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Old Yesterday, 01:05 PM
Status: "but it depends on what the definition of "is" is." (set 10 days ago)
 
Location: Clyde Hill, WA
3,537 posts, read 632,057 times
Reputation: 1113

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I was more or less ok with Trump's trade moves. Even Gary Cohn, who was Trump's econ guy in 2017, has agreed with the idea of using tariffs as leverage against China's 'bad actor' proclivities. There is no more ardent free trader than Cohn, former Goldman CEO.

The big problem is that a non-Democratic state like China can just wait out an American president, who is limited to 8 years. That's kind of what happened to W. Bush's plans for Iraq. It's possible that if Trump is re-elected in 2020 they will say 'enough is enough' and come to the table. Or they might just wait for 2024.
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Old Yesterday, 01:28 PM
 
8,966 posts, read 3,982,514 times
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Quote:
Originally Posted by travis t View Post
I was more or less ok with Trump's trade moves. Even Gary Cohn, who was Trump's econ guy in 2017, has agreed with the idea of using tariffs as leverage against China's 'bad actor' proclivities. There is no more ardent free trader than Cohn, former Goldman CEO.

The big problem is that a non-Democratic state like China can just wait out an American president, who is limited to 8 years. That's kind of what happened to W. Bush's plans for Iraq. It's possible that if Trump is re-elected in 2020 they will say 'enough is enough' and come to the table. Or they might just wait for 2024.
I agree. China doesn't need to worry so much about our sorts of open politics, along with its inefficiency and inherent time lag. The central command can basically just make it so...
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Old Yesterday, 02:34 PM
 
16 posts, read 3,642 times
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Taking one thing at a time. Tariffs or Duty. ( A tax at the end of the day with a small portion used for support of the governments port related admin costs. ) Depending on the context, import duty may also be referred to as customs duty, tariff, import tax or import tariff.

I worked with this for most my career from white goods to fine chemicals. If you have not worked directly or know someone with a background in this program be it a logistics, procurement or operational finance role, then you may be unwittingly spouting internet half truths to fit whatever narrative someone wants you to push. One truth is, everyone loses, the damage does not go away overnight and the high profile people spouting trash in interviews and sound bytes know better.



1 example .

Chemicals. A lot of imported chemicals for years and years had a 3- 6.5% tariff/duty. Some chemicals processes were too risky for US producers to keep in the USA. Remember Bophol India? That same chemical was still being made in one plant in Institute WVA until an explosion in a completely unrelated production unit on the site scared the hell out of everyone enough to shut it down for good.

When my old company stopped making the active ingredients for its pesticide/insecticide products in the USA and began to import concentrated versions of these chemicals produced under our patents, we, the US company paid to the US government the 6.5% tariff/duty on the value of the import when it hit the docks in CA or NY. The concentrate came into the USA to be added to other chemicals and then blended with water, sand or clay as the carrier to be sold to farmers in bulk or in some cases retailers like Home Depots Lowes, Orkin etc. There are entire businesses who handle this tariff / duty program for companies who don't have the admin staff to support it.

While things were stable in the worlds trade, we, like every other major chemicals company hired lobbyists to go to our representatives in the senate and house to reduce or eliminate this. All companies do this. Our success often depended on who had the congressman with the most clout as a competitor might challenge the request and often did.


Ask yourself this question.

If US companies are not paying these tariffs/duties why hire or create a company to lobby congress? US companies based from Tupelo MS, NYC, Boise ID to Possum Trot Ky , not China, India or Korea pay the tariff/duty and include that expense in the rolled up cost to manufacture the final product in the USA.

That was my job. I had to develop & explain the global cost structure every year , materials, labor, overhead, duty/tariffs, logistics, Foreign exchange currency impacts and the impact to our selling margins .

You know, a budget, an operating plan, where is the money going and where can I reduce my costs, what we all get measured against in one form or another either at work or home. If the tariff/duty increased where were we going to find the funds to meet or exceed the EBIT/ earnings target as we were not left off the hook. Cut costs, (our companies people but never the CEO jet) less capital equipment spending ( someone else's company job but not his CEO's jet).


