Economic, taxes, and tariffs discussion

[TranaGreg]

If you are less literal, it's a valid statement.

I've decided that I'm not going to take the above statement literally.

[onejayhawk]

I've decided that I'm not going to take the above statement literally.

Get that man a MAGA hat.

J

[Ken]

I've decided that I'm not going to take the above statement literally.

Figuratively speaking.

[revo]

Sad!

"According to new research provided by the Federal Reserve Bank of New York, Princeton University, and Columbia University, Americans are losing big economically due to President Donald Trump’s tariffs and trade wars. In a report, the analysis shows that “businesses and consumers saw ‘substantial increases’ to the tune of $1.4 billion per month by the end of last November,” reports NBC News.

According to comments within the report, “Economists have long argued that there are real income losses from import protection. Using the evidence to date from the 2018 trade war, we find empirical support for these arguments.”

“Losses mounted steadily over the year, as each wave of tariffs affected additional countries and products, and increased substantially after the imposition of the wave 6 tariffs on $200 billion dollars of Chinese exports,” the report continued.

In the report, New York Fed’s Mary Amiti, Princeton professor Stephen Redding, and Columbia professor David Weinstein revealed that losses were accumulating at a rate of $1.4 billion per month by last November, with the total from January 2018 through November 2018 conservatively estimated to be at $6.9 billion.

The NBC analysis added, “That number may be too low, the economists said, because their model assumes that the U.S. government uses tariff tax revenues to offset the welfare burden. If the U.S. government did not offset the cost of the tariffs to the American consumer with the new tax revenues, the full value of the tariff payments would be $12.3 billion.”

“We find that the U.S. tariffs were almost completely passed through into U.S. domestic prices, so that the entire incidence of the tariffs fell on domestic consumers and importers up to now, with no impact so far on the prices received by foreign exporters,” the Fed, Princeton and Columbia economists wrote. “We also find that U.S. producers responded to reduced import competition by raising their prices.”

https://www.nbcnews.com/business/economy/trump-s-tariffs-are-costing-americans-1-4-billion-each-n987336

[revo]

Trade War, Part Deux!

Europe slams ‘exaggerated’ US tariff threat and prepares to retaliate
The EU has hit back at new U.S. proposals to target European goods with tariffs, following a World Trade Organization (WTO) ruling over subsidies for Airbus.

Trade tensions between the EU and U.S. flared Monday after the U.S. said it’s considering $11 billion worth of retaliatory tariffs on a range of goods in response to illegal subsidies the EU granted to the aerospace firm.

The WTO ruled last year that these allowances had caused “adverse effects” to the U.S., with the decision coming after a long-running litigation battle between the Washington and Brussels over their respective aviation giants.

Shares of Airbus were trading 2.3% lower Tuesday after the tariffs were proposed. A spokesman for the company said there is no legal basis for the U.S. move to impose sanctions, and said the EU had complied with WTO rulings. The European Commission criticized the proposals.

“The EU is confident that the level of countermeasures on which the notice is based is greatly exaggerated. The amount of WTO authorized retaliation can only be determined by the WTO-appointed arbitrator,” a Commission spokesman said.

On Monday, the Office of the U.S. Trade Representative said it would slap tariffs on EU goods ranging from aircraft to fish, dairy products to binoculars, olive oil and wine, according to a preliminary list.

It said it estimates “the harm from the EU subsidies as $11 billion in trade each year,” although the amount is subject to an arbitration at the WTO, the result of which is expected to be issued this summer.

https://www.cnbc.com/2019/04/09/europe-slams-latest-us-tariff-threat-as-greatly-exaggerated.html

[nots]

Big quarter for GDP:

https://www.nytimes.com/2019/04/26/business/economy/gdp-economy.html

3.2% surprised most economists.

[revo]

Big quarter for GDP:

https://www.nytimes.com/2019/04/26/business/economy/gdp-economy.html

3.2% surprised most economists.

