Free Trade

Is Trump Choosing Tariffs Over a Trade Deal With China?

The tariffs were supposed to create the conditions for such a deal, but Trump is refusing to drop them as part of an agreement.

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When someone says he is a "Tariff Man," you should probably believe him.

President Donald Trump says he is unwilling to roll back any of the tariffs his administration has placed on Chinese imports as part of a "phase one" trade deal. Although the framework of a deal has been announced by leaders in both countries—and despite the fact that plans to sign the deal are already being made—Trump's unwillingness to withdraw any tariffs appears to be a major stumbling block toward actually reaching an agreement.

Trump and his top trade advisor have been quick to shoot down speculation that the "phase one" deal could be the beginning of the end of the trade war. That speculation started on Thursday, when a spokesman for the Chinese Commerce Ministry said both countries had agreed to a reduction in tariffs. But Trump told reporters over the weekend that he had not agreed to any such reduction—a statement that effectively signals Trump's desire to control the outcome of the negotiations, regardless of what his own trade negotiators might be crafting.

Peter Navarro, Trump's top trade advisor and an avowed China hawk, slammed what he called "misleading" coverage of the tariff rollback agreement. In an email to multiple media outlets, Navarro said "the story began with a declaration by propagandists within the Chinese government" and that "there was no such agreement," Politico reported.

It is impossible to tell which side is playing the other—or whether both are merely staking out negotiating positions. But the whole incident strongly suggests that a deal to end the trade war is not imminent, and should lower expectations for what will actually be accomplished within the "phase one" agreement that's still being hammered out.

A quick check of the scoreboard: The United States has imposed tariffs on about $500 billion worth of Chinese imports since July 2018, with another round of tariffs scheduled to hit in mid-December. If those go ahead as planned, nearly all imports from China (minus a few specific carve-outs) will be subject to import taxes. China has retaliated with tariffs on about $110 billion of U.S. goods and by shifting their purchasing of agricultural goods towards other producers. Both sides are losing.

But if he's facing a choice between his beloved tariffs and a possible trade deal with China, it shouldn't be a surprise if Trump decides to stick with the tariffs.

He's been telegraphing as much since early this year, just weeks after an apparent December 2018 breakthrough in the trade war dissolved. During a January 31 interview with reporters from The New York Times, Trump was asked bluntly whether he would be willing to lift his tariffs on Chinese imports as part of a trade deal.

"Do you think it's possible that you might still go, even if you reach a deal on all of the points you're trying to reach, leave some of the tariffs on?" asked Peter Baker, the Times' White House correspondent. "Is that a possibility?"

"Yeah, sure," said Trump, after an extended rant about the World Trade Organization. "We have 25 percent now on $50 billion. And by the way, Peter, that's a lot of money pouring into our Treasury, you know. We never made 5 cents with China. We're getting right now 25 percent on $50 billion."

At the time, this seemed like just more evidence that Trump does not understand how tariffs work. The Treasury is not "getting" money from China—the $37 billion in tariff revenue collected since the trade war began have come out of the pockets of American importers, businesses, and consumers—though the tariffs are likely responsible for a slowdown in China's growth rate, and for disadvantaging the private businesses operating in the shadow of China's state-controlled economy.

But Trump was clear that, even with a deal that accomplished all of his goals (which remain unclear), he'd keep the tariffs in place.

More than 10 months later, he's sticking to that position. Another potential breakthrough in the trade war looks to be on shaky ground because Trump is unwilling to budge on his commitment to maintaining tariffs on Chinese imports—the removal of which are, understandably, a major priority for China.

And without an agreement to roll back tariffs, there will be no deal, tweeted Hu Xijin, editor of the Global Times, a Chinese newspaper widely seen as a mouthpiece for the country's government.

Much of the trade war has been defined by Trump's misunderstanding of how tariffs work and who pays for them, crossed with his unwillingness to use any other tools to accomplish his trade policy goals.

That ignorance has imposed immense economic costs on American consumers and businesses while failing to reduce how much America imports from China and dragging down U.S. economic growth.

That stubbornness might preclude Trump from being able to reach an agreement that would start to undo the damage.

NEXT: Immigration Enriches Migrants and Their New Countries

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  1. Trump is a protectionist, period. He’s been lying to us all along, when he says that he wants or likes free trade.

    1. I was going to say the same thing. Now cue lc and the other conservative sycophants to say tariffs mean free trade or some other nonsense.

      1. They must be waiting for the appropriate talking points.

        1. Fox News must be covering something else right now. I would have expected some comments by now.

          1. Poor leo. Hasnt been called a dumbfuck today. Such a needy person.

            1. Ah, I see you’re going with the “2 wrongs make a right” talking point on this one. Maybe we should become full on socialist like China and beat them at their own game!

            2. Poor JesseAz. Hasn’t gotten in his quota of ad-hominems today. Such a fallacious person.

              1. “the other conservative sycophants”

                “ad-hominems”

                1. I was going to make a thoughtful reply, then I saw who it was.

                  1. Would your thoughtful reply have included, “OK you got me”?

                    Or just a bunch of excuses why the shit you’re deriding other people for is ok for you?

                    1. Tulpa, the mindless troll, constantly creates new names for itself… Then tries very hard, apparently, to NOT always AGAIN act like… Like Tulpa, the mindless troll!

                      But Tulpa, the mindless troll, can NOT resist doing the same old mindless trolling, so it rapidly becomes clear… That we have yet ANOTHER new name for Tulpa, the mindless troll!

                    2. Fuck off Mary, I asked sarc a question, and it wasn’t about eating shit, so you have no useful input.

              2. The first 4 comments are literally you, the squirrel, and Leo leveling ad-hominems, then you call someone out for an ad-hominem response? That’s rich.