While one poster said you can avoid paying the duty or get a reduced one that is not true for every one and few really can. One way is if you were located in an exempt opportunity zone designed to help a depressed area of the USA looking to generate jobs. But that often only lasts so long as an incentive. Even then you often still paid the duty up front and waited to get a refund from the government. Not all E-zone are the same. If as in my example you bring the chemical or other component into the USA for conversion to an intermediate or final product and then export it out of the country you could often get most the duty paid refunded, but not 100%.

With this import for manufacture and export you could apply what is called DUTY DRAWBACK. The tracking of the imported materials by batch produced is required and the refund can take 2 years or more to come back to you via the US government who levied it to begin with. We had $$$ millions in accounts receivables for tariff/duty on our books at any one time and full time admin employees who tracked all this. While the govt is a good bet to pay, it was an enormous tie up of cash.


We won't feel the new tariff/duty effects until all the pre tariff/duty inventory in the US are fully consumed. This often takes up to a year to happen with some commodities with seasonality and buying patterns. Some companies will eat the extra costs if they have high margin products but most will not be able to afford to. Some may have contractual adjustment clauses with suppliers to share the pain.

As far as the other country suffering, yes that will certainly be the case if they can't produce and ship products, but we suffer as well. In the case of specialty farm chemical items that are regulated ( as they end up being used on items we eat) there are few companies that are even allowed to produce certain chemicals and new registrations can take years to obtain for good reasons. (cancers / birth defect studies) However without these chemicals it's not just a matter of getting food with no blemishes that we in the west demand, the yields globally will without any question fall, world hunger would increase dramatically causing more refugees, local wars over resources etc. US farmers will see any new duty passed on as much as the chemical companies believe they can next season and the small farmer can ill afford another shot.


The tit for tat tariffs will disrupt supply chains and shift production outside the U.S, jeopardizing as much as $100 billion in planned chemical factory investments, per the ACC American Chemical Council an industry organization, hardly partisan against any one individual. As many as 24,000 jobs could be lost due to lower chemical demand from China, the council said. Big U.S. plastics makers including DowDuPont Inc. have said they’ll supply China from plants outside the U.S. to avoid the tariffs.

Most larger companies hedge their exposure to currency swings and energy. I always considered hedging like going to las vegas. When things were calm you could hedge that China might move in a reasonable range vs the USD. Same for the India Rupee. Now US companies are screwed by people saying we will play with the currency and interest rates. How do you hedge effectively for that? It's a mess and the hammer will fall for everyone.

The only ones who will suffer are the consumers, workers and middle managers on both sides. They and their families are expendable to corp leadership. So when someone says CHINA or INDIA or some other country is paying the duty they are simply lying to you or trying to throw in other comments and issues to cloud what is really happening. So while I used my chemicals experience as an example it applies to everything getting tagged. Don't completely blame Target or Wallmart. So yeah stand in front of the cameras and say US companies are not paying anything extra. If you say it often enough people will start to believe it until they go to the local check out line

What ever side is speaking, a lie is still a lie.

A quote from a well known best seller.


All this was inspired by the principle—which is quite true within itself—that in the big lie there is always a certain force of credibility; because the broad masses of a nation are always more easily corrupted in the deeper strata of their emotional nature than consciously or voluntarily; and thus in the primitive simplicity of their minds they more readily fall victims to the big lie than the small lie, since they themselves often tell small lies in little matters but would be ashamed to resort to large-scale falsehoods.

It would never come into their heads to fabricate colossal untruths, and they would not believe that others could have the impudence to distort the truth so infamously. Even though the facts which prove this to be so may be brought clearly to their minds, they will still doubt and waver and will continue to think that there may be some other explanation. For the grossly impudent lie always leaves traces behind it, even after it has been nailed down, a fact which is known to all expert liars in this world and to all who conspire together in the art of lying.



An article, titled Aus Churchills Lügenfabrik (English: "From Churchill's Lie Factory") was published in Die Zeit ohne Beispiel. The essential English leadership secret does not depend on particular intelligence. Rather, it depends on a remarkably stupid thick-headedness. The English follow the principle that when one lies, one should lie big, and stick to it. They keep up their lies, even at the risk of looking ridiculous.

