USA Trade war.

[ZenOps]

https://www.bloomberg.com/view/artic...mp-s-trade-war

I will defend Trump. There is some precedent to raising prices so that they can have more money flow in dollars, which will increase taxation. If the ultimate goal is to raise prices so that they do not have to print more money - then its a worthwhile risk.

If you have a free market pizza that only costs $15, you can only tax proportionately on that $15. But if you restrict the flow of cheese and bread, you can punch up that pizza to $150 - and tax accordingly.

Now before anyone goes OMG, take this from the perspective that the USA needs a diet because it is the fattest country in the world.

[Buster]

There are better ways to achieve inflation, if thats your goal.

[ZenOps]

Its very effective if you want global inflation. Most other policies would only be effective within country of rule.

Typically its been the role of the big banks and the Federal Reserve to try and manage global inflation, not the USA.

Since day 1, Trump has been saying that China has been producing too much stuff for too cheap (too inexpensive).

[Xtrema]

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Since day 1, Trump has been saying that China has been producing too much stuff for too cheap (too inexpensive).

He's right and he's wrong, just look at cell phone price trend of the last 5 years.

[95EagleAWD]

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https://www.bloomberg.com/view/artic...mp-s-trade-war

I will defend Trump. There is some precedent to raising prices so that they can have more money flow in dollars, which will increase taxation. If the ultimate goal is to raise prices so that they do not have to print more money - then its a worthwhile risk.

If you have a free market pizza that only costs $15, you can only tax proportionately on that $15. But if you restrict the flow of cheese and bread, you can punch up that pizza to $150 - and tax accordingly.

Now before anyone goes OMG, take this from the perspective that the USA needs a diet because it is the fattest country in the world.

Nobody will buy pizza anymore for $150. People will be out of work because of $150 pizza. For every 1% increase in unemployment in the USA, 1500 more Americans die.

[ExtraSlow]

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For every 1% increase in unemployment in the USA, 1500 more Americans die.

but 1500 Americans get richer, so overall its a benefit in terms of republican votes.

[ZenOps]

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Nobody will buy pizza anymore for $150. People will be out of work because of $150 pizza. For every 1% increase in unemployment in the USA, 1500 more Americans die.

Maybe. But lets say its avocadoes from Mexico instead of pizza, you can 10x the price of avocadoes and people will just eat all-American hot dogs for 2x the price. People have to eat afterall. Steel and aluminum is arguably even more a staple of civilization than food is.

Should staples be expensively priced or cheaply priced? That it is important should make it more expensive (ask any grain farmer what they think of $100 per ton wheat prices) Although it does beg the question: Is the threat of starvation a good motivation tactic? (expensive pizza, expensive aluminum, expensive steel) I don't think anyone is really throwing away *that* many aluminum pop cans, or day old uneaten pizzas.

It may be the correct move from the standpoint that it may make things like farming and steelworking more appealing as a career in the USA - Instead of having people moving to the cities, playing Fortnite in their parents basement, and making $300,000 a week.

Put americans on an all US grown oatmeal diet for four years - the ones that survive get to survive. Noone is going to like it, but America is sick - she needs that awful tasting medicine and maybe an amputation, or she might not pull through. I was really hoping to be 80+ years before a "Trump" to not have to live through the pain, but oh well...

[ZenOps]

BTW: I'm pretty sure if you ask Trump, China has been the ones artificially creating deflation for decades. And that his current actions would simply be to bring prices where they "should" be.

If China had its way, they would probably be pushing for $50 per ton rice or wheat (soybeans really, but that's another story)

Trump comes from a background where you have to make enough in rent, to payback $915 million construction debts. Which makes it physically impossible to payback if you are renting to said farmer only making a few dollars per ton who can only afford to rent a hotel or casino vacation for one day of the year.

And that's the eternal question. Is my lobster served in a trump casino little better than prison food? What are things actually worth in nominalized US dollars? Did people manage to break free of the matrix without the rich people knowing about it?

In the long run, if this trend continues - This may actually end up being in Canadas favour. Generalized inflation will undoubtedly show in oil at some point, if not immediately. Losing out 25% in two key metals, might be offset fairly quickly by a 25+% jump in oil.

