Trump caves in to EU on trade

[OftenWrong]

It is clearly a victory for both the US and the EU, since the proposed elimination of tariffs benefits both sides. It is the outcome Donald Trump sought to achieve, and Jean-Claude Juncker from the EU is also very pleased. Not just a victory for one "side". Trade deals don't work that way.

Your opening post gives motivations that are too simple. There is a lot more going on here than the elimination of tariffs.

Quote

In a joint statement in the Rose Garden, Trump and Juncker also announced that the two trading partners will work to eliminate tariffs on all non-auto industrial goods, increase cooperation on energy purchases and work together to reform the World Trade Organization.

 

[Wilber]

On 7/30/2018 at 8:32 PM, OftenWrong said:

It is clearly a victory for both the US and the EU, since the proposed elimination of tariffs benefits both sides. It is the outcome Donald Trump sought to achieve, and Jean-Claude Juncker from the EU is also very pleased. Not just a victory for one "side". Trade deals don't work that way.

Your opening post gives motivations that are too simple. There is a lot more going on here than the elimination of tariffs.

 

It's a nothing burger. They agreed to the status quo and to talk about stuff. Juncker can negotiate but he can't ratify, the member countries have to do that and Macron said right away that France would continue to support its agriculture and he is just the first. Some things will change but don't have high expectations. The EU had already started buying soy from the US because it is now the cheapest available due to Chinese demand driving up prices elsewhere. They were also looking into LNG imports to offset their Russian dependence. Those were business decisions not political.

European automakers would love to have no tariffs (so would Asia) but it ain't going to happen and the US is the reason why. US manufacturers have basically abandoned cars and gone all in on trucks and SUV's. They have enjoyed a 25% tariff on imported light trucks since 1963 and getting rid of it would be a big win for Europe and a kick in the nuts to the US industry. Not going to happen.

How to sink the US auto industry

Trump's shtick requires everything to be a win, even if it is a turd. This makes him easy to play by the likes of Kim, Xi and Putin.  As Juncker said to Trump, "we can also do stupid".

[paxamericana]

8 hours ago, Wilber said:

It's a nothing burger. They agreed to the status quo and to talk about stuff. Juncker can negotiate but he can't ratify, the member countries have to do that and Macron said right away that France would continue to support its agriculture and he is just the first. Some things will change but don't have high expectations. The EU had already started buying soy from the US because it is now the cheapest available due to Chinese demand driving up prices elsewhere. They were also looking into LNG imports to offset their Russian dependence. Those were business decisions not political.

European automakers would love to have no tariffs (so would Asia) but it ain't going to happen and the US is the reason why. US manufacturers have basically abandoned cars and gone all in on trucks and SUV's. They have enjoyed a 25% tariff on imported light trucks since 1963 and getting rid of it would be a big win for Europe and a kick in the nuts to the US industry. Not going to happen.

How to sink the US auto industry

Trump's shtick requires everything to be a win, even if it is a turd. This makes him easy to play by the likes of Kim, Xi and Putin.  As Juncker said to Trump, "we can also do stupid".

Actually I don't think most countries want to make pickup truck for us. Toyota makes them here and they are popular. 

[Wilber]

26 minutes ago, paxamericana said:

Actually I don't think most countries want to make pickup truck for us. Toyota makes them here and they are popular. 

I think you are wrong and I don't believe the US manufacturers want to find out. Your government wanting to trade SK with tariff immunity on steel in return for a 20 year extension to the tariff is proof enough that I am right. If not, there should be no difficulty with dropping  the pickup tariff in return for dropping all vehicle tariffs with other countries. After all, Americans don't buy cars anymore so what's the problem.

Edited August 3, 2018 by Wilber

[paxamericana]

45 minutes ago, Wilber said:

I think you are wrong and I don't believe the US manufacturers want to find out. Your government wanting to trade SK with tariff immunity on steel in return for a 20 year extension to the tariff is proof enough that I am right. If not, there should be no difficulty with dropping  the pickup tariff in return for dropping all vehicle tariffs with other countries. After all, Americans don't buy cars anymore so what's the problem.

