Article

2018-03-03 Economy

Trump threatens ‘reciprocal taxes’ on trade partners

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Posted by Fred 2018-03-03 00:00|| || Front Page|| [11135 views ] Top

#1 "When a country Taxes our products coming in at, say, 50%, and we Tax the same product coming into our country at ZERO, not fair or smart," Trump said on Twitter.

I'm pretty sure he couldn't actually name a US product that is taxed at 50% or more in another country. Certainly not in the EU or Canada.

Steel definitely isn't an example. And most steel the U.S. imports comes from Canada. This means that the "national security" argument is not valid.

But it serves as a perfect excuse for other nations to claim "national security exemptions". WTO rulings be damned.

This is a SERIOUSLY BAD IDEA and if not stopped in time will see no winners.

Posted by European Conservative 2018-03-03 00:32|| 2018-03-03 00:32|| Front Page Top

#2 Tariffs are historically stupid. It is better to keep this hand.

Posted by newc 2018-03-03 00:57|| 2018-03-03 00:57|| Front Page Top

#3 Germany taxes American cars at 10%. America taxes German cars at 2.5%. In what kind of world is that fair?

China charges 17% VAT on all American goods. America has no such tax on Chinese goods. In what kind of world is that fair?

Let's charge them the same as they charge us. That's fair.

Posted by Harcourt Angoluting9366 2018-03-03 01:22|| 2018-03-03 01:22|| Front Page Top

#4 Germany almost imports no cars manufactured in the U.S. Instead it produces U.S. cars (Opel, belonged to General Motors until 2017).

Also Germany produces most of its cars it sells in the U.S. in the U.S.

Actually German car companies are the biggest exporter, by value, of cars from the U.S.

Posted by European Conservative 2018-03-03 02:32|| 2018-03-03 02:32|| Front Page Top

#5 And your VAT example doesn't hold. China has 17% VAT on almost everything (Germany 19%).

VAT is a tax on all products, not just imports.

Posted by European Conservative 2018-03-03 02:36|| 2018-03-03 02:36|| Front Page Top

#6 Also note that TTIP was going to eliminate all tariffs. Trump killed it.

Posted by European Conservative 2018-03-03 02:38|| 2018-03-03 02:38|| Front Page Top

#7 Yeah of course it doesn't import cars from the US. The tariffs make the cars too expensive! LOL. That's the whole point of higher taxes for American goods.

America should put a 17% tax on all Chinese imports. That would be fair. Plus the additional tariff that China charges on top of this.

It's just that the world has become accustomed to America as a highly profitable dumping ground for its products. We put our own people out of work so we can fund the development of ungrateful nations. That's coming to a screeching halt and a lot of people are going to be very confused because 'stupid America' has been part of their lives since they were born. It's going to be a painful adjustment period for them but luckily hundreds of other countries are still around to trade with.

Posted by Harcourt Angoluting9366 2018-03-03 03:30|| 2018-03-03 03:30|| Front Page Top

#8 It's going to be a painful adjustment period for them but luckily hundreds of other countries are still around to trade with. Posted by Harcourt Angoluting9366

..."painful for them" ....and also for US investors who put money in foreign companies (fok'n global economy) betting the betrayal of the American worker would never end. This is undoubtedly why the why the market appears to be in a bit of a downward spin, but will in time correct.

Posted by Besoeker 2018-03-03 03:50|| 2018-03-03 03:50|| Front Page Top

#9 "Free trade" has to be bidirectional otherwise, there's nothing "free" about it.

Posted by g(r)omgoru 2018-03-03 04:22|| 2018-03-03 04:22|| Front Page Top

#10 NAFTA negotiations just started

Posted by Frank G 2018-03-03 04:38|| 2018-03-03 04:38|| Front Page Top

#11 I'm pretty sure he couldn't actually name a US product that is taxed at 50% or more in another country. Certainly not in the EU or Canada.

AND...YOU, would be wrong. Take Harley-Davidson for example, India was taxing that product at 100%! They’ve since reduced the tax to 50%. Trump has used that situation as an example a couple of time. Turn about is fair play. Apply the same tax on all imports that the exporting nation applies to our products.

Posted by Betty Hatfield5124 2018-03-03 06:23|| 2018-03-03 06:23|| Front Page Top

#12 Oh, it's bidirectional all right. But it's not equal. It highly favors everyone else, while the American worker gets screwed.

