I have a request. If you know of any good sources or think you can explain it yourself, please point me to some information on how we might follow President Trump’s desire and impose a 35% import tax against select companies that have moved manufacturing jobs overseas or to Mexico.
Obviously, in the case of Mexico, NAFTA precludes us from doing that, so it would have to be violated or ignored or somehow repealed or modified. But I’m trying to figure out how you would identify products (some of which are only partly assembled in foreign countries or are assembled in several foreign plants), how the shipping would be inspected or the law would otherwise be enforced, and how this could stand up in court.
I think border enforcement would be impossible, so it would have to based on voluntary compliance and enforced through some agency (the International Trade Commission?), perhaps a new one dedicated to just this purpose.
I’m not even concerned about the merits or reciprocal retaliation. Let’s just stipulate that Trump wants to accept those tradeoffs and focus on whether he (or Congress) could actually construct a law that would do what he says he wants to do without it either being struck down in the Courts or constantly bound up in the Courts or it being nothing much more than Swiss Cheese.
One thing I’m fairly sure about is that companies that want to relocate some manufacturing will be less transparent about what they’re doing and be certain to muddy the waters. For some big ticket items like fully assembled cars, the scheme might be workable, but I’m baffled when I try to envision how this would work in practice.
Details, details — that’s for staff to figure out and do; Mr. MAGA’s too busy with the big stuff, the vision thing, doncha know.
And if it all goes to hell, why, that’s just because staff screwed up and they’re fired, and/or the evil Democrats/liberals/media sabotaged it.
On to the next tweet!
Not to mention the problem of products assembled here that contain some foreign components. (cars, for example.)
Doesn’t NAFTA allow for a six month notice of withdrawal? Couldn’t Congress impose a tariff? Not advocating, just asking. I would prefer something more sophisticated such as sanctions against the remaining US units or delisting the stock, requiring the board and CEO to register as foreign agents, requiring a disclosure in all advertising such as the list of horrors at the end of every drug ad. The threat of delisting may be enough to make Wall Street rein in the manufacturing companies. Their recommendations can make or break a company and certainly the company CEO who is usual chosen because… Read more »
What mechanism does the federal gov’t use to compel a private stock exchange to de-list a particular firm?
Asking for a friend…
Sounds like something other than capitalism?
Congress could pass a law enabling the SEC?
Do you think it is really a wise thing to simply stop importing goods? Or should we be looking for those products and areas where our relationship is not really bilateral and take some action there?
No, but I’m sick of competing with labor making 30 cents an hour. We need tariffs so that labor costs are equal.
We run at $150Bn trade deficit with the EU each year as well. Apparently we can’t compete with workers who make a lot more than 30 cents an hour either.
They charge VAT tax on our exports while we charge nothing on their exports to us. The trade treaties eliminated tariffs, but allowed VAT tax. If we were going to agree to that, we should have created a VAT tax to countervail.
isn’t VAT fairly regressive though, it would hurt the people we’re supposedly trying to save?
He could start with Finished Goods, which are already a separate category. That would return a lot of small manufacturing, I would think. Look at Walmart.
What exactly will you impose the tax on? Dresses and clothing, for example? Or will that be exempted?
Might bring some textile jobs back to the South.
Whatever he does, if he taxes imports, I am pretty sure other countries will start to do the same and so exports may suffer. But his jawboning could discourage any existing manufacturer’s from leaving. Seeing your stock price tumble would be discouraging.
But what happens if some block of countries, say the EU or Asian retaliate? It could lead to more serious problems.
What exports? Disney movies? How many jobs are there in those?
We export $2. 23 trillion. You would be surprised what comprises it. Check out thebalance.com for details. We import $2.76 trillion. It is all rather substantial.
right manufacturing is fairly strong here, it’s just manufacturing jobs that aren’t – mostly the fault of automation and technology.
Trump’s goal will be some staged event with minimal actual effects that he can trumpet to the rubes. The Carrier business is an example – a couple hundred jobs held in the country temporarily while more than twice as many leave, but it’s all over the news for days. He’ll probably threaten tariffs a lot and actually impose them on one or two goods, which will produce proportionate retaliation from the affected countries, but not make any real difference in outsourcing. We’ve been down this road before, with W’s steel tariffs. Trump would probably grandstand rather than back down, but… Read more »
I agree with this. He’ll just focus on some pissant nonsense, claim victory, and make massive quantities of hay out of it. It’s what he’s doing with Carrier, the F-35, and Air Force One. His message is tailor-made for idiots.
