Trump’s Trade War

So, you think Trump’s intention to place tariffs of up to 25% on steel and aluminum imports won’t matter to you?  You’ve skimmed the headlines, shrugged your shoulders, and moved on to the juicier news surrounding Jared, Ivanka, Hope Hicks, Donnie and others in the chaotic White House?  Well guess what … it will matter to you, and in more ways than one.

First, how much did you pay for that last clothes dryer you bought?  Around $400?  Well, if you have to replace it, look for your next one to cost around $600.  The imported beer/wine you like from France/Italy?  Add 30% or so to the price a month from now.  And a new car?  Don’t even think about it.

Long story short, Trump has decided, against the advice of many in his administration, including Gary Cohn, Director of the National Economic Council and Trump’s chief financial advisor, to assess tariffs of up to 25% on steel and aluminum imported from … everywhere.  What happens when Maytag needs to buy more steel to manufacture clothes dryers?  It costs them 25% more.  Do they pass this cost on to you?  Of course, but not before increasing the total cost by an additional 10% – 15%, for their overhead is based on a calculation as a percentage of raw materials.  So now your clothes dryer is 35% more than the last one, and that does not even factor in normal price increases due to inflation.

Trump’s idea is that companies like Maytag, in the above example, will stop buying exported steel and buy steel made in the U.S.  Well, guess what?  There isn’t enough of it to go around.

Next scenario.  U.S. companies export goods to all over the world.  Next time Le Bon Marché of Paris or Harrods of London are deciding what brand of jeans to carry, guess what?  They may well pass over U.S.-made Levi-Strauss jeans, for the EU will have imposed a 25% import tariff on that brand, which makes it cost prohibitive, for shoppers will only pay so much for a pair of Levis.  European Commission President Jean-Claude Juncker said the bloc is prepared to respond forcefully by targeting imports of Harley-Davidson Inc. motorbikes, Levi Strauss & Co. jeans and bourbon whiskey from the U.S. So, now Levi-Strauss is losing overseas business, thus must raise their prices to domestic buyers to cover the shortfall.  So, next time you want to buy your kids Levis for back-to-school, don’t be surprised that they cost more.

There are long-term and long-range consequences to the action of imposing hefty tariffs on imports that Donald Trump has not considered, in part because he doesn’t understand international trade.  His more intelligent, economy-savvy advisors have tried to explain it to him, to talk him out of such a foolish move, but with no luck, because when Trump decides he wants to do something, he will do it, come hell or high water.  But … there is more to this story than meets the eye.

carl icahn

Carl Icahn

Carl Icahn … name ring a bell?  He is said to be the 26th wealthiest person in the world, with a net worth of $16.9 billion.  He is the founder and ‘controlling shareholder’ of Icahn Enterprises.  The man knows how to make money, just not always in an honest, ethical or moral manner.  He is what is known as a corporate raider. Funny, but just a few days before Trump’s decision to impose the steel tariffs, Carl Icahn sold $31.3 million worth of shares in the crane and lifting equipment supplier Manitowoc Company – a company heavily reliant on … guess … imported steel.  The value of the shares he sold has since dropped by around $6 million. Coincidence?  I think not.  Oh … by the way … Icahn is also a former Trump ‘special advisor’.

Earlier today, after announcing that he would defy logic and move forward with his tariff plan, Trump said, “Trade wars are good, and easy to win.”  Another of his many lies … there are no winners in a trade war, only losers.  And it is a reverse equation, for the poorer you are, the more you will lose.  The rich, like Carl Icahn and Donald Trump, will lose very little, if anything.  You and I, my friends, stand only to lose. Republican Senator Ben Sasse hit the nail on the head when he said …

 “Trade wars are never won. Trade wars are lost by both sides. Kooky 18th century protectionism will jack up prices on American families — and will prompt retaliation from other countries. Make no mistake: If the President goes through with this, it will kill American jobs — that’s what every trade war ultimately does. So much losing.”

There is much more to say on this topic, but for now, you get the idea of why you shouldn’t pass over the news of the day, for it is another foolish Trumpian move that will cost you … bigly.

Note to readers:  Surprise Saturday will return soon, along with Jolly Monday and Wednesday’s Good People posts.  For the moment, I am still awaiting Jolly’s return, for I need his help to write these.  Thank you for your continuing patience.

 

47 thoughts on “Trump’s Trade War

  1. Pingback: A Rudderless Ship … | Filosofa's Word

  2. This move by Trump, by the standards of any economic course, is a lose-lose proposition. I think there is a deeper problem, however. He wants to bring manufacturing back to the US. Manufacturing is not the future of this country, it’s the past. The future is technology and automation. The future is better and more efficient delivery to consumers. We are not going to bring manufacturing back. This is in direct opposition to the evolution of a modern society. The industrial revolution is over. The technology revolution is what we should be focusing on.