            3. I think its hilarious that sarcasmic and Leo need me here.

              Boehm’s garbage articles speak for themselves.

              Nobody is buying the shit Boehm is selling, Trump won’t be impeached, and Trump will win reelection.

              1. We like having you around. It would be boring if we only had libertarians at this site.

                1. Who cares if you like having Libertarians like me around.

      2. You dont have free trade with a dishonest actor such as china even if you are on your knees juggling their balls. Stop being so damn naive.

        1. Yes, but we can allow Americans to freely trade. The American government is supposed to protect the rights of Americans, right? We aren’t at war with China. Let Americans do business as they see fit. That’s the issue here. It has nothing to do with China, or juggling China’s balls, it’s about respecting the autonomy of Americans.

          1. Exactly. Tariffs are not a tax on China. They are a tax on individual Americans who choose to trade with individual Chinese people.

            1. All the arguments for tariffs seem to rest on some kind of collective ownership or control over American assets. These companies and individuals are doing it wrong, so they need to be whipped into shape.
              I’d much rather have Trump than Bernie Sanders, but they aren’t all that far apart on a lot of stuff.

              1. Ironic, isn’t it. We are getting to live through a real world horse shoe theory. Lucky us.

                I would support Trump suing China in the WTO, or other similar actions over China’s IP theft. Trump seems to think that he’s going to create a wave of American manufacturing, though. And that simply is not going to happen.

                1. Fuck off Jeff.

    2. Trump, as far as I can tell, has very few principles save for self promotion. To say he is a protectionist might miss the bigger point that Trump is going to do whatever it takes to get elected.

      I’m of the opinion that Trump is misreading the room, and probably because he’s listening to Navarro on trade. Whatever Americans voted for him because they thought he would get tough on China, are likely concerned more with the economy of the US. Right or wrong, market indices are an in your face metric for the economy. If Trump could get the Dow rolling like it was up until 2018, he will certainly be reelected. If the Dow is up and down, basically like it has been since January 2018, then it will be a closer election.

      One thing is certain, the major market indices will go up on both the news of a trade agreement AND a reduction in tariffs from both sides. The markets have reacted very favorably to just a hint that there might be a deal the last few weeks.

      Trump is risking losing swing voters who vote based on the economy to keep nationalist voters who want to be tough on China — nationalist voters that will almost certainly vote for Trump anyway.

      1. >>I’m of the opinion that Trump is misreading the room

        lol.

      2. Your opinion is generally naive and infantile. Of we drop all regulations china is sure to follow righy?

        1. I don’t care what China does, nor do I naively pretend that I can predict or affect the outcomes of a sovereign nation, especially one that is socialist.

          We would be better off with no taxes on imports, just like we would be better off with no taxes on income, sales, property, etc. It’s really not a difficult concept to grasp.

          1. You don’t give a shit about next week, because today is all that matters

            1. I wouldn’t really say that the state is a paragon of forward thinking…

            2. Are you arguing for a five year plan?

              1. I’m arguing for some consideration for the big picture rather than an exclusive focus on dogmatic theory.
                I understand libertarians only consider the trees real, but that doesn’t stop the forest from existing

                1. You are arguing, as you and the normal trump crew do, for whatever he wants, all else be damned. You and your buds are personality cultists. It is plain to see

                  If he decides to pull a 180 tomorrow and say trade should be the most free it has ever been, and all tariffs gone, you will argue full force that it is the best idea, without reservation, and do whatever mental gymnastics you need to that make sure you say he is doing the right thing, at all times.

                  You and the trump crew are a running joke line, you are all NPC’s that spew the recent talking points and propaganda. You might as well all have been made by the fat gross whale huckabee sanders or whatever hag he has as his press bitch now.

                  Every thread is so predictable and hilarious to see. You all fall into line, every time, like good cultists. LRH would be proud to have slaves like your ilk.

                  1. ShotgunJimbo, dumbest hick here, going with the groupthink!
                    “All Trump supporters are cultists” they chant in unison.

          2. There you have it. Leo does not care what a tyrannical Socialist nation like China does.

            Fortunately enough Americans DO care and want Trump to stand up for American interests.

            Gotta love this Constitutional Democratic Republic!

      3. Trump is risking losing swing voters who vote based on the economy to keep nationalist voters who want to be tough on China — nationalist voters that will almost certainly vote for Trump anyway.

        Sort of the mirror obsession with Democrats for far-left ideas, when the far left would never vote for Trump anyway

    3. Heres some information for you… so is china. They’ve been so for decades. And they practice corporate theft and espionage openly. They are not for free trade, they are for leveraged trade. Tit for tat is a valid game theory play in economics.

      Once you realize you cant have free trade with a dishonest trade partner you’ll stop being so naive.

      1. Why don’t companies stop operating in China if the cost of IP theft exceeds the benefits?

        1. Good question. I’d like to know what JesseAZ thinks.

          The IP is owned by the companies operating there. Not collectively by all Americans, or by the government. If it’s worth it for them to do business in China despite the shady business with IP, is up to each company or individual doing business in China.

          1. Yaye Zeb! Well put! When Trump pretends to own Boeing’s IP and Ford’s IP, in this manner or any other, he’s just being another God-damned socialist, collectivist asshole!

          2. Because CEOs don’t give a shit about the future of the company, they care about immediate payoffs.
            The short sightedness of dogmatists is amazing

            1. Because CEOs don’t give a shit about the future of the company, they care about immediate payoffs.

              So I guess we are taking the leftist tack that the government needs to step in and help manage publicly-held corporations, despite having literally zero skin in the game? holy shit

            2. And why should we want the government to decide how they should be running their companies? How is that any different from progressives wanting to tell everyone how to run everything?
              If you think libertarianism is dumb and doomed to fail if implemented, fine. But the whole idea is that without government intervening every time something sub-optimal happens, people will learn to take the longer view and take responsibility for their own shit. No one is arguing that shortsighted CEOs looking for profits now at the expense of the future are a good thing.