Except for the grift.
These types of threats and policies are where grifters profit. It’s the same as regulation, particularly in the tech sector.
Make my kids a partner…or the goods get it.
When he had that meeting with the ‘tech leaders’ two months ago…that is why his sons were at the head of the table to Trumps right. ‘Here are who you need to bring on board to avoid trouble’.
.
His comments to CEOs this morning was quite nuanced in his bullying way. A copy that (paraphrased) fires all its workers to send jobs overseas will see high tariffs on imports. No one fires ALL it workers. There is a difference, as stated above, between goods assembled abroad and manufactured abroad. If we make transmissions and other parts for cars in USA, send to Mexico (by US train companies) to be assembled there, where does that fall? As they used to say “money is fungible” and so is manufacturing these days. And the jobs that would be created by new… Read more »
It might be a failure on a massive scale waiting to happen, but it is not a sham unless Trump doesn’t do what he promises to do with tariffs and what happens at the border. And that takes the collaboration of all of the folks down the chain of command from Trump.
Well, next time you go to the grocery store see if you can figure out where the grapes come from. Almost all the corporate toothpaste is made in asia or mexico. We might just put it in a tube and the box. I don’t think we make shampoo any more. Well, most of the stuff on health and beauty isles are just packaged here. To ID will be real easy…proof of manufacture here. However, I think all the talk of tariff is a smoke screen for the VAT tax. For many who manufacture in Asia it will be cheaper to… Read more »
And how much it would do for energy independence? A VAT tax would make us equal to Europe.
I’m not a trade expert but what you said about NAFTA is true and one of the reasons NAFTA was created in the first place. That said, I can’t imagine any company with content for one or more products being produced in more than one location anywhere even in the same town not having a detailed inventory of which items are being made in which location at which price, etc. The real question is whether the gummint is allowed to track that information for tariff-setting purposes. They may already be doing so for other regulatory purposes; not sure. But if… Read more »
Although technically against the law, the US could pass legislation to do that or possibly through executive action alone, using technicalities in existing law to justify such protectionist action. Affected counterparties could then sue in various arbitration arenas, but the decisions could take many years to resolve. This has happened before in the cotton and sugar industries which have allowed protections to exist or be legislated during various times in recent history, even though in apparently direct violation of NAFTA, WTO, or other treaty obligations. Similarly, prohibitions on Mexican truck driving existed for years although in direct violation of… Read more »
How will Democrats/liberals deal with this: AFLCIO – TPP Withdrawal Good First Step Toward Building Trade Policies that Benefit Working People AFL-CIO President Richard Trumka made the following statement about the withdrawal from the Trans-Pacific Partnership (TPP): Last year, a powerful coalition of labor, environmental, consumer, public health and allied groups came together to stop the TPP. Today’s announcement that the US is withdrawing from TPP and seeking a reopening of NAFTA is an important first step toward a trade policy that works for working people. While these are necessary actions, they aren’t enough. They are just the first in… Read more »
As much as I can tell, Democrats are all denying that any single one of them ever disbelieved in the healing and sanctifying power of the TPP to solve problems, and that evil Donny Trump is gonna ruin the economy by withdrawing.
The trade pact sucks 12 ways from yesterday, and it’s a good thing that Trump withdrew. I hope he finds a way to reduce or eliminate NAFTA.
Your first sentence is incorrect. If it were true, Clinton would never have deviated from her pro-TTP position during the campaign. Thus, a majority of Democratic voters opposed it. A smaller group were indifferent. And the smallest group supported it but understood that Clinton made a political calculation for the campaign.
One from that smallest group was quick to remove the mask — Think Progress (a pup to John Podesta’s CAP) – Trump just took his first big step away from the international community.
They’re going to be flailing on this.
That is basically the definition of elite blindness right there. Sigh.
Well, I guess saying that Hillary would have done the same (an unknown that at least fitted with her stated policy inclination going into the general election) would only have given Trump more currency without adding any for her. OTOH, the ThinkProgress opinion piece further cements the decision of many not to vote for her.
As Hillary’s campaign is as dead as Sanders, bizarre that they couldn’t follow Sanders’ lead by welcoming the decision.
Bernie’s response was terrible, too. Neither was good. He could have talked only about the issues at hand that “I’m glad that TPP is gone” and left it there. We all know Trump is not going to pursue fair trade deals. Trump’s world view is all of the bad of neoliberalism without any of the good. By saying “I can work with Trump on trade”, he is validating Trump’s nationalist worldview rather than an internationalist one. There is nothing to discuss on trade with someone like Trump.