Uh they can easily bypass tariff if they built plants here like what toyota did... but no... also bmw and mercedes have plants here but they are not focused on pickup trucks. Again, they're just not interested in building them because their main client in Europe don't really use pickup trucks. I'd love to own a bmw pickup but here's the thing pickup are not really true luxury vehicle they're mainly utility vehicle. 

[Wilber]

Then there should be no problem with getting rid of the tariff. Should there?

[Wilber]

44 minutes ago, paxamericana said:

Uh they can easily bypass tariff if they built plants here like what toyota did... but no... also bmw and mercedes have plants here but they are not focused on pickup trucks. Again, they're just not interested in building them because their main client in Europe don't really use pickup trucks. I'd love to own a bmw pickup but here's the thing pickup are not really true luxury vehicle they're mainly utility vehicle. 

Because of the tariffs, BMW is moving its export X3 production to China and South Africa. Until now, all X series were  built in the US. Tesla also building a plant in China.

[bush_cheney2004]

2 minutes ago, Wilber said:

Because of the tariffs, BMW is moving its export X3 production to China and South Africa. Until now, all X series were  built in the US. Tesla also building a plant in China.

 

Good....perhaps other auto manufacturers will pull out of Canada for good because of tariffs.   Canada exports 85% of auto production to the USA.

Tesla plant in China was planned long before Trump tariffs...nice try.

[Wilber]

China now biggest car market in the world. US number 3 after China and Europe. Things change.

[bush_cheney2004]

5 minutes ago, Wilber said:

China now biggest car market in the world. US number 3 after China and Europe. Things change.

 

Yes they do...GM now builds more autos for China than North America.   No reason to build U.S. product in Canada, which is the highest cost producer.

Canada has no domestically owned major auto make.

Edited August 3, 2018 by bush_cheney2004

[Wilber]

VW builds double what GM does in China. Honda also builds more.

[Argus]

On ‎7‎/‎29‎/‎2018 at 10:12 PM, Centerpiece said:

Surely you understand that the the Germans have to save face with their reporting.

Can you tell us exactly what the EU agreed to do? 

On ‎7‎/‎29‎/‎2018 at 10:12 PM, Centerpiece said:

The stock market and American dollar will tell you how well Trump is doing - or not doing. So far, he's done pretty darn good. 

Can you point to any economic policy Trump has put in place which has helped the economy?

[Argus]

On ‎7‎/‎30‎/‎2018 at 8:08 AM, Centerpiece said:

Trump doesn't fit into the "generally" category. Instead of just looking for a way to disparage Trump - maybe you should reflect on the fact that the removal of tariffs will ultimately be a "win" for both sides -

Tariffs are not going to be removed - on either side.

[Argus]

On ‎7‎/‎30‎/‎2018 at 12:22 PM, paxamericana said:

. Trump is taking a first step in the right direction and it is bearing fruit. Look at the eu and mexico. Only one left is silly canada and china.  Secondly, tariff is now a executive branch power under national security. The supreme court can knock out any congressional overstep. 

What concessions have either the EU or Mexico given to the US? 

You talk about congressional overstep without blushing when this is clearly an overstepping of his authority by Trump, who is simply lying about these being a national security issue?

[OftenWrong]

3 minutes ago, Argus said:

Can you point to any economic policy Trump has put in place which has helped the economy?

How about deregulation?

[Argus]

Just now, OftenWrong said:

How about deregulation?

You mean like allowing more pollution and safety violations? Given the economy of the US leans more and more to high tech firms like Apple, Google, Facebook, Amazon, Netflix, Microsoft, etc. I don't see how that really helps a ton. Allowing the banking industry to do whatever they want, much as Bush did, could certainly help drive profits there - until the banks touch off the next huge financial crisis through their greedy and unsupervised actions, I suppose. But I don't think that will ultimately profit the US. They haven't even begun to pay off the costs of the lsat one.

[OftenWrong]

25 minutes ago, Argus said:

You mean like allowing more pollution and safety violations?

Yeppers.