              1. I suspect that a lot of people posting on here have less of a problem with progressive interventionism itself and more of a problem with the fact that it is progressives doing it.

              2. So we should allow Lockheed to sell missiles and jets to Iran? Hell, why stop at Iran – IS has billions. Who is the government to step in and prevent free trade between individuals?

                Economies don’t exist in a vacuum. Trade is a factor in geopolitics. The US prevailed in World War II because the US had unmatched production capacity. What happens when the US becomes dependent on foreign manufacturing?

                Since when is dependance a libertarian ideal?
                Because that’s what all these anti-tariff articles seem to be implying – without bending over for foreign manufacturing, the US economy is doomed.

                And where does value come from when Americans no longer make anything?

            3. +100000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000

              1. Congrats on outing yourself as a lefty again.

              2. Poor old trolls need new socks blardo to troll reason.

    4. No, he is a free trader. His tariffs are designed to put pressure on China. If he were a protectionist his tariffs would be designed to bring jobs home. Three changes would be required for tariffs to bring jobs home. First, tariffs would have to long lasting and certain in order to make an investment in plant and equipment. Back when tariffs created jobs they were imposed by act of Congress and required an act of Congress to change. Trump could end these tariffs today. Second, to bring jobs home tariffs would have to apply to all sources not just China. There must be no way other than domestic production to avoid the tariff. Third, we must have compensating tariffs. Any item used in a component part must include a tariff equivalent to the tariff it would carry as a stand alone tariff.

      Trump is doing none of this. He is using tariffs in a manor approved by Adam Smith in the Wealth of Nations. That is to pressure a country into honest free trade.

      1. 1) Congress won’t pass tariffs so he went with the option available.
        2) Tariffs have also been applied to Mexico, Canada and the EU.
        3) He ended the TPP talks.
        4) Added more restrictions to NAFTA making it more managed trade not less.

        So you will need to revise your hypothesis. I believe him when he says he is a tariff man. He has held this belief since the 1980s from what I can tell.

      2. No one is arguing that Trump is competent in pursing policy goals. He is competent in pursuing his personal goals, sometimes.

        1. Fuck off jeff.

    5. All the dimwits are incapable of telling the difference between a “stumbling block” and a “negotiating tool”.

      The Chinese haven’t been seriously negotiating because they thought the DemonCRAPS might have a shot at the White House – at which all the pressure on China would be gone as the Dims sell out.

      Now they’re starting to figure out that Trump is going to win re-election and they better be serious. There’s no point in taking another year of losses due to tariffs – and both sides know that. So Trump is essentially saying, “You haven’t made the best deal for America. Put more on the table – then we’ll talk about tariffs.”

      Good for Trump.
      Good for America.

  2. If the goal of the policy is to stop China’s serial lying, serial cheating, and serial theft of IP….why on earth would you give up the only tool you have to enforce compliance (tariffs)?

    I would like the tariffs to go, but I want the serial malign behavior of China to stop even more.

    1. The goal of the policy is to erase the trade deficit. We give China boatloads of money, all we get in return are boatloads of consumer goods and Trump seriously believes that a dollar is worth more than a dollar’s worth of goods. We’re better off not trading with China at all if trade involves us giving them money.

      1. Trump has actually been pretty clear that IP theft and espionage are a big consideration for these tariffs. The estimate even under Obama was 80 billion a year. This isnt a no cost to trade despite the naive Leo’s of the world.

      2. What do people pay the US for?
        How is money/value created?
        Whete does it end?

      3. Jerryskids….I think there are multiple goals here, not necessarily exclusive of each other. You’re right, one of the stated goals is to reduce/eliminate the trade deficit. 100%, no debate. I also think that in order to get to that happy medium, China’s malignant behavior must be addressed, and changed.

        I guess what I am saying: We are both right. 🙂

        1. Well, my comment was more on how I think Trump sees things, not as you or I see it. I think Trump has only lately seen the China trade issue as anything other than simply the matter of the trade deficit and jobs. All their other malign behavior is of little concern to him.

          As far as I see it, collectivists of any sort are the enemy and we shouldn’t be messing with them at all. Whether the Chinese or the Democratic Party are currently a bigger threat to America is debatable, but failing to see them as an existential threat and dealing with them accordingly is a mistake. You simply can’t compromise your way into peaceful coexistence with people who want to exterminate you.

    2. Exactly. Clearly tariffs are working to bring China to the table to negotiate IP rights and freer trade policy.

  3. I don’t think there’s any doubt that Trump is looking at this as it relates to his reelection chances.

    If Trump believes that letting the tariffs go will cost him the White House, then I suspect he won’t let the tariffs go.

    Incidentally, I’m also not sure there’s much doubt but that Boehm would oppose Trump’s trade policy no matter whether Trump dropped the tariffs or not.

    1. Outcomes ranked from best to worst.

      1) Trump takes the White House in 2020, and the tariffs are rescinded.
      2) Trump takes the White House in 2020, and the tariffs are kept in place.
      3) Sanders or Warren takes the White House in 2020, and the tariffs are kept in place.

      Notice, there is no option where Sanders or Warren takes the White House in 2020 and the tariffs are rescinded–because there is no reason to believe that either one of them wants to get rid of the tariffs. If the reality is that reelecting Trump is the only chance we have of getting rid of these tariffs, then even if that stinks, it’s still the reality.

