Global Trade and Tariffs

While the US President proceeds with tariffs, 11 countries sans the US just signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership that will reduce tariffs among theses countries. This is the infamous TPP that the President pulled out of early in his Presidency.

David Smick, an economic advisor to Presidents Ronald Reagan and Bill Clinton said both Presidents loved global trade. It should be noted that more jobs were created under these two Presidents with Clinton #1 at 22.9 million and Reagan at #3 at 16.1 million (FDR was second). While we need to be mindful of and help employees impacted by job loss, we need to recognize global trade is accretive to the US economy and creates more jobs. We do well when we all do well.

As one global economist said, tariffs and trade wars are how recessions start. So, in protecting some jobs, we will likely be impacting negatively a much greater number.

8 thoughts on “Global Trade and Tariffs

    • You are right, the stock market will continue to meander downward. Plus, having just mortgaged more of our future to pass the tax bill to heat up a pretty good economy, the President just through water on it. Sto, now we will have even more debt than the projected $33 trillion in 2027.

      • It makes me want to cry! I’m on the downward slope to retirement, and would hate like hell to lose my retirement fund. I don’t want to work until I’m 70!

      • CC, just brace yourself for the continuing fall of the stock market over the next two years. Think high dividend payers as you invest and dollar average your investments (please note I am not an investment advisors).

        I have written before how Presidents get too much credit and blame for the economy, but do provide headwinds and tailwinds. The tax bill is a tailwind for now, although it borrows from our future. The tariffs will be a headwind. Keith

  1. Note to Readers: One thing the President excels at is convincing people that their problems are due to a sole reason and tell them he can solve it for them. The loss of manufacturing jobs in various industries has a multitude of reasons, but is traceable to the fact companies chase cheap labor or less labor through technology. A CFO even said a company will have no labor if they can get away with it.

    Right now, we are producing far more in America with far less labor. Tariffs will not fix that and will cause other problems. I would add a comment From Gronda, an informed blogger. We could have introduced infrastructure investment years ago that would have increased manufacturing and created jobs. I fault both parties for not getting this done, especially when interest rates were low and debt was less than it is now.

  2. Dear Keith,

    Workers being left behind with these trade agreements is a consequence that needs to be addressed but not via tariffs.

    We will pay a price for not being part of TPP. If TPP had been revised to protect the workers displaced by this agreement with retraining, investing venture capital for starting businesses targeted to these laborers, etc, then maybe President Trump wouldn’t have so easily gotten away with the US not being a part of it. This would have been an act consistent with acting to protect US national interests.It would have been a check on China.

    I am worried about tariffs on the EU countries because this is part of Russia’s goal which is to put a wedge between the US and our NATO allies. The president’s republican cronies in the US Congress ought to enact legislation to prevent this.

    Hugs, Gronda

    • Gronda, you raise two excellent points about the TPP. We must retrain any workers affected by trade agreements. And, this was in direct response to Chinese influence.

      It has happened relatively quickly, but Putin is indeed driving those wedges in the west. The way to challenge China is to have agreements they are not a part of. China is now in a much stronger position and will be the world leader sooner than expected. Keith

  3. Note to Readers: I saw a funny editorial cartoon that would solve the tariff thing pretty quickly. Any Trump business would have to pay a 25% tariff. While it would be illegal per the WTO to do that, if they said all US owned hotels or golf courses must pay a tariff, that might fly.

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