The United States Office of Strategic Services in describing a particular leaders psychological profile:

His primary rules were: never allow the public to cool off; never admit a fault or wrong; never concede that there may be some good in your enemy; never leave room for alternatives; never accept blame; concentrate on one enemy at a time and blame him for everything that goes wrong; people will believe a big lie sooner than a little one; and if you repeat it frequently enough people will sooner or later believe it, take advantage of every opportunity to raise a political whirlwind
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Old Yesterday, 02:48 PM
 
15,882 posts, read 4,194,571 times
Reputation: 11324
The Earth is Flat.
It was formed 6,000 years ago in a week.
We are all in the Matrix.

Actually, the last statement there has more truth than the OP statement.
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Old Yesterday, 02:54 PM
 
15,882 posts, read 4,194,571 times
Reputation: 11324
Quote:
Originally Posted by travis t View Post
I was more or less ok with Trump's trade moves. Even Gary Cohn, who was Trump's econ guy in 2017, has agreed with the idea of using tariffs as leverage against China's 'bad actor' proclivities. There is no more ardent free trader than Cohn, former Goldman CEO.

The big problem is that a non-Democratic state like China can just wait out an American president, who is limited to 8 years. That's kind of what happened to W. Bush's plans for Iraq. It's possible that if Trump is re-elected in 2020 they will say 'enough is enough' and come to the table. Or they might just wait for 2024.
These idea would make SOME (but still limited) sense if the best trade relationships were not win-win.

They would make SOME sense if the USA was, looking forward, the majority of the world economy.

But given the actual situation...none of it makes any sense. There is a zero percent chance of any of these moves attaining a goal (and what goal? We are adding trillions to deficit and debt and somehow care about a trade balance?)......but even if they did, the question is the usual one.

You have a beef with your neighbor. What's the best course of action?

1. Putting on Rap Music and AC/DC full time with giant speakers facing his direction?
2. Telling him you have guns and will use them
3. Telling him you will trash your yard, hang clotheslines with underwear on them...all to reduce his property value?
4. Talk to him and see if you can figure out a solution which benefits both of you?

I wonder why we even discuss these things? Trump has never been in a situation even close to this and every tiny equiv. he ever ran into was a complete disaster (everyone, including he, lost billions).

Always remember that classic definition of intelligence - learning from mistakes. Trump is only accomplishing one thing - making sure the Chinese and other rising power remember - for many decades - that the USA is not a good partner.
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Old Yesterday, 03:03 PM
 
3,074 posts, read 1,062,436 times
Reputation: 3393
LOL. Man some want to believe the lies so bad. It’s has been proven that yes the consumer pays for tariffs.

http://money.com/money/5646202/costc...ina-trade-war/

https://www.latimes.com/business/la-...514-story.html
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Old Yesterday, 03:32 PM
 
16 posts, read 3,642 times
Reputation: 43
Quote:
Originally Posted by craigiri View Post

You have a beef with your neighbor. What's the best course of action?

1. Putting on Rap Music and AC/DC full time with giant speakers facing his direction?
2. Telling him you have guns and will use them
3. Telling him you will trash your yard, hang clotheslines with underwear on them...all to reduce his property value?
4. Talk to him and see if you can figure out a solution which benefits both of you?

Dont Worry be Happy

https://www.dailymotion.com/video/x15bqv
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Old Yesterday, 03:51 PM
TKO
 
Location: On the Border
3,202 posts, read 3,159,470 times
Reputation: 2570
Well, then...if we raise income taxes on the 1% they won't be paying them. China will. Git-R-Done.
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Old Yesterday, 03:57 PM
 
Location: Houston
22,717 posts, read 11,705,942 times
Reputation: 9220
Quote:
Originally Posted by Mason3000 View Post
Economy continues to be weak?
Would we be cutting interest rates and running huge deficits in a good economy?

Keynes would not even had done that.
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Old Yesterday, 04:01 PM
 
11,427 posts, read 7,406,050 times
Reputation: 4608
American consumers and businesses are paying the tariffs.
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