The Foreign Trade Thread

#1
Velo Vol

Velo Vol

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#1
More of this, please.
Cunningham is planning to introduce a bill to roll back the President’s authority to unilaterally impose tariffs under Section 232 of the Trade Expansion Act of 1962, his spokesman, Tyler Jones said Monday. The legislation, which is similar to a bill Congressman Mark Sanford and a coalition of bipartisan members introduced earlier this year, would also give Congress the authority to retroactively roll back any tariffs imposed under Section 232 over the last two years, Jones said.

“This administration’s unnecessary trade war is now doing real and significant damage to the Lowcountry economy and it will only get worse if Congress doesn’t step in,” Cunningham said in a statement. “Section 232 of the Trade Expansion Act was intended for national security emergencies only, not politics."
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#2
#2
Meanwhile, Trump's efforts to fix the damage he is doing are similarly successful:

More than 1,100 of the early recipients of Trump tariff payments intended to offset the impact of the trade war on U.S. agriculture actually live in America’s largest cities, said the Environmental Working Group on Monday. The bailout recipients, the latest batch of “city slickers” identified by the EWG for collecting federal subsidies without living or working on a farm, are eligible for the payments because they satisfy the USDA’s loose definition of being “actively engaged” in farming.
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#4
#4
zeihan.com

But in the background this entire time, Trump’s trade team has continued hacking away at rewriting the United States’ entire trade position. During the decades of the global Order, the United States was all about granting the world deference on economic and trade issues so the Americans could gain the allegiance of most of the world on security issues. That’s how the Americans built and maintained their alliance against the Soviets. That Order is now collapsing, and that necessitates a different approach to both security and trade.

Meaningful adjustments to how the Americans treat the world are, generally, broad-scale disasters for most countries. The ability to trade security deference for economic dynamism in a world of global security was a great exchange for most. Under Trump the two issues are now divorced. You want a security deal with the Americans? You need to offer them something security-related. You want a trade deal with the Americans? You need to offer them something trade-related. No more cross-swaps unless you are willing to be embarrassingly deferential. At first everyone resisted. In part because they had a great deal going in – with the Cold War long gone they hadn’t needed to give the Americans much – in part because no one wanted worse terms.
 
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#5
#5
More Zeihan on geopolitics:

Since the Americans control global finance and the global currency and global trade flows and the global ocean and global energy and the world’s largest market, the White House holds all the cards. Once it became clear Trump’s position wasn’t rhetoric, everyone knew they’d have to find a way to make a deal.
 
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#6
#6
And with each bilateral trade agreement that Trump establishes, it puts more pressure on those countries that haven't created their own agreement. It's wrong to assume that the agreements with Mexico and then Canada are simply minor enhancements to NAFTA.

I love having a true capitalist leading the US and promoting our interests. I'll take a "Nationalist" over a socialist every single day.
 
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#7
#7
Thunder Good-Oil said:
Trump might be failing at Twitter but he's hitting homeruns fixing the oppressive trade deals.
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It's a great time to be a storage operator!

Harvesting in a trade war: U.S. crops rot as storage costs soar | Reuters

U.S. farmers finishing their harvests are facing a big problem - where to put the mountain of grain they cannot sell to Chinese buyers.

For Louisiana farmer Richard Fontenot and his neighbors, the solution was a costly one: Let the crops rot.

Fontenot plowed under 1,000 of his 1,700 soybean acres this fall, chopping plants into the dirt instead of harvesting more than $300,000 worth of beans.
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#Winning
 
#10
#10
Trump's position on trade seems like it will inevitably diminish the standing of the US in the world. Tariffs just lead to more (retaliatory) tariffs. With USCMTA not being a given as the Dems take control of the house, this stuff could really bite us in the ash.
 
#11
#11
jvol1 said:
Trump's position on trade seems like it will inevitably diminish the standing of the US in the world. Tariffs just lead to more (retaliatory) tariffs. With USCMTA not being a given as the Dems take control of the house, this stuff could really bite us in the ash.
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What do the Dems in the house have to do with USMTA?
 
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#13
#13
jvol1 said:
Trump's position on trade seems like it will inevitably diminish the standing of the US in the world.
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It would certainly take a giant step backwards if we were to foolishly leave the WTO.

Maybe if Navarro is really being pushed to the outside Trump will come to his senses? Doubtful, but possible.
Thunder Good-Oil said:
Deals with Mexico and Canada have been made. Japan and the UK are expected to follow suit.
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NAFTA 2 has yet to be approved by any of the countries, and it's not a given that it will. Moreover, you said "bilateral," which NAFTA is not.
 
