Category Archives: Tariffs

The Future of the Auto Industry

19 Wednesday Dec 2018

Posted by in Politics, President Trump, Tariffs

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                I don’t blame President Trump for his tantrum about General Motors closing four assembly plants. They are in states he barely won by saying he would bring more and better jobs into the areas. The tariffs he put on vehicle steel and aluminum cost GM over a billion dollars. It has cost all the auto companies billions.

                If all the companies are losing or passing on the costs of tariffs, why is GM closing the plants? Anyone who has been noticing traffic for as long as I have or just for the last few years has seen the decline of the sedan. We aren’t buying sedans. We are buying pick-ups, SUVs, and some cross-overs. Ford and Chrysler have already announced their closures for 2020 to 2022. What upsets Trump is the GM closures are before the 2020 elections. Remember it’s all about him and his image, not the people.

                CEO Barra, who is a generational GM employee, is putting the company into artificial intelligence and electric vehicles. Shutting those plants saves money for GM’s future. Building cars nobody wants is irresponsible and having to sell them at a loss is stupid and she isn’t.

                So let Trump and others rant and rave but shutting those plants to meet demand is necessary. Some of those cars were being shipped to China before the Chinese put tariffs on them in response to
Trump’s tariffs on imports. Small parts suppliers around the country will be affected also. One automotive engineer said an electric car has half as many parts.

                These closings are the future of the auto industry.

Tariffs — The Truth

10 Monday Dec 2018

Posted by in Economy, Tariffs, Uncategorized

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President Donald Trump has repeatedly said he is hurting the Chinese with his tariffs. Last quarter was the biggest trade deficit with China possibly ever. Companies have pre-bought Chinese products in case Trump won’t back down on his promised raises in the tariffs. He has made it him against the Chinese government and they can’t back down so the Chinese will go to their closet of retaliations.

He has said the billions in tariffs are going into the U.S. Treasury. That is true! The money isn’t paid by the Chinese but by the American Companies purchasing the items. Companies don’t eat that money they paid to import the item, so they pass along the tariff money to the consumer–the American consumer. We, the American consumer will pay this back door tax, wiping out any minimal tax we may have gotten. The steel and aluminum tariffs cost GM $1.4 billion, not China.

The Chinese have put tariffs on many exports to China. Farmers have been especially hit hard. Soybeans have been hit hardest. Corn, wheat, other grains, pork, beef, turkeys, and chicken prices have dropped–Good for consumers, bad for farm communities, farmers, and businesses.  The U.S. Government is going to partly subsidize the soybeans and to a smaller amount the corn farmers, and others. The Agriculture Department just released the meat in storage numbers. They are the largest in years or ever depending on who read the release and their research. When the freezers burst our costs at stores will plummet and so will the price farmers get.

The President thinks in a time span of days and maybe weeks when he destroys markets that were carefully nurtured. China can buy products elsewhere and leave us out for years. Many industries are worried if China will come back.

Tariffs Hit Homeowners

20 Monday Aug 2018

Posted by in President Trump, Tariffs

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I built my house thirty years ago and it is worth much more than I paid for the materials. As long as I don’t buy any appliances I couldn’t believe Trump’s tariff fights would affect my finances. I had to connect the dots to see how I have just got dinged.

A few weeks ago I read where home builders were expecting to pay $4,000 to $6,000 or more for the lumber to build homes. Since I am not building a new one, it is not my problem. Yesterday I got my house insurance bill. It had gone up because the cost to rebuild my house had risen.

So we have to pay more so his billionaire friends can raise the price of wood from American trees and override the Wildlife Preservation restrictions to cut in protected areas. Note his comment on the need to cut more trees to reduce fires. That’s another dot to connect.

It’s costing me another few percent. As new houses are built and sold I bet our real estate tax will rise too!

No Foreign Policy

08 Wednesday Aug 2018

Posted by in Foreign Policy, Tariffs

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A few months ago I wrote the reaction to President Trump’s tariffs on China’s products could be breaking the sanctions on North Korea and selling hundreds of billions of treasury debt. International relations has many layers and the President apparently doesn’t understand it’s complexities. He has browbeat Xi, then said they are friends, got them to vote to increase sanctions on Kim, keeps saying China has been screwing America for years, and keeps increasing the tariffs. Does he expect Xi to do nothing?

