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Economics - Tariffs Question - Trump - Why? (2 Viewers)

Joe Bryant

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Please let's do our best to keep the responses non trolling here. Let's focus on understanding and less on snark. And yes, I know it's Political Forum on a Friday... :unsure:  

But work with me.

Is it fair to say:

  • Trump is a guy who puts "winning" on a pedestal?
  • For better or for worse, Trump will do almost anything to "win" and gain approval from his supporters?
  • "Winning" for Trump is seen as a Strong Economy.
  • Trump is a "scoreboard" kind of guy.
  • The Stock Market is seen as one of Trump's scoreboards for the economy.
So bottom line, Trump is highly incentivized for the stock market to do well. Is that fair to say?

I'm no economist, but it seems like most people agree Tariffs are bad for the stock market. This isn't a republican or democratic point. This is a practical point. "Stocks dip on fear of tariffs" seems common.

With that said, why is Trump so strongly in favor of tariffs?

 
I think it’s the idea of strong arming China and he thinks he can do it and force them to deal.  He can keep telling everyone that China is paying the treasury directly and enough people will believe him.  Stock market up enough during his presidency and the last jobs report was good so he can keep claiming those are great for him as well (ignoring the previous job report that was awful).

The truth is secondary to the narrative. 

 
Please let's do our best to keep the responses non trolling here. Let's focus on understanding and less on snark. And yes, I know it's Political Forum on a Friday... :unsure:  

But work with me.

Is it fair to say:

  • Trump is a guy who puts "winning" on a pedestal?
  • For better or for worse, Trump will do almost anything to "win" and gain approval from his supporters?
  • "Winning" for Trump is seen as a Strong Economy.
  • Trump is a "scoreboard" kind of guy.
  • The Stock Market is seen as one of Trump's scoreboards for the economy.
So bottom line, Trump is highly incentivized for the stock market to do well. Is that fair to say?

I'm no economist, but it seems like most people agree Tariffs are bad for the stock market. This isn't a republican or democratic point. This is a practical point. "Stocks dip on fear of tariffs" seems common.

With that said, why is Trump so strongly in favor of tariffs?
Yes, that is fair to say. 

I watch CNBC all day, just about every day, and 100% of people not in the administration agree tariffs are bad for the economy.  Kudlow is the only person I've head support them. 

So to answer your question, that's really the question isn't it?  

 
I think it’s the idea of strong arming China and he thinks he can do it and force them to deal.  He can keep telling everyone that China is paying the treasury directly and enough people will believe him.  Stock market up enough during his presidency and the last jobs report was good so he can keep claiming those are great for him as well (ignoring the previous job report that was awful).

The truth is secondary to the narrative. 
I can see that. It's more of a "macho /  I can force your hand" thing?

But is any gain there worth "losing" on his "scoreboard" of the stock market?

I mean he doesn't seem to have any problem cooperating with North Korea or Russia. Why the need to be macho with China?

Now maybe it's a mistake to assume rational behavior. But it seems to me he's not acting in what he sees as his own best interests. Again, this takes out of consideration the best interests of the US. I'm saying it's assumed by many he's about his own best interests. Yet here, he doesn't seem to be acting in his own best interests. 

And trust me, there's nothing deeper than that. I don't think he's playing 3 D Chess or something. I'm just sayng I "THINK" I understand what seems to motivate him and what his interests are, and he seems to be not acting in those best interests. 

 
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I believe that he believes that they can be imposed so that he has negotiating chips to take them back.  He thinks that undoing what he has done is of benefit and that the other side will make concessions.  He is right, to a limited extent.  They other side will, in the isolated instance, perhaps, come to the table to negotiate.  The problem is that nothing in the economy is so limited and he does not, in my opinion, appreciate or properly weigh this.  He fails to weigh that business can and will move elsewhere, that others may take advantage of the moment and the lingering distrust which will impact future negotiations, if they occur at all, and are not wholly eschewed due to the lingering hard feelings.

 
Do you think Trump would take ownership of anything negative? 
Of course not but the original question is this: Why is Trump so strongly in favor of tariffs? Your post has nothing to do with the question.

Love him or hate him, the answer to the question is that Trump has the best interests of the USA when he takes on unfair trade. We can't become isolationists, that's a proven failure and we cannot let other countries take advantage of us so we have to take a stand. He's stepped to the plate when all those before him, Rs & Ds alike, ignored it hoping it would fix itself.

He did the same with rocket boy. Success or failure, he's at least taken it further than any other president. Same with this topic. He may have to end up with less than he wants and yes, he will claim 100% victory but that's just the way he is. Hate it all you want.

 
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Of course not but the original question is this: Why is Trump so strongly in favor of tariffs? Your post has nothing to do with the question.

Love him or hate him, the answer to the question is that Trump has the best interests of the USA when he takes on unfair trade. We can't become isolationists, that's a proven failure and we cannot let other countries take advantage of us so we have to take a stand. He's stepped to the plate when all those before him, Rs & Ds alike, ignored it hoping it would fix itself.
I hear Trump say this often, and now you.  Care to explain what this means? 