      1. Do you think Biden would rescind tariffs? It seems that you’ve limited the outcomes to only Sanders of Warren.

        1. Biden would probably forget what tariffs are and if we have any.

          1. He can’t fondle or sniff a tariff so why would he remember.

        2. I think Biden is less likely to rescind the tariffs than Trump, and, unfortunately, tariffs aren’t the only downside to having a Democrat in the White House.

          I like having someone in there who will veto the Green New Deal and Medicare for All. To whatever extent Biden opposes Medicare for All, I do not see him having the balls to veto his own party if and when they get that shit through Congress.

          And we haven’t even started talking about foreign policy, gun rights, etc.

          In short, yeah, Biden would be better than Sanders or Warren, but that’s not saying much.

      2. Best outcome would be china ending many of it’s bad trade practices, not returning to the normal market of the last few decades.

      3. The only solution is to keep the unstable man. Genius

        1. “The only solution is to keep the unstable man. Genius”

          It isn’t up to me.

          These are the options, whether we like them or not.

          If you don’t like the options, work on your friends and family. They’re to blame, well, yours, mine, everybody’s. Those are the options because we’ve failed to persuade our friends and family to demand some better options.

      4. Ken….May I add a fourth outcome?

        4) POTUS Trump wins re-election in 2020, Team R holds the Senate, and takes back the House, China changes their malignant behavior, the trade deficit is eliminated, and Ginsberg/Breyer both retire and are replaced by Scalia Mini-Me’s. 🙂

        1. 5th option… Trump-to-the-dump via impeachment, Pence for POTUS in 2020 elections! I’m no expert, but Pence, I suspect, is much more of a “stable genius” than Trump! And will do what’s right for free trade… I’ve not studied Pence excessively, but I bet he’d make a better POTUS than Trump, or ANY “D” running right now!

          (Sad to say, Libertarian POTUS is a pipe dream).

          1. I’d much rather have a Libertarian Congress, truth be told. 🙂

  4. Drumpf’s tariffs are partly responsible for destroying the US economy to such an extent that Charles Koch’s net worth is stagnating in the $58,000,000,000 to $62,000,000,000 range. Only when a Democrat is back in the White House will the richest people on the planet return to prosperity — which is the primary objective of Koch / Reason libertarianism.

    #DrumpfRecession
    #VoteDemocratToHelpCharlesKoch

  5. Trump’s main problem is that he views trade policy as nothing more than some display of negotiation skills. Which means there is no there there.

    I actually changed my mind a bit re the basic tariff level when I saw the impact on small businesses. I now think a tariff is a bit like sand on an icy road. Need a bit of grit to get traction and move forward predictably. Capital investment needs some predictability about the future as well – or it ceases to even occur.

    But since everything Trump does can change tomorrow, I don’t even think that notion is secure. He could throw that under the bus in order to get some photo opp deal.

    1. So some level of central economic planning is acceptable to you?

      Where I live, the government can’t even efficiently manage actual sand on actual roads. Why do you think they’re capable of putting metaphorical sand on something as complex as world markets?

      1. Leo… china already centrally plans dummy. That is the trade partner you are dealing with. Educate yourself and stop living in an ideal world that doesnt exist.

        1. So because China does it, we should? I don’t understand your point. I’m talking about why we shouldn’t centrally plan our economy. China can do what they want.

        2. And I should add, to further my point above, that if you’re all in favor of the government planning this aspect of our economy (how much imports cost) then why stop there? There must be other parts of the economy that you think they would be better at planning… right?

          1. Right. Besides, if you want to see the results of high tariff policy, look no further than Argentina. Successfully moved from “developed” to “developing” country.

          2. The decision not to tariff is as much central planning as the decision to tariff

            1. LOL

              I started typing a response, but I feel LOL in all caps is the only appropriate response.

              1. It is for you, since that’s obviously all you have.

            2. Is anything not central planning then?

              1. The US imposes regulatory factors on operations occurring in US territory that are much greater than those in other nations. This significantly handicaps US production and incentivizes foreign manufacturing. To impose tariffs on imports is a central plan to mitigate disadvantage. To choose not to impose tariffs on imports is a central plan to advantage foreign production.
                Libertarians seem to believe that Faith Alone will set you free

                1. Ah, excellent. State intervention to justify more state intervention: exactly what a libertarian should support!

                  1. Libertarians apparently don’t support nation states, so nothing is going to please you.
                    What you’re saying is akin to advising that heroin addiction not utilize methadone – “drug addiction to justify more drugs!”

                    My ideal would be to fund the federal government entirely through tariffs and eliminate income taxes.
                    Somehow I get the impression that you would also object to that…

            3. The libertarian argument for taxation? No taxes = taxes, no regulation = regulation.

              Now I’ve seen it all.

      2. So some level of central economic planning is acceptable to you?

        Assholes like you who are completely fucking ignorant of actual history are precisely why a guy like Trump ultimately wins. Here’s the history of fucking tariffs in the US. And you want to pretend that some increase NOW is the introduction of central planning? What fucking planet do you asswipes live on?

        Free-floating currencies anchored to nothing outside banking and controlled by central/private banks is actually a huge amount of cronyism. It tilts the playing field towards those companies who have global supply chains and eliminates the small/new. Those small can get slaughtered by something as unknown to them as a 5% change in exchange rates. But hey – here comes a guy from Wall St who can sell you protection – a ‘currency hedge’. It’s a fucking racket.

        Why do you think they’re capable of putting metaphorical sand on something as complex as world markets?

        It’s not rocket science — and what I’m talking about is NOT subject to negotiation. Pick the measure you want – I think a 10% or half the annual dollar exchange rate volatility whichever is less would be about right. But whatever it is – it remains. And becomes EXACTLY what those who invest capital need to have before they invest – which is some basic measure of predictability in knowing what the unit of account will be worth in the US in future years.