Okay. “Leave it there” is a good suggestion for Democrats. Chelsea Clinton made a good statement about Barron Trump — and she better than anyone has standing to make such a comment. Then such mucked it up by not leaving it there.
May I suggest another advent of it? “Leave it there” about discussing the topic at hand rather than trying to figure out a way to take a dig at the Clintons.
Now we can’t cite relevant on-point examples? I truly was thinking in terms of how Democrats/liberals are using this moment less effectively than they could. I complimented Chelsea on her statement wrt to Barron Trump and included there isn’t anyone better to make such a statement (Malia and Sasha are currently too young). And I limited myself to saying it would have been better if she left it there. If I wanted to take a dig Clinton, I assure you I wouldn’t have stopped there.
The nationalist world view on trade is not terrible to me.
wrt that last sentence, maybe not. Politico … “The problem with circular firing squads is everyone gets hit. I don’t think there’s any room in the party right now for a circular firing squad. The party has a long way to go in order to regain its proverbial political footing across the country,” said interim DNC chair Donna Brazile — a Bill Clinton campaign advisor in 1992 and 1996 — adding that Hillary Clinton’s victory over Trump in the popular vote underscores the potential use of promoting her as a surrogate for the next crop of candidates. …Well acquainted with… Read more »
Can progress be made without destroying the Clintonites? I have no idea. I just wish theyd go away.
My sense of the zeitgeist on the Trump and GOP side of the government is to: 1, Do something that creates chaos for Democratic interests to go scrambling to defend. Introduce legislation to get out of chaos with benefits to GOP interests. Finesse relationships with foreign countries or beat the US imperial chest with exceptionalism. I’m reminded here of how W ended the anti-ballistic-missile (ABM) treaty in order to start moving bases and so-called “Star Wars” installations into Eastern Europe. Funny how that action got us to Trump. First, flat out abrogate NAFTA and the World Trade Organization while conserving… Read more »
I have to read this at least twice more, but wow.
Booman, would you consider (with TD’s permission) putting this on the front page?
Trump promised to do this. He’s doing it.
With these trade bills, the effect, IMHO, is to strike uncertainty in the planning for corporations. This MAY have an effect to get them to set up more factories and jobs in country:
Net result: A decision to do stuff in this country.
We’ll see.
I guess someone would have to explain to me how going back to the economic policies of the 1970s wouldn’t lead to the economy of the 1970s, which really kind of sucked in terms of the adjustments that were going on. Would it be that we would have these new factories but without unions?
This is much, much different than going back to the economic policies of the 1970s, or as it is better known, pre-Milton Friedman and Arthur Laffer. If you tighten the so-called labor market for the new factories and disintermediate the long supply chains, there is more reason to decentralize within urban regions to keep transportation costs low and to tap labor without boomtown wages. When there the economy is close to the full employment level or even beginning to strip it as it did in World War II, labor has leverage. And organizing in a tight-labor environment exerts a cost… Read more »
Wake me up when we repeal Taft-Hartley and there’s an actual, functioning NLRB…
When working people remember what frames employer-employee relationships is law and government’s enforcement of employer privileges.
All of my entire analysis was conditional on full employment. Wake me when the business community allows that to happen without tanking the economy after panicky articles about labor shortages.
Trump and his band of clowns can’t do anything unless they completely withdraw from NAFTA AND the WTO, and that would completely devastate American trade in the near term and spark an all out trade war. Even if he ‘withdraws from NAFTA’, the GATT/WTO is still in effect and therefore will give Canada and Mexico power to challenge any tariffs imposed. I’m all for avoiding a race to the bottom, but that involves moving us to an economy that looks more like Germany and will involve careful unpeeling of the free trade onion to get us back to an economy… Read more »
Two hundred years ago, it was understood, without question, that national borders are things that neither persons, nor goods, nor money, nor information should routinely cross. This does not mean that no such crossings could take place, but that each one required scrutiny, because each one raised, in principle, issues of national policy. What we have discovered, since that understanding eroded, is that it was a correct and necessary understanding. The necessity for it is a shame, but it is no good pretending that it is not necessary. But its erosion was almost as unwitting as it was gradual. What,… Read more »
So what we see in 200 years is a practical conflict between political interests in absolute control and economic interests in expanding trade without increased migration.