    Liked by 1 person

    • I agree … this was just about the stupidest move he could have made, and is quite likely, I fear, to signal the beginning of a global recession, especially if he doesn’t walk it back a bit where our closest allies are concerned.

      Y’know, I hadn’t thought of manufacturing in that way, but now that I think about it, to a large extent you are right … it is certainly not the wave of the future, though I don’t look for it to completely go away anytime soon. But yes, the technological revolution is upon us, and meanwhile, Trump is still playing with his Lego blocks. Sigh. It’s bad enough that he has no clue what he is doing, but the worst is that he won’t listen to his advisers, who might keep him from making fatal errors.

      Liked by 1 person

      • The Sunday morning talk shows were interesting. His own people see it as a destructive move and are talking about exceptions to the tariffs where they will obviously hurt American concerns. It’s amazing that this man made any money in business with his rudimentary knowledge of how the economy works.

        Liked by 1 person

        • It seems that he is alienating more of his own party by the day! I only watched This Week with Stephanopoulos, but though there were two republicans on the panel, not a single person had anything positive to say about Trump’s last two weeks. He is running out of excuses. The tariff decision he made against the better judgment of both advisors and members of Congress. But, ol’ Wilbur Ross and Peter Navarro are egging him on, trying to minimize what effect it will have on We The People, and I suspect he will not be swayed. I wonder who he will blame when his house comes caving in on him, which I believe is going to happen.

          How’ve you been, old friend? Between my multiple eye surgeries and trying to keep up with Trump and my blog, I haven’t had time to go visiting lately, so have not been over to your blog. Hopefully I will catch up one of these days! Hope all is well in your world. I recommended you to an author last week who is struggling with self-publishing … told him you were the best I knew of! Take care … thanks for dropping by … I will return the visit soon!

          Liked by 1 person

          • I’ve been fine. Published a new book and I’m picking up some editing work from other authors which is helping set me up for my eventual retirement business. No retiring now, however. At 55 with a nine-year-old, I’ve got college to worry about in about 9 years. Hope your holding up well after your health issues.

            Liked by 1 person

            • Glad to hear you’re doing well. Yes, I saw on … I think it was John Howell’s post … that you had published a new book. Congratulations!!! I will check it out in the next day or two! Well, you may not be able to retire for a while yet, but who knows? In a few years, you may have so many authors begging for your editing services that you can retire from the day job! As for me, I am hanging in and glad to be having my vision at least partly restored. I find that I am busier since I retired than I ever was when I worked for a living! 😀 I’m not sure how I ever had time for a job!

              Liked by 1 person

    • Agreed! He operates on a purely emotional plane, and has no concept of intellect or logic. Worse yet, he defies the advice of those in his administration that DO know how things work. 😦

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  3. Reblogged this on Opher's World and commented:
    Trade wars are a most stupid way to go about things. The wealthy seem to like them though. The poor pay for them.
    Perhaps having given huge sums of money away through myopic tax cuts Trump is after clawing it back through the backdoor from tariffs? Another way to soak the poor?

    Liked by 1 person

    • Many thanks for the reblog, Opher! Yes, just another way to help his rich buddies who, in turn, fill his coffers. To heck with We The People! Somehow, though, he manages to convince his base that everything he does is in their best interest. I sometimes believe he has drugged them, or mesmerized them. Sigh. Thanks again!

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  4. Dear Jill,

    This president’s decision making process is a nightmare. It seems that for a short window of time, the president was left unattended. Big mistake! The tariff proponent, Commerce Secretary Wilbur Ross swooped in with steel industry executives to hold a meeting with the president without a peep to anyone else.You know the rest of the story.

    Did you see The Commerce Secretary Ross explaining to the public that about 2 cents would be added to the cost of a can of Campbell soup? He forgot to mention items like cars and the cost of a trade war.

    In the background, there is a March 13 special election coming up to fill a vacant US congressional seat in Pennsylvania’s 18th district which includes the city of Pittsburgh, steel country. The normally safe republican seat is being successfully challenged by a great democratic candidate, Conor Lamb. The president has plans to travel to Pennsylvania to help with rallies to excite the base. How much do you want to bet that the steel tariffs will be mentioned?

    The paperwork is not close to being completed regarding the imposition of tariffs, to where the president can sign it. Let’s pray that he can be talked out of this foolishness.

    Hugs, Gronda

    Liked by 1 person

    • He has a decision-making process? Who knew? I just thought he woke up in the morning and said, “hmmm … what can I do to make people mad today?”

