency, he told reporters, “I’ll probably have to veto it,” and predicted his veto wouldn’t be overturned by Congress. The Senate passed its resolution 59-41, with 12 Republicans including Mitt Romney and Marco Rubio voting for it, prompting a one-word Trump tweet in response.
The declaration is already the subject of a legal challenge. Trump has attempted to coax Republicans into voting his way on the issue and painted those who vote against him as standing with House Speaker Nancy Pelosi and for crime and open borders.
Seven Reasons Trump is Hopping Mad
- Trump wants a trade deal that includes agriculture. The EU says no.
- Trump wants Germany to increase military spending, Germany has plans to cut military spending according to Eurointelligence. I do not know if Trump is aware of this yet. Discussion below.
- Trump wants Germany to scrap Nord Stream 2, a gas pipeline between Russia and the EU underneath the Baltic Sea. The EU sided with Germany.
- Trump wants the EU to buy US Liquid Natural Gas, but the EU instead will buy from Russia because its cheaper. This is part of the Nord Stream 2 issue.
- Trump wants the EU to abide by his sanctions on Iran. Instead, the EU created a mechanism in which European suppliers can trade with Iran in euros rather than dollars as a means to get around US sanctions. The mechanism is little used, if at all, but the idea infuriates Trump.
- EU tariffs on US cars are higher than US tariffs on EU cars. US tariffs on EU SUVs and Trucks are way higher than EU tariffs on US trucks and SUVs but that doesn’t matter.
- Trump does not want Germany to use 5G technology from China’s Huawei. Germany said it will go ahead. It is almost forced to. The reason is Germany is far behind the US. Its 4G technology is made by Huawei. My understanding is that there is compatibility between 4G and 5G if the vendor is the same. Thus, Trump’s demand could set back Germany a couple of years.
German Military Spending
Spiegel Online has a terrific story that Olaf Scholz is torpedoing the planned increased in the German defence budget. Germany is spending only a meagre 1.2% of GDP on defence. Ursula von der Leyen, defence minister, recently proposed an increase in the defence budget to 1.5% by 2023, which would at least show minimal convergence towards the Nato spending target of 2%. But Olaf Scholz, her arch-enemy in the cabinet, is promising a mere €3bn increase, cumulatively over four years. This would leave the defence spending quota effectively unchanged. Since the inflation rate for defence equipment is above the average inflation rate, Spiegel notes that this constitutes a de facto cut in military expenditures.
I picked up the above from Eurointelligence. The article is in German.
Instant Global Recession
One of the reasons Trump is anxious to close a deal with China is so he can blast the EU with a massive dose of Tariffs. I do not think he wants two simultaneous trade wars.
This is another reason to expect Trump to not demand too much from China in a deal.
Should Trump rule that EU cars are a threat to US security, as he has threatened to do, the EU will retaliate strongly.
The end result would be an instant global recession. We are on the cusp of one anyway.
Mike “Mish” Shedlock
Trade tariffs exist today. Trump believes current tariffs are unfair to the US and wants changes. Do you believe existing tariffs are ‘fair’?
Trump also claims NATO allies are not paying their ‘fair’ share of defense.
You should be criticizing China, EU, and the rest of world for unfair trade practices but you won’t just because you are ‘libertarians’. If you criticize others as much as you criticize the US, you will have more credibility. But you don’t.
Recession GOOOOOOD.
Don’t know about stupid, but if prices go up on imported goods because of tariffs and they lose their cost advantage, domestically produced goods can expand their market share, if the companies play their cards right.
Domestically produced goods rely on imported components. How much market expansion do you reckon a Chinese PC assembler can pull off, as a result of no longer being able to obtain Intel Chips?
In some tiny corner cases, there will be firms which will profit. Like Steelmakers if foreign steel is banned or tariffed out of the market. But virtually every product sold in the developed world, relies on global supply chains. Heck, the reason the world is “developed” is specifically on account of the efficiencies this kind of global sourcing allows for.
The only groups who benefit massively from politicizing, bureaucratizing trade, and making it dependent on arbitrary “laws”, are the usual suspects: Politicians, Apparatchiks and ambulance chasers. The guys competent and useful enough to be able to build and produce stuff, benefits from having the widest possible array of sources for inputs. That way, they can pick the best ones. Ditto their customers.
