Trade Wars are Good and Easy to Win
Flashback March 2, 2018: Trump Tweets “Trade Wars are Good and Easy to Win”
Victory for Steel Workers
One of Trump’s big wins has been the steel industry.
Trump promised more steel jobs.
Today we see Bayou Steel shuts suddenly with loss of 376 jobs in LaPlace; governor blames tariffs
OK, forget about that. Let’s check out the latest manufacturing reports.
Manufacturing ISM Worst Since 2009 on Severe Contraction of Export Orders
Please note Manufacturing ISM Worst Since 2009 on Severe Contraction of Export Orders
Say what? That can’t be.
Let’s move on to agricultural exports where Trump promised big wins.
Corn Exports Plunge but Trump “Not Ready to Make a Deal With China”
I am pleased to report this big win: Corn Exports Plunge but Trump “Not Ready to Make a Deal With China”
Oops, apologies offered. I accidentally read plunge as soar. These things happen.
Instead, let’s turn our attention to other notable Trump wins.
Hmm. I am drawing a blank. Does anyone have any wins?
Question is Moot
The question is surely moot and the answer totally meaningless.
We know this for a fact.
How?
- Trump says he is “winning big time”.
- Not only are we winning big, we are also collecting “big tariffs”.
This is clearly a double win!
Problem is With You
That farmers, steel workers, the auto industry workers, Apple, etc., and most importantly you cannot spot the wins means one thing and one thing only: You simply do not understand winning.
There is no other logical conclusion.
Mike “Mish” Shedlock
Heh, Mish, if everything’s as “bad” as you say it is – How come I feel so good? The economy is great, and we have a President who is the only person standing between us and a full-blown communist revolution. I think you’ve wired yourself not to like Donald Trump, and you pick and choose bits of information you believe puts The Trumpster in a bad light.
Hmm
are you the sole judge of the economy?
If things are fine with you everything is OK?
Why should China negotiate in good faith with Trump when the entire establishment is knifing him in the front? Imagine if instead they were standing firmly behind him in his efforts. I think China would be singing a very different tune and many of the losses you happily piled on to would have been wins by now.
Evil American elites, and dumb American populace! First of all, I’m from China and have been to two Western countries for many years. Regarding to this trade war, my option is:. It is definitely necessary for the US and even the whole Western world if the Western countries still want to live a free and rich life style. The only pity here is that Trump is not a strategist, nor does he have a strong will to fight against China (Chinese Communist Party-CCP-controlled China) – the most dangerous and evil country in the human history. I did not exaggerate anything here, just look at the situation US and the Western are facing here:. A country that has the biggest population on Earth, a country that has the extremest nationalism on Earth today due to its thousands of years closed social environment history, a country that is the second largest economy on Earth today, a country that doesn’t have any belief in its over 90% of majority population, a country that has a deep-rooted tradition of power worship, a country that doesn’t share the common values with the main stream international communities, and the worst thing for the West, a country that is married with all major Western power on almost every aspectts. And this monsttrous Frankenstein is People’s Republic of China, or short way , China. Based on above facts, if anyone in the West still say in public that fighting with China in a trade war, or any other kinds of wars is wrong , he or she either a really dumb human in this space age, or he or she is a very evil person who, like most of Wall Street tycoons ad typical, just wants to gain their personal benefits from China by sacrificIn their own country and peoples interest in a long run. Now the US has finally understood that he has married a bitch who not only wants to steal all of his wealth, but also in the end wants to kill him. So he is now trying divoring, rather than trying to divorcing, with this eveil wife. As every knows that divorces are never an easy event, especially for rich people. To summarize all the phenomena you see in this US-China trade wall exactly mirror the divorce analogy mentioned above. In the end, as a person living in the West world, you must stand your ground firmly tagainst China his time, otherwise, when the WWIII comes, we all will become dust‼. Good bless America!
Frankly speaking, we are all screwed if we keep a free market with your country. I worked sometimes in ASIA and must recognize that you are very clever people (IQ higher than western world), you learn fast, you improve your products fast., in some sectors you are leading now. Your population (hopefuly controled, if not you would be 2 billions today) is around 1.4 billions compared to 330 millions for US and 750 millions for all Europe. JAPAN (100 millions) and South-Corea (50 millions) were small contenders compared to your huge country.
