[Rugoz]

That is very true, but in a trade war that purchasing will be forced to be American made products. This will benefit the US economy and our trade balance.

Your "purchasing" is financed with money from abroad. It's an accounting identity. If you consume more than you produce, somebody has to lend money to you. That's why it's silly to talk about losing and winning in this context. Does the creditor lose or the debtor? That depends. If we're talking about countries, a sudden correction is bad for both.

Clearly though trade and capital flows should only be rebalanced and not shut down, that benefits nobody.

[Rancid]

Your "purchasing" is financed with money from abroad. It's an accounting identity. If you consume more than you produce, somebody has to lend money to you. That's why it's silly to talk about losing and winning in this context. Does the creditor lose or the debtor? That depends. If we're talking about countries, a sudden correction is bad for both.

Clearly though trade and capital flows should only be rebalanced and not shut down, that benefits nobody.

What? No, you're missing a lot.

There will be plenty of winners and losers in all of this, the question is who are the winners and who are the losers. I think the American public will be losers, and American elite will be big winners. All of this is debatable though. To even suggest that it's silly of talking about winners and loser shows you don't really know what you're talking about.

You're implying that all US buying is financed, which is simply not true. The tariffs mean Americans will buy less first and foremost. It does not necessarily mean they will finance more. Maybe some segments of the economy and population will increase their financing, but this is highly debatable too. As a result of reduced finance demand, interest rates could drop (I'm a host of other things could happen too). The net result on financing Could be 0 with or without tariffs. No way to know for sure.

Overall volume in America could drop, but the shift to more American made products could result in increased volume for American products than would have otherwise happened. The question then becomes, will decreased overall volume result in decreased volume for American producers or not? Trump believes it will result in an increase for American producers. I think it will be a decrease. Again, very debatable.

My overall point here is anyone that is very confident in either side of the argument (tarrifs are good/bad), shouldn't be listened to.

Aside from the economics, I favor global integration, so on those grounds alone I'm against this protectionism. It just rubs all of our allies the wrong way, and we should be able to play nice with them. That said, the economic argument of whether this is good or bad for America is very very debatable. Even if it's good for the American public, it's probably bad for our long term political and economic relationships with other countries.

[Rugoz]

What? No, you're missing a lot.

There will be plenty of winners and losers in all of this, the question is who are the winners and who are the losers. I think the American public will be losers, and American elite will be big winners. All of this is debatable though. To even suggest that it's silly of talking about winners and loser shows you don't really know what you're talking about.

You're implying that all US buying is financed, which is simply not true. The tariffs mean Americans will buy less first and foremost. It does not necessarily mean they will finance more. Maybe some segments of the economy and population will increase their financing, but this is highly debatable too. As a result of reduced finance demand, interest rates could drop (I'm a host of other things could happen too). The net result on financing Could be 0 with or without tariffs. No way to know for sure.

Overall volume in America could drop, but the shift to more American made products could result in increased volume for American products than would have otherwise happened. The question then becomes, will decreased overall volume result in decreased volume for American producers or not? Trump believes it will result in an increase for American producers. I think it will be a decrease. Again, very debatable.

My overall point here is anyone that is very confident in either side of the argument (tarrifs are good/bad), shouldn't be listened to.

Aside from the economics, I favor global integration, so on those grounds alone I'm against this protectionism. It just rubs all of our allies the wrong way, and we should be able to play nice with them. That said, the economic argument of whether this is good or bad for America is very very debatable. Even if it's good for the American public, it's probably bad for our long term political and economic relationships with other countries.

I wasn't even talking about tariffs in that post, but about trade imbalances.

And your overall point is wrong. One can be extremely confident that a tariff war (meaning both sides impose tariffs to an equal degree) between countries like Canada/EU/US would be bad for both sides, in terms of impact on the overall economy. Individual sectors might benefit.

[Kaiserschmarrn]

Your "purchasing" is financed with money from abroad. It's an accounting identity. If you consume more than you produce, somebody has to lend money to you. That's why it's silly to talk about losing and winning in this context. Does the creditor lose or the debtor? That depends. If we're talking about countries, a sudden correction is bad for both.

Clearly though trade and capital flows should only be rebalanced and not shut down, that benefits nobody.

I'd be interested in your opinion on the trade imbalance issue in general. It's been a while but I've been reading a lot of different takes back when it came up as part of the eurozone crisis. My impression was that most thought more balanced trade would be desirable, although that was only wrt the euro.

[Stormsmith]

Yes in the end US runs a trade deficit but it get to project influence around the world.

Not with Canada. The US has a small advantage

Trump is a dumb fuck acting on instinct but he has economic advisors who know better. It's possibly just a stunt to please his dimwitted followers and he won't escalate any further.

This. He wants to appease dairy farmers whose products were banned in Canada. These modified products werent being made when NAFTA was created and you have a surplus that we dont want.

