I have a request. If you know of any good sources or think you can explain it yourself, please point me to some information on how we might follow President Trump’s desire and impose a 35% import tax against select companies that have moved manufacturing jobs overseas or to Mexico.
Obviously, in the case of Mexico, NAFTA precludes us from doing that, so it would have to be violated or ignored or somehow repealed or modified. But I’m trying to figure out how you would identify products (some of which are only partly assembled in foreign countries or are assembled in several foreign plants), how the shipping would be inspected or the law would otherwise be enforced, and how this could stand up in court.
I think border enforcement would be impossible, so it would have to based on voluntary compliance and enforced through some agency (the International Trade Commission?), perhaps a new one dedicated to just this purpose.
I’m not even concerned about the merits or reciprocal retaliation. Let’s just stipulate that Trump wants to accept those tradeoffs and focus on whether he (or Congress) could actually construct a law that would do what he says he wants to do without it either being struck down in the Courts or constantly bound up in the Courts or it being nothing much more than Swiss Cheese.
One thing I’m fairly sure about is that companies that want to relocate some manufacturing will be less transparent about what they’re doing and be certain to muddy the waters. For some big ticket items like fully assembled cars, the scheme might be workable, but I’m baffled when I try to envision how this would work in practice.
Details, details — that’s for staff to figure out and do; Mr. MAGA’s too busy with the big stuff, the vision thing, doncha know.
And if it all goes to hell, why, that’s just because staff screwed up and they’re fired, and/or the evil Democrats/liberals/media sabotaged it.
On to the next tweet!
Not to mention the problem of products assembled here that contain some foreign components. (cars, for example.)
Doesn’t NAFTA allow for a six month notice of withdrawal? Couldn’t Congress impose a tariff?
Not advocating, just asking.
I would prefer something more sophisticated such as sanctions against the remaining US units or delisting the stock, requiring the board and CEO to register as foreign agents, requiring a disclosure in all advertising such as the list of horrors at the end of every drug ad.
The threat of delisting may be enough to make Wall Street rein in the manufacturing companies. Their recommendations can make or break a company and certainly the company CEO who is usual chosen because of wall street favor.
What mechanism does the federal gov’t use to compel a private stock exchange to de-list a particular firm?
Asking for a friend…
Sounds like something other than capitalism?
Congress could pass a law enabling the SEC?
Do you think it is really a wise thing to simply stop importing goods? Or should we be looking for those products and areas where our relationship is not really bilateral and take some action there?
No, but I’m sick of competing with labor making 30 cents an hour. We need tariffs so that labor costs are equal.
We run at $150Bn trade deficit with the EU each year as well. Apparently we can’t compete with workers who make a lot more than 30 cents an hour either.
They charge VAT tax on our exports while we charge nothing on their exports to us. The trade treaties eliminated tariffs, but allowed VAT tax. If we were going to agree to that, we should have created a VAT tax to countervail.
isn’t VAT fairly regressive though, it would hurt the people we’re supposedly trying to save?
He could start with Finished Goods, which are already a separate category. That would return a lot of small manufacturing, I would think. Look at Walmart.
What exactly will you impose the tax on? Dresses and clothing, for example? Or will that be exempted?
Might bring some textile jobs back to the South.
Whatever he does, if he taxes imports, I am pretty sure other countries will start to do the same and so exports may suffer. But his jawboning could discourage any existing manufacturer’s from leaving. Seeing your stock price tumble would be discouraging.
But what happens if some block of countries, say the EU or Asian retaliate? It could lead to more serious problems.
What exports? Disney movies? How many jobs are there in those?
We export $2. 23 trillion. You would be surprised what comprises it. Check out thebalance.com for details. We import $2.76 trillion. It is all rather substantial.
right manufacturing is fairly strong here, it’s just manufacturing jobs that aren’t – mostly the fault of automation and technology.