Extremely surprising. So surprising that many economists can't explain how it actually happened. Inventory building is the primary factor in the number, yet the underlying stats don't bear out exactly where the inventory was coming from:

"This stockpiling of goods boosted first-quarter GDP growth by about 70 basis points and helped propel growth to a 3.2% annual rate, well above forecasts.

The problem is that it is not at all obvious where these inventories came from. Goods have to come from somewhere, either produced by domestic firms or imported from abroad.

The mystery is that both production and imports fell in the first three months of the year, according to government data."

https://www.marketwatch.com/story/the-big-mystery-in-the-gdp-report-where-did-the-inventories-come-from-2019-04-26?mod=mw_theo_homepage

[revo]

Trump's disastrous washing machine tariffs have cost Americans $82-$96 per washing machine over the last 12 months, for a total of an extra $1.5 BILLION from JUST THIS TARIFF ALONE:

https://www.nbcnews.com/business/consumer/trump-s-washing-machine-tariffs-are-costing-americans-almost-100-n999461?cid=sm_npd_nn_fb_ma

And his disastrous trade war has nearly driven an entire industry, an American standard, into oblivion:

https://www.nytimes.com/2019/04/26/us/politics/trump-trade-war-wisconsin-dairy.html

But hey, GDP had a surprising quarter, so who gives a fuck, right?

[onejayhawk]

Disastrous is a wild overstatement. Annoying maybe.

Signs of improvement are common. February had the lowest balance deficit in 8 months. Exports are up. The 1st quarter economic growth was from increased exports to a significant extent.

Wages are starting to move up, but even when they were flat, household income was rising. The short version is that more income came from more work being available. I ran across an interesting article I missed last fall (Oct 2018)

https://www.brookings.edu/blog/up-front/2018/10/04/if-real-wages-arent-rising-how-is-household-income-going-up/

J

[nots]

More good news:

https://www.nytimes.com/2019/05/02/business/economy/wage-growth-economy.html?action=click&module=Top%20Stories&pgtype=Homepage

Coupled with unemployment hitting a 49 year low in today’s job numbers (with February’s revision increasing as well) and the Dow just a little off it’s all time high, the economy continues to hum along.

[onejayhawk]

More than half the people in the United States have never seen unemployment this low.

J

[Kevin Seitzer]

More than half the people in the United States have never seen unemployment this low.

J

It's true that U-3 has not been this low since 1970. It's more encouraging to me that U-6 is getting down closer to the levels we saw in 2000.

[revo]

Tariffs of 25% on $200Bn of Chinese goods just went into effect as OneJay says "what Trade War?"

At this point, it would behoove the Chinese to hardline talks until closer to the ‘20 election. Why give any concessions if a Dem is going to win? And if they don’t, start talks up again then. At this point, the odds are a regime change is coming, so play the odds at the table.

[onejayhawk]

Tariffs of 25% on $200Bn of Chinese goods just went into effect as OneJay says "what Trade War?"

At this point, it would behoove the Chinese to hardline talks until closer to the ‘20 election. Why give any concessions if a Dem is going to win? And if they don’t, start talks up again then. At this point, the odds are a regime change is coming, so play the odds at the table.

Yes I do.

China is the only country where we are close to a war and they have been stealing from us for years. Most of the other countries that steal from us are shaping up after a firm reminder but China acts entitiled. Still, they sent real people to negotiate. Maybe this will be short termed.

Perhaps the Chinese can read the headlines better than Americans. They don't seem to think Trump will be out in 2021.

J

[Fresno Bob]

More good news:

https://www.nytimes.com/2019/05/02/business/economy/wage-growth-economy.html?action=click&module=Top%20Stories&pgtype=Homepage

Coupled with unemployment hitting a 49 year low in today’s job numbers (with February’s revision increasing as well) and the Dow just a little off it’s all time high, the economy continues to hum along.

it's moved "a little more" off the highs since your post