[One Degree]

Your "purchasing" is financed with money from abroad. It's an accounting identity. If you consume more than you produce, somebody has to lend money to you. That's why it's silly to talk about losing and winning in this context. Does the creditor lose or the debtor? That depends. If we're talking about countries, a sudden correction is bad for both.

Clearly though trade and capital flows should only be rebalanced and not shut down, that benefits nobody.

I think this is all Trump is attempting. The ‘trade war’ label comes from those who oppose everything Trump does simply because they know it will work.

[blackjack21]

Trump forcing through but how many times this way will work ? Until a real wars ? There will be a watershed.

What are they going to do? Bomb us into buying their products? Germany has to build a credible military first.

lol, the Republicans are scrambling to cover their lobbies now.

It's a riot act isn't it? The Democrats can't do too much about it either, because it's the working class blue collar whites that effectively put Trump in office. Washington's push for free trade and open borders has backfired big time. I love it!

There is a good way to respond to this. We need to put tarrifs on businesses who are directly involved with the Republican party funding. Also put tariffs on firms that provide split funding to both democrats and republicans.

That's almost pointless, since all major organizations split funding to both parties. Tariffs are generally uniform. I don't think you can say, "We'll import Fords, but not Chevys" under international law at present. Maybe this innovation will arise. It would be interesting to see. The US did this to Russian oligarchs, but it was about sanctions not tariffs.

That should make the guilty party squirm and squeal.

They aren't the guilty party. Trump did not get into power on their motion, but in spite of it. Trump won white working class voters that the Democrats had abandoned. The Democrats are still running on identity politics. They aren't changing in this election cycle. There are no "lessons learned." China wants to stop buying US agriculture, but they are a net food importer. So they are just making things more expensive for Chinese consumers--that's what Trump is doing in the US too. However, China just can't make that up with domestic production.

I'm not sure how you can hurt domestic construction or retail sales in a trade war. All it does is make imported goods more expensive.

They are talking about whiskey and stuff, imposing tariffs on Kentucky whisky or something. So to bad for all the drinkers of whiskey in Europe and Canada.

Canada already has insanely high taxes on booze. I have friend in Montreal who makes his own wine just to get out of paying the ridiculous levels of tax. Maybe we could pay Canada back for Prohibition Era bootlegging and start smuggling alcohol into Canada duty free.

I've read that retaliation tariffs will be designed exactly with that purpose in mind, to hit Republican stronghold states and regions in USA.

That's awesome. They're already missing the mark. Trump won Wisconsin, Michigan, Pennyslvania and Ohio. That's why he won the White House. It's blue collar Democrats that made Trump president, and that's why he's likely to win again.

Justin Trudeau using extremely strong language by Canadian standards.

Trump is the gift that keeps on giving.

MAGA!

I thought conservatives were all about "LET THE MARKET DECIDE!!! FREE TRADE!!"

Voters everywhere have had enough of open borders and globalism. It's not just in the US. Don't kid yourselves.

The EU isn't going to do anything to stress their economy with half its members considering leaving.

Well, I'm sure the Germans are shitting their pants with Trump considering cars. Half of Germany's GDP is exports. Most of the problem in Europe is German exports killing of the PIIGS.

There's more than one kind of 'conservatism', Rancito. For most of the 20th century, the free-marketeer conservatives have managed to carry the populist and evangelical conservatives along for the ride, but over the past decade or so they have begun to part company. The populist and evangelical conservatives have no ideological commitment to free markets, and gain their support from different demographic groups compared to the free-market conservatives.

That's the problem the globalists have now. By embracing political correctness and attacking white people everywhere, there is no longer a real Democrat vs. Republican dynamic. Basically, there is the political establishment versus the people. The establishment has lost a tremendous amount of political support.

I also recollect reading the free trade deals that the US had signed with South Korea and other nations years & years ago. They were honestly ridiculous terms that provided no benefit for the US but maintained the trade deficits. It really felt like nobody was seriously interested in making the best possible deal. And that seemed to have been the norm.

Perhaps somebody can prove me wrong, but I am inclined to believe that the direction that Pres. Trump has taken us in the realm of trade, that acutally puts America first, was the proper one.

There has been a free ride underwritten by America for a very long time. The Cold War ended in the late 1980s/early 1990s, so there was no reason for us to do thing like create free trade with China (a communist oligarchy). It was competition with Europe that made that happen. However, the European electorate has had enough of it too, so the elites have to try to strike out while their voters are rebelling.

There's a simple reason for the current account deficit. America saves very little, the rest of the world saves a lot. The savings from the rest of the world flow into the US, equalizing returns, appreciating the dollar, making American exports less competitive. Consequently the cure is obvious too. Save more, spend less or reduce capital inflow and demand for dollars by other means (which will lead to higher interest rates).

Trump's tax policy has already kicked off a dollar rally as companies repatriate their money to the US.