      No, I didn’t see Ross explaining about the soup cans, but I did see him saying that it would raise the cost of an average car by ONLY $175, and that should be no big deal. Of course it isn’t a big deal for him, for his net worth is either $2 billion or $700 million, depending on which source you believe. Plus, that $175 is wrong by a long shot. I don’t know what the true figure would be, but I’m guessing closer to $1,000. The more zeros are in their bank balance and investment portfolios, the more likely they completely lose sight of how we live, those of us who have to budget simply to buy food!

      Yes, I am banking on Connor Lamb … I think he will win hands down. And I do hope that Trump changes his mind on the steel tariffs, for the way it stands now, he is likely to bring about the start of a global recession. He has no understanding at all of how his actions affect other nations.

      Hugs!!!

      Liked by 1 person

      • Jill, Gronda, by the way, we should not lose sight of Wilbur Ross owned a cadre of distressed steel companies before his current role. Like the President and his family, conflict of interest is in abundance. Keith

        Liked by 1 person

  5. Jill, good post. Not only is the decision poor, based on his simplistic zero-sum thinking, how it was rashly done without vetting and buy-in was very poor. He caught everyone including his staff, Congress, allies, investors and business with their pants down. This is poor form and the end result is how recessions start. Keith

    Liked by 2 people

    • Thanks Keith! Yes, depending on international reprisals, this could signal the beginning of a global recession. This is why we didn’t need a person with zero understanding of international affairs and how intertwined nations are, in the White House. Ignorance is one thing, but coupled with a refusal to listen to those trained, educated experts, it is a recipe for disaster.

      Liked by 1 person

  6. Trump is the guy who likes to upset the apple cart it keep the focus off his troubles by veering the attention elsewhere.

    All Trump is doing to Canada is opposing the Liberals of Justin Trudeau till their out but they can’t see that.

    His war is on with the Liberals Free trade war but when the Liberals are defeated ‘ALL WILL CHANGE & BE WELL AGAIN’ remember in order to wage the right worldly war you must have the right people in Governments… across the board and thinking the same way.

    The Justin Trudeau’s Government is way to different for the President’s liking and so he keeps hitting them with changes… unfortunately the world of trade sees his far from helpful. It’s not just about the USA it’s about his way of doing things.

    Liked by 1 person

    • Agreed, though I think that in part his decision is made out of sheer ignorance, and being too stubborn to listen to his advisors who do understand the ramifications. Ultimately, depending on the international response, this could signal the start of a global recession. I wonder if he’ll step up to the plate and take credit for that one? Nope … it will likely be President Obama’s fault.

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      • When people talk about Trump they seem to be the ones ignorant… sorry.

        When Trump is concern there are two issues to look at and study or maybe three.
        The Bible says to test the Spirits one scripture anyone can use is found in John 10:10.
        A- The THIEF comes not but to Kill, Steal and Destroy.
        B- But I Am come to give Life and Abundant Life.

        The Lines to watch:
        #1: He’s the President of the USA and in that line you have nothing but confusion, turmoil and it’s dysfunctional to say the least…
        #2: His Trump Motel down the street you don’t hear of any of this when he meets for his business deals with all the business elites from all over the world, do you?
        #3: Florida golf course is the same as #2.

        So why all this turmoil in the Government and what’s that saying? Is he destroying the USA so his friends can buy it up in pieces and a discount? Hey isn’t that how he does business? I’m just wondering why, that’s all.

        If the nations don’t wake up soon it’s going to be quite a sale on the open market.

        Good business deal coming for those with off shore British Island money, if I’m right.

        Liked by 1 person

        • You make some interesting points to ponder. Yes, he is making money on his hotel down the street. I have even read of one delegation from … I disremember, but I think it was one of the African nations … that did not wish to stay there, but rented rooms there anyway, to appease Trump, then stayed elsewhere.

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    • My thoughts exactly. He has no clue what he is doing. I cannot foresee a good outcome, no matter how hard I try. Same with the decisions he has made pertaining to the environment. If, late one night, you hear a distant howl and wonder what it is … it is me. 🐺 🌙

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  7. Reblogged this on It Is What It Is and commented:
    This is it, in a nutshell … “Trade wars are never won. Trade wars are lost by both sides. Kooky 18th century protectionism will jack up prices on American families – and will prompt retaliation from other countries.’
    Tired of winning yet, America?

    Liked by 1 person

  8. Of course the EU is steaming … and now they are considering to retaliate … e.g. on Whisky, Jeans and Motorbikes …. Has the whole world gone mad? I thought we had moved beyond that … sigh. (Well, I honestly don’t care how expensive Whisky gets, as I am not touching that stuff … tastes horribly for me … – but that is not the point really.)

    Liked by 2 people

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