I suspect you don't really know how tariffs work in the context of this post.

 
Yes, that is fair to say. 

I watch CNBC all day, just about every day, and 100% of people not in the administration agree tariffs are bad for the economy.  Kudlow is the only person I've head support them. 

So to answer your question, that's really the question isn't it?  
And to tell you what kind of sycophant Larry Kudlow is - you could probably pull up close to 1,000,000 video segments of him on CNBC extolling "free trade" from the Reagan administration on. He gets in the Trump White House and he's kissing you know what.

 
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There's a piece from Dr. Charles Lipson out today that does a better job of breaking this down than anyone on the board can do. https://www.realclearpolitics.com/articles/2019/05/10/a_don_corleone_offer_to_china_on_trade_140290.html

Highlights

Yet serious trade sanctions are the only hope of getting Beijing to roll back its abusive economic practices and open its markets to U.S. exporters and investors.


No one doubts China’s own protectionism. It uses tariffs, non-tariff barriers, and outright theft of intellectual property to support its industries and harm U.S. interests. It demands American companies share ownership, profits, and proprietary information with local partners, most with strong ties to Communist Party leaders. The U.S. market, by contrast, has been relatively open to Chinese goods and investments, which are protected by the rule of law. No such luck for Americans in China.


No one can tell if Trump's hard-line negotiating strategy will work. But we do know he is in a good position to try. With the United States at full employment, Trump’s approval ratings up in the mid-40% range, and the next election 18 months away, he will never be in a better position.


Why try it now? That is partly China’s fault, partly Trump’s choice. Beijing forced the issue when it reneged. One of its biggest concerns, apparently, is that the U.S. actually intends to enforce the final deal. Imagine that.


President Trump is forcing Xi to choose between two unhappy alternatives. That’s why he has thrown a severed horse head into the bed. Trump wants to force the issue and make it hard to resist the American offer. If he succeeds, he will present the deal as a huge win for both sides.


And remember, this is the rare area where Congressional Ds and Rs agree.

The New York (Schumer) senator, who has largely cheered the president's efforts to crack down on what officials from both major parties call Chinese trade abuses, backed Trump again on Sunday. In a tweet, he urged the president to "hang tough on China."

"Strength is the only way to win with China," said Schumer, who is otherwise at odds with Trump on a wide variety of policy issues.
Democrats, nonetheless, have no means to attack Trump’s glaring vulnerability on tariffs -- because they are largely protectionist themselves. The Peterson Institute studied the candidate positions and divided them into three categories. The “pro-trade” Democrats are: Joe Biden, Julian Castro, John Delaney, John Hickenlooper, Jay Inslee and Beto O’Rourke, while “anti-trade” Democrats include Klobuchar, Cory Booker, Tulsi Gabbard, Bernie Sanders, Kirsten Gillibrand and Elizabeth Warren. Kamala Harris, Seth Moulton, Eric Swalwell, Pete Buttigieg and Tim Ryan all fell into the “mixed/no position” category.

 
So bottom line, Trump is highly incentivized for the stock market to do well. Is that fair to say?

I'm no economist, but it seems like most people agree Tariffs are bad for the stock market. This isn't a republican or democratic point. This is a practical point. "Stocks dip on fear of tariffs" seems common.

With that said, why is Trump so strongly in favor of tariffs?
I think that Trump honestly thought that the trade war would be an easy and quick win for him: make some threats, then negotiate a new deal (or just rename the old deal, like USCAM or whatever NAFTA is called now), and then make a victory lap to a bunch of red state rallies.

But China didn't budge. And now he's in too deep. He's desperate to save face, so he's doubling down by imposing more tariffs.

 
I don`t know much about what these trade deals with China are.

 Only thing that I heard yesterday on the business station is a few pundits saying "The China trade situation should have been dealt with starting 30-40 years ago and that China has taken great advantage of the USA and the pirating of USA technology the last 3-4 decades"  Not just the last 7-8 years. 

 
Please let's do our best to keep the responses non trolling here. Let's focus on understanding and less on snark. And yes, I know it's Political Forum on a Friday... :unsure:  

But work with me.

Is it fair to say:

  • Trump is a guy who puts "winning" on a pedestal?
  • For better or for worse, Trump will do almost anything to "win" and gain approval from his supporters?
  • "Winning" for Trump is seen as a Strong Economy.
  • Trump is a "scoreboard" kind of guy.
  • The Stock Market is seen as one of Trump's scoreboards for the economy.
So bottom line, Trump is highly incentivized for the stock market to do well. Is that fair to say?

I'm no economist, but it seems like most people agree Tariffs are bad for the stock market. This isn't a republican or democratic point. This is a practical point. "Stocks dip on fear of tariffs" seems common.

With that said, why is Trump so strongly in favor of tariffs?
Not sure if you are serious but Trump is absolutely not in favor of tariffs.  He is willing to have some short term volatility in turn for better long term trade deals.