There are a number of developing countries who get 100% duty free import facilities in the US (and the EU) for garments, seafood, pharmaceuticals and other commodities yet they have huge import tariffs, like over a hundred percent and more (I have the specifics) for Western goods like cars, consumer products, machineries, even basis industrial materials.
And to add insult to injury, they vote against the US every single time in the UN.

Can someone pass this message on to the American Authorities ? Niki ? Donald ?

That's correct. It has hollowed out entire US industries. So the Republican party simply doesn't have the muscle to try to get voters to go along with free trade anymore. They traffic with the Democrats on everything from global warming to gay rights to amnesty for illegal aliens to the point that nobody really gives a fuck if the Republicans fall off the face of the Earth. The Democrats are facing a similar problem.

Perhaps they should reconsider their rabid anti Trump position? It amazes me liberals expect to attack without being attacked.

That is interesting that people haven't figured that out yet. I've been saying for decades now that nobody ever fights back against the establishment. Trump did and that is why he won so easily. The US primaries were absolutely hilarious. I remember Trump gloating in South Carolina when he had beaten Lindsay Graham in his own state and Bush came in fourth or fifth and dropped out. Trump said something like, "I beat him badly" about Graham. I laughed so hard.

The American stock and job market continues to seem completely unaffected by the world trade war that is supposedly raging on at this very moment.

Trump is exactly right in that Tweet. This is simply a matter of countries that trade with the US eliminating the barriers to entry that the US eliminates for them.

I believe the tariffs and retaliatory tariffs have not hit in yet. As far as I know Canada plans its retaliation on July 1st, that is on Canada Day. The government here is pretty upset and the media is telling us how we should all be upset as a nation. So to mark how upset we should all be with USA and how serious we are, the tariffs against USA will come in effect on Canada Day. Also legalization of weed should be around that time as well.

Trump has been very good for Canadian oil though. He's building the Keystone XL pipeline that Obama held up for a full eight years.

You don't know Koreans. Beneath the surface, they hate Americans, like every occupied nation hates its occupier.

Resentment is a better word. South Koreans would be living like North Koreans if it weren't for the US. That's an almost intolerable fate. South Korea was a pretty backward country during the war, and today it is a first rate industrial power largely on the basis of trade with the United States. The US lets Korea get away with those trade policies for geostrategic reasons. The problem for the globalists is that they got too ambitious and have lost the electorates in Europe and the US. In Europe, they forced the Lisbon treaty after the Nice treaty failed--and the results have been nothing short of disastrous.

Volkswagen has never succeeded in the US and was subject to huge penalties.

Huh? The US bought the VW Beetle (Hitler mobile) in droves after WWII to help rebuild the German economy. We didn't have to do that. Volkswagen has done significant business in the US since the end of WWII.

If companies shed their US businesses, they are free to develop the Eurasian and ME markets (including Russia, Iran, Syria, etc.) without fear of being targeted by US sanctions.

Obviously, you don't have a business degree. Boy, I'll bet VW just can't wait to get a slice of the Syrian auto market.

Or perhaps I'm overestimating him, he does after all come from business background, so he might be just looking at his from spreadsheet cost benefit way. If that is the case he might not be taking into account that this will reduce American influence in Europe and also with its allies around the world. Unless he is willing to back it up with other means, like militarily, but then that is kind of going a little to far.

Europe is committing suicide. So this reaction is probably a good thing, like a defibrillator--not something you would choose to do to yourself on a good day, but something that may save your very life.

The US didn't bomb Assad to kingdom come in 2013 because the British lower house didn't give Cameron the mandate to bomb Syria. Without the Brits, the Yanks won't do it.

Obama couldn't even get the US House to go with him. He was the emperor with no clothes. That and his "gay Olympics" gambit was when I figured that Obama was a twink.

There are other fields such as mechanical engineering and robotics where they can't compete with the Germans or electronics where they can't compete with the Asians;

The US comparative disadvantage has more to do with labor costs. For example, a company like Universal Display owns much of the IP around OLED displays, but the manufacturing is all done in Asia. As manufacturing of high tech products becomes more automated, the absolute advantage of labor cost evaporates and the US comparative advantage improves. Trump's corporate tax policies help that too. US corporate taxes are now more in line with the rest of the industrialized world, so there is not as compelling an incentive to outsource now; although, we are not even one year into it yet, so it remains to be seen what the long term effect is.

US manufacturers depending on the government to protect them will sell without having to innovate. They will increase their prices and the shareholder will cash in on the profits, while the foreign competitors will innovate to produce better quality at lower costs.

All countries erect non-tariff barriers to protect their industries. The Asian economies are notorious for this practice. It was one of the driving forces for the EU as well to eliminate those barriers within Europe, which has inured primarily to the benefit of Germany.

Franco Spain is an example of that.

Well, that's a little different as businesses tend to be leery of investing in dictatorships unless there is some tremendous advantage. China is no longer the super cheap labor market it used to be and manufacturing is increasingly becoming automated.

That's why you have a trade deficit in the first place, One Degree.