Well here we are with this "madman and wild card" as president who is now setting up to rearrange the relationship with the world to America's advantage. He is doing the same with NAFTA, TPP and TTIP. He intends to make sure America becomes energy self sufficient. All this to bring jobs and wealth to America for the national benefit.

Naturally, the Europeans in particular are horrified by this. They take unequal trade with America as their birthright. It's been going on ever since after WWII. See, lots and lots of people in Europe wanted to go Communist. It was genuinely popular among not just the masses, but with intellectuals as well. Jean-Paul Sartre, George Bernard Shaw, the list goes on and on.

In order not to "lose" Europe (i.e. let their own people decide what they want to do) the State Department decided to offer Europe a gigantic bribe to stay on "our" side. American markets are open to your goods, but you can protect your own markets all you like. And here I thought all this time Europe was our friend. Nope, the only reason they stayed on "our" side is because our government gave a truly gargantuan bribe to them with our money. America is the violent bully who doesn't have any friends and whose mother has to pay other children to play with him. But the moment Mom stops paying, the other kids immediately go back to hating the bully, which is what is happening right now.

Europe grew up doing nothing but taking, taking, taking from America. Making a mint off of screwing American workers, accepting the free security provided by NATO, and the really delicious part - all the while calling Americans deranged warmongering baby-killers whose products suck so bad nobody will buy them. So satisfying. Practically a national sport in Europe.

They aren't angry because reciprocal tariffs are unfair. They're angry because it is fair.

Posted by Herb McCoy7309 2018-03-03 07:39|| 2018-03-03 07:39|| Front Page Top

#13 Using the methodologies of the '30s and not the cook books methodologies of 2010s, we've been in a depression. Eight years of which there has been no Smoot-Hawley in effect. Maybe its well beyond time the 'settled' economics be reexamined rather than just tossing it out as an excuse to treat trade issues as a given.

Wonder how sovereign nations would feel if we demanded a VAT in countries that expect us to provide their military security?

Posted by Procopius2k 2018-03-03 08:59|| 2018-03-03 08:59|| Front Page Top

#14 Tesla cars have more than %100 tax in China.
They say no tax if he makes them there partnered with some politically connected thug and no mechanism to take profits out of China.
India is the same. Good luck taking profit out.

Posted by 3dc 2018-03-03 09:58|| 2018-03-03 09:58|| Front Page Top

#15 Not to mention that China is a hostile and aggressive totalitarian nation with complete disregard for the human rights of its workers. It isn't fair at all that American workers have to compete with slave labor.

And, as I've said before, we need to slap a hefty tariff on their computers too.

Posted by Abu Uluque 2018-03-03 11:46|| 2018-03-03 11:46|| Front Page Top

#16 Steel definitely isn't an example. And most steel the U.S. imports comes from Canada.

There was a thread about this the other day over on the Canadian blog Small Dead Animals. tl;dr version:
Steel and Aluminum from Canada and Mexico actually originates in China and is sold thru 'cutouts' to get the advantage of North American Free Trade pact.

Posted by SteveS 2018-03-03 11:58|| 2018-03-03 11:58|| Front Page Top

#17 Getting the heat reports (we require them on every lot) should show country of origin and metallurgy

Posted by Frank G 2018-03-03 12:10|| 2018-03-03 12:10|| Front Page Top

#18 It ain't about Europe.

Posted by Anguper Angearong6845 2018-03-03 13:46|| 2018-03-03 13:46|| Front Page Top

#19 Steel and aluminum from China via Mexico and Canada actually originates in Australia (and Brazil). Maybe some American company will now have the bright idea of cutting out the two stages of middlemen.

Posted by Grunter 2018-03-03 14:28|| 2018-03-03 14:28|| Front Page Top

#20 It raises the prices for all of us to subsidize a small sector that was decimated by unions.
Do not use the Harley Davidson argument. That was one and a very short lived thing for a specific reason.

We are not at an emergency level with these industries.

We just went through this a few years ago.

Posted by newc 2018-03-03 15:22|| 2018-03-03 15:22|| Front Page Top

#21 The EU (not Germany) charges a flat tax of 10% on imported automobiles. I wouldn't mind to see it go (and TTIP would have eliminated it), but this tax is hardly a reason why Germans don't import (and buy) cars manufactured in the U.S. Germans buy a lot of Japanese cars which are subject to the same tax.