Trump’s goal will be some staged event with minimal actual effects that he can trumpet to the rubes. The Carrier business is an example – a couple hundred jobs held in the country temporarily while more than twice as many leave, but it’s all over the news for days. He’ll probably threaten tariffs a lot and actually impose them on one or two goods, which will produce proportionate retaliation from the affected countries, but not make any real difference in outsourcing. We’ve been down this road before, with W’s steel tariffs. Trump would probably grandstand rather than back down, but I think a real trade war will still be averted.
I agree with this. He’ll just focus on some pissant nonsense, claim victory, and make massive quantities of hay out of it. It’s what he’s doing with Carrier, the F-35, and Air Force One. His message is tailor-made for idiots.
Except for the grift.
These types of threats and policies are where grifters profit. It’s the same as regulation, particularly in the tech sector.
Make my kids a partner…or the goods get it.
When he had that meeting with the ‘tech leaders’ two months ago…that is why his sons were at the head of the table to Trumps right. ‘Here are who you need to bring on board to avoid trouble’.
.
His comments to CEOs this morning was quite nuanced in his bullying way. A copy that (paraphrased) fires all its workers to send jobs overseas will see high tariffs on imports. No one fires ALL it workers. There is a difference, as stated above, between goods assembled abroad and manufactured abroad. If we make transmissions and other parts for cars in USA, send to Mexico (by US train companies) to be assembled there, where does that fall? As they used to say “money is fungible” and so is manufacturing these days.
And the jobs that would be created by new plants? Well, high paying technical jobs — the people who will run and service the robots. What 50 y.o. worker in the mid-west who lost his/her job is qualified to do that? Could even begin the process of retraining to do that work.
It’s all a sham.
It might be a failure on a massive scale waiting to happen, but it is not a sham unless Trump doesn’t do what he promises to do with tariffs and what happens at the border. And that takes the collaboration of all of the folks down the chain of command from Trump.
Well, next time you go to the grocery store see if you can figure out where the grapes come from. Almost all the corporate toothpaste is made in asia or mexico. We might just put it in a tube and the box. I don’t think we make shampoo any more. Well, most of the stuff on health and beauty isles are just packaged here. To ID will be real easy…proof of manufacture here. However, I think all the talk of tariff is a smoke screen for the VAT tax. For many who manufacture in Asia it will be cheaper to pay the tax and pass it on to the consumer. This has nothing to do with job creation and more about getting rid of income taxes. Can you imagine a 35% tax on oil coming from Mexico/Venezuela/Canada and how that would normalize $4 gal gasoline?
And how much it would do for energy independence? A VAT tax would make us equal to Europe.
I’m not a trade expert but what you said about NAFTA is true and one of the reasons NAFTA was created in the first place. That said, I can’t imagine any company with content for one or more products being produced in more than one location anywhere even in the same town not having a detailed inventory of which items are being made in which location at which price, etc. The real question is whether the gummint is allowed to track that information for tariff-setting purposes. They may already be doing so for other regulatory purposes; not sure. But if Trump tried to do so, Congress would really unload on him.
Although technically against the law, the US could pass legislation to do that or possibly through executive action alone, using technicalities in existing law to justify such protectionist action.
Affected counterparties could then sue in various arbitration arenas, but the decisions could take many years to resolve. This has happened before in the cotton and sugar industries which have allowed protections to exist or be legislated during various times in recent history, even though in apparently direct violation of NAFTA, WTO, or other treaty obligations. Similarly, prohibitions on Mexican truck driving existed for years although in direct violation of NAFTA.
Law suits takes a long to resolve in trade arbitration forums, and Trump can take advantage of that.
How will Democrats/liberals deal with this:
AFLCIO – TPP Withdrawal Good First Step Toward Building Trade Policies that Benefit Working People
Recall that Trump first ran for the presidential nomination in 2000 on the Reform Party (Perot). Dropped out quickly but retained some of the lingo and form of that third party movement.
