Category Archives: Free Markets

TRUMP Trade Tactics Are About WINNING Negotiations

Canada, Free Markets, Labor, Taxation, Trade

I love Canada, am a Canadian (and American) citizen, have Canadian loved-ones. I don’t want to see Canadians hurt.

It’s true, however, that, in the artificial universe of trade agreements, previous US leaders have shown they don’t care about US workers. Trump’s the opposite. He’s using American power to muscle deals he believes are beneficial to American workers.

Canada taxes purchases of American goods starting at $20, whereas America starts taxing Canadian goods at $1000. Trump has said he’s love for trade to be entirely and mutually without tariffs:

“No tariffs, no barriers. That’s the way it should be. And no subsidies. I even said, ‘no tariffs’,” the US president said, describing his meetings with fellow Group of Seven leaders as positive “on the need to have fair and reciprocal trade”. “The United States has been taken advantage of for decades and decades,” he continued, describing America as a “piggy bank that everyone keeps robbing.”

But since that’s not going to happen …

“Canada is going to have to make some concessions,” says Laura Dawson, head of the Canada Institute at the Woodrow Wilson Centre in Washington, DC. Among them might be raising the threshold at which Canada taxes purchases of American goods from C$20 to around C$1,000, the American level. Canada might consent to more onerous conditions for a vehicle to be imported duty-free within NAFTA, including on wages and the amount of North American content.

And of course, the American market is enormous. Trump knows it. Leaders before him no doubt knew the power of American markets but refused to use it:

Canada gamely argues that the United States would also be hurt in a trade war. Canada is the biggest destination for exports from 36 of the 50 American states. Bilateral trade in goods and services is immense: $674bn in 2017. It is also, despite what Mr Trump says, balanced. In 2017 the United States had a small surplus with Canada, of $8.4bn. Yet Mr Trudeau’s bargaining position is weak. “We absolutely need them, but they could live without us,” says Philip Cross, an economist.

BESIDES,

Canada’s system of supply management, which sets limits on the production of dairy, poultry and eggs, has long irritated the United States (and should anger Canadians, who pay more for food than they need to). Canada subjects imports of those products beyond a ceiling to punishing tariffs (298% in the case of butter). Mr Trump has been angry about this since he met dairy farmers from Wisconsin in April 2017.

The article is “Canada: Breaking a few eggs: The economy is already feeling the effects of Donald Trump’s trade war,” courtesy of The Economist.

Harley-Davidson Had Been Looking To Move Production Off Shore For A While

Capitalism, Debt, Donald Trump, Economy, Free Markets, Trade

Conservatism once had the genius of James Burnham, Russell Kirk, Frank Chodorov, and Felix Morley; now the brand boasts Rich Lowry, Meghan McCain and S. E. Cupp.

The last has learned nothing from the 2016 election. S. E. Cupp, a Never Trumper who hosts a CNN show, is betting against Donald Trump. She says, “Trump Supporters Soon Will Learn That No One Wins A Trade War.”

Where’s the learning curve? I would not bet on Trump losing a trade war.

This is not to advocate tariffs. I am for free trade. But here’s the clincher. We don’t have free-market capitalism. Never have; at least not in recent memory.

Thus, “trade deficits must be seen in the context of state-managed trade and systemic debt.” That’s what Trump is negotiating; he’s not messing with the divine order in which we true free-marketers believe. For it doesn’t exist.

As for Harley-Davidson’s decision to move some of its production outside of the U.S.: Rep. Thomas Massie (R-Ky.) and Kennedy of Fox Business disclosed that the company had been looking to move production off shore for a while and were searching for an excuse to do so.

 

POTUS Is Right: ‘Country-on-Country’ Trade Deals Are Better

Donald Trump, Economy, Europe, Free Markets, Media, Trade

A laudable sentiment unreported (except here) was expressed by President Trump, on June 1.

It is that the US would be far better off if it negotiated bilateral trade agreements, instead of multilateral deals. Of course, “county-on-country” agreements, as the president put it, are preferable to the multilateral maze we currently negotiate.

If you can’t have free trade—and we don’t!—smaller and less unwieldy agreements are preferable.

If you find a quote, please send it along. The rule is that the malpracticing media neglect or twist everything substantive Trump does or says.

POTUS & Pompeo Make Great Strides On North Korea, Are Rewarded With Double Negative Headlines

China, Critique, Donald Trump, Foreign Policy, Free Markets, Trade

June 1, President Trump was impressive on North Korea, sharing a significant development with the media. He would “be meeting with Kim Jong-Un in the coming weeks as we seek to denuclearize the North Korean area and the entire Korean peninsula.”

“I think it is a getting-to-know-you meeting-plus. And that can be a very positive thing,” said the president.

POTUS and Mike Pompeo, U.S. secretary of state, had just met with Kim Yong Chol, a high-ranking North Korean, in talks to salvage the summit.

At the same time, the president indicated that he viewed China and South Korea as neighbors who should do the dominant policing of North Korea.

In addition to non-stop sneering during “programming,” the headline President Trump received from CNN today was a double negative, something along the lines of:

“North Korea Summit No Longer Cancelled.”

Why not run a positive headline?

“North Korea Summit is On.”