Why are we screwed? Because you make all necessary things cheaper than us and the quality improve every day. So we stop manufacturing almost everything here.
The consequence nowadays is that we can keep a good standard of living because of your efforts; a lot of manufactured product prices do not increase here (not like our service sector!)
BUT BUT BUT ….why are you considering still that our EUROS and DOLLARS are worth what they are compared to your YUAN.? They are incredibly overvalued on the basis of your products prices.? It is so because you must develop your own consumer base.
When you will be happy with it I expect our currencies to go in freefall following the basic economic law as the products of our zombie economies will be of small interest to you.
Communist republic of China an Evil?
I think that all people are good or bad following the conditions in their living environnement. Real communists are dangerous militants exactly like radical religious ones.Is China population still communist now?
Some people ( good standard of living, believers type) have a trend to be too much indulging with other peoples considering at first sight that their soul must be peace oriented like their own one. Smoking pot or drinking alcohol are bad habits in this respect!
We need to truly know how China is doing for the worse for us to know if we are doing better. It’s zero sum.
If Trump is NOT winning, why will the Chinese want to negotiate? Working in Asia these last few years, I believe the current measures are not a “Trade Conflict” but a war between two nations with very different values clashing.
Perhaps the battles are not successful at the moment but the commies are everywhere deflecting every social economic norm into the disaster like their own.
Mish still doesn’t get it, and still views the trade debate through an aloof college professors eyes.
Yes, we have all been indoctrinated by two generations of college professors. Free trade is always and everywhere a good thing, and you must never ever question this. The Smoot Hawley mistake caused the great depression, because it sure as heck wasn’t the failed central planning and free money the Fed handed out in the 1920s. You can’t get tenure on a college faculty if you don’t drink the socialist Kool Aid. You will not get tenure if you blame the Great Depression on FDR’s socialism or the Fed’s money printing.
But GASP!! what if the clueless faculty trying to ingratiate themselves to one another are wrong? What if the stock markets are not effecient? What if there is a risk in buying MBS bonds? Could the never want to grow up Peter Pans of academia have flawed models on trade too? Yes, its blasphemy to question the priests of academia.
The USA wasn’t winning the trade war before Trump. China was (and is) stealing intellectual property rampantly, and they were not giving equal access to their markets. Looking at one year like the academics, US consumers are better off by getting lower prices.
Looking at longer time horizons, one has to balance cheap Chinese goods on Amazon versus losing a good paying factory job — and the income stream that paid for all products (not just Chinese). Academics just raise tuition double digits every year, so they can’t grasp the longer term picture.
Free trade is only a good thing when it goes both directions, and when the US education system (the same quacks!) educates US factory workers to shift to other jobs when the factories move to China.
Academia focused on political activism, and failed to train even the Ivy League for the post-factory economy. Nope, ordering a chai latte with coconut milk while complaining about safe spaces in the genderless bathrooms is not free trade.
The US was losing the trade war before Trump, and still is. The education system failed to do its job. US workers are ill equipped to do “old” factory work, and ill equipped to do post-factory work — all for $70K per year for four years!!!
We don’t have a student debt problem, we have an ineffective education system. But I doubt sanctions or tariffs on China can ever fix the education system.
Oh, and Mish still has TDS…. so we must blame Trump for forcing us to realize China isn’t the root of the problem. We were so happy pretending that student debt and lost industries were some other country’s fault. Why did Trump have to make us realize our own education system doesn’t prepare our workers to compete?
The beltway power struggle escalates. The despised, non-beltway usurper who snatched away Hillary’s properly-anointed crown on the very cusp of her crowning as Queen of Wars and legitimate heir to the socialist dream for America, lives.
This narcissistic usurper sits atop their political rubble and further enrages them by directly, and continuously, twittering heretical notions to the serfs, such as:
1.The fruits of capitalism, led by us, have lifted China from Marxist serfdom in 40 years flat. Let’s now insist China play from the tips like the rest of us.
2.If Europe’s worth protecting from the Russian Empire, growing at the rate of one Belgium per year since Peter The Great, maybe it’s time Europe pitched in on the bill.