        1. It appears I’ve struck a chord.

          And you want to pretend that some increase NOW is the introduction of central planning?

          I never said that. Central planning is bad no matter when or who implements it, and it certainly predates Trump. We should be advocating for removing it whenever we can, not advocating for more of it or some baseline level of it.

          Free-floating currencies anchored to nothing outside banking and controlled by central/private banks is actually a huge amount of cronyism.

          No argument against that. But the solution isn’t more government involvement. Because they screwed up our currency by creating the Fed is really no reason to ask them to “fix” some other area to compensate.

          1. We should be advocating for removing it whenever we can, not advocating for more of it or some baseline level of it.

            Who is we kimmosabe? And would you buy a car with only an accelerator and no brakes or transmission or steering wheel?

            Ricardo’s theory of comparative advantage is perfectly appropriate to call ‘free trade’ – but it also is based on the assumption that international (cross-currency) trade is, overall, goods for goods not merely goods for money. It is quite different with floating currencies – and doesn’t apply AT ALL to the reserve currency.

            Further, ‘free trade’ is not a universal benefit. There are winners and losers. That means it is utilitarian not libertarian. Absent a real trade adjustment system where winners compensate losers, it can easily – and already has – turned into a coercive ‘learn to code FYTW’. And far worse than govt setting a baseline exchange rate range for its currency (paid for + a bit by that tariff) is govt trying to predict winners/losers from trade.

            At a certain point, it’s just not fucking worth it to negotiate trade deals anymore. Those don’t deliver broad benefits anymore – and they are in fact negotiations to create loopholes, distortions, etc for people with connections at those global levels.

            1. And would you buy a car with only an accelerator and no brakes or transmission or steering wheel?

              I don’t know. Would you trust Trump at the wheel, Pelosi with the brakes, and Schumer shifting gears? The reason for advocating free markets isn’t that command economies don’t work in theory, it’s because they don’t work in practice. How can even the most well-intentioned person ever possibly know how to pull the right levers for everyone all the time?

              Further, ‘free trade’ is not a universal benefit. There are winners and losers.

              This is wrong. It’s the same zero sum gamesmanship that leads to tariffs. Trade, at least in aggregate, is beneficial to all parties. If it weren’t beneficial, at least in the long term, then why would one of the parties trade?

              Absent a real trade adjustment system where winners compensate losers, it can easily – and already has – turned into a coercive ‘learn to code FYTW’.

              Compare countries that live in isolation vs those that trade more freely and get back to me on who has it better. It’s the same logic generally employed that argues that technology kills jobs. For the whole of human history both have been extremely beneficial. I really don’t understand this argument at all.

              1. Trade, at least in aggregate, is beneficial to all parties. If it weren’t beneficial, at least in the long term, then why would one of the parties trade?

                This is conflating two totally different things. Trade within a currency area does not affect the value of the currency itself. Trade within an area is simply the exchange of money for goods and then circulating round and round. It all occurs within a single market area and is more accurately called an element of a free market.

                Trade across a currency area – international or intermarket trade – DOES affect the value of the currency itself. Which is also why it is an issue of public policy since ‘currency’ has always been a product of govt (and not because of ‘legal tender’ coercion). Money leaves one market and goes to the other and goods goes vice versa. Which means the price of the currency relative to goods changes a little bit for everyone else in both markets. IOW – that exchange affects the value OF everything else FOR everyone else. And assuming this is a one-time trade, the only way those ‘pre-trade’ prices can be restored for everyone else is if interest rates on money are raised to pull that money that left the system back into the system. Which in turn changes the price of capital for investment in the first system.

                It gets even more complicated really fast which is why international trade is its own thing in economics. But just looking at our own history in the 19th century – why were some periods in that time called a ‘revenue tariff’ (ie free trade) and other times ‘protective tariff’ (protectionism)?. When the entire time period had far higher tariffs than anything we have now?

                The reason is because back then our major export product was ag products. Those are highly seasonal. Every harvest, railroad cars full of grain would head east to Europe. The payments for that however would lag a bit. Don’t get paid for those until they arrive in Europe. Our imports were not seasonal. The result was that each year the ‘normal’ flow of money (which is also what is expected when credit is extended) was a drip-drip exit from the US for most of the year – with a huge expected inflow in Nov or so. If anything unexpected happened re that ‘normal’ flow, then all of a sudden you’d have a ton of people who couldn’t make their payment on a loan. Which is the ingredients for a financial crisis in the banking system. And that is all HIGHLY manipulable – even today the meme about the stock market doing poorly in Sept/Oct dates back to then and is now almost self-fulfilling. A market like ours then – eg the Third World now with its utter dependence on cash crops and commodities – needs a higher base tariff simply to prevent financial crises based on the timing of money flows. More advanced balanced economies can have a lower base tariff because the money flows are not so volatile.

                Every financial crisis in history – and today – relates to this money flow that doesn’t match what everyone was expecting. This is an effect that is so far beyond buying some cheap plastic stocking-stuffer for the kids for Xmas or going to the store to buy a sandwich. Conflating the two merely makes it easier to manipulate and impossible to really understand what is happening.

          2. Because they screwed up our currency by creating the Fed is really no reason to ask them to “fix” some other area to compensate.

            You’re wrong. It is their obligation to support the product that they HAVE – NOW. To make it a currency that fulfills what the market requires of a currency. Not for you to pretend that in some other universe there will be a perfect product and until then corruption is not only acceptable it is welcome in order to hasten the day we will all die and go to that other universe.