As much as I can tell, Democrats are all denying that any single one of them ever disbelieved in the healing and sanctifying power of the TPP to solve problems, and that evil Donny Trump is gonna ruin the economy by withdrawing.
The trade pact sucks 12 ways from yesterday, and it’s a good thing that Trump withdrew. I hope he finds a way to reduce or eliminate NAFTA.
Your first sentence is incorrect. If it were true, Clinton would never have deviated from her pro-TTP position during the campaign. Thus, a majority of Democratic voters opposed it. A smaller group were indifferent. And the smallest group supported it but understood that Clinton made a political calculation for the campaign.
One from that smallest group was quick to remove the mask — Think Progress (a pup to John Podesta’s CAP) – Trump just took his first big step away from the international community.
They’re going to be flailing on this.
That is basically the definition of elite blindness right there. Sigh.
Well, I guess saying that Hillary would have done the same (an unknown that at least fitted with her stated policy inclination going into the general election) would only have given Trump more currency without adding any for her. OTOH, the ThinkProgress opinion piece further cements the decision of many not to vote for her.
As Hillary’s campaign is as dead as Sanders, bizarre that they couldn’t follow Sanders’ lead by welcoming the decision.
Bernie’s response was terrible, too. Neither was good. He could have talked only about the issues at hand that “I’m glad that TPP is gone” and left it there. We all know Trump is not going to pursue fair trade deals. Trump’s world view is all of the bad of neoliberalism without any of the good. By saying “I can work with Trump on trade”, he is validating Trump’s nationalist worldview rather than an internationalist one. There is nothing to discuss on trade with someone like Trump.
Okay. “Leave it there” is a good suggestion for Democrats. Chelsea Clinton made a good statement about Barron Trump — and she better than anyone has standing to make such a comment. Then such mucked it up by not leaving it there.
May I suggest another advent of it? “Leave it there” about discussing the topic at hand rather than trying to figure out a way to take a dig at the Clintons.
Now we can’t cite relevant on-point examples? I truly was thinking in terms of how Democrats/liberals are using this moment less effectively than they could. I complimented Chelsea on her statement wrt to Barron Trump and included there isn’t anyone better to make such a statement (Malia and Sasha are currently too young). And I limited myself to saying it would have been better if she left it there. If I wanted to take a dig Clinton, I assure you I wouldn’t have stopped there.
The nationalist world view on trade is not terrible to me.
wrt that last sentence, maybe not. Politico
New and younger Clitonites sound more like a death wish than a way forward to me.
Can progress be made without destroying the Clintonites? I have no idea. I just wish theyd go away.
My sense of the zeitgeist on the Trump and GOP side of the government is to:
1, Do something that creates chaos for Democratic interests to go scrambling to defend.
I’m reminded here of how W ended the anti-ballistic-missile (ABM) treaty in order to start moving bases and so-called “Star Wars” installations into Eastern Europe. Funny how that action got us to Trump.
First, flat out abrogate NAFTA and the World Trade Organization while conserving bilateral treaties. Essentially unsign the treaty stating that six months (or whatever the notice period is) the US is gone.
Second, draft legislation that imposes the promised tariffs without yet designating the products on which the tariffs fall. Open up the play to pay window for members of Congress and for the GOP itself. And of course, Trump’s re-election. Sort out the chaos politically. Put everything on the line, tariffs, non-tariff restrictions of trade, regulations, patents, trademarks, copyright, banking regulations, transfers of funds, shipping, shipbuilding, federal contracts–anything that has financial value and crosses the US border. Then let the bazaar begin.
Third, welcome foreign countries to participate in the bazaar in several different ways: pay to play, preferable contracts with US companies (Hi, Rex Tillerson); US tax laws; parity of regulated costs with those of the US; better trade terms for the US; monetary policies. Show preferences for stiffing Silicon Valley, the Democratic side of Wall Street, the Democratic side of Hollywood, the major job exporters that Trump folks associate with their misery.