#14
#14
Velo Vol said:
It would certainly take a giant step backwards if we were to foolishly leave the WTO.

Maybe if Navarro is really being pushed to the outside Trump will come to his senses? Doubtful, but possible.

NAFTA 2 has yet to be approved by any of the countries, and it's not a given that it will. Moreover, you said "bilateral," which NAFTA is not.
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Actually by it’s very nature NAFTA and the following deal are trilateral agreements. No I did not just make that up.
 
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#15
#15
This is a pretty good write up on Robert Lighthizer

Subscribe to read | Financial Times

And here's a problem with him:
“He wants to repatriate global supply chains and bring manufacturing back to the US, is willing to make foreign investment more risky and expensive — and he’s willing to take the heat from business,” the business lobbyist said.
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More expensive supply chains for business means more expensive goods for consumers. The existing supply chains have developed because they're cheaper.
 
#18
#18
Velo Vol said:
It would certainly take a giant step backwards if we were to foolishly leave the WTO.

Maybe if Navarro is really being pushed to the outside Trump will come to his senses? Doubtful, but possible.

NAFTA 2 has yet to be approved by any of the countries, and it's not a given that it will. Moreover, you said "bilateral," which NAFTA is not.
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Trump made a bilateral deal with Mexico and then he made a bilateral deal with Canada. Canada had to move quickly since Trump had already struck the deal with Mexico. Japan and the UK don't want to be left out. The UK really needs a deal unless they exit BREXIT. That will be a massive trading block with 4 of the G7 plus Korea and Mexico.

China is under pressure but trying to leverage the looney left putting their warped ideology ahead of their country's interests. Stopping the theft of IP and shuttering strategically critical industries doesn't seem to be a concern of the deranged lefties. China hopes the left's rhetoric ramps up and they get a deal before spring. China has no economic leverage. They can only play the TDS card with the assistance of the US's domestic socialist wannabes.
 
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#19
#19
Thunder Good-Oil said:
China is under pressure but trying to leverage the looney left putting their warped ideology ahead of their country's interests. Stopping the theft of IP and shuttering strategically critical industries doesn't seem to be a concern of the deranged lefties. China hopes the left's rhetoric ramps up and they get a deal before spring. China has no economic leverage. They can only play the TDS card with the assistance of the US's domestic socialist wannabes.
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China, the second largest economy in the world, but sadly has "no economic leverage." And its leaders are consumed with domestic U.S. politics because apparently they have nothing else to do.

Got it.
 
#21
#21
Velo Vol said:
China, the second largest economy in the world, but sadly has "no economic leverage." And its leaders are consumed with domestic U.S. politics because apparently they have nothing else to do.

Got it.
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We don't need their crap that fills the shelves of Walmart and DollarTree. They need our food. They send us 4 times as much as we send them. If they don't agree to a fair trade agreement they'll starve. We will see the price of Christmas decorations shoot up. Got it?
 
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#22
#22
You’ve made great posts and I always read your market inputs. And all he’s come back with is “screeeeech! Orange man bad!”
 
#23
#23
Thunder Good-Oil said:
We don't need their crap that fills the shelves of Walmart and DollarTree. They need our food. They send us 4 times as much as we send them. If they don't agree to a fair trade agreement they'll starve. We will see the price of Christmas decorations shoot up. Got it?
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How's the strategy been working?

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#24
#24
So here is the list of top 15 countries China exports to. We’re of course number 1. And we are almost as much as 2 thru 4 combined. China needs our purchasing to fuel their growth.

China also buys a huge amount of our treasuries. That’s the other fear, that China will just dump those treasuries or cut back their purchases which would cause our interest rates to rise dramatically and force a recession.

But... see paragraph 1. That’s self destructive. All countries increased their imports from China over the last three years except Hong Kong. China will make whatever deal they need to make to insure those imports keep coming here. And they will continue to buy our treasuries so that our purchasing economy will fuel their mfg economy.

Both economies are tightly coupled. But for China to force recession on the US would kill their own economy.

All of the investment letters I get say the same thing. They all expect the US and China to reconcile this trade spat.

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#25
#25
Velo Vol said:
How's the strategy been working?

925a00f7-537e-4738-a7eb-2c0cf292845d.png
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Should work great. Your own post indicates that export growth equaled import growth. The Chinese will have to feed a billion people plastic trinkets when their food reserves are depleted. Trump can wait it out. Even with the dumb lefties screaming and posting graphs.
 
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