Right. A tariff is just a tax on imports. In other words, it's a tax on businesses. I find it odd that the people who lamented Trump cutting the corporate rate to something approaching what the rest of the world pays are suddenly opposed to raising taxes on corporations engaged in international trade. Why should they pay less tax?

I think the American public will be losers, and American elite will be big winners.

I think it is the other way around. The elite have already been the big winners. Even with a banking crisis, the establishment bails them out and sticks the bill to the middle class. The American elite won't be winners unless they invest more in the US. That means they can't run around championing all sorts of weird identity issues and foisting regulations on US business, because they will have to invest in them and reap a return.

My overall point here is anyone that is very confident in either side of the argument (tarrifs are good/bad), shouldn't be listened to.

Tariffs are just taxes. People who clamor for high taxes on the rich seem puzzled by the fact that low tariffs typically mean low taxes for the rich, because they produce and bank their profits offshore. Nobody believes what the elite are saying anymore. They lie constantly, and they just don't have the ear of the electorate anymore.

The ‘trade war’ label comes from those who oppose everything Trump does simply because they know it will work.

I find it amusing. I remember back in the 1990s when Nancy Pelosi was clamoring about labor practices in China before we gave China MFN trading status. Pelosi got muzzled and Clinton got his trade policy that Wall Street Democrats and Republicans wanted. At that point, labor in the United States effectively died.

I think organized labor has seen its day. We still need to break them on the government front, but we also need to have jobs for people with IQs of 90. Welfare and drugs are not the answer.

[Albert]

Trump tariffs: Mexico retaliates against US products

Mexico has announced new tariffs on US products in response to Donald Trump's decision to impose steep duties on imports of steel and aluminium.

The list includes whisky, cheese, steel, bourbon, and pork.

Analysts say the tariffs are designed to hit US Republican strongholds ahead of mid-term elections in November.

Mr Trump last week levied tariffs on steel and aluminium imports from Mexico, Canada and the European Union, riling key US allies

The move has also dismayed some domestic businesses, including pork producers, who now face a 20% tariff on exporting leg and shoulder to Mexico.

Mexico is the largest market for US pork exporters.

Other products affected by the new tariffs include apples and potatoes. Certain cheeses and bourbon will be hit with 20% to 25% duties.

Mexico - a net importer of US steel - is also putting 25% duties on a range of American steel products.

Political dimension?
The potential economic effect on US exporters could damage Republican support ahead of November's midterms.

In Iowa, the top pork-producing state in the US, with Mexico as its largest market, Republican Congressman Rod Blum is seen as vulnerable.

"We need trade and one of the things we're concerned about is long-term implications that these trade issues will have on our partnerships with Mexico and Canada and other markets," Iowa Secretary of Agriculture Mike Naig, a Republican, was quoted as saying by Reuters news agency.

"If our customers around the world start going to other parts of the world for their supplies, that is a serious problem," he said.

The renewed trade dispute between US and Mexico comes amid fraught attempts to renegotiate the trillion-dollar North American Free Trade Agreement (Nafta).

The agreement governs trade between the US, Canada and Mexico.

President Trump's economic adviser, Larry Kudlow, on Tuesday revived a possibility that the president would attempt to replace Nafta with bilateral deals with Canada and Mexico - a move both nations oppose.

US-Mexico trade is worth about $600bn annually and about 16% of US goods go to its southern neighbour. Mexico sells about 80% of its exports to the US.

Trade sanctions: The basics
What is a trade war? It's when countries attack each other's trade with taxes and quotas. One will raise tariffs, a type of tax, causing the other to respond, in a tit-for-tat escalation. This can hurt economies and lead to rising political tensions.

What are tariffs? Taxes on products made abroad. In theory, taxing items coming into the country (imports) makes people less likely to buy them as they become more expensive. They're likely to buy cheaper local products instead, boosting your country's economy.

What's a trade deficit? The difference between how much your country buys from another country, compared with how much you sell to that country. The US has a massive trade deficit with China. Last year, it stood at about $375bn.

Markets react.
Nasdaq closes at new record as Netflix jumps; trade worries weigh on broader market

[Verv]

People have to consider not that new tariffs go into place.

They have to worry about what the effects of the actual tariffs are.

For instance, the net gain from tariffs on China is far greater than whatever losses we will experience from Chinese tariffs.

Please, post about whether or not these things will actually negatively impact America.

Generally speaking... 300 million people with American purchasing power is nothing to shake a stick at and wew have a lot of weight to throw around in the trade wars.

[Negotiator]

I really dont get why people call tariffs a "trade war".

Nobodies dies or suffers.

This term "trade war" is pure exaggeration and overdramatization.

[Victoribus Spolia]

Right. A tariff is just a tax on imports. In other words, it's a tax on businesses. I find it odd that the people who lamented Trump cutting the corporate rate to something approaching what the rest of the world pays are suddenly opposed to raising taxes on corporations engaged in international trade. Why should they pay less tax?

