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Trump's Trade War


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On June 10th, the United States will impose a 5% Tariff on all goods coming into our Country from Mexico, until such time as illegal migrants coming through Mexico, and into our Country, STOP. The Tariff will gradually increase until the Illegal Immigration problem is remedied,..

is he dictating a fucking telegram?

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Following up on my last post, looks like it's not just a rumor:

Quote

Beijing has readied a plan to restrict exports of rare earths to the U.S. if needed, as both sides in the trade war dig in for a protracted dispute, according to people familiar with the matter.

The government has prepared the steps it will take to use its stranglehold on the critical minerals in a targeted way to hurt the U.S. economy, the people said. The measures would likely focus on heavy rare earths, a sub-group of the materials where the U.S. is particularly reliant on China. The plan can be implemented as soon as the government decides to go ahead, they said, without giving further details.
...

https://www.bloomberg.com/news/articles/2019-05-31/china-has-a-rare-earths-plan-ready-to-go-if-trade-war-deepens

Read the article for more context if you don't already understand the significance of this.

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If you wanted to implement a plan to create trading blocs that looked like "everyone else" vs. the US, this would be a good way to do it.

And the fallout in both Texas and the US at-large from this one will be significant.  Mexico is our largest trading partner.

Also, if I was a Mexican leader, I'd stop ALL spending on law enforcement related to cartels, because hey, we'll need to save our money now that our trade is going to be hurt.  And I'd also work out something of a "peace treaty" with the cartels.  Tell 'em that in exchange for us leaving you alone, you now have free reign to do as you wish in the US.  We won't be cooperating with the DEA, FBI, etc.  They're welcome to be here, of course -- we're hospitable and friendly people.  They just won't be getting any help or information from Mexico.

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-dumb question amnesty alert-

so i'll admit i don't know much about this whole process, but if we raise tariffs, we're paying mexican companies more for goods they're sending us, right?  so in the short term, mexican companies will be making more off these transactions.  so what incentive would they have at that point to halt the flow of immigrants from/thru mexico if they're making more money off the tariffs?  and what does one thing actually have to do with the other?

and the longer it goes on, the higher the tariffs go, so it seems like they would be even less incentivized down the road to do anything.

is the administration just hoping/assuming that american companies, fearing higher tariffs, would stop buying so much shit from mexico and become more self-reliant?  isn't that a long process, like turning a freighter around that's been steaming ahead for decades?  it seems like in the short term (the next 1-5 years) it's more likely that americans just get stuck paying more money for products in the marketplace from the tariff trickle down.

it's been a while since i sat in an economics class, but can someone explain to me what i'm missing here? 

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1 hour ago, DigglerontheHoof said:

So put pressure on Mexico and tax American citizens with tariffs, so that Mexico will "get tough" on migrants.  And in doing so, he'll likely drive up unemployment in Mexico, causing more illegal immigrants from Mexico to cross the border.  Got it. 

It goes well with threatening to close the border and restrict eligibility for asylum seekers. Boom! Huge increase in the flow of migrants from south of the border. Another Trump-manufactured crisis. 

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4 minutes ago, henrygandorf said:

-dumb question amnesty alert-

so i'll admit i don't know much about this whole process, but if we raise tariffs, we're paying mexican companies more for goods they're sending us, right?  so in the short term, mexican companies will be making more off these transactions.  so what incentive would they have at that point to halt the flow of immigrants from/thru mexico if they're making more money off the tariffs?  and what does one thing actually have to do with the other?

and the longer it goes on, the higher the tariffs go, so it seems like they would be even less incentivized down the road to do anything.

is the administration just hoping/assuming that american companies, fearing higher tariffs, would stop buying so much shit from mexico and become more self-reliant?  isn't that a long process, like turning a freighter around that's been steaming ahead for decades?  it seems like in the short term (the next 1-5 years) it's more likely that americans just get stuck paying more money for products in the marketplace from the tariff trickle down.

it's been a while since i sat in an economics class, but can someone explain to me what i'm missing here? 

so, no. 

those companies importing mexican goods absorb that cost. they then either eat that cost or pass that cost onto the customer, but eventually tariffs will trickle down to the consumer. 

really, when you think about it, tariffs are the ultimate trickle down economics.

think of GM, who manufactures and imports car chassis in mexico. when that chassis crosses the border, GM has to pay the US a tax on that chassis. GM can either take the hit on product margin or pass the cost of that chassis onto the customer in the form of higher prices. 

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-dumb question amnesty alert-
so i'll admit i don't know much about this whole process, but if we raise tariffs, we're paying mexican companies more for goods they're sending us, right?  so in the short term, mexican companies will be making more off these transactions.  so what incentive would they have at that point to halt the flow of immigrants from/thru mexico if they're making more money off the tariffs?  and what does one thing actually have to do with the other?
and the longer it goes on, the higher the tariffs go, so it seems like they would be even less incentivized down the road to do anything.
is the administration just hoping/assuming that american companies, fearing higher tariffs, would stop buying so much shit from mexico and become more self-reliant?  isn't that a long process, like turning a freighter around that's been steaming ahead for decades?  it seems like in the short term (the next 1-5 years) it's more likely that americans just get stuck paying more money for products in the marketplace from the tariff trickle down.
it's been a while since i sat in an economics class, but can someone explain to me what i'm missing here? 


I might be wrong here, but I think it’s actually the US Company importing the goods who pay the tariffs directly to customs at the port.

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4 minutes ago, hayden_horn said:

so, no. 

those companies importing mexican goods absorb that cost. they then either eat that cost or pass that cost onto the customer, but eventually tariffs will trickle down to the consumer. 

really, when you think about it, tariffs are the ultimate trickle down economics.

think of GM, who manufactures and imports car chassis in mexico. when that chassis crosses the border, GM has to pay the US a tax on that chassis. GM can either take the hit on product margin or pass the cost of that chassis onto the customer in the form of higher prices. 

right.  that's literally what i said:

it seems like in the short term (the next 1-5 years) it's more likely that americans just get stuck paying more money for products in the marketplace from the tariff trickle down.

you said "no" but then seemed to echo what i was saying (and what i'm confused about).

still confused.

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7 minutes ago, BLKNSTY said:

 


I might be wrong here, but I think it’s actually the US Company importing the goods who pay the tariffs directly to customs at the port.
 

 

i know it's the us company, but do the tariffs go to the govt?  is that the part i'm missing?  still seems like a slow process with limited upside and real downside that consumers will feel first.

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1 minute ago, henrygandorf said:

right.  that's literally what i said:

 

 

you said "no" but then seemed to echo what i was saying (and what i'm confused about).

still confused.

right. but mexican manufacturers receive the same amount of money, not more. the importer (GM in my example) would pay the tax when their goods cross the border. that goes to the US government, not to the mexican manufacturer. 

so we agree on the second part, my "so, no" was to the mexican first part of your post.

if you bring a carton of cigarettes into hong kong, you'll pay a tax on that carton of cigarettes. you won't turn around and pay philip morris any more. 

does that make sense?

tariffs are taxes on US companies manufacturing elsewhere. if apple gets hit with an iphone tariff on goods made in china, they can either absorb that cost or pass it on to the consumer. foxconn ain't realizing more revenue from our tariffs. 

that's what makes trump's rhetoric on this so fucking maddening. he is completely misrepresenting the whole thing, and i honestly cannot tell if he is doing so intentionally and cynically to mislead his rabble base, or if he genuinely does not understand how these things work.

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