3.Is there a reason, other than cosmic scale implied influence peddling, that Clinton Foundation “contributions” imploded upon my election?
4.Sans his relationship with his United States Vice Presidential dad, was Joe Biden’s son worth a board seat and $50,000 per month to a Ukrainian firm…or anyone else?
5.Etc.
6.Etc.
Oh! The humanity!!!
.
about that CO2 Declining CO2 price paths
Risk and uncertainty are important in pricing climate damages. Despite a burgeoning literature, attempts to marry insights from asset pricing with climate economics have largely failed to supplement—let alone supplant—decades-old climate–economy models, largely due to their analytic and computational complexity. Here, we introduce a simple, modular framework that identifies core trade-offs, highlights the sensitivity of results to key inputs, and helps pinpoint areas for further work.
https://www.pnas.org/content/early/2019/09/30/1817444116
Trump ran on a few key promises.
Build the wall. About a mile of new wall a day is being built. Plus hundreds of miles of upgrade to existing wall. Being fought tooth and nail by democrats. Big win.
Deport illegals and reform America’s enforce asylum/immigration laws. Being fought tooth and nail by liberal judges and “sanctuary cities.” All should be turned in Trump’s favor at higher level courts. Partial win so far.
Repeal obamacare. Came within one vote (John McCain). Parts of obamacare have been repealed. Partial win.
Bring manufacturing jobs back to America. Huge win compared to obama’s dismal “the fundamentals of the economy have changed” numbers.
Cut Regulations. Huge win.
Cut the number of bureaucrats. Huge win.
Rebuild the military. Huge win.
Appoint judges who have actually read and follow the US Constitution. Yuuuuuge win.
Plus no new wars. A win over the ISIS caliphate.
Obama deported more illegal immigrants that Trump has and that is a fact. Obama care is bad and we all know it, even democrats, but it is FAR better than no plan at all and that is exactly what the GOP came up with, nothing at all. That wall by the way, will not work, oh except to keep you in, it will keep nobody out.
Bring manufacturing jobs back eh? All I can do with this one is laugh at you, WORST MANUFACTURING NUMBERS SINCE THE DEPTHS OF THE GFC! You are delusional if you think manufacturing has returned, just straight up crazy.
Cut regulations? The only people that won there are the biggest and wealthiest polluters and drug companies who have sent prices out of reach.
Fewer bureaucrats? Here are the federal employee numbers for 2016/17/18: 2,097,038 2,087,747 2,100,753
There are more people on the payroll now than before he took office.
Rebuild the military, and yes here I agree with you as long as your definition of rebuilding the military is spending a lot more money on it, which you then misappropriate billions for a stupid wall that will keep nobody out.
Far right judges are not a win, they are merely stacking the deck on social issues that should be the purview of elected representation, if you are planning to go with the appointment of Kavanaugh as a win then you are going to be sadly disabused of that notion in 2020 because nobody aside from a white supremacist nationalist thinks he was qualified for that job. It will end up with democrats getting control and who will be the first to go? Kavanaugh for perjury in his testimony to the senate.
And they are very likely to increase the size of the SCOTUS to be able to appoint liberal judges to the bench, a thing I would not approve of except that the nation is now so grossly out of balance that there has to be a counter to the very far fringe right, you will not like it but tough. You are the minority and will just have to put up with it.
Ah – the same old democrat talking points recycled again and again and again.
obama change the stats so anyone stopped at the border was counted a “deported.” For the rest of history – it was people deported from the interior, which obama had the “catch and release” policy.
obama (just like clinton) cut the military and called it cutting “federal employees” even while bloating the government with more and more bureaucrats. Trump actually cut the number of bureaucrats by 17,000.
obama could do nothing – Bush was the fault for eight years and why nothing could be done even though the democrats has the White House, a filibuster proof senate and a supermajority in the house. And obama left Trump a load of crap and Trump actually gets things done without crying about it.
Anyone who believes in the US Constitution is now “far-right” and a “white supremacist.” It is such a silly argument.
Out of balance = the liberal/progressives lost.
And can’t deal with it. Impeach for a phone call! Pack the SCOTUS! Ban guns with an executive order!