I never thought of that irony before, quite brilliant.

I suppose the best explanation is that leftists oppose taxing the rich if such a taxing plan even remotely resembles patriotism. It just doesn't comport with their post-colonialist self-loathing instincts.

As long as the rich are exploiting the evil white american Christians who have apparently pillaged earth, they'll get a free pass. But don't you dare sell a big mac to a decadent thug in the inner-city Chicago and pay his crack-whore girl-friend less that $15/hr for her part-time gig refilling the ketchup bottles.

I think organized labor has seen its day. We still need to break them on the government front, but we also need to have jobs for people with IQs of 90. Welfare and drugs are not the answer.

those folks don't need unions, they just need a resume, a decent pair of clothes, and a will to work. End welfare and you won't need labor incentives for these folks anymore.

Survival under threat of starvation has a funny way of giving people a work ethic, and interestingly enough, they seem to lack the time requisite for getting high and tend to put their money in savings accounts instead of the pockets of drug-dealers.

This is why during a time of NO welfare and fully legalized drugs we didn't have rampant drug abuse. People didn't have time for that shit and getting hooked on Chinese Opium was a legitimate threat to one's life. In 1876 you couldn't just become a junkie and live off of welfare and check in-and-out of methadone clinics without consequence...No, you would die and that seemed to be a pretty good disincentive for such behavior.

"sometimes the best way forward, is to go backwards."
- C.S. Lewis.

[Albert]

Today it is the G7 meeting.

Macron turns on Trump after US president attacks EU and Canada: 'We don't mind being G6, if needs be’

The Group of Seven (G7) summit is more divided than at any time in its history amid Donald Trump’s attacks on the European Union and Canada ahead of the meeting in Canada on Friday.

The US president imposed heavy tariffs on steel and aluminium imports in a bid to rebuild America’s industry, targeting nations from key G7 allies such as Canada, Japan and the EU.

Emmanuel Macron, the French president who has attempted to establish a warm personal relationship with Mr Trump, said the other G7 nations should remain “polite” and productive, but warned “no leader is forever.”

In comments to reporters, Mr Macron signalled Europe would not surrender meekly to the US president and suggested the G7 could function as six nations instead of seven.

“Maybe the American president doesn’t care about being isolated today, but we don’t mind being six, if needs be,” Mr Macron said.

“Because these six represent values, represent an economic market, and more than anything, represent a real force at the international level today.”

Justin Trudeau, Canada’s prime minister, predicted “robust discussions” on trade. The Canadian leader is also embroiled in a row with Washington over negotiations to revamp the almost 25-year-old North American Free Trade Agreement (NAFTA).

Other issues which are likely to be raised include Mr Trump’s decision to take the US out of the Iran nuclear accord and pull out of the Paris climate agreement.

However, Mr Trump fired back at the two leaders over Twitter, accusing the EU and Canada of imposing “massive trade tariffs on non-monetary trade Barriers” against the US, and he threatened to take retaliatory action against the bloc and country unless the measures were removed.

He said: ”Why isn’t the European Union and Canada informing the public that for years they have used massive Trade Tariffs and non-monetary Trade Barriers against the US.

“Totally unfair to our farmers, workers & companies. Take down your tariffs & barriers or we will more than match you!”

He added: ”I look forward to seeing them tomorrow.”

Other G7 members appeared less likely to want to challenge the US president, with Japan being expected to take a less confrontational approach while quietly pressing its case on trade, and Theresa May urging the EU to stick to the World Trade Organisation (WTO) rules and to ensure any response to the tariffs was proportionate.

The British prime minister will hold formal meetings with the leaders of all G7 countries except Mr Trump. But she is expected to have informal talks with the US president.

On the plane to the summit in Quebec, Ms May told reporters: ”I made my views clear on the steel and aluminium tariffs that President Trump has announced, I have done that directly to him.

She added: “As the UK, we want to be a great champion of free trade around the world and that’s what we will continue to be.

“I will continue to put the argument for the importance of those trade relationships around the world and I’ll be doing that here at the G7 as I have done elsewhere and will continue to do elsewhere.”

Mr Trump’s approach to the G7 summit represents an abandonment of America’s traditional role.

Previous presidents have lobbied for freer global trade and championed a trading system which required countries to follow WTO rules.

By contrast, Mr Trump’s policies are unapologetically protectionist and confrontational.

The US president is expected to leave the summit in Charlevoix, Quebec, early to fly to Singapore for his historic meeting with the leader of North Korea, Kim Jong-un, on Tuesday.

Look at these losers.

Basically Trudaeau and Macron Macarron have formed this block against Trump.

[One Degree]

“Because these six represent values, represent an economic market, and more than anything, represent a real force at the international level today.”

That sums it up. Trump is a threat to the global Oligarchy. They think that is a bad thing? Lmao

[Albert]

Here is another good article.

