Trump and China call cease fire on tariffs

[blackangst1]

Shall we thank Democrat states for raising the minimum wage then?

Democrat and GOP states that did, yes. Thats certainly part of it.

 

[fskimospy]

Because... reasons?

I don't think it's as well defined and valid as you proclaim. I would estimate that it's more on a case-by-case basis depending on industry, labor, material costs and locations, etc..

According to the world bank the EU and the US have roughly equivalent overall tariff rates.

https://data.worldbank.org/indicator/tm.tax.mrch.wm.ar.zs

Tariffs are one of the few things that economists are basically universal on as being bad. All they are doing is making the citizens of your country pay more money in order to protect the profits of the industries favored by the tariffs.

 

[K1052]

Because... reasons?

I don't think it's as well defined and valid as you proclaim. I would estimate that it's more on a case-by-case basis depending on industry, labor, material costs and locations, etc..

The costs to consumers FAR outweigh any benefits. :

One example

https://www.washingtonpost.com/busi...t-us-consumers-every-job-created-experts-say/

President Trump has shown little interest in removing the steel and aluminum tariffs he imposed more than a year ago despite growing evidence Americans are paying a hefty price for these tariffs and increasing pressure from Republicans in Congress to remove them.

U.S. consumers and businesses are paying more than $900,000 a year for every job saved or created by Trump steel tariffs, according to calculations by experts at the Peterson Institute for International Economics. The cost is more than 13 times the typical salary of a steelworker, according to Labor Department data, and it is similar to other economists’ estimates that Trump’s tariffs on washing machines are costing consumers $815,000 per job created.

“It’s very high. It’s arresting,” said Gary Hufbauer, a senior fellow at the Peterson Institute who did the steel tariff cost calculation. “The reason it’s so high is that steel is a very capital-intensive industry. There are not many workers.”

 

[s0me0nesmind1]

According to the world bank the EU and the US have roughly equivalent overall tariff rates.

https://data.worldbank.org/indicator/tm.tax.mrch.wm.ar.zs

Tariffs are one of the few things that economists are basically universal on as being bad. All they are doing is making the citizens of your country pay more money in order to protect the profits of the industries favored by the tariffs.

Again - If it was that simple why does every country have SOME tariffs of sorts? Be it Canada having regulations on US dairy - or EU on our vehicles.

 

[Indus]

The more isolated the US market becomes the more all prices will rise.

I think banning gas imports that keeps costs low (such as the banning of venezuela that Trump did) will have a bigger impact on inflation since everything is shipped somewhere. If the shipping costs go higher, everything goes higher.

Just think back to when gas was $5 a gallon under Bush and everything become more expensive, and they sort of stabilized during Obama years due to gas becoming more or less stable at $3 ish.

 

[K1052]

I think banning gas imports that keeps costs low (such as the banning of venezuela that Trump did) will have a bigger impact on inflation since everything is shipped somewhere. If the shipping costs go higher, everything goes higher.

Just think back to when gas was $5 a gallon under Bush and everything become more expensive, and they sort of stabilized during Obama years due to gas becoming more or less stable at $3 ish.

Fracking exploding during the Obama years and swamping the US in new supply is what pushed gas prices down.

 

[fskimospy]

Again - If it was that simple why does every country have SOME tariffs of sorts? Be it Canada having regulations on US dairy - or EU on our vehicles.

Governments are more interested in protecting politically powerful constituencies than what is most economically efficient.

 

[Indus]

Fracking exploding during the Obama years and swamping the US in new supply is what pushed gas prices down.

Except that shale gasoline is very low octane and not really usable in cars.

https://www.desmogblog.com/2018/04/...oil-makes-poor-fuel-high-tech-cars-and-trucks

 

[[DHT]Osiris]

Except that shale gasoline is very low octane and not really usable in cars.

https://www.desmogblog.com/2018/04/...oil-makes-poor-fuel-high-tech-cars-and-trucks

https://en.wikipedia.org/wiki/Shale_oil
It's usable for non-gasoline fuels and misc other purposes, that probably reduces the pressure to convert 'richer' oil to Gasoline, thus lowering the price.

 

[Indus]

https://en.wikipedia.org/wiki/Shale_oil
It's usable for non-gasoline fuels and misc other purposes, that probably reduces the pressure to convert 'richer' oil to Gasoline, thus lowering the price.

Yes but its the gasoline fuel that has a direct impact on economies via it's price because of shipping and travel costs.

 

[s0me0nesmind1]

https://en.wikipedia.org/wiki/Shale_oil
It's usable for non-gasoline fuels and misc other purposes, that probably reduces the pressure to convert 'richer' oil to Gasoline, thus lowering the price.

Majority of people have zero clue that oil makes an absolute shit ton of products and fuels for a variety of purposes that people use daily.

They just equate Oil -> Gasoline -> Cars.

That and the qualities of oil are often based on the physical location.

 

[[DHT]Osiris]

Yes but its the gasoline fuel that has a direct impact on economies via it's price because of shipping and travel costs.

I know? I was saying that reduction in prices at the pump for Gasoline can still be correlated to the introduction of shale oil refinement, even if shale oil itself isn't usable for Gasoline.

