Tag: trade

Despite Ranking 7th and 8th in World’s Largest Economies, India and Brazil Are Included in the U.S.’s Free-Trade ‘General System of Preferences’ Program

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By Robert Romano   The past month has seen President Donald Trump significantly toughening up the U.S. stance on trade, enacting a 25 percent tariff on steel and 10 percent on aluminum and then $60 billion worth of tariffs against China for intellectual property theft and steel dumping. The month was capped off by an announcement that South Korea had agreed to concessions reducing exports of steel to the U.S. and an increase in U.S.-made automobile imports. Just this past week, Congress tucked a renewal of the $21 billion a year General System of Preferences. The program “provide[s] opportunities for many of the world’s poorest countries to use trade to grow their economies…” according to the U.S. Trade Representative website. It does so by giving participating, poor countries a certain amount of duty-free imports to the U.S. Here’s the problem. In 2017, the top recipient was the seventh largest economy in the world, India, at $5.6 billion. The third top recipient was eighth largest economy, Brazil, at $2.5 billion. If these are two of the larger economies in the world, why do they still qualify for the General System of Preferences as being exclusive for the “world’s poorest countries”? The answer is they really shouldn’t.…

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Mnuchin: ‘We Are Going to Proceed with Our Tariffs’ on China

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On “Fox News Sunday,” Secretary of the Treasury Steven Mnuchin said that “we are going to proceed with” the $60 billion in tariffs that President Donald Trump threatened against China for its unfair trade practices. Trump imposed a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum earlier in March to protect the U.S. economy and national security interests, although he announced Thursday he would exempt several countries.

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Trump Boosts Tariffs on Chinese Imports

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U.S. President Donald Trump imposed tougher economic sanctions on China on Thursday, setting the stage for $60 billion in new tariffs on Chinese imports that could quickly lead to a trade war with Beijing. The U.S. leader targeted China’s alleged years-long theft of U.S. intellectual property, imposing new restrictions on Chinese investment in the U.S. that mirror regulations that American companies face when they invest in China.

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‘Free-Trade’ Theory Failures in the Face of Real World Trade Warfare Against the U.S.

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Donald Trump, Xi Jinping

By Printus LeBlanc   Last week the Trump administration announced it would impose a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum. Many in the media and were quick to lose their mind as usual. Before judging President Donald Trump’s actions, those criticizing should look at the real world instead of the utopian society they want to live in. In the real-world trade is used as a weapon and it is time the U.S. wake up to that reality. A 2014 white paper from U.S. Army Special Operations Command on Unconventional Warfare discusses different methods of warfare being used by various adversaries. With regards to China, it states, “China will use a host of methods, many of which lie out of the realm of conventional warfare. These methods include trade warfare, financial warfare, ecological warfare, psychological warfare, smuggling warfare, media warfare, drug warfare, network warfare, technological warfare, fabrication warfare, resources warfare, economic aid warfare, cultural warfare, and international law warfare.” This is more than abstract theory. There is actual recent historical evidence to prove nations use trade and economic warfare to accomplish a goal. The U.S. and Saudi Arabia used the oil trade as a weapon…

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Trump to EU: We’ll Drop Our Tariffs If You Drop Yours First

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President Donald Trump said Saturday he would spare the European Union his steel and aluminum tariffs if the bloc halts its own trade barriers to US products, in his latest round of economic hardball. The duties of 25 percent on imported steel and 10 percent on aluminum have stung the EU, along with other major partners including Japan, and European Trade Commissioner Cecilia Malmstroem said earlier Washington had failed to clarify how its allies could be spared.

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Trump’s Steel Tariffs Protect National Security, End $8 Billion in Foreign Aid Annually to Canada, Mexico, South Korea and Brazil

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By Robert Romano   President Donald Trump is keeping the promise he made in 2016 and is protecting the American steel industry, instituting a 25 percent tariff across the board on steel imports. No nations are excluded. The move comes as the U.S. imported 34.5 million metric tons from around the world, a 16 percent increase from 2016 when it was 30 million metric tons. In comparison, while America’s steelworks are heating up once again, they comparatively only grew by 3.4 percent in 2017 according to the International Trade Administration to 81.6 million metric tons from 78.5 million metric tons. This flooding of U.S. markets is designed to drive down prices here by dumping subsidized steel products here, making it harder for domestic producers to maintain market share. The imported steel is much cheaper. In the event of war, keeping U.S. productive capacity at high levels is critical, to prevent shortages at a time when production would be needed the most and imports cannot be guaranteed. As the Commerce Department noted in its recommendation for instituting the tariffs: “Domestic steel production is essential for national security applications. Statutory provisions illustrate that Congress believes domestic production capability is essential for defense requirements and critical…

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Australia Warns of Trade War, Pushes for Trump Tariffs Exemption

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Australia Sunday warned against tit-for-tat retaliation and the outbreak of a trade war that could slow global economic growth, as it pushed to be excluded from US President Donald Trump’s steel and aluminium tariffs. Canberra has sought to be exempt from the hefty tariffs, citing an understanding reached with the United States at G20 meetings last year. There are also local industry concerns that the tariffs could see cheap steel destined for the US flood the domestic market instead.