Canada, France forge united front ahead of G7 summit with Trump as the U.S. president’s tweets grow strident

QUEBEC CITY—Prime Minister Justin Trudeau’s turn as host to a gaggle of the world’s most powerful leaders has turned into a diplomatic tapdance of epic proportions.

Key summit players acknowledged profound differences ahead of what promises to be an acrimonious face-off with U.S. President Donald Trump at the G7 summit.

As the G7 leaders and more than a dozen other invited heads of government and key financial leaders arrived here under heavy grey skies, several hundred anti-globalization protestors took to Quebec streets.

French President Emmanuel Macron portrayed the other countries as bigger than the U.S. and the U.S. as not just truly embodied by its current leader.

Donald Tusk, President of the European Council, warned the tensions put at risk the G7’s ability to protect “the free world against those who disrespect our shared fundamental values: freedom and dignity of the individual, equal rights for people and nations and fair rules.”

Tensions were on display early.

Trudeau and Macron publicly staged a united front on climate change, trade and the deal to deter Iran’s nuclear proliferation. They denounced Trump’s trade tariffs on steel and aluminium as “unacceptable,” “counterproductive” and “ridiculous” in Trudeau’s words.

Trump shot back in response late Thursday on Twitter.

“Please tell Prime Minister Trudeau and President Macron that they are charging the U.S. massive tariffs and create non-monetary barriers. The EU trade surplus with the U.S. is $151 billion, and Canada keeps our farmers and others out. Look forward to seeing them tomorrow.”

Trump followed up that tweet with a more personal shot at Trudeau, mocking him for “being so indignant, bringing up the relationship that the U.S. and Canada had over the many years and all sorts of other things … but he doesn’t bring up the fact that they charge us up to 300 per cent on dairy — hurting our farmers, killing our agriculture!”

A senior Canadian government official who briefed reporters played down the impact of Trump‘s tweets on the tone of the coming talks. He repeated Trudeau’s insistence that the two leaders have often had frank discussions, and that’s what the G7 is for. “We’re not sugarcoating the fact there’ll be strong differences of opinion.”

Until Thursday, Trump’s attendance was in doubt, his reluctance framed as indifference and an unwillingness to be ganged up on.

Reporters pressed Trudeau and Macron, who have until now adopted a respectful and cordial approach to relations with Trump, if it was time to change tack, as they’d failed to persuade Trump to reverse course on trade. Macron shrugged off a question about whether Trump can or should be isolated, saying he would continue to work closely with the U.S. President.

“When you’re saying that President Trump doesn’t really care, perhaps that’s the case. But no one lives for ever,” Macron responded. “Our countries, the commitments we have made go beyond us.”

The French president said the group of like-minded leaders should not hesitate to speak their minds even at the expense of failing to reach a joint communiqué at the end of it all.”

“The six other countries of the G7 — that’s a market that is bigger than the American market,” said Macron. “So we must look it in the eye,” he said, launching an impassioned defence of multilateralism.

Trudeau said the two-day G7 gathering is a chance for more “frank” discussions. He acknowledged that questions swirl about the “dynamic” at the summit, but said frank discussions are its very purpose.

On Thursday evening Trudeau met with Tusk and European Commission president Jean-Claude Juncker who that day highlighted the G7’s existential angst in a column for The New York Times.

Tusk said the “crucial question” on everyone’s mind is whether Trump’s tariff moves “are only incidental changes to current American policy (to which, of course, every president is entitled) or the beginning of a new strategic trend.”

“Simply put: Are they merely seasonal turbulences or rather the first symptoms of the breakup of the Western political community, which the G-7 represents and informally leads?”

Tusk defended the value of the G7, saying “our community cannot be blown apart by aluminium tariffs.” But he added, “it’s clear that something may have changed.”

“Europe should, in a way, be grateful to President Trump. His decisions have made us realize that we need to depend on one another,” Tusk said.

Meanwhile, Japanese Prime Minister Shinzo Abe met with Trump in Washington before both arrive here Friday, with an eye to shaping the U.S. President’s approach to North Korea.

Trump heads straight to the June 12 summit with North Korean leader Kim Jong-Un in Singapore when the G7 ends Saturday.

Abe went to great lengths to portray himself as an ally of Trump, stressing the two were perfectly aligned on how to deal with the North Korean leader.

However, Abe, too, is deeply concerned about Trump’s tariffs which have hit Japan as well.

John Kirton, head of the University of Toronto’s G7 research group, said if this summit ends without a final joint communiqué, it will have been the first time in the 43-year history of this particular gathering that the leaders failed to land on an agreed statement.

It wouldn’t, of itself, constitute a failure, said Kirton, but Trudeau is at risk of a diplomatic failure if he attempts to portray a consensus where the U.S. would happy to point out there was none.

With files from Bruce Campion-Smith and Daniel Dale

It seems they do not understand what Trump is all about nor what the populist surge is. They are stuck in their multilateral, multicultural, globalizing world they are in.