[tonytiger55]

There was a great talk on the radio last night.
The guy was explaining nobody wins on the trade war between Canada and USA. The term 'steel' is too simplified. The reasoning is the there are many types of it and uses and one country does not produce all. The USA and Canada is a text book example of how the trade benefits both countries.

So in your case Zen ops... Yes there is cheese, but there are different types of cheeses for different types of markets. One would not put Blue Stilton on a pizza for example. Or if you just have mozza cheese. What about all the other people who eat welsh cheddar and crackers..? What about that segment of the market..?

[ZenOps]

I don't see these types of punitive tariffs in terms of cheese so much as nukes:

Trump would probably be the sort of guy who would like to build one nuke at 100x destructive force than 100 nukes at 1x destructive force. Quality over quantity, and then charge 1000x for the singular nuke as a superior nuke.

China and even Canada has been more along the lines of "be a river to your people, abundance is wealth" Abundance or quality, you can't have both - unless you fire all the humans and let the machine take over (which is the best idea yet)

Personally since I have a computing background - abundance (more gigahertz, more terabytes) is what you want, quality you can always work on later. If you can make it cheaper, make it cheaper. 52x CD-ROM drive with two week warranty? Yes, that *is* progress, quality last. The USA consumer has voted, and they like Chinese products.

[HiTempguy1]

Trump is finally doing something about what has been a problem for a long time

http://business.financialpost.com/op...-fighting-back

People in general are starting to get very tired of the doublespeek politicians have been getting away with for the past 30 odd years.

"Sunny ways". "Hope". But their all just window dressing. A system built on rules and laws doesn't actually work when you just turn a blind eye to those who willingly and continuosly break them.

The USA has the biggest economy, they aren't doing anything crazy besides forcing others to abide by the rules. The WTO is a joke, why would the US care? The only reason the WTO has power is because the US says it does.

[ExtraSlow]

I'm no expert on international trade, but I do agree that Canada is incredibly protectionist and closed to foreign trade. Hell, we are quite closed to inter-provincial trade in many areas.

[sabad66]

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I'm no expert on international trade, but I do agree that Canada is incredibly protectionist and closed to foreign trade. Hell, we are quite closed to inter-provincial trade in many areas.

how so? got any examples of foreign trade protectionism? (I agree with the inter-provincial statement somewhat)

[ExtraSlow]

Dairy is a quick example. Total volume of cheese allowed to be brought in from the EU is controlled.

[tonytiger55]

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how so? got any examples of foreign trade protectionism? (I agree with the inter-provincial statement somewhat)

Cheese!! Motherfuckers... why is it so damm expensive here! In the UK its so dam cheap! So much good cheese!! Im talking about the good shit. Its sooo expensive here.
I spoke to a old civil servant that worked in the foreign trade sector one time. There is a cheese cartel here.

[suntan]

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how so? got any examples of foreign trade protectionism? (I agree with the inter-provincial statement somewhat)

There's a tariff of around 17% for clothing.

[HiTempguy1]

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how so? got any examples of foreign trade protectionism? (I agree with the inter-provincial statement somewhat)

Uh, just look at duty rates. Anything with a duty is trade protectionism, and anything over 10% is extreme protectionism.

How about the Quebec syrup cartel? I don't think you are allowed to import syrup from the US into Canada.

Only 1500 pages of tariffs. Have fun.

http://www.cbsa-asfc.gc.ca/trade-com...2016-1-eng.pdf

[sabad66]

interesting... i had heard of the dairy thing but had no idea how big the list was outside of that.

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There's a tariff of around 17% for clothing.

now it makes sense why i had to pay UPS an extra $45 on a $120 pair of shoes i ordered from the UK. fuckers.

[rage2]

The Canadian diary cartel pisses me off. I never liked cheese much, overpriced crap. Went to Europe, so much more selection with shit that tastes 100x better at 1/4 of the price. Most people just don't know any better I guess.

[HiTempguy1]

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The Canadian diary cartel pisses me off. I never liked cheese much, overpriced crap. Went to Europe, so much more selection with shit that tastes 100x better at 1/4 of the price. Most people just don't know any better I guess.

Even just going down to the USA. Tillamook cheese is to die for, pick up like 10 bricks whenever I am in Washington or Oregon. Marble, pepperjack, it just tastes so much better. And lasts a long time, had a brick in the fridge (yes, fridge, not freezer) unopened for 10 months and it was fine once opened.