            1. That is the path to a total state. Every state intervention will fail, necessitating another (by your reasoning), because apparently the solution is never to reverse the failed interventions.

              1. Yeah yeah yeah. Give the state a courtroom and a nightwatchman and before you know it its off to the gulag and brainwashing camp for everyone.

                You anarchos are the reason libertarians will be perpetually sidelined

                1. Gotta say I enjoyed your exchange with Leo and Met, and you guys have given me a lot to think about.

                  1. Specifically, how JFree crushed your points and now you realize you were wrong.

              2. Wow, what a total whiff, JFree murdered you and destroyed your point, and all you did was say “NU uhhhhh”

  6. “A continued focus on a recession by policymakers, talking heads, and the media clearly caused some consternation among small businesses in previous months, but after shifting their focus to other topics, it’s become clear that owners are not experiencing the predicted turmoil,” – NFIB President and CEO Juanita D. Duggan.

    Apparently markets feel confident despite the sky having fallen.

    1. Nobody is saying the sky is fallen. Stop beating that strawman up.

      The markets, and the economy in general, would be better with less government involvement. Period. It’s a basic tenet of classical liberalism. If you don’t get it, then you probably never will.

      If you do get it, then you need to learn that the thing with principles is that you don’t abandon them when it becomes necessary to defend your own party. Free markets is a pretty fundamental principle.

      You’ve lost credibility as a libertarian by defending Trump on this issue. You could at least find some mealy-mouthed pragmatist approach to support Trump as the only possible solution while maintaining the facade of supporting free trade. If you need help with that, I would refer you to Ken Shultz.

      1. So Leo….Theoretically, I agree with you = The markets, and the economy in general, would be better with less government involvement. Period. It’s a basic tenet of classical liberalism. and this Free markets is a pretty fundamental principle.

        Now my question: What realistic alternative do you promote in order to address the trade deficit and China’s malignant behavior?

        1. Why is the trade deficit a problem?

          What malignant behavior, in particular?

          1. Recycled old comments of mine below…

            If we ***DO*** grant that some of China’s trade-plays are a bit “unfair”, then what next? Below is “what next”, IMHO… We think of long-term peace being better than war! Trade wars and shooting wars are both EVIL, to be avoided at (almost) all costs!

            So they don’t play by the exact rules that we’d like them to play by. When you are 15 and your little brother is 5, when you play chess with him, you give up your rook or queen (handicap yourself a wee tad) to let him catch up with your chess skills… If you treasure long-term peace in the family, that is… If you want little brother to get along with you when you are 30 and he is 20, and so on. Or, when you play golf with a business partner, and he sucks at golf, you cut him a few breaks. It’s called “getting along with others”. Do YOU want a shooting war with China? It’s where we’re headed, if The Donald doesn’t stop, and Congress doesn’t take back the powers that belong to Congress!
            Sometimes we need to have the humility to acknowledge that we cannot control others… We can only control ourselves!
            https://en.wikipedia.org/wiki/Economy_of_China
            GDP per capita
            Increase $10,153 (nominal; 2019 est.)
            USA GDP per capita : 59,531.66 USD (2017)
            We are about 6 times as wealthy as they are!!! HOW MUCH MORE per-capita wealth do YOU want to have, compared to the Chinese, before you are willing to be a wee tad less greedy, nationalistic, and selfish? Maybe we should FIGHT a little less, and COOPERATE a wee tad more? And NOT try always to tell others what to do and not do? Be a little less Trump-ish, in other words? I think more cooperation and less competition would be in order here! Trump is flushing the world economy down the crapper, if there’s no stop to the trade wars!
            Really now… HOW MUCH more wealthy, per capita, are we going to have to be, before you’d consent to being more graceful

            1. Yeah. My problem is that virtually all the “bad acting” China does is hurting individual firms that participate in the Chinese market. If it’s so harmful to them, they should stop. Or, just maybe, the negatives are outweighed by the positives.

              As for the trade deficit, it’s meaningless, of course. As opposed to the fiscal deficit, which is enormous and should be ended at once.

              1. A trade deficit is not meaningless. It is just another of the effects of a fiat currency. If we had the gold standard trade deficits would never last because eventually one side would run out of currency and go into a recession balancing things out. They only last now because we continue to print and borrow money. If you think endlessly printing and borrowing money is a bad thing, it is hard to see how you think that is somehow okay if it is done in the name of buying foreign goods.

                1. I don’t advocate resolving one of the worst interventions in the economy that there could be (fiat money) with additional interventions. Time to ditch fiat, then.

                  1. It’s so funny how it’s always just, do this impossible thing, and nothing short of it is acceptable, as though you don’t live in the real world.

                    You’re not getting that. And EVEN IF YOU WERE, IT WOULDN’T HAPPEN IMMEDIATELY.

                    So, it’s super cool that you want impossible things because they’d be better. Now can the adults talk without your Christmas list?

                    Thanks.

                    1. Tulpa talking about having the adults do the talking…

                      Now THAT is RICH!

        2. What realistic alternative do you promote in order to address the trade deficit and China’s malignant behavior?

          Do nothing.

          I prefer Chinese goods to dollars in every instance that I trade them. I prefer dollars to Chines goods in every instance that I keep my money. I don’t need Trump making that decision for me, and I suspect the rest of America doesn’t either.

          Same argument over IP theft, if that’s what you’re getting at. As someone pointed out above, American owners of IP can probably decide whether doing business with China is worth giving up IP or not without Trump making that decision for them.

          1. That is great that you prefer Chinese goods to dollars. That preference, however, doesn’t address the problems China creates with those dollars. China uses those dollars to create a giant police state, terrorize its neighbors, and often produces those goods you like using slave labor.

