US trade deficits with China and Europe hit records

[Brave New World]

Originally Posted by Supposn

Brave New World, I believe the consequences of USA adopting the Import Certificate policy would be the opposite of what you contend. I'm opposed to both tariffs and to pure free trade policy.

Of course trade will be hindred if you adopt a system where companies have to buy import certificates based on US exports in to the country. In the end it will certainly mean more goods manufactrured in the US but you will have to pay far higher prices for many of those goods thereby causing inflation and increasing wage demands. Furthermore the more expensive goods are, the less you are going to buy therefore causing an economic downturn. The US simply can not manufacture many goods as cheaply as they do in some other countries for a variety of reasons.

Originally Posted by Supposn

Regardless of yours and many other opinions supported by logically conflicting arguments, I doubt if anyone knows what actually caused that world depression that was marked by the 1929 USA stock market crash. You're aware that both the USA and Great Brittan were major participants of global trade when the crash occurred.

One of the main reasons for the Great Depression was a downturn in exports from the US to Europe following the stock crash.

[Brave New World]

A further problem with Import Certificates would be US Companies manufacturing outside the US, as most countries would rather export their own goods if there is only a limited number of income certificates based on exports.

The current Trump administration demands that companies build their products in the US is falling on deaf ears precisely because US manufactured goods are often not viable in terms of manufascturing in the US.

Ford will not build new Focus cars in US, despite Trump tariffs tweet - Guardian

Apple warns of higher prices with looming Chinese tariffs - The Telegraph

The US with more multinational companies than most would be hit hardest.

The reason that many goods are made overseas is that they are cheaper to produce and this free trade allowing the US Consumer to buy goods at a much reduced rates and supports the high standard of living that Americans enjoy.

By putting tariffs on goods or restricting imports through Import Certificates you are going to inflate the price of goods, and products may actually become much cheaper in neighbouring countries or much of the rest of the world than they are in the US, and I can't imagine Americans wanting to go on shopping trips to Canada to buy certain goods.

As for China, it's rising labor costs will eventually help other South Asian countries gain a foothold in low-end manufacturing, as well as other emerging economies. However the problem in relation to Import Certfcates is that these poorer countries can't afford to buy lots of expensive US imports and would therefore be limited in terms of providing cheap exports to the US.

[Supposn]

Originally Posted by Brave New World

Of course trade will be hindered if you adopt a system where companies have to buy import certificates based on US exports into the country. In the end, it will certainly mean more goods manufactured in the US but you will have to pay far higher prices for many of those goods thereby causing inflation and increasing wage demands. Furthermore, the more expensive goods are, the less you are going to buy therefore causing an economic downturn. The US simply can not manufacture many goods as cheaply as they do in some other countries for a variety of reasons. ...

Brave New World, we agree more goods will be produced, (not necessarily more manufactured) in the USA. Import Certificate policy does not determine which goods are or are not to be imported.

The market value of the transferable certificates that reflect increases beyond the government's fees for administrating the policy, behave as indirect but effective price subsidies for USA exported goods. The entire value of the certificates are reflected in higher prices of imported goods. If the prices of imported goods become higher, more USA products that were otherwise too pricey for global trade, become globally marketable. Exporters will be less concerned about what portion of their revenue they earn or lose from the products they sell; the critical question is what's their net profits due to their participating in this policy.

Exporters of USA goods choose, they are not required to participate. I don't believe they are required to be USA citizens. Foreign entrepreneurs could hire agents in the USA to act as exporters of USA goods, or perform the entire tasks themselves remotely without leaving their national homes.

Only the prices of goods that pass through USA's borders are affected by this policy. Domestically produced goods sold in the USA are only affected to the extent that they reflect imported components or materials. The policy is net beneficial to a nation that otherwise experiences chronic annual trade deficits of goods.

[Supposn]

Originally Posted by Brave New World

A further problem with Import Certificates would be US Companies manufacturing outside the US, as most countries would rather export their own goods if there is only a limited number of income certificates based on exports. ...

Brave New World, only exporters of USA goods can contribute to the transferable certificates in circulation. Surrendered certificates are not reusable. The world's supply of certificates is dependent upon foreign purchases of USA goods.

If foreign nation's (in aggregate) refrain from purchasing USA goods, there will be lesser volumes of certificates in circulation, limiting the volumes of goods that may enter the USA, and due to the increased global market value of the limited certificates in circulation, foreign purchasers will be offered and/or will negotiate cheaper prices for USA goods, at no lesser net profits to exporters of USA goods.

To the extent foreign nations purchase USA goods, there will be additional certificates in circulation.

[Brave New World]

Originally Posted by Supposn

Brave New World, we agree more goods will be produced, (not necessarily more manufactured) in the USA. Import Certificate policy does not determine which goods are or are not to be imported.

The market value of the transferable certificates that reflect increases beyond the government's fees for administrating the policy, behave as indirect but effective price subsidies for USA exported goods. The entire value of the certificates are reflected in higher prices of imported goods. If the prices of imported goods become higher, more USA products that were otherwise too pricey for global trade, become globally marketable. Exporters will be less concerned about what portion of their revenue they earn or lose from the products they sell; the critical question is what's their net profits due to their participating in this policy.

Exporters of USA goods choose, they are not required to participate. I don't believe they are required to be USA citizens. Foreign entrepreneurs could hire agents in the USA to act as exporters of USA goods, or perform the entire tasks themselves remotely without leaving their national homes.

Only the prices of goods that pass through USA's borders are affected by this policy. Domestically produced goods sold in the USA are only affected to the extent that they reflect imported components or materials. The policy is net beneficial to a nation that otherwise experiences chronic annual trade deficits of goods.