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China Will ‘Take Necessary Measures’ If US Harms Trade

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China will “take necessary measures” if the United States harms the country’s economic interests, a Chinese official said Sunday, as President Donald Trump plans to impose tariffs on steel and aluminium. “China doesn’t want a trade war with the United States,” Zhang Yesui, spokesman for the National People’s Congress, told a news conference on the eve of the rubber-stamp parliament’s annual session.

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Beijing Protests US Sanctions on Chinese Firms over North Korea Ties

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Beijing has protested against Washington’s decision to impose sanctions against Chinese companies accused of conducting illicit economic deals with North Korea, the foreign ministry said. US President Donald Trump on Friday announced measures targeting more than 50 North Korea-linked shipping companies, vessels and trade businesses, hailing the package as the “heaviest sanctions ever” levied on the nuclear-armed regime.

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S. Korea’s Moon Urges ‘Stern’ Response to New US Tariffs

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South Korean President Moon Jae-in called Monday for a “stern” response to new US tariffs on the South’s exports as concern grew over looming trade restrictions by Washington. US President Donald Trump last week threatened retaliatory action against China and South Korea and vowed to revise or scrap a 2012 free trade deal with the South which he described as a “disaster”.

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Commentary: Modernize NAFTA or End It

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By Robert Romano   More than any other issue, President Donald Trump’s vow to renegotiate the North American Free Trade Agreement (NAFTA) or else leave it may have been the most important reason he won the Electoral College in 2016 against his opponent, Hillary Clinton. Trump won Ohio by about 450,000 votes. In Pennsylvania, Trump only won by 44,000 votes. In Florida, Trump won by only 113,000 votes. In Michigan, Trump only won by 11,000 votes. In North Carolina, Trump won by 173,000. In the rust belt they included states that traditionally voted Democrat. And they’re what put Trump over the top in 2016. These were some of the states hit the hardest by NAFTA. Ohio has lost 290,874 manufacturing jobs since the NAFTA and World Trade Organization (WTO) era began in 1994 and 1995 respectively, according to data compiled by the Bureau of Labor Statistics and Public Citizen. Pennsylvania has lost 312,338 factory jobs since then. Florida has lost 82,006 jobs in manufacturing. Michigan lost 182,288. North Carolina lost 338,990. Fortunately, since taking office in 2017, President Trump has been working to keep his promise. On April 27, Trump took to Twitter to announce, “I received calls from the President of Mexico…

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Commentary: President Trump Is Right about ‘Fair and Reciprocal’ Trade

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by Robert Romano   “I want reciprocal. If they’re going to charge us 100 percent for a motorcycle, it should be 100 percent the other way, too.” That was President Donald Trump in an interview with CNBC’s Joe Kernen on Jan. 26 while he was on the ground in Davos, Switzerland renewing his call for “fair and reciprocal” trade. Here, the President was referring to India’s 100 percent tariff on motorcycles manufactured in the U.S., including Harley-Davidson, and telling the subcontinent that if it’s going to put that kind of tax on U.S. goods, then it should go in the other direction, too. Trump is right. Sometimes the only incentive for another country to lower their tariff wall is for them to feel tariffs, too. That is how tariffs have been lowered the past century following Smoot-Hawley — reciprocally. When each side is mutually agreeing to lower their tariffs in an enforceable, the world gets closer to free trade. In the case of India, a good place to start is the $4.7 billion of trade preferences the U.S. gives under the General System of Preferences. At $19 billion a year, the General System of Preferences, which expired Dec. 31, “provide opportunities for…

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US Subsidiary of South Korea’s LG Will Increase Washing Machine Prices Due to US Tariffs

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The US subsidiary of South Korea’s LG Electronics warned retailers on Wednesday that it will raise prices of its washing machines following import duties imposed by the Trump administration this week. It was the first concrete reaction to the trade measures announced this week that have angered US trading partners. “As a result of the trade…

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U.S.-China Trade Deficit Heads for an All-Time High for 2017 as Trump Tells Xi Arrangement ‘Not Sustainable’

