Tag Archives: trade war

Is Trump Serious?!

This must also be what the Chinese are thinking right now.
If Trump is genuine regarding Tariffs on Steel and Aluminum coming from outside the United States it must be considered Economic War.
The debilitating effects of Tariffs are well documented following Smoot-Hawley.

I am guilty of under estimating the negotiating skill of this man… and I must remind myself that he is a graduate of Wharton School of Business.  I must remind myself that he Knows where this will go.

So let’s assume this is the opening shot across the bow of an international trade war.

The White House is desperately trying to keep the focus of proposed tariffs on steel and aluminum on the increased cost of goods which will be directly passed to the consumers.  (This is also how corporate taxes work… but that’s for another day.)  The Maison Blanc is currently sending Peter Navarro out to sell the tariffs with talking points implying there will be ‘only a penny increase on the cost of a six-pack of beer’ and ‘only $45 to the cost of a new car’… I sh*t you not.  Navarro knows better, too.

Why do I find this an amazing point in time? Because once you read a bit about the Smoot-Hawley Tariffs (linked above) we imposed with only the best of intentions during the 30’s and the resulting consequence of extending the duration of the Great Depression you quickly realize it’s not the direct impact which hurts the most.

It’s the Indirect Impact.

It’s the Retaliation.

It so happens that we American’s have had our productivity and living standards vastly increased by our ability to access inexpensive goods from… China.

Chew on that for a second.

Now think about the fact that China is a poisonous concept based in Communism/Socialism that exploits its population as life is cheap under such a horrid Governing Theory.  It is also an open secret that China must… must… create a quarter of a million new jobs every month or they risk a full-out pitchfork rebellion… not just the condemnation of a pathetically partisan Socialist Press as we endure here in The United States.

Which of us can weather  the economic impact we both know will result?

This is nothing short of War.

I’m not sure it’s not time… but I’m not sure it is.