Sure if you are looking at the status quo in a short time frame. But those global supply lines didn’t pop up overnight, and changing the status quo won’t, either. Let’s take an extreme example, purely for illustrative purposes, and work back. You sell $1 trillion of good and services around the world and buy $2 trillion of stuff from other countries. You have a $1 trillion trade deficit. Instantaneously, a total trade embargo arises, and now no one buys $1 trillion of your stuff and you cannot buy $2 trillion of stuff from other countries. Your domestic industries retool and supply your domestic market with the $2 trillion internally produced goods which were formerly purchased from other countries. On the balance, your country is making twice the amount of goods and services. Assumes perfect substitution of course. Trade surpus countries come out behind. Now work back. Just a thought exercise, but I do believe Trump is trying to rebalance, and bring more jobs back tonthe USA.
Just imagine how easy it must be for German industry, to replace $2trillion worth of Saudi oil and Russian gas from domestic sources…. Just ban petro imports, and in a few years, all those “jobs” are German…. Merkel must be really dense, to not see such an easy way to riches…
Stuff is made where it is made, because that is where it can be made most efficiently. An Island country of hoarse, tone deaf pacific Islanders, aren’t suddenly going to replace Rock’n’Roll one-for-one with domestic Elvis’, by banning American music. All they’ll end up with, is music that, comparatively, sucks. Leaving them poorer. Ditto for Germany and imported oil and gas. And America and imported flat screens.
We are talking about the USA, not Germany. And yes, substitution is an issue as mentioned. Incorrect to say stuff is made where it is because it is made more efficiently. True to say that cheaper labor and lax regulation contributes to lower cost. This is absolutely not the same as efficiency, so I question your logic. The USA is not an island of tome deaf people. Your argument has not gas.
I can assure you that if flat panels could be made more efficiently somewhere other than in Asia, it would be. Ditto oil and Arabia. And music people want to listen to and Nashville/LA.
Labor is an input to production. Just like natural resources are. It’s not efficient to produce clothes in some Gulf state, where you can’t get anyone to roll out of bed in the morning for less than $200K/year. The same holds true for all simple, labor intensive and low value add products, wrt wealthier countries.
And, despite what progressive indoctrinators, and those dumb enough to believe them, insist on; the world is not an accumulation of special cases and special snowflakes. Germany is not meaningfully different from Belgium or Turkey or Indonesia or the USA in any economic sense. The arbitrarily drawn borders which delineate any of them, could be rearranged tomorrow, with no change to economics whatsoever. Economic laws, like physical ones, are universal. So no, gravity don’t work upwards in China and Germany. Nor does comparative advantage.
“I can assure you that if flat panels could be made more efficiently somewhere other than in Asia, it would be.” You can’t be serious.
“Germany is not meaningfully different from Belgium or Turkey or Indonesia or the USA in any economic sense. The arbitrarily drawn borders which delineate any of them, could be rearranged tomorrow, with no change to economics whatsoever.” I will buy German built tools over equivalent built in Indonesia any day.
Economics is not science. Definitions are not absolute. A country that can make goods more cheaply by throwing more pollution into the air and ground that a country that has more stringent environmental regulations might seem to make goods more efficiently, under a narrow, short-sighted definition of efficiency. Adding the costs of pollution on human health never enters into the calculation under such a narrow definition. Germany is definitely not the USA in terms of energy, as but one example. In closing, if all of our goods and services were made more cheaply in China, imagine how wealthy we’d be.
Economics definition are absolute specifically because economics is not a science…..
And efficiency is how cheaply a given final good can be made. Making up arbitrary regulations forcing all agriculture to use plows dragged by snails, doesn’t mean one cannot compare it efficiency wise to a place where ag is done with tractors. How much pollution tolerance someone has, factors into how efficient they can be at certain tasks. Hence, production is organized more efficiently if asthmatics don’t work as arborists during pollen season, but instead do indoor work. While those who don’t have allergy problems, limb trees. America making Rock’n’Roll and China making flat panels, ditto.