Fourth, slam through the legislation in Congress as the individual deals are made.
Fifth, move faster than the courts can react, hoping to create a massive fait accompli before the courts can decide.
In short, create realities on the ground that only an autocrat can. Have the presence of those realities enhance your domestic and international power. Use the complicit Republicans but hide their role in the bazaar. Strip out large sections of existing law that get in the way and replace them with new starter laws that get padded through reaction to judicial precedents.
The pleaders in the bazaar sort out the product content regulations which are authorized in outline by Congress and rolled out into regulations, tariff schedules, product definitions, and the massive paperwork of tariff administration. The delay in having the actual rules will provide time for producers to rejigger their supply chains and production locations to position themselves to compete in Trump’s American economy just as they tried however successfully or unsuccessfully to cope with the collapse of the Soviet Union and the capitalist transformation of China. All Trump and Congress have to do is understand how the changes benefit Republican constituencies and restructure Democratic constituencies.
C’mon, this is not a technocratic question, it’s a question of how someone thinking really yuge could move the system without asking “May I” or asking for forgiveness after overstepping. It also benefits by being relatively simple to report and understand.
The fact that it is a textbook definition of corruption matters not one whit to whether the GOP can now pull it off. Close to half of the voting electorate is willing to tolerate pretty massive corruption if they can see results.
To your question:
Throwing the situation into a huge Congressional bazaar will have the effect of muddying the waters pretty well. Picking through those twists and turns is where media can enable creative opposition to things that will turn out wildly bad in their particulars. It will help the opposition coalition frame a diverse set of alternatives with some degree of focus.
Helping take down the air of inevitability of results, generally noted in the phrase “There is no alternative.” or TINA is the major thing that independent or explicitly oppositional media can do at the moment.
Abrogation of treaties sets the time pressure on getting things done. That pressure is not on Trump; it is on everyone else. Creating an atmosphere like a gold rush or the Oklahoma land rush forces a rapid sorting out by many people of practical options no matter what emerges.
I have to read this at least twice more, but wow.
Booman, would you consider (with TD’s permission) putting this on the front page?
Trump promised to do this. He’s doing it.
With these trade bills, the effect, IMHO, is to strike uncertainty in the planning for corporations. This MAY have an effect to get them to set up more factories and jobs in country:
Net result: A decision to do stuff in this country.
We’ll see.
I guess someone would have to explain to me how going back to the economic policies of the 1970s wouldn’t lead to the economy of the 1970s, which really kind of sucked in terms of the adjustments that were going on. Would it be that we would have these new factories but without unions?
This is much, much different than going back to the economic policies of the 1970s, or as it is better known, pre-Milton Friedman and Arthur Laffer.
If you tighten the so-called labor market for the new factories and disintermediate the long supply chains, there is more reason to decentralize within urban regions to keep transportation costs low and to tap labor without boomtown wages. When there the economy is close to the full employment level or even beginning to strip it as it did in World War II, labor has leverage. And organizing in a tight-labor environment exerts a cost for employers who fire union-favoring folks. Then union organizers can bring back unions in plants and facilities that still thing the bosses are unassailable and not subject to checks on their power. Moreover, the rising wages create the consumer market that has strong demand.
IOW, unions would have to be built from the shop floor up. Fortunately, there are still some of the industrial unions around who have the infrastructure to do this unless Congress explicitly undercuts it.
The 1970s suffered from a failed effort at stopping inflation from the Vietnam War through wage and price controls that were laxer on the price controls than they were on the wage controls. Then OPEC used oil as a weapon against Israel’s major backer in 1973 and 1979. And throughout, Saudi Arabia was so flush with US dollars that they had to dump them somewhere; they were buying up US farm real estate and creating corporate farms in areas that had been heavily family farms. As farmers left, small towns suffered a loss that they tried to balance by bringing in Walmart.