            Either explain why it is that you getting those goods from China as opposed to from somewhere else is worth the problems it creates or just admit that the only thing that matters is your access to cheap shit and the second order effects of your having access to said cheap shit are of no moral consequence. By your logic, selling them nuclear weapons or gas that they would use to murder dissidents would be totally okay if someone somewhere could make a profit doing so.

            1. You’re free to not buy Chinese goods. So are all Americans. It’s no big secret that China is a repressive police state.

              And most of the evidence indicates that me getting goods from China has led to a large increase in the quality of life of the Chinese. There are rare cases where labor is abused in China today. It was much more common before China opened up to foreign investment. The same can be said of their oppressive police state. Do you really think life in China is worse than it was in the 60s?

              The term slave labor gets bandied about a lot with respect to China. That it exists in rare cases, I’m not disputing that. A union person arguing that the job they do for $40/hr in the US is being done by “slave labor” for $5/hr in China isn’t exactly what I would call slave labor. Absent that $5/hr job, the Chinese worker doesn’t eat.

          2. IP is not always given away or risked by a partnership with China. Sometimes it’s just outright stolen.

            1. Most times it is outright stolen. It is amazing how naive people can be.

                1. You mean the Chinese are only listening in to American board rooms? If they tried a little harder they’d be up there with the NSA!

                  1. They were using the hack to spy on the government, too. Amazon found it first because they are very thorough in their security protocols. If they hadn’t caught it, the Chinese would be privy to everything store on the CIA cloud. No matter your opinion of our intel agencies, that would not have been good for Americans.

            2. “IP is not always given away or risked by a partnership with China. Sometimes it’s just outright stolen.”

              So China outright steals IP in some cases? Find some appropriate punishment, narrowly tailored to the bad actors! (Not sure exactly what… Saturate their servers with fake hits, for starters, maybe… Or steal their IP in kind).

              What we have TODAY, is, we TAX (tariff) American consumers, to punish Chinese sins! What sense does THAT make?

          3. So Leo…Your answer is to lay back and enjoy the rape? = Do nothing (in the face of serial lying, serial cheating, serial theft of IP)

            Sorry Leo, that is where we part ways.

            1. I think you’re buying into the scary boogeymen that the nationalists want you to buy into. Serial lying, cheating, theft. It almost sounds like you’re describing the very government that you want to go after China for you.

            2. It is kind of humorous that a Rand book is disagreeing with a Rand character, though. I enjoyed that, and I appreciate the discussion without falling into the normal ad homs of this comment section.

              Also, if Ayn were in this discussion today, she’d be on the side of the character, not the book.

  7. Meanwhile there is this

    http://www.foxbusiness.com/economy/steve-moore-trump-economy-is-really-experiencing-a-middle-class-boom-this-data-doesnt-lie

    I recently wrote op-eds that ran in the Wall Street Journal and on these pages that showed median household incomes under Donald Trump have soared from $61,000 to an all-time high of $66,000 in less than three years into the Trump presidency. This is tremendous news and documents substantial middle-class prosperity in Trump’s first three years in office.

    The $5,003 rise in middle-class incomes is especially impressive given that incomes only rose by $1,200 in the seven years under Obama — after the recession ended.

    Maybe incomes are rising in spite of the tariffs. If that is true, it is incumbent on the critics of these tariffs to explain how that is instead of just assuming it is true. Even if income is rising in spite of the tariffs, the fact that they have risen so much at the very least shows that the negative effects of them has been grossly oversold. Just how much faster can incomes rise?

    If, however, such an explanation cannot be provided, the huge growth in middle class income over the last three years is very strong evidence that the case that tariffs are bad for the economy and especially the middle class is clearly a flawed one. The data isn’t consistent with the predictions the critics of these tariffs have made. If they refuse to reconsider their theory, they need to be honest and admit they adhere to a religion not a economic policy.

    1. Maybe incomes are rising in spite of the tariffs. If that is true, it is incumbent on the critics of these tariffs to explain how that is instead of just assuming it is true.

      What needs to be explained? That incomes can still go up even when shitty economic policies are enacted? Since you’re the one who advocates putting up barriers to voluntary transactions, isn’t it incumbent on you to explain how these tariffs are benefiting people? To what extent were those peoples’ incomes boosted by the tariffs, and what evidence do you have of that?

      Even if income is rising in spite of the tariffs, the fact that they have risen so much at the very least shows that the negative effects of them has been grossly oversold. Just how much faster can incomes rise? If, however, such an explanation cannot be provided, the huge growth in middle class income over the last three years is very strong evidence that the case that tariffs are bad for the economy and especially the middle class is clearly a flawed one. The data isn’t consistent with the predictions the critics of these tariffs have made.

      In other words, incomes are rising so fast that the tariffs must be a good thing. Or they’re not as shitty as some people said they would be. Either way, it’s another win for Trump, and another win for mercantilism.

    2. +100000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000

  8. The Art of the Deal: Do what I ask or I will punish Americans. Do what I ask and I will still punish Americans. Because to not punish Americans is to admit I was wrong. And I can never admit I was wrong. So I will continue to punish Americans with this ridiculous tariff no matter what China does.”

    The Art of the Deal. He’s not acting like a businessman, he’s acting like a thug.

    p.s. Yes, the tariff hurts China. But it hurts Americans more. But regardless, the tariffs are not leverage if Trump refuses to negotiate.

    1. “he’s acting like a thug.”

      You mean like demanding people you disagree with be censored?

    2. Yes, the tariff hurts China. But it hurts Americans more.

      I see no evidence why that would be true. The Chinese are much more dependent on the American market than the US consumer is dependent on Chinese goods. Other countries produce things too. Moreover, the tariff is not on the entire world, they are just on China. The longer they go, the more purchasers will look to other countries to fill the needs that China was filling and the weaker the Chinese position becomes.