10% not fair? Maybe, but then the U.S. charges tariffs of 25% on imported light trucks. Fair?

Sorry folks, tariffs between developed nations are stupid. They might make sense if a country blatantly subsidizes its production (China comes to mind), but even then I'd tread lightly. Competition is always the best thing to guarantee quality and the best price.

Trump says that trade wars are easy to win. No Sir, they are not. They are easy to begin (like any other war).

Steel tariffs will only have indirect effects on Europe. Trump's latest threat to impose crippling tariffs on European vehicles is an open declaration of war. A very stupid war that no side will win.

The people on both side of the Atlantic would pay for this stupidity.

I'll give you an example

Let's assume that in the U.S. you have these prices:

1) Imported BMW: 50000 US$
2) Locally produced BMW: 45000 US$
3) Locally produced Chrysler: 30 000 US$

Now let's say Trump slaps a 25% tariff on imported cars.

The imported Beamer would now cost 62500 US$

Great you say. Now Americans will buy more locally produced cars. Maybe they will.

But the local BMW or Chrysler now competes with a more expensive imported car. What will happen? They can afford to raise their prices, too. How about 5000 US$ more?

Who pays? YOU

Btw tariffs are not the sharpest sword in a trade war (as they are so visible). The finer "weapon" is regulations.

TTIP was going to harmonize them. And then we'd have had true competition based on quality/price only.

Anyway I think that most of it is just Trump grandstanding. The U.S. steel industry may love the tariffs, most others won't.

And if you give me Harley Davidson at (now) 50% in India, I give you US import tariffs at 100% on European products like

100% tariffs on:

cured ham
French truffles
lingonberry and raspberry jams
certain chocolates
unfermented fruit juice
oats
Italian mineral water

And did you know that peanut imports into the U.S. are subject to an ad valorem tax anywhere between 131.8% (for shelled peanuts) and 163.8% (for unshelled peanuts)?

Posted by European Conservative 2018-03-03 17:37|| 2018-03-03 17:37|| Front Page Top

#22 100% tariffs on:
cured ham
French truffles
lingonberry and raspberry jams
certain chocolates
unfermented fruit juice
oats
Italian mineral water

H-D motorcycles and the agriculture products you listed are apples and oranges comparison. A 50% tax on a $20,000 motorcycle results in $30,000 motorcycle.

A 100% tax on a $20 ham...or whatever is still affordable. I personally am not a big fan of tariff's, VAT's, or other import taxes. However, I am in favor of turning the screws on these countries that engage in unfair trade practices.

You mention that TTIP would have fixed some things, ok, sure. But I looked at it and its cousin TPP, these were overall very bad for the US, and we weren't going to get one without the other. It is way past time for a major reset across the board. We, the US can weather a lot more than Europe or Asia. WE, are the MARKET.

Enjoy your Islamification, don't ask us to bail your asses out again.

Posted by Otto White1881 2018-03-03 18:23|| 2018-03-03 18:23|| Front Page Top

#23 H-D aren't taxed at 50% in Europe.

Btw largest economies in 2017

1) China $23.1 trillion in economic output
2) EU $19.9 trillion.

Together, China and the EU generate 33.9 percent of the world's economic output of $127 trillion.

U.S. $19.4 trillion

A trade war against the EU and China? Good luck.

Posted by European Conservative 2018-03-03 18:33|| 2018-03-03 18:33|| Front Page Top

#24 Enjoy your Islamification, don't ask us to bail your asses out again.
Posted by: Otto White1881

Otto nails it.

Posted by Besoeker 2018-03-03 18:37|| 2018-03-03 18:37|| Front Page Top

#25 The last time I was in Europe ('86-90), the import tax on an American-built car bought by Europeans was 35% of the LIST PRICE. The import tax on a British or European luxury car in the US was 12.5%, for a regular car was 0%. One of my commanders sent a Bentley back to the US in pieces to avoid the luxury tax, since there was no tax on parts.

Posted by Old Patriot 2018-03-03 18:37|| 2018-03-03 18:37|| Front Page Top

#26 European car makers were all in favor of TTIP, which would have eliminated the 10% on EU import taxes.