Wake me up when we repeal Taft-Hartley and there’s an actual, functioning NLRB…
When working people remember what frames employer-employee relationships is law and government’s enforcement of employer privileges.
All of my entire analysis was conditional on full employment. Wake me when the business community allows that to happen without tanking the economy after panicky articles about labor shortages.
Trump and his band of clowns can’t do anything unless they completely withdraw from NAFTA AND the WTO, and that would completely devastate American trade in the near term and spark an all out trade war. Even if he ‘withdraws from NAFTA’, the GATT/WTO is still in effect and therefore will give Canada and Mexico power to challenge any tariffs imposed.
I’m all for avoiding a race to the bottom, but that involves moving us to an economy that looks more like Germany and will involve careful unpeeling of the free trade onion to get us back to an economy that doesn’t just favor the elites.
The Trump wrecking crew will, as mentioned above, either be all about theatrics, or will for real, out of sheer stupidity and recklessness, basically destroy our economy in one year. Good times!
Two hundred years ago, it was understood, without question, that national borders are things that neither persons, nor goods, nor money, nor information should routinely cross. This does not mean that no such crossings could take place, but that each one required scrutiny, because each one raised, in principle, issues of national policy.
What we have discovered, since that understanding eroded, is that it was a correct and necessary understanding. The necessity for it is a shame, but it is no good pretending that it is not necessary.
But its erosion was almost as unwitting as it was gradual. What, for example, did Marconi do? (Voice from the back row: “He invented radio!”) No: what he really did was make it impossible to control national borders. If information can cross, it does not matter what else can cross. “Securing the border” would have to begin with the decommissioning of all radio-based technology.
So we have something that is both necessary and infeasible. This is not a good situation. At any earlier time, one might have simply said that it would resolve itself in the direction of abandoning the ideal of controlling borders. Today we are in the era of make-believe; there is nothing to stop the propaganda from asserting that the border must be closed, and that it has been closed, when in fact every effort in that direction is doomed to complete and immediate failure.
So what we see in 200 years is a practical conflict between political interests in absolute control and economic interests in expanding trade without increased migration.
What we currently see are economic and political migrants seeking opportunity and asylum, and nations retreating to mono-ethnic cultures or mono-lingual cultures.
Dissolution of empires instead of federation of nations and hopes for a global polity.
Which way lies the addressing of the moral issues of the 20th midcentury — war, poverty, bigotry?
Do you seriously believe this drivel? “nations retreating to mono-ethnic cultures” What absolute rot. We naturalize 800,000 persons a year. You should educate yourself, and stop saying such ridiculous things.
Information is not people. People cross borders either legally or illegally. We can and should and must continue to maintain our physical borders. Information cannot be controlled, but persons certainly can.
Obama did not want to control persons, and did not. He did huge damage to American workers, and his damage continued until the end of his administration. Hopefully Trump will be changing the orientation of ICE to actually do their job again, instead of babysitting.
Maybe you should read up. Obama deported a record number of people.
That’s one of those fake news items. Obama changed the definition of deportation. He defined “border refusal” as “deportation”, which was new. EVERY SINGLE YEAR, he deported fewer people from the country.
“The number of undocumented immigrants deported by President Obama is falling and could hit a 10-year low in 2016 just as the issue heats up in this year’s presidential race.
Immigrations and Customs Enforcement (ICE) figures from June suggest 230,000 people could be removed or returned from the country by the end of the fiscal year next month, slightly fewer than the 235,413 deported in 2015. That was the lowest number since 2006.
While the total does not include people caught attempting to illegally cross borders, it still highlights a change in enforcement patterns under Obama.”
http://thehill.com/latino/293861-deportations-under-obama-could-hit-10-year-low
This has been known for years and years. Open-borders ignorance denies this truth – Obama was the best friend the ill-im ever had. He was terrible for US workers. He helped millions of foreign workers get jobs here, and did SHIT for American workers.
