tag:blogger.com,1999:blog-24338064.post8735195613173431408..comments2024-02-11T19:28:27.997+11:00Comments on Personal Reflections: Monday Note - President TrumpJim Belshawhttp://www.blogger.com/profile/10075614280789984767noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-24338064.post-58745752882937416082018-07-30T20:12:05.501+10:002018-07-30T20:12:05.501+10:00Hi kvd. I couldn't access that link because of...Hi kvd. I couldn't access that link because of the paywall. 2t, you draw out some of the complications in a world of integrated supply chains and multiple inputs as well as the capacity to retaliate in a targeted way. There is also a real risk that it will bring on a global recession.<br /><br /> Jim Belshawhttps://www.blogger.com/profile/10075614280789984767noreply@blogger.comtag:blogger.com,1999:blog-24338064.post-38517363698110290282018-07-27T18:16:42.303+10:002018-07-27T18:16:42.303+10:00The Chinese are wary of Donald Trump’s creative de...The Chinese are wary of Donald Trump’s creative destruction:<br /><br />https://www.ft.com/content/f83b20e4-8e67-11e8-9609-3d3b945e78cfAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-24338064.post-25184484514627914502018-07-26T22:12:22.875+10:002018-07-26T22:12:22.875+10:00Trump has looked and seen that the US imports more...Trump has looked and seen that the US imports more than it exports in $US terms. Therefore, he reasons, he has more ammo than anyone else. <br /><br />There are a several problems with this. Some of the things the US exports (steel) it reimports (cars). The tariff on cars should reduce the demand for steel, and particularly US steel exports if it is subject to reciprocal tariffs. Second, reciprocal tariffs will be targeted at the areas most critical to electoral support for Trump - agricultural products to China, high value iconic exports to the EU and so on. Third, as you point out, world surpluses in some goods (the source of real damage to the US) will mean that where the US is competing in world markets it will be targeted - other countries can supply the shortfall (soybeans as an example). Fourth, mobile businesses may choose to relocate if they can - Harley-Davidsons being built in Europe saves no American jobs. And last, there will be markets to whom the US exports more than it imports (Canada, Mexico) who therefore can hit harder in retaliation than Trump, or who can instruct businesses to ignore the bottom line (China, Russia) putting up a higher effective wall against the US than it can manage to impose against them.<br /><br />And then there's us who no matter what the situation will try to buy our way out of a situation of Trump's making; that's what he anticipates from everyone, but in the case of the larger markets, I think he find that he is sadly mistaken.2 tannersnoreply@blogger.comtag:blogger.com,1999:blog-24338064.post-27017159903794112582018-07-25T10:40:56.500+10:002018-07-25T10:40:56.500+10:00Hi 2t. Mr Trump is as he is, I guess.
The trade ...Hi 2t. Mr Trump is as he is, I guess. <br /><br />The trade war, and it is a trade war, carries the risk of tipping the global economy into recession. Unlike the 1930s when all countries retaliated with universal tariff increases thus accentuating the pain, this one looks like the US on its own with retaliation restricted to the US. This will re-balance trade, but won't have quite the same consequences.<br /><br />I don't properly understand what Mr Trump expects to achieve. Perhaps he doesn't. My knowledge of trade theory is rusty, but if Mr Trump wishes to reduce the US trade deficit he will need to increase US savings. Then because the US is seen as a safe haven (at least at present) continuing financial flows will keep interest rates down. <br /><br />Bilateral tariffs will reduce US imports from certain countries, but with retaliation will also reduce US exports to those countries. Given existing capacity levels, now surplus capacity in both the US and its targets will flow into increased import competition in other markets. At the same time, US target countries will increase imports previously provided by the US from other countries. I'm not sure how all this will work out. <br /><br /> Jim Belshawhttps://www.blogger.com/profile/10075614280789984767noreply@blogger.comtag:blogger.com,1999:blog-24338064.post-65271018672843588442018-07-24T13:28:25.492+10:002018-07-24T13:28:25.492+10:00I'm not sure why we need to continue to cosy u...I'm not sure why we need to continue to cosy up to the US. Under ANZUS, we continue to be dragged into their wars, while they refuse help to us on the few occasions we ask. The TTP looked like a great deal for the US at our expense and I was grateful that Trump sank it. <br /><br />China is a threat to us and will continue to be treated that way, although as you say hopefully with a bit more temperance and respect. That is the right atmosphere to negotiate trade, especially avoiding sucking up to friends who aren't planning to help you.<br /><br />As for Trump, he's a lying egomaniac. Not really sure how that differentiates him from many others in his profession, except that he puts it on public display so regularly. He's done us the signal favour of being able to negotiate knowing that he doesn't mean a word he says.<br /><br />If the trade war comes, it'll hurt us, no question. It will hurt the US too, but not in time to really impact the first Trump presidency, so Trump will probably have a second swing (i.e. get the Republican primary nomination). I may be wrong there.2 tannersnoreply@blogger.com