Go figure.

Posted by European Conservative 2018-03-03 18:50|| 2018-03-03 18:50|| Front Page Top

#27 I think that most of it is just Trump grandstanding.

I tend to look at Trump's "outbursts" as an opening bid or a feint to get the conversation moving in a particular direction. Say what you will about his personal style, but the man has some well-honed negotiating skills.

Posted by SteveS 2018-03-03 18:59|| 2018-03-03 18:59|| Front Page Top

#28 yep

Posted by Frank G 2018-03-03 19:44|| 2018-03-03 19:44|| Front Page Top

#29 I tend to look at Trump's "outbursts" as an opening bid or a feint to get the conversation moving in a particular direction.

Well...in his book the art of the deal, he says that is exactly what he does.

Posted by Otto White1881 2018-03-03 20:20|| 2018-03-03 20:20|| Front Page Top

#30 April 2017: EU ups import tariffs on China steel (18.1 to 35.9 percent)
http://www.dw.com/en/eu-ups-import-tariffs-on-china-steel/a-38321597

The EU executive said Thursday it had set anti-dumping duties on imports of hot-rolled flat steel products from China at a higher rate than the preliminary tariffs already in place.

The European Commission explained it had set final duties of between 18.1 percent and 35.9 percent for five years for producers including Bengang Steel Plates, Handan Iron & Steel and Hesteel.

This compared with provisional rates in place of 13.2 to 22.6 percent, following a complaint by EU producers ArcelorMittal, Tata Steel and ThyssenKrupp.

Posted by Elmish Chusolet1370 2018-03-03 21:10|| 2018-03-03 21:10|| Front Page Top

#31 1) China $23.1 trillion in economic output
2) EU $19.9 trillion.
U.S. $19.4 trillion

Thank you for pointing out why we should be out of NATO. First World military welfare.

Posted by Procopius2k 2018-03-03 21:19|| 2018-03-03 21:19|| Front Page Top

#32 Those GDP numbers are in adjusted purchasing power parity (PPP) dollars. Try paying for trade with PPP dollars. They don't exist. China's 2017 GDP is 12 trillion USD, EU GDP is 17T USD.

Posted by Elmish Chusolet1370 2018-03-03 21:50|| 2018-03-03 21:50|| Front Page Top

#33 State dumping policies like China's are a different matter.

German car makers just make good cars.

If you REALLY want to start a trade war, it would help to do it WITH the EU, not against it.

Posted by European Conservative 2018-03-03 22:04|| 2018-03-03 22:04|| Front Page Top

#34 The 2017 US trade deficit with the EU was $150 billion, half of it with Germany. Not as much as with China at $375 billion, but equalizing trade with the EU would add nearly $500 billion to US GDP assuming a monetary turnover of 3 times a year in the economy.

Now factor in the total 2017 US trade deficit of $800 billion. That would add 2.4-3.2 to the US economy based on a monetary turnover of 3 and 4 or an additional 12-16.5% to GDP. That enough to re-employ the cities and countryside and eliminate the budget deficit.

Posted by Elmish Chusolet1370 2018-03-03 22:22|| 2018-03-03 22:22|| Front Page Top

#35 On a smaller level - a friend's son had a game that won one of the "cons" as best new game. The produced it with a kickstarter. Unfortunately they got some orders from the EU. By the time they were able to fill them and ignoring the paperwork the EU took 3 times the sales price in taxes and duties. They quickly made sales "US ONLY".

Posted by 3dc 2018-03-03 22:54|| 2018-03-03 22:54|| Front Page Top

22:55 3dc
22:54 3dc
22:47 Besoeker
22:22 Elmish Chusolet1370
22:15 Gomez and Company1909
22:07 Zenobia Floger6220
22:04 European Conservative
21:50 Elmish Chusolet1370
21:37 swksvolFF
21:19 Procopius2k
21:10 Elmish Chusolet1370
20:59 Bangkok Billy
20:57 SteveS
20:20 Otto White1881
19:44 Frank G
19:36 Anguper Hupomosing9418
19:34 Anguper Hupomosing9418
19:28 Anguper Hupomosing9418
18:59 SteveS
18:50 European Conservative
18:46 trailing wife
18:45 Besoeker
18:40 Old Patriot
18:37 Old Patriot