It may even have a *more* direct correlation with shipping costs, given that you can create diesel from shale oil.

 

[Indus]

I know? I was saying that reduction in prices at the pump for Gasoline can still be correlated to the introduction of shale oil refinement, even if shale oil itself isn't usable for Gasoline.

It may even have a *more* direct correlation with shipping costs, given that you can create diesel from shale oil.

Hmm that's quite possible.

 

[VRAMdemon]

Last Q4 we had a perfect shitstorm of trade deal worries, Trump hammering the Fed chair on Twitter for lower rates, then the gov shutdown.

This time around there is no shutdown to worry about, and the Fed has reversed course on % rates, so now it's a topped out market and a trade deal blowing up, with the whole Constitutional Crisis simmering in the background.

However, like @sportage comments, the market doesn't necessarily focus on those other things. It's about predictions of profits and that's about it.

To add to the irony of Trump team's own words making waves, people are saying the Chinese took Trump's comments against the Fed and push for lower rates as an indication of economic weakness and thus an advantage to press for a more favorable deal.

Turns out they gave him for credit than he deserves. He was just talking out his ass and wants to stack the deck for 2020 with a hot economy. He doesn't care about long term concerns.

The problem with this idiot trade policy, for both countries, is that China is probably our biggest supplier of manufactured goods, particularly the really really cheap stuff and the high-tech stuff, and we are probably their biggest market for those goods, except maybe the EU as a whole.

All of his advisors have doubtlessly been telling him "Brilliant! Hundreds of billions of free dollars coming into the treasury from China!" He does something completely stupid and there are no adults in the room to take his toys away until he calms down.

No one is going to "win" from this. Except the Trumps, who are no doubt lining their pockets as fast and deeply as they can

He knows enough about tariffs to exclude Ivanka's businesses from them.

 

[Fenixgoon]

Majority of people have zero clue that oil makes an absolute shit ton of products and fuels for a variety of purposes that people use daily.

They just equate Oil -> Gasoline -> Cars.

That and the qualities of oil are often based on the physical location.

most oil is used for fuel of some kind though. as I recall, plastics are only like 5-10% of oil consumption

 

[s0me0nesmind1]

most oil is used for fuel of some kind though. as I recall, plastics are only like 5-10% of oil consumption

Not necessarily... It will also depend on many properties of the oil specific to regions by viscosity (e.g. Texas "light sweet crude" vs. Venezuela "Heavy crude")

But just for the sake of argument:

 

[desy]

Again - If it was that simple why does every country have SOME tariffs of sorts? Be it Canada having regulations on US dairy - or EU on our vehicles.

Most Canadians would scrap tarrifs as it only supports a minor subset of farmers, we would love cheaper dairy as long as it abides by quality standards of hormones and pasteurization etc

 

[Fenixgoon]

Not necessarily... It will also depend on many properties of the oil specific to regions by viscosity (e.g. Texas "light sweet crude" vs. Venezuela "Heavy crude")

But just for the sake of argument:

that is a list of products, not how much each one uses. and yes, different oils will have different qualities in terms of what grades of oils can be extracted.

for comparison:
https://www.eia.gov/energyexplained/index.php?page=oil_use

transportation uses combined are around 70% of oil use while all industrial uses are 24%.

so, at a ~ 3:1 ratio, most of our oil is turned into fuel of some kind

 

[sdifox]

Again - If it was that simple why does every country have SOME tariffs of sorts? Be it Canada having regulations on US dairy - or EU on our vehicles.

Cuz you guys heavily subsidise dairy production. This lead to giant surplus production amidst dwindling demand. What you are saying is everyone else is responsible for your dum dum policies.

Oh and US has a trade surplus with Canada on dairy.

 

[Bitek]

Dow closes 600+ pts down, VIX surging.

Otoh it's Monday, and Monday freakouts are always the best.

 

[IronWing]

Cuz you guys heavily subsidise dairy production. This lead to giant surplus production amidst dwindling demand. What you are saying is everyone else is responsible for your dum dum policies.

Oh and US has a trade surplus with Canada on dairy.

You will drink our milk and you will like it.

 

[blankslate]

I heard a report on my local NPR station that China ran out of imports from the U.S. to slap Tariffs on from the U.S. while China has many more things that they export to the U.S. that we can hit with tariffs.

Which is a pretty damning portrait of the state of manufacturing and trade imbalance I guess.


________

 

[fskimospy]

I heard a report on my local NPR station that China ran out of imports from the U.S. to slap Tariffs on from the U.S. while China has many more things that they export to the U.S. that we can hit with tariffs.

Which is a pretty damning portrait of the state of manufacturing and trade imbalance I guess.


________

But why is a trade imbalance bad?

 

[brycejones]

You will drink our milk and you will like it.

That’s not milk.

 

[Jhhnn]

I heard a report on my local NPR station that China ran out of imports from the U.S. to slap Tariffs on from the U.S. while China has many more things that they export to the U.S. that we can hit with tariffs.

Which is a pretty damning portrait of the state of manufacturing and trade imbalance I guess.


________

It has served the ownership class rather nicely. It's part & parcel of free market trickle down.