Not to mention
not only eliminating the deficit but the entire federal debt,
release his tax returns,
never play golf,
make great trade deals,
bring back coal,
$1T infrastructure plan,
cut middle class taxes and make the rich pay more,
Hello RedBanana. I know this has been pointed out to you before, but ISIS was our proxy. Our enemies (Hezbollah, Syria, and Russia) defeated them. There was no joy in the Pentagon over the struggles of ISIS.
I still don’t get how you understand the stranglehold the bankers have over the world yet want to play the red/blue game. I guess you keep playing out of inertia, or maybe abandoning MSM politics would be too depressing?
Trump simply took a page out of the Obama playbook,talk game and pretend your ass off,it (somehow) got Barak relected!Will it work for Trump?
Problem is if we ditch Trump just think how much “winning” we will have under the AOC clan. I’m starting to think we’re just screwed.
I agree and that is why I changed my registration from Dem to GOP last July, because the far left is actually worse than the right which is now also too far right. There is no centrist available to vote for and I will not vote for Trump so I hope to god he is impeached and a cooler head is put forward as the GOP nominee. Or, that the party primaries him and nominates someone like Weld. Otherwise your worst nightmare will come true, Warren will be elected. As of today Sanders is off the campaign trail with emergency arterial surgery, I have always said he was too old and probably would not live till the election anyway. I also say Biden is unlikely to survive to the end of his first term if elected so he better have a damned good VP lined up.
The BIG picture. Ray Dalio.
Dalio?
No offense, but he (and Bill Gross) has been (and will be) completely wrong on bond market.
Some “Bond Kings”.
Trump’s master plan will be revealed after he is re-elected. If he’s not re-elected, we will have thwarted God’s will, and shall be plunged into 1000 years of darkness! The bible say so! Bow down, unbelivers!
And the best healthcare plan evahhh too (after the election!)
Well, let me tell you…if he wins, it ain’t gonna be pretty either with all those ‘celebrities’ and hypersensitive wokesters. Prepare for a lot of skyscreaming and hyperbole on Twatter!
It is the left with the doom and gloom of environmentalist nazism who believe the earth will in end in 11.35 years. Or earlier if Al Gore is correct.
And the only solution is bigger and bigger government, more and more regulations and higher and higher taxes.
You are truly a child of The Lord, 2
Fruit, and shall no doubt spend eternity in heaven with Jim Baker, enjoying the sweet, distant music of the screaming damned.
“Our children will never know snow…”
“Polar bears will go extinct…”
“CAT5 after CAT5 hurricanes…”
Just a few of AlGore predictions that never came true.
AOC deadline is now only 11.34 years away. Better get rid of all planes now…
Look at the real science, not the ginned up nonsense from Big Oil, etc. and you’ll understand the issue with the climate. It isn’t all doom and gloom, but there are some simple and cost effective things we can do today, plus we can lead to build a Worldwide framework if the more dire predictions play out.
Or, you could decide climate science is a political matter, and check which side your team is on, and jump up and down parroting the correct talking points and blaming the other side’s politicians.
Your choice.
I looked at real science.
Nature, all by itself, froze the earth to such a degree that there was over a mile deep glacier over NYC.
Nature, all by itself, heated the earth to such an extent that the glacier over NYC melted, Alaska had tropical rain forests (with alligators) and Greenland was warm enough to raise crops.
The best scientists in the 1970s told us we were entering a new ice age and I would have to move to the equator.
“but there are some simple and cost effective things we can do today” – like destroy the economies in the west.
Because every solution requires bigger and bigger government, more and more regulations and higher and higher taxes.
And the trade deficit, especially with China, is higher, not lower. Is that winning?
Lets remember who runs China– the CCP has sent entire peoples (Uigyers) to the Gulags, Xi Jinping now wants to be called The Chairman, and his most fervent wish is to complete the takeover of HK and Taiwan. The whole country is now a creepy police state with cameras watching you everywhere. They need to change directions back to the days of Deng Xiaoping.
Have you hear about the cameras in England? 1 surveillance camera for every 14 people? New York working on a network of 18,000 linked cameras…
Cashless society means a controlled society.