[Atlantis]

It seems they do not understand what Trump is all about nor what the populist surge is. They are stuck in their multilateral, multicultural, globalizing world they are in.

We know that the populists are a bunch of hard-core liars who don't have a concept other than to bash in each other's head. What more is there to understand?

[Atlantis]

An open letter on trade: The facts speak for themselves By 29 E.U. Ambassadors to the U.S.

There has been a lot of talk recently about the trade and investment relationship between the European Union and the United States. Who wins? Who loses?

The fact is, we are both winning and have been for years. Claims to the contrary, including that the United States is at the losing end of this relationship, deserve to be debunked. Because the United States makes more money doing business with the E.U. than with anyone else.


The facts speak for themselves:

Fact No. 1: Together, the U.S. and the E.U. have created the largest and wealthiest market in the world. The transatlantic economy accounts for half of the global gross domestic product by value, which directly supports more than 15 million high-quality jobs and $5.5 trillion in commercial sales. And nearly one-third of the world’s trade in goods occurs between the E.U. and United States alone.

Fact No. 2: The United States has a partner in the form of the European Union that invests more in the United States than the United States does in it. The E.U.’s foreign direct investment in the United States is $2.56 trillion, compared with $2.38 trillion in the other direction. Seventy percent of all foreign direct investment in the United States comes from Europe.

Fact No. 3: There is no “buy European” policy for U.S. enterprises to compete with. We have a level playing field in public procurement, regardless of whether you are a European or American company. On top of that, we have eliminated thousands of legal and bureaucratic barriers to trade, leading to an open and thriving marketplace of more than 500 million consumers.

Fact No. 4: The European Union is the top destination for American exports — in 2016, we bought $269.6 billion worth of goods from the United States. And U.S. exports of services to the E.U. — increasingly the backbone of any modern economy — have been steadily increasing over the years, coming in at a record-setting $231 billion in 2016. That makes us the top destination for U.S. services – in fact, transatlantic trade in services results in a surplus for the United States.

Fact No. 5: Our tariff rates are constant, level and predictable, helping U.S. enterprises to seamlessly enter our markets without having to fear sudden, perhaps unforeseen heightened charges. The United States currently imposes individual tariff rates of more than 15 percent on 330 separate manufactured goods. Yet when U.S. companies sell their products to the E.U., they encounter only 45 such tariff peaks.


Simply put, the E.U. invests more in the United States, buys more American services and employs more American workers than the other way around. As a ready comparison: 45 of 50 U.S. states export more to the E.U. than they do to China. And what of China’s foreign direct investment into the United States? It’s around one-hundredth that of Europe’s.

This is a relationship, indeed a partnership, that other countries can only dream of. It’s a partnership underpinned by a broad set of shared values, grounded in a common determination for freedom, peace and prosperity. But, as with any partnership, the prospect of unilateral action by one side, to the detriment of the other partner, places the entire mutually beneficial relationship at risk. Placing tariffs on E.U. steel and aluminium imports — imports that are high value and support critical U.S. industries — is a significant step in that protectionist direction. So is going after the European auto industry — an industry that invests billions in the United States and creates millions of jobs.

Instead, as the two most free and open economies in the world, let’s focus on what benefits us both. We should work together to address Chinese steel overcapacity and other market distortions. We should work together toward a fair, open and rules-based global trading system. We should work together to improve market access for our companies and farmers around the world. Together we should tackle intellectual property theft and look at how we can further reduce red tape, regulatory barriers and tariffs between us — facilitating innovation and investment, to the mutual benefit of business and consumers on both sides of the Atlantic. This, not tariffs and quotas, would be moving in the right direction.



Ambassador of Bulgaria to the United States, Tihomir Stoytchev

Ambassador of Austria to the United States, Wolfgang Waldner

Ambassador of Romania to the United States, George Maior

Ambassador of Finland to the United States, Kirsti Kauppi

Ambassador of Croatia to the United States, Pjer Simunovic

Ambassador of Germany to the United States, Peter Wittig

Ambassador of Portugal to the United States, Domingos Fezas Vital

Ambassador of Slovenia to the United States, Stanislav Vidovic

Ambassador of France to the United States, Gérard Araud

Ambassador of the Czech Republic to the United States, Hynek Kmonicek

Ambassador of Sweden to the United States, Karin Olofsdotter

Ambassador of Spain to the United States, Pedro Morenés

Ambassador of Belgium to the United States, Dirk Wouters

Ambassador of Hungary to the United States, Laszlo Szabo

Ambassador of Poland to the United States, Piotr Wilczek

Ambassador of Denmark to the United States, Lars Lose

Chargé d’affaires of Cyprus to the United States, Andreas Nikolaides

Ambassador of Ireland to the United States, Daniel Mulhall

Ambassador of Lithuania to the United States, Rolandas Krisciunas

Ambassador of Greece to the United States, Haris Lalacos

Ambassador of Italy to the United States, Armando Varricchio

Ambassador of Latvia to the United States, Andris Teikmanis

Ambassador of Luxembourg to the United States, Sylvie Lucas

Ambassador of the Netherlands to the United States, Henne Schuwer

Ambassador of the Slovak Republic to the United States, Peter Kmec

Ambassador of Malta to the United States, Pierre Clive Agius

Ambassador of the United Kingdom to the United States, Sir Kim Darroch

Ambassador of Estonia to the United States, Lauri Lepik

Ambassador of the European Union to the United States, David O’Sullivan

Source




Go on Donald, make my day.