      Maybe this hurts Americans more than China. But you are going to have to come up with a really good explanation for why and certainly something better than a faith based assertion.

      1. Additionally, Trump advocated for Free trade at the G-7 Summit and that offer was rejected.
        “No tariffs, no barriers, that’s the way it should be — and no subsidies,” the president said at a press conference.

        The president, however, did not elaborate on how or whether the United States would reduce its tariff barriers. Instead, he pointed to Canadian duties on U.S. dairy.

        “We don’t want to pay anything — why should we pay?” Trump said. “Ultimately, that’s what you want. You want a tariff free, no barriers and you want no subsidies.”

    3. The Art of the Deal. He’s not acting like a businessman, he’s acting like a thug.

      By doing what? Extracting the best deal possible for the American public? Isn’t that what he is paid to do? By your logic every President who does his job is a “thug”. Contrary to what the internationalists tell you, he isn’t there to look out for the Chinese and no one should give a shit if he doesn’t.

      1. “Extracting the best deal possible for the American public? Isn’t that what he is paid to do?”

        I for one do NOT want to pay Donald Trump to be THE Supreme Pussy-Grabber on the planet!!! Not on MY behalf!!! Dammit, you unspeakably GREEDY and SELFISH bastards!!!

        The reason I despise the idea of vast political powers in the hands of Trump, is that he doesn’t even understand a VERY simple principle, which intelligent and benevolent people have realized for thousands of years… Treating everyone as enemies and potential enemies, is a VERY quick way to make tons of enemies! Treating most people (nations, tribes, etc.) as potential friends (until they prove otherwise) is a MUCH smarter choice! Donald is too stupid, arrogant, and narcissistic to see that, though. He thinks that ALL games are zero-sum games!

        Summary: Donald (and Trumpistas) simply cannot or will not recognize the central illusion of politics… You can pussy-grab all of the people some of the time, and you can pussy-grab some of the people all of the time, but you cannot pussy-grab all of the people all of the time! Sooner or later, karma catches up, and the others will pussy-grab you right back!

        John, are you entirely TOO stupid to see ancient wisdom? “You reap as you sow!” Sow selfishness, and hatred of all others, and they WILL figure you out! Individually, or collectively! And they WILL pay you back, in kind! No supernatural forces required! Ditto kindness and UN-selfishness! On the AVERAGE, at least, you WILL be paid back in kind!

        I hate to contemplate the debts being piled up by The Trump, and The Trumpistas, in terms of long-term damage to USA credibility and good will world-wide…

        1. What if you’re in a situation where 90% of other nations ARE taking advantage of you, because previous leaders WANTED them to take advantage of you?

          Because that’s the situation we’re in. Previous leaders subsidized military expenditures for some of the wealthiest nations in the world, because they didn’t give a fuck about the American taxpayer, wanted to give those nations a leg up on us, and wanted to exert control over them.

          If you were nice enough to let your deadbeat brother in law and sister crash for free in your basement for years… But then your finances become shitier… And you ask them to pay a nominal rent amount, because you need the money… Does that make you a bad person? Are you making them an “enemy” by not bending over and taking up the ass anymore? OR are you just being reasonable, and hoping for a reasonable reaction from them?

          The fact that all thee other nations are acting like children when we ask them to do perfectly reasonable things shows how retarded it all is. We never should have done all this stupid shit in the first place, but we certainly shouldn’t keep doing it forever just because spoiled children complain when you take their candy away.

          China has never been our friend. We never should have opened up to them without their reciprocating. Again it was the internationalists who didn’t push for a fair deal up front, which we could have easily got if we’d tried. They did this because a STATED GOAL of all the leftist globalists is to equal out incomes globally.

          Quit acting like a naive child and use your brain.

    4. Yes, the tariff hurts China. But it hurts Americans more.

      Now Brandy, that line is just hokum. As I write, China’s stock market is down very substantially, compared to our record stock market. Supply chains and factories are moving away from China. Their banking system is currently hurting; ours is doing quite nicely. Hong Kong is a real PITA for China right now. I’m pretty sure our record arms sales to Taiwan is putting a crimp on China’s style as well. We can rachet up the pain far more if need be.

      It is safe to say China is hurting a hell of a lot more than the United States these days. Ultimately, I think there will be a change in malign behavior on the part of China. But it will take time. I’m willing to wait because I don’t really ‘feel’ the tariffs.

      1. We could get China to cave overnight if we wanted to… Because we have all the power still for now.

        If we slapped 200% tariffs on all Chinese goods, to go into effect 3 months from now… The Chinese would do whatever we asked of them, because if they didn’t their entire economy would implode… Which would cause riots, and a potential revolution.

        Period. We have them over a barrel for now. If we let this shit slide another 20 years, we won’t. Which is why we need to get them to open up now while we still can, otherwise they won’t have the incentive to do it in the future.

  9. “Damage”? What Damage?

    Oh yes – Here we go; (5) Other Anti-Tarriff articles written by none other than “Eric Boehm”. LOL…. That’s some pretty crafty journalism there 🙂 LOL….

  10. As usual this article can be summed up as autistic retardation, vs being able to accurately observe the real world and how it works.

    This is basically the problem with dogmatic libertarians on all issues of contention. You guys just can’t seem to appreciate that the world isn’t a perfect Matrix style world that adheres to utopian ideas about how you think it should work.

    News Flash: It never has been, and never will be!

    Which is why you have to play hardball to get shit done sometimes. I DO NOT think Trump has been very competent in getting a lot of his goals achieved… But I don’t disagree with the aims on most issues.

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