It isn’t the number of cameras, it is the intent and practice of their usage. Saudi Arabia may have fewer cameras than England, but those that are in place can be used for far more oppressively than 1,000 of those in England.
Having lived in England, and still visiting and staying with friends there, I’ve only heard positive things about the cameras – they help reduce crime (or at least relocate it from where my friends and their families shop, eat and drink), and nobody feels Big Brother is watching them.
China is a bifurcated country–both developed and developing. Hundreds of millions of people in China live at very low standard of living while millions live life very well. It is not clear that those hundreds of millions will be able to step on the development train in this rapidly changing world.
And, by the way, the people who decided to bring manufacturing to China were the corporations that have been profiting mightily over the past decades. They went on their own free will with the attraction of grater profits that they could escape taxation on.
The US economy has grown on the basis of the arbitrage in labor rates and at the same time wage rates have remained suppressed due to pressure of the unlimited labor supply across the world. A little thought experiment–all those bits and pieces made around the world, would we be able to afford them if they were made in the US with workers who want a living wage? Could the famous American consumer remain so great if they had to be paid China labor wages to make a product that they could afford? There’s some mind-twisting trail to the bottom of the canyon of wealth if you discard the option of the lowest-cost provider. If you wanted cheap goods you went where there was cheaper labor to make those goods.
However, this all becoming moot in the era of ultimate automation. The cost of delivery becomes a prime factor rather than assembly labor.
Are you ready for China-owned lights-out automated factories in the US?
Mish, you’re right – changing the status quo isn’t easy and it wasn’t going to be. And, there’s certainly more pain to come.
But the fact remains, the USA got taken to the cleaners in prior “free trade” deals, period.
I (and many others) give Trump a lot of credit for trying to change the paradigm. No other President has had the balls to do it. Question to all the doubters, would Trump have gotten the political support if he said, “well, to be honest, changing the status quo is going to be a total mess, but we have to do! We need opportunities for people here. We cant keep encouraging companies to move ever job overseas.”
And for those anti-Trumpers waiting for sunnier days, it’s only one election away. And I predict the next President will be a total, unadulterated lackey for global interests. Just wait. He or she won’t be able to get on their knees fast enough to please the world on trade and climate change, all while their buddies get super rich and the rest of us wait by the mailbox for our monthly $1,000 free money. That’s what opportunity will look like in “New America”…the right to get “high” and free money because doing anything else would be, well, just too hard.
You guys still do not get it! Trump is playing 5-D chess that people living in a 4-D world cannot understand! He is winning by losing!
China is not a developing Country yet still plays that game. China is run by a mafia with an army don’t forget who you are dealing with. Low cost labor can be had in India etc. countries not hostile to USA. Short term trade pain for longer term peace.
Wow clearly you’ve never been to China. Also if you think that bullying is the solution; imagine how America would react if this was done to you! China is not a democracy but to call it poor is to misunderstand the dynamic of the country — its like saying that America is poor because of its slums…
I said they are NOT a developing country
I have to agree with you on this one, Mish.
I can understand his logic in trying to offset the trade-imbalance and to reverse the obscene export of jobs from the USA to cheap(er) labour countries. I totally get that. But these aren’t fair or normal marketconditions. It’s all a giant pump-scheme, based on the falsehood of propping up markets with cheap money, while the rest of society falls further and further behind (see Mish’s recent articles about wage”growth” and such). Apple is just one example of corporations sitting on huge piles of off-shore cash, whilst not paying their fair share of taxes, like the rest of us.
So winning isn’t exactly the right word I’d use.
And the proposals by the opposing political party aren’t ‘winning’ either.
Let’s face it, either the whole thing collapses in 12-24 months or the masses will be treated to bread and circuses for the foreseeable future.
Totally agree that trade wars hurt everyone, but I don’t think this is just about trade. This is about crushing a potential adversary before they have a chance to become a threat. I don’t necessarily agree with this, but this might be the strategy in the longer term. In this context, job losses from a trade war may be more acceptable than actual deaths resulting from a hot war.
You really think there is a strategy?
I agree. it’s way too soon to claim victory or defeat. Eventually both sides will reach an agreement and it will almost certainly be better than what we’ve done in the past.