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Donald Trump, Xi Jinping

By Robert Romano   Once December’s numbers come in, the U.S.-China trade in goods deficit will likely hit an all-time high in 2017 at more than $370 billion, according to U.S. Census data, as President Donald Trump told Chinese President Xi Jinping in a recent phone call that the arrangement is “not sustainable.” The number will be set off partially by about a $38 billion trade in services surplus. That would put the overall trade deficit with China very close to the 2015 record of $334 billion. China was granted permanent normal trade relations in 2000 and admitted to the World Trade Organization in 2001. Since that time, U.S. global manufacturing market share has dropped from 13.98 percent in 2000 to 7.91 percent in 2016, while China’s has risen from 4.75 percent to 16.92 percent, according to data compiled by the World Bank. As far as tariffs go, China’s most favored nation tariff is 4.3 percent while the U.S. sits at 2.7 percent. On currency, China has kept its fixed exchange rate with the dollar, which today stands at 6.4 Yuan per 1 U.S. dollar, about where it was at the start of 2016. By keeping the yuan artificially low, it is believed China keeps its exports…

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Trump Slaps Big Tariffs on Imported Solar Panels, Riling Renewables Industry

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The Trump administration announced Monday that it will impose hefty tariffs on the cheap, imported panels that have driven the rapid expansion of solar power in the United States, a move that industry groups warn will slow the spread of renewable energy and cost thousands of jobs. The tariffs come as Trump has vowed to take a tough line against cheap foreign imports that are undercutting American manufacturing industries.

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Commentary: Time for China, Japan to Join ‘Developed’ Nations at WTO

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Donald Trump, Xi Jinping

By Robert Romano   China ($11.2 trillion) and Japan ($4.9 trillion) combined make up 21 percent of the world’s Gross Domestic Product, according to the World Bank, having benefited from preferential treatment in global trade deals, and are still being treated as “developing” nations under world trade rules. At institutions such as the World Trade Organization (WTO), developing economies do not have to play by the same rules on tariffs, subsidies and other trade barriers as developed economies like the U.S. The policy, called “special and differential” treatment, has been a mainstay of world trade rules since at least the Tokyo Round of GATT that began in 1973, when developing economies in the Asia-Pacific region argued for special protections. Back then, the concept was called “non-reciprocity.” It states, “The developed contracting parties do not expect reciprocity for commitments made by them in trade negotiations to reduce or remove tariffs and other barriers to the trade of less-developed contracting parties.” And specifically, that “the less-developed contracting parties should not be   expected, in the course of trade negotiations, to make contributions which are inconsistent with their individual development, financial and trade needs, taking into consideration past trade developments.” Now, more than 40 years…

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Rick Manning Commentary: Reciprocity Is the Key to Lasting, Prosperous Trade

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by Rick Manning   You know, as a non-economist, when I received the invitation to participate in this forum, I kind of felt like a Christian being invited into the Coliseum to meet the lions for lunch.  However, since this debate is largely a political and not an economic question, I am confident that the audience will find that I have some smooth stones at my disposal to take down Goliath. After listening to the affirmative, I want to remind the audience of what this debate is about. The affirmative must prove this resolution: “The U.S. government should unilaterally abolish all tariffs and duties on imports and all subsidies to exports, thereby making all reciprocal trade agreements with other countries unnecessary.” This resolution rises or falls on three words: UNILATERALLY, SHOULD and UNNECESSARY. Because ultimately, the affirmative demands that the U.S. should, in the real world, take unilateral actions, which in practical application will cause reciprocal trade agreements to become unnecessary. So, as we begin we will exam these three areas. Let’s start with the terms unilateral and reciprocal. Unilateral action is the opposite of seeking reciprocal trade agreements as a precondition to lowering tariffs and lifting subsidies. But reciprocity is not merely a negotiating…

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John Miller Commentary: An Obscure Trade Dispute Could Upend Tennessee’s Senate Race

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by John Miller   Tennessee’s Senate race is poised to become a battleground in one of the most divisive issues facing the country: Can the United States make free trade work in the national interest? With Sen. Bob Corker out of the race and national figures like Breitbart chairman Stephen Bannon vowing to field populist candidates, the 2018 campaign could become a nationalized race that features intra-party debates on the trade issue. Fueling the debate may be an obscure trade dispute that is making its way to the president’s desk—one with significant implications for Tennessee. Earlier this month, the U.S. International Trade Commission (ITC) unanimously held that trade practices by Samsung and LG Electronics are harming Whirlpool and other U.S. manufacturers. The decision follows two previous rulings by the ITC that Samsung and LG are dumping washing machines into the U.S. market. With the benefit of subsidies from the Korean government, the conglomerates are overloading the U.S. market with washers and selling them below market value in order to undercut U.S. manufacturers. Dumping is illegal under both U.S. and international trade law. President Trump will decide in the coming months whether or not to level tariffs and other remedies against…

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