Pollution does enter into calculation, wrt people living close enough together that pollutants emitted by one, has negative consequences for others. That’s where the issue of how to include externalities come in. For this to be a practical problem, the pollution has to be sufficiently geographically agnostic, that the problems they cause for the non polluter, is fairly close to as big in magnitude, to the problems they cause for the polluter himself. Which is darned near never the case for a place as far away as a different country. Much less a country on the opposite side of the earth. IOW, Pollution in China costs Chinese people something. Not Americans. If the Chinese don’t mind; it’s no more “unfair” than a guy without asthma, not minding limbing trees during pollen season.
If all our goods and services were made more cheaply in China, we’d have one heck of a lot of time and resources available with which to make goods and services which the Chinese currently don’t have time and resources to make, busy as they are making everything else. Which is why the countries where “all” low-value-add goods and services are being made, rarely have the time and resources to write neither Pagerank nor Love Me Tender.
And yet America has the lowest unemployment in generations, wage growth for the first time in a 20 years, manufacturing jobs (good pay/benefits) booming, shrinking numbers of people on welfare rolls and most businesses hiring and who can’t find enough people to hire.
Trump is not the president of the World. Trump is the president of the United States.
The Soviet Union had no unemployment…. And Weimar had “wage growth” out of this world.
only trolls would say US economy in top shape and employment all time low , disregarding the devastation farming and other industry cut off from china due to trade war and the millions of american not bothering to find jobs
Trump’s main problem was obvious from the get go: Cultivated ignorance.
Let’s see, you elected a Kenyan coon, that was a community organizer. That dumb fuck never started, or ran anything in his life.
That coon couldn’t run a hot dog stand. Trump owns roughly 500 business world wide. What have you ever accomplished?
Did not. Elect.
Was actually in favor of Trump’s election, but mainly because he was promising to scale down America’s humanitarian interventionism and the threat of a nuclear war with Russia.
There’s another good reason for Germany to go with Huawei. All the protests from the five eye countries claiming that China will be able to wire tap the traffic are a projection of the fact that Western-produced hardware does have government secretly mandated back doors. We know this from multiple reports, including boasts by the NSA that they can decrypt anything (but not b/c they have quantum computers). It’s the old splinter in the eye of another when there’s a beam in your own. Plus the fact that Huawei probably does not have back doors, making part of the communications traffic invisible to the prying eyes.
trump is not just stupid, he just didnt care about american people suffering from his shenanigans.. look at how callous trump and his advisers to the unpaid federal workers during shutdown , look at how trump only care to save farmers when in fact he only care about his farcial trade war vs china..
let face it, the only fools take for a ride were trump voters.. and only trolls like 2banana here still gorging out despicable pro trump agenda
I shop for multiple people and 20 animals weekly so I spread the love around to various outlets where the prices are lowest. Some of the discount stores raised prices on several items and I buy on a regular basis about a month ago and I hadn’t made the connection because Walmart was still the same. Until last week. Now Walmart is right up there with the rest of them. So, it’s true. The costs a there simply handed down to us. China isn’t paying them, Business isn’t paying them, we are. My question is Trump really that stupid? Or was this just a ploy for our govt to raise more money? So much for any supposed tax break you’ll send every bit of it to the govt thru increased prices. Did they just steal our refund in a roundabout way?
Businesses are imaginary. They can’t actually “pay taxes”. They are merely a conduit for collecting taxes. Thus, if you tax a corporation, it will simply pass the tax on to it’s customers, or, if they are unable to, to it’s owners. All taxes are ultimately paid by individuals, either the customers or the owners of corporations.
Trump himself may well be that stupid, or if not he may just not care, but he no doubt has people around him who aren’t quite that hopeless.
And yet those price increases will never leak into the fake CPI numbers. BTW do you think these increases are actually due to tariffs as I have seen price increase above the normal inflation rate that have nothing to do with China.
Because of all the people working now, they are taking in more money. When your nigger was in Washington, he put record numbers of people on food stamps, and welfare!
https://www.thenewamerican.com/economy/economics/item/17367-welfare-hits-record-levels-after-50-years-of-war-on-poverty
You niggeRATS love your losers.