Trump is trying to get an oriental ruler to lose face by punishing his country. His language and tariffs raise support for Xi, who is well regarded by his people and will support him more. We now know the Chinese have allowed a porous border to open up again and are off loading fuel from Chinese tanker to North Korea tankers at sea.

On the other hand he lauds Putin while our maligned intelligence agencies report Russia is aiding thousands of North Korea workers by allowing them to work Russia’s Far East. Most of the wages will go to the North Korean government and Putin knows it.

I question whether Secretary of State Pompeo and National Security Advisor Bolton are being listened to by Trump. Their history is very different from what policy is being made by Trump. We can’t extend a hand to people and then repeatedly slap them with it. As a news junkie and a student of foreign relations, it is clear the United States has no clear foreign policy. Trump has demeaned our allies many times and even pushed their leaders out of his way for pictures. He has lauded our long standing enemies and frayed or broken ties with our much needed friends. Scorched earth policies never help the arsonist. People remember who started the fires.

Tariffs Are Taxes

05 Thursday Jul 2018

Posted by in Tariffs, U.S. Taxes

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When an item is imported at a price of $10.00 and is subject to a 30% tariff, the item becomes a $13.00 purchase. The American company that manufactures the same item will now raise its price to $13.00 giving it an additional $3.00 profit. So tariffs are just another tax on the consumer. The recent tax cut was minor for most people and tariffs will more than offset the few dollars saved by the cuts.

A car dealer has said the average price of a car he sells will increase over $5,000. A builder of a single family home stated his homes will raise about $7,000.00 per house. Both raises are for materials imported from Canada, Mexico, European Union, and China. If the reader isn’t buying a new car or house, the cost of clothes washers and dryers, dishwashers, and many other imported appliances is going up substantially.

The backlash is clearly stated by the Texas Governor who has pled with Trump to remove the steel and aluminum tariffs from China because no American company makes the specific grades or worse the American smelters are already at peak capacity. He says the potential increase of 17,000 steel jobs will cost 550,000 Texas jobs. The U.S. Chamber of Commerce and many companies have predicted an economic disaster if the tariffs aren’t dropped.

Why doesn’t Congress do anything about tariffs? It is because they have had their attention diverted by a concocted immigration emergency. Common knowledge shows Congress is incapable of juggling two or more subjects at once. They gave us a few dollars a week tax cut for political gain and refuse to address the tariff disaster. A three year old child has a greater multi-tasking ability.

The Constitution says Congress is to levy tariffs and they have shirked the responsibility.

The Real Economic Boom

29 Friday Jun 2018

Posted by in Politics, Tariffs, U.S. Economy, U.S. Taxes

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I used boom and not boon because the few dollars each week a wage earner may get is more than offset by reality. The tax cut was designed for companies and not the average American. Non-public companies like Trump’s, Koch’s, and others are able to pocket the entire cut. A few public companies gave one-time bonuses. One big Republican donor is Wall-Mart. It was touted as giving raises because of the tax cut, but raises were scheduled more than a year before. They offset by closing almost a hundred stores and laying off hundreds of higher paid managers.

The offset is the rising National Debt which raises interest rate. The Federal Reserve will be raising the rate three more times this year and more times next year. A few dollars each week doesn’t overcome the credit card, auto, and mortgage rate increases.

The tariff Trump is putting on the items we buy means the items cost the consumer money even if paid in cash. Add the tariff increases to credit increases and the tax cut is a net loss to the average consumer. Increasing an item’s cost may cause consumers to not buy an item made overseas or here because the domestic manufacturers are already raising their prices to match the tariffs. Now we don’t buy the more expensive items so Americans lose their jobs.

Future Presidents will have to raise income taxes to pay down the massive debt. As interest rates increase a greater portion of the yearly budget will go to paying the interest just as Greece and other debtor nations do. The rich will move elsewhere leaving the rest of us to suffer the consequences.