Economic, taxes, and tariffs discussion

[TranaGreg]

Canada agrees to a revamped NAFTA -- the USMCA.

yup. generally positive response up here, although there is big concern that the aluminum & steel tariffs remain in place.

[cardboardbox]

so you can post away about the rosy economy obama created, and i'll post about the cluelessness of our current president and how he's affecting the very people who voted for him. Deal?

LOOOOOOOOOOL!

I wish you weren't so incredibly biased that could see both the positives and negatives of what Trump is doing. It would make for a much better discussion.

[nots]

LOOOOOOOOOOL!

I wish you weren't so incredibly biased that could see both the positives and negatives of what Trump is doing. It would make for a much better discussion.

Acknowledging the economy is ‘rosy’ is a huge step up for him

[cardboardbox]

Acknowledging the economy is ‘rosy’ is a huge step up for him

according to revo, anything rosy about the economy came directly from obama.

[revo]

according to revo, anything rosy about the economy came directly from obama.

I hope you guys are watching his press conference. He's giving himself more than a few rousing pats on the back, telling me how my 401k was garbage -- you got killed for years!! -- until he became President. Oh, and now he's cracking jokes about the tsunami in Indonesia. What a guy!

[nots]

I hope you guys are watching his press conference. He's giving himself more than a few rousing pats on the back, telling me how my 401k was garbage -- you got killed for years!! -- until he became President. Oh, and now he's cracking jokes about the tsunami in Indonesia. What a guy!

Putting aside his bragging and self-praise, do you think USMCA is an improvement on NAFTA or did we get screwed?

[revo]

Putting aside his bragging and self-praise, do you think USMCA is an improvement on NAFTA or did we get screwed?

It's too early to say for sure. Steel and aluminum tariffs are still in place, so the high prices in those commodities are here to stay.

For autos, it requires a $16/hour wage and 75% of parts to be purchased from the 3 nations. Sounds good? Well, now autos will be jumping in price above and beyond the already higher prices from the steel and aluminum tariffs, and lower-priced compacts and mid-sized cars, which could have prices jump dramatically, may have production moved elsewhere. Is that a wrong assessment? That appears to be the general consensus of most of the pundits I've read so far.

For dairy, seems like a win, although they haven't said exactly what is going to happen. There will be greater access for "Class 7" products, which seems good.

As far as the rest, there are new rules and regs on IP that will likely apply to any deal with China, but again, it remains to be seen how this will be implemented.

So is it a Yuuuge win? Doesn't seem that way. But he'll tout it as such to his base, who believes anything he says, and he gets to check off another campaign promise. And the markets are relieved that the general basis for NAFTA is in place, even if he changed the name. But was this worth damaging our relationship with Canada and Trudeau? Doubt it.

Fair?

[cardboardbox]

It's too early to say for sure. Steel and aluminum tariffs are still in place, so the high prices in those commodities are here to stay.

For autos, it requires a $16/hour wage and 75% of parts to be purchased from the 3 nations. Sounds good? Well, now autos will be jumping in price above and beyond the already higher prices from the steel and aluminum tariffs, and lower-priced compacts and mid-sized cars, which could have prices jump dramatically, may have production moved elsewhere. Is that a wrong assessment? That appears to be the general consensus of most of the pundits I've read so far.

For dairy, seems like a win, although they haven't said exactly what is going to happen. There will be greater access for "Class 7" products, which seems good.

As far as the rest, there are new rules and regs on IP that will likely apply to any deal with China, but again, it remains to be seen how this will be implemented.

So is it a Yuuuge win? Doesn't seem that way. But he'll tout it as such to his base, who believes anything he says, and he gets to check off another campaign promise. And the markets are relieved that the general basis for NAFTA is in place, even if he changed the name. But was this worth damaging our relationship with Canada and Trudeau? Doubt it.

Fair?

where did you find this analysis? I havent read much yet, havent looked very hard though.

For much of the 80s, 90s, and 00s, autos prices went up less than the rate of inflation but since 2009 cars have gone up equal or higher than inflation. Do you really think they will go up even higher now?

[revo]

where did you find this analysis? I havent read much yet, havent looked very hard though.

For much of the 80s, 90s, and 00s, autos prices went up less than the rate of inflation but since 2009 cars have gone up equal or higher than inflation. Do you really think they will go up even higher now?

I don’t know, but if the costs for employees and parts are going to rise dramatically, and the price of steel has already risen, it makes sense that prices will rise faster than the CPI rate.

Here’s one analysis:

https://www.washingtonpost.com/business/2018/10/01/winners-losers-usmca-trade-deal/?noredirect=on

[baldgriff]

I don’t know, but if the costs for employees and parts are going to rise dramatically, and the price of steel has already risen, it makes sense that prices will rise faster than the CPI rate.

Just curious - are you a $15/hr min wage proponent?

[chancellor]

Putting aside his bragging and self-praise, do you think USMCA is an improvement on NAFTA or did we get screwed?

It's a step change improvement. Steel and aluminum tarrifs, as revo noted, stay in place, though there is a separate group negotiating those. There's plenty that both Trump and Trudeau will get to point to as wins.

To clarify the car point - the $16/hour wage is required for 30% of the work done on the car, moving to 40% in 2023. And the 75% of parts purchase is an increase from 62.5%, not something that was zero before. I agree with revo to a degree - certainly, that will impact some car prices, though many it will not - but the $16/hour wage rule is one that will drive more good jobs into both the US and Canada.

The US gets greater market share access into Canada for dairy, but Canada won on trade dispute resolution (known as Chapter 19). Frankly, I think that's a win for the US, too, as anything that helps manufacturers avoid our all-too-often stupid legal system is a plus. Drug companies get two years longer patent protection in Canada before generics are introduced.

An important aspect revo left out is the improved safety, environmental, and labor agreement, which should improve Mexican workers ability to form unions and collectively bargain and truck safety on vehicles entering the US, among others.

The IP agreement is mostly technical, but looks like it could benefit the biotech industry if it continues to grow as expected in the US. I was surprised to not see any changes to wood/paper products or oil transportation.

I'll differ with revo on benefits. It's a big win for farming, dairy and food products. There's upside, especially in the biotech world. This gives the new Mexican government a real opportunity to prove they care about their workers by enforcing those aspects of the agreement.

[revo]

Just curious - are you a $15/hr min wage proponent?

I'm not, and don't believe I argued as such here. Still, even if I was, that's not a tripling of wages like it might be here.

[baldgriff]

I'm not, and don't believe I argued as such here. Still, even if I was, that's not a tripling of wages like it might be here.

Revo - I wasnt saying you argued it... I was just wondering if you were a proponent. Thanks

[revo]

Revo - I wasnt saying you argued it... I was just wondering if you were a proponent. Thanks

You do bring up a great point, though. Isn’t it interesting that the GOP is in favor of a higher minimum wage when it suits their needs?

[baldgriff]

LOL --- They are opposite sides of the same coin. So if it fits their needs - well we can live with it.