No. Did you read the link you posted? Did you do the math? Did you see where those numbers add up to 2.5 million? Also too, bail out the auto industry and the ACA are two things Obama did for American workers.
Obama did more for foreign workers than he ever did for American workers. Did you know that a lot of those jobs are capped at 29 hr/week? That’s the Obamacare effect.
He extended the time that OPT workers can work after they finish their college by 29 months – 2 1/2 years. The employers get FUCKING TAX BREAKS to hire these fucking scabs. That means that these OPT workers are hired AS DIRECT STAND-INS for US kids. US kids DO NOT GET HIRED because Obama made it cheaper, easier, and better to hire FUCKING FOREIGN SCABS.
Thanks, Obama.
Except save the American auto industry. Put in overtime rules that stopped allowing companies to simply work people 80 hours a week by declaring them exempt.
Also net illegal immigration was down under President Obama.
http://www.pewhispanic.org/2015/11/19/more-mexicans-leaving-than-coming-to-the-u-s/
As for Trump, or really any politician, if they were truly serious about dealing with illegal immigration they would make e-verify the law of the land because the most effective way to reduce illegal immigration is cut off demand.
Another key lever in reducing illegal immigration from Mexico is revisiting our policy on corn subsidies and/or in the NAFTA renegotiation concede to not flooding the Mexico market with our cheap corn. Want to bet that won’t happen given it is likely to tick off many a rural voter? You see that is the dirty little secret about trade agreements. For every manufacturing worker who hates them, there is a farmer who loves them.
That said I do agree that the Democrats need to revisit their stance on several visa program, in particular the H1-B.
Yeah, NAFTA was a piece of gilded shit which damaged the rural economy in Mexico and other CA countries, producing a tidal wave of desperate hungry people. I really do get that. It’s something which needs fixing. We should not be destabilizing other economies.
Very true. However, I wonder if you know the true extent of the work visa issue? J-1: 500,000/year. L-1: Uncapped. B-1: Uncapped. F-1/OPT: uncapped. In addition, corporations get tax breaks TAX FUCKING BReAKS to hire foreign workers under these visas.
The root problem though is our insane policy of corn subsidies. I am not kidding when I say I think they are of the devil. They made issues with NAFTA exponentially worse, they contribute to our obesity epidemic, and they keep us on corn based ethanol which is obscenely inefficient.
If we used those subsidies for labor intensive agriculture instead we could afford to pay people workers in those industries higher wages thus making them more attractive to american workers. That means crops wouldn’t rot on the ground (as they did in Alabama) if guest workers weren’t clamped down on.
Unfortunately as long as Iowa is first in the nation almost every politician of both parties will continue to support corn subsidies. The one and only time I ever agreed with Ted Cruz was when he stood up in Iowa and said we shouldn’t be subsidizing corn.
What is absolutely shocking about Obama’s hispandering and condoning of illegal criminals is that he cut the number of CONVICTED CRIMINALS he deported. In 2012, he deported more than 200,000. In 2016, he deported less than 125,000. This is stunning.
He is the best friend that the illegal criminal ever had.
Something smells like shit around here. Oh, just noticed – marduk has dropped a couple turds. What an asshole.
Actually that is not true at all, even though I see what your point is and generally agree.
200 years ago, borders were essentially impossible to enforce and people crossed them all the time, with little attempts to enforce them at all. The idea of a nation state itself was only about century and half old then and still quite controversial and not really demarked by solid physical borders yet. People, goods, information, and relationships carried on across artifical borders, themselves frequently changing, with little attempts by political authorities to impede them.
Passports themselves, first invented in Europe in the 19th century for diplomats and official travel,only became a commonly required item for international travel in the 20th century, for example.
Even Napoleon Bonaparte famously scoffed, when presented with a plan for deployment of forces to defend against invasion, that the geographically disbursed deployment he was shown was “as useless as the border patrol is.”