I understand Import Certificates and the fact the proceeds from the sale of ICs would encourage US exporters (who would gain that extra money in addition to the proceeds of their exports) and discourage importers (who would need to pay the additional cost to acquire ICs as well as the cost to acquire the goods they are importing). This system would essentially create a broad-based tariff on imports to the United States, and subsidy for exports.

However if you make other countries imports more expensive they will see this as unfair and take actioin in relation to US exports as protectionism is a two way street and tariffs could be applierd to US exports in order that EU exporters can pay for IC's.

[Brave New World]

Originally Posted by Supposn

Brave New World, only exporters of USA goods can contribute to the transferable certificates in circulation. Surrendered certificates are not reusable. The world's supply of certificates is dependent upon foreign purchases of USA goods.

If foreign nation's (in aggregate) refrain from purchasing USA goods, there will be lesser volumes of certificates in circulation, limiting the volumes of goods that may enter the USA, and due to the increased global market value of the limited certificates in circulation, foreign purchasers will be offered and/or will negotiate cheaper prices for USA goods, at no lesser net profits to exporters of USA goods.

To the extent foreign nations purchase USA goods, there will be additional certificates in circulation.

Emerging Nations that produce cheap goods often don't have a lot of spending power in relation to buying US goods what they do have is cheap labour costs and cheap manufacturing.

If Import Certifcates were introduced such countries would no longer be able to export much to the US as they are low paid countries who can't afford to import much from the US in the first place.

That's fine with me, as the rest of the world can trade with them and fill it's shops with cheap goods whilst the US stifles free trade through Import Certificates and has to pay more for goods.

I never supported the EU's Common Agricultural Policy which takes up half the EU budget and subsidises EU Agriculture putting third world and other agriculture at a massive disadvantage and I don't support protectionism that would be equally damaging in relation to import certificates linked to how much a country exports from the US, as poor countries can't afford to export from the US and rely on their ability to produce cheap goods in order to help sustain the standard of living of many in the west.

[Supposn]

Originally Posted by Brave New World

I understand Import Certificates and the fact the proceeds from the sale of ICs would encourage US exporters (who would gain that extra money in addition to the proceeds of their exports) and discourage importers (who would need to pay the additional cost to acquire ICs as well as the cost to acquire the goods they are importing). This system would essentially create a broad-based tariff on imports to the United States, and subsidy for exports.

However, if you make other countries imports more expensive they will see this as unfair and take action in relation to US exports as protectionism is a two-way street and tariffs could be applied to US exports in order that EU exporters can pay for IC's.

Brave New World, Import Certificate program (is not), but complies with the concept of a mutual “most favored nation” agreement. A most favored nation” agreement, doesn't necessarily prohibit the agreeing nations from favoring their own entities but they must necessarily grant all mutually agreeing nations with all advantages and considerations they grant to any other nation in the world.

If a foreign nation or a pact of foreign nation do not have a mutual “most favored nation” agreement with the USA, that's to their own peril. USA may deal with such international trade disagreements on an ad hock basis.
Similarly, we are in peril because they also can be expected to respond in a similar fashion. That's been, now is, and I suppose is likely to be the way of the world for a long time in the future.

Regardless of how other nations respond, adopting the unilateral Import Certificate policy would be to USA's net benefit.

[Supposn]

Originally Posted by Brave New World

Emerging Nations that produce cheap goods often don't have a lot of spending power in relation to buying US goods what they do have is cheap labor costs and cheap manufacturing.

If Import Certificates were introduced such countries would no longer be able to export much to the US as they are low paid countries who can't afford to import much from the US in the first place.

That's fine with me, as the rest of the world can trade with them and fill its shops with cheap goods whilst the US stifles free trade through Import Certificates and has to pay more for goods.

Brave New World, Import Certificate policy requires importers of goods into the USA, not the foreign exporters to surrender certificates that cover the assessed value of their cargo entering the USA.

Originally Posted by Brave New World

I never supported the EU's Common Agricultural Policy which takes up half the EU budget and subsidises EU Agriculture putting third world and other agriculture at a massive disadvantage and I don't support protectionism that would be equally damaging in relation to import certificates linked to how much a country exports from the US, as poor countries can't afford to export from the US and rely on their ability to produce cheap goods in order to help sustain the standard of living of many in the west.

USA Department of Agriculture and U.S. Customs Service enforce similar USA policy which may not be so detrimental to third world nations. Those nations may do better by developing their own agricultural industries and better feed their own populations.

The USA and other industrial nations contribute to subsidize the World Bank whose mission is promoting third world economies in manners most advantageous to the borrowing nations.

[Supposn]

Originally Posted by Brave New World

I understand Import Certificates and the fact the proceeds from the sale of ICs would encourage US exporters (who would gain that extra money in addition to the proceeds of their exports) and discourage importers (who would need to pay the additional cost to acquire ICs as well as the cost to acquire the goods they are importing). This system would essentially create a broad-based tariff on imports to the United States, and subsidy for exports.

Brave New World, that's correct.

Originally Posted by Brave New World

However if you make other countries imports more expensive they will see this as unfair and take action in relation to US exports as protectionism is a two-way street and tariffs could be applied to US exports in order that EU exporters can pay for IC's.

Import Certificate policy does not directly discourage imports, but it certainly increases the prices of imported goods sold to USA purchasers. An Import Certificate policy is likely to reduce USA sales of imported goods, but it wouldn't cost EU importers, or exporters, or producers a single penny.

Unless the European Union adopts something similar to the Import Certificate policy, any EU retaliation tariffs or other strategies of the EU would be of no particular assistance to exporters of EU goods or EU goods producers unless they enacted something that's similar to the Import Certificate policy.

Just as EU purchasers would benefit from any excessive subsidy of USA goods, if EU followed our Import Certificate example, USA purchasers would benefit from reduced prices for EU goods.