Cut off your nose to spite your face.

[One Degree]

http://ec.europa.eu/trade/policy/countr ... ed-states/

The EU’s own figures give a much simpler view and clearly show the huge imbalance with the US. They even show these statements about the US having a big advantage in service trade is a lie.
Also, Ambassadors are not involved in trade negotiations. There are committees that do that.

[Rugoz]

Right. A tariff is just a tax on imports. In other words, it's a tax on businesses. I find it odd that the people who lamented Trump cutting the corporate rate to something approaching what the rest of the world pays are suddenly opposed to raising taxes on corporations engaged in international trade. Why should they pay less tax?

Nonsense. It resembles a consumption tax, not a corporate tax (which is paid on profits). There's nothing wrong with consumption taxes per se, unless it's applied to only a subset of goods (which is the case here), in which case it is distortionary. Worse, it's being applied to goods where the domestic alternatives are produced by low-productivity firms, meaning it protects low-productivity firms and the expense of competitive firms which are hit by retaliatory tariffs.

Trump's tax policy has already kicked off a dollar rally as companies repatriate their money to the US.

That would at least temporarily worsen the trade deficit because it would strengthen the dollar even further. It won't happen though, since most of the liquid assets held by overseas subsidiaries of American companies are already dollar-denominated.

https://www.economist.com/finance-and-e ... ad-reasons

Instead what will drive demand for foreign capital, as usual, it the trillion+ deficit the Trump admin will amass with its tax cuts. Worse, deficit spending during an economic boom phase will primarily increase demand for foreign goods becase domestic producers are capacity-constrained.

I think this is all Trump is attempting. The ‘trade war’ label comes from those who oppose everything Trump does simply because they know it will work.

It's a tariff tit-for-tat, commonly called a "trade war", but call it what you want.

Your trust is Trump is utterly unjustified. He has never ever demonstrated an understanding of the issues. Whether he will listen to his advisors is questionable as well, too attractive is the idea of blaming America's problems on the rest of the world.

[blackjack21]

Nonsense. It resembles a consumption tax, not a corporate tax (which is paid on profits). There's nothing wrong with consumption taxes per se, unless it's applied to only a subset of goods (which is the case here), in which case it is distortionary.

Tariffs are paid by directly by importers. They don't necessarily have to raise prices if they don't mind cutting in to fat profit margins.

Fat profit margins aren't merely just a wage arbitrage, but also reflect the other labor costs such as worker's compensation, disability, family and medical leave, state retirement plans and health care insurance among other things. Countries like China aren't known for fantastic labor practices.

Trade with thin profit margins or losses are often about forcing competing firms in other locales to their shutdown point, where marginal cost exceeds marginal price. This is an issue with our more advanced trading partners.

Worse, it's being applied to goods where the domestic alternatives are produced by low-productivity firms, meaning it protects low-productivity firms and the expense of competitive firms which are hit by retaliatory tariffs.

Nothing prevents high productivity firms from re-locating to the US.

[Rugoz]

Tariffs are paid by directly by importers.

Like a consumption tax, a tariff is either paid for by consumers or producers, depending on easy it is to substitute the good with an alternative. In the case of low substitutability consumers will bear the brunt of it, otherwise producers. To my knowledge steel production is highly specialized these days, suggesting American consumers will mostly pay for the steel tariffs, not foreign producers.

Either way, retaliatory tariffs will obviously be designed to hurt American producers, not domestic consumers.

Nothing prevents high productivity firms from re-locating to the US.

If they could produce competitively in the US, they would have moved there already (or never left).

I'd be interested in your opinion on the trade imbalance issue in general. It's been a while but I've been reading a lot of different takes back when it came up as part of the eurozone crisis. My impression was that most thought more balanced trade would be desirable, although that was only wrt the euro.

I think whether trade imbalances are bad in the long run is a rather complex question that has to be answered on a case by case basis. In case of the US there seem to be many economists who believe the trade deficit is no problem. Like this one:

https://voxeu.org/article/external-debt ... oncern-yet

He argues that the negative NIIP (net international investment position) is not an issue since the net investment income is still positive, meaning the US earns a higher return on its foreign assets than foreigners earn on US assets. I don't think that's very assuring. If the US dollar loses its reputation as a safe-haven, foreign investors might not be satisfied with the lower return anymore. A sudden stop of capital inflow would lead to painful macroeconomic adjustments.