I'm not judging whether it's right, and technically they are no longer violations if the regulations are removed. But it makes sense to do this if a nation wants to be competitive against countries that have very few pollution and safety regulations in place. In some cases, these self-imposed regs (many pushed through under Obama, or by liberals generally) are excessive, as though trying to make up for other country's lack of commitment. It gets to the point that domestic production has no chance of competing on the world market. Sometimes bureaucrats impose these regulations carte blanche, without any understanding.

25 minutes ago, Argus said:

Given the economy of the US leans more and more to high tech firms like Apple, Google, Facebook, Amazon, Netflix, Microsoft, etc. I don't see how that really helps a ton.

In some cases, other industries died off due to the fact that third world countries can exploit their workers and environment, without restriction. We know that's happened. Perhaps Trump wants to roll back the clock, get off the Chinese dope. This is something long called for, as a warning to guard against the exploitation. But globalization makes it impossible to resist, without some enforcement. Tariffs come to mind... But at this point, late in the game, change can only come about through a transitional period of pain and suffering. The fact that those countries could own the western economy finally becomes a matter of national security.

[Centerpiece]

48 minutes ago, Argus said:

Can you tell us exactly what the EU agreed to do? 

Can you point to any economic policy Trump has put in place which has helped the economy?

I'm not an economist - I just know that business reacts to policy (or non-policy). As I said, I'll watch the stock market. So far, my US based RRSP is doing pretty good.

[Centerpiece]

50 minutes ago, Argus said:

Tariffs are not going to be removed - on either side.

Don't forget that you said that.........

[bush_cheney2004]

2 minutes ago, Centerpiece said:

I'm not an economist - I just know that business reacts to policy (or non-policy). As I said, I'll watch the stock market. So far, my US based RRSP is doing pretty good.

 

So are my Roth IRAs and 401K plans.  

Canada's CPP investment board has far more holdings in American stocks and bonds than in any other nation in the world, including Canada.

[Wilber]

8 minutes ago, Centerpiece said:

Don't forget that you said that.........

Tariffs are much more difficult to get rid of than impose. Industries become dependent on them. The current light truck tariff was imposed in retaliation to German restriction on American chickens back in 1963. Who knows from German chickens but the truck tariff is still there giving US manufacturers a 25% automatic price advantage over all imported trucks, not just German trucks.

People say that if we impose these tariffs, industry will come back. Maybe it will but if they weren’t competitive before the tariffs, what makes them think they will be competitive if they are removed?

[OftenWrong]

15 minutes ago, Wilber said:

People say that if we impose these tariffs, industry will come back. Maybe it will but if they weren’t competitive before the tariffs, what makes them think they will be competitive if they are removed?

Presumably the idea is to "buy American".

[Wilber]

44 minutes ago, OftenWrong said:

Presumably the idea is to "buy American".

Sure, but it will be more expensive and your industry will be less competitive in world markets.

[OftenWrong]

8 minutes ago, Wilber said:

Sure, but it will be more expensive and your industry will be less competitive in world markets.

Of course it will be. Short term pain, long term gain? How long? Who knows. But the alternative to keep doing the same thing you are doing now, and hoping for a different, better result is not going to work.

Question is why now, why after so many years of people warning that doing trade with certain countries are bad trade deals that lead to eventual poverty of your nation, why did they wait until now to take action when it's so late in the game? Perhaps it is a ruse, just as the tariffs are a ruse. Trump does not seem to want tariffs, because of his enthusiasm after the meeting with Junckers. Possibly he sees them as a means to an end. The desired end result is and always has been, US dominance. There are issues at play here that go far deeper than just simple, one-dimensional analysis. 

I for one would prefer US because it's better than Chinese dominance... Russian dominance... Indian... Pakistani... Malaysian... Mexican... even European. Look at the EU, run by an elite group with no obligation to look after any one group in particular. Instead, they dictate their terms for others to follow. Most people who live under it can't stand it. People want control over their destiny, through self-determination. Hence the reason Americans elected Donald Trump.

[Wilber]

Trump’s turning inward is not the road to dominance.