What we currently see are economic and political migrants seeking opportunity and asylum, and nations retreating to mono-ethnic cultures or mono-lingual cultures.
Dissolution of empires instead of federation of nations and hopes for a global polity.
Which way lies the addressing of the moral issues of the 20th midcentury — war, poverty, bigotry?
Do you seriously believe this drivel? “nations retreating to mono-ethnic cultures” What absolute rot. We naturalize 800,000 persons a year. You should educate yourself, and stop saying such ridiculous things.
Information is not people. People cross borders either legally or illegally. We can and should and must continue to maintain our physical borders. Information cannot be controlled, but persons certainly can.
Obama did not want to control persons, and did not. He did huge damage to American workers, and his damage continued until the end of his administration. Hopefully Trump will be changing the orientation of ICE to actually do their job again, instead of babysitting.
Maybe you should read up. Obama deported a record number of people.
That’s one of those fake news items. Obama changed the definition of deportation. He defined “border refusal” as “deportation”, which was new. EVERY SINGLE YEAR, he deported fewer people from the country. “The number of undocumented immigrants deported by President Obama is falling and could hit a 10-year low in 2016 just as the issue heats up in this year’s presidential race. Immigrations and Customs Enforcement (ICE) figures from June suggest 230,000 people could be removed or returned from the country by the end of the fiscal year next month, slightly fewer than the 235,413 deported in 2015. That was… Read more »
No. Did you read the link you posted? Did you do the math? Did you see where those numbers add up to 2.5 million? Also too, bail out the auto industry and the ACA are two things Obama did for American workers.
Obama did more for foreign workers than he ever did for American workers. Did you know that a lot of those jobs are capped at 29 hr/week? That’s the Obamacare effect.
He extended the time that OPT workers can work after they finish their college by 29 months – 2 1/2 years. The employers get FUCKING TAX BREAKS to hire these fucking scabs. That means that these OPT workers are hired AS DIRECT STAND-INS for US kids. US kids DO NOT GET HIRED because Obama made it cheaper, easier, and better to hire FUCKING FOREIGN SCABS.
Thanks, Obama.
Except save the American auto industry. Put in overtime rules that stopped allowing companies to simply work people 80 hours a week by declaring them exempt. Also net illegal immigration was down under President Obama. http://www.pewhispanic.org/2015/11/19/more-mexicans-leaving-than-coming-to-the-u-s/ As for Trump, or really any politician, if they were truly serious about dealing with illegal immigration they would make e-verify the law of the land because the most effective way to reduce illegal immigration is cut off demand. Another key lever in reducing illegal immigration from Mexico is revisiting our policy on corn subsidies and/or in the NAFTA renegotiation concede to… Read more »
Another key lever in reducing illegal immigration from Mexico is revisiting our policy on corn subsidies and/or in the NAFTA renegotiation concede to not flooding the Mexico market with our cheap corn. Want to bet that won’t happen given it is likely to tick off many a rural voter? You see that is the dirty little secret about trade agreements. For every manufacturing worker who hates them, there is a farmer who loves them. Yeah, NAFTA was a piece of gilded shit which damaged the rural economy in Mexico and other CA countries, producing a tidal wave of desperate… Read more »
The root problem though is our insane policy of corn subsidies. I am not kidding when I say I think they are of the devil. They made issues with NAFTA exponentially worse, they contribute to our obesity epidemic, and they keep us on corn based ethanol which is obscenely inefficient. If we used those subsidies for labor intensive agriculture instead we could afford to pay people workers in those industries higher wages thus making them more attractive to american workers. That means crops wouldn’t rot on the ground (as they did in Alabama) if guest workers weren’t clamped down… Read more »
What is absolutely shocking about Obama’s hispandering and condoning of illegal criminals is that he cut the number of CONVICTED CRIMINALS he deported. In 2012, he deported more than 200,000. In 2016, he deported less than 125,000. This is stunning.
He is the best friend that the illegal criminal ever had.
Something smells like shit around here. Oh, just noticed – marduk has dropped a couple turds. What an asshole.
Actually that is not true at all, even though I see what your point is and generally agree. 200 years ago, borders were essentially impossible to enforce and people crossed them all the time, with little attempts to enforce them at all. The idea of a nation state itself was only about century and half old then and still quite controversial and not really demarked by solid physical borders yet. People, goods, information, and relationships carried on across artifical borders, themselves frequently changing, with little attempts by political authorities to impede them. Passports themselves, first invented in Europe in… Read more »