 
I think that Trump honestly thought that the trade war would be an easy and quick win for him: make some threats, then negotiate a new deal (or just rename the old deal, like USCAM or whatever NAFTA is called now), and then make a victory lap to a bunch of red state rallies.

But China didn't budge. And now he's in too deep. He's desperate to save face, so he's doubling down by imposing more tariffs.
It's sort of like breaking up with your GF because you expect her to change an undesirable trait and then come crawling back to you.  The problem is you forgot it's a million times easier for her to find another dude to do stuff than it is for you to find another lady. 

 
The problem with screwing with the stock market, which he totally is doing, is that the retirements of most Americans are either directly or indirectly tied to the market. So he shouldn’t be screwing with people’s retirement money. You want to decouple retirement from the stcok market? Fine, then do all the dumb tariffs you want. But you want to explain to all the 60 year olds “hey, winning though” when they’re just looking to get out after 35 years? And please, don’t give me that they should just be in bonds or a savings account. Low interest rates don’t make that feasible unless you’re  into multiple millions. Don’t mess with people’s retirement. Trump doesn’t care, and that’s what bothers me is that people are just like “but winning though”.

 
With that said, why is Trump so strongly in favor of tariffs?
Because he remembers what he was taught decades ago and thinks the same applies today. Problem is those principles don't apply anymore. 

To put that in perspective ask the question "how does applying tariffs force China to change their IP malfeasance?"  or "are tariffs an effective approach to reduce the trade deficit in this global economy?"  

Answers to those are obvious at this point. 

 
The problem with screwing with the stock market, which he totally is doing, is that the retirements of most Americans are either directly or indirectly tied to the market. So he shouldn’t be screwing with people’s retirement money. You want to decouple retirement from the stcok market? Fine, then do all the dumb tariffs you want. But you want to explain to all the 60 year olds “hey, winning though” when they’re just looking to get out after 35 years? And please, don’t give me that they should just be in bonds or a savings account. Low interest rates don’t make that feasible unless you’re  into multiple millions. Don’t mess with people’s retirement. Trump doesn’t care, and that’s what bothers me is that people are just like “but winning though”.
The exact same argument could and has been made against environmental improvements. 

Not working to make the future better for short-term gains is how we ended up in an environmental imbalance and a trade imbalance.

 
Not sure if you are serious but Trump is absolutely not in favor of tariffs.  He is willing to have some short term volatility in turn for better long term trade deals.
"Tariffs are the greatest!" - Donald Trump, July 2018

"Our country was built on tariffs" - Donald Trump, August 2018

"Tariffs are working big time" - Donald Trump, August 2018

"Remember, I am a tariff man" - Donald Trump, December 2018 (he added "It will always be the best way to max out our economic power")

"Tariffs have really been great" - Donald Trump, November 2018

"Now [China is] paying big tariffs...we might make a deal, and if we don't, that's OK. I'm happy either way" - Donald Trump, November 2018

"I am somebody who believes in tariffs" - Donald Trump, May 2019

 
"Tariffs are the greatest!" - Donald Trump, July 2018

"Our country was built on tariffs" - Donald Trump, August 2018

"Tariffs are working big time" - Donald Trump, August 2018

"Remember, I am a tariff man" - Donald Trump, December 2018 (he added "It will always be the best way to max out our economic power")

"Tariffs have really been great" - Donald Trump, November 2018

"Now [China is] paying big tariffs...we might make a deal, and if we don't, that's OK. I'm happy either way" - Donald Trump, November 2018

"I am somebody who believes in tariffs" - Donald Trump, May 2019
It is a negotiating tactic but I am sure you know this

 
It is a negotiating tactic but I am sure you know this
There aren't links to those quotes but I assume he was talking to the American people or his supporters for most of those.  In my opinion purposefully lying (I tried to think of a better word but none fit) to the American people as a negotiating tactic isn't an acceptable behavior for a President.  Do you not agree?

 
There aren't links to those quotes but I assume he was talking to the American people or his supporters for most of those.  In my opinion purposefully lying (I tried to think of a better word but none fit) to the American people as a negotiating tactic isn't an acceptable behavior for a President.  Do you not agree?
I don't agree at all.

 
"Tariffs are the greatest!" - Donald Trump, July 2018

"Our country was built on tariffs" - Donald Trump, August 2018

"Tariffs are working big time" - Donald Trump, August 2018

"Remember, I am a tariff man" - Donald Trump, December 2018 (he added "It will always be the best way to max out our economic power")

"Tariffs have really been great" - Donald Trump, November 2018

"Now [China is] paying big tariffs...we might make a deal, and if we don't, that's OK. I'm happy either way" - Donald Trump, November 2018

"I am somebody who believes in tariffs" - Donald Trump, May 2019
It is a negotiating tactic but I am sure you know this
Trump can believe that tariffs are a negotiating tactic while also supporting the general concept of tariffs.

But it's clear from these quotes that Trump does not see tariffs as merely a negotiating tactic. Look at the quote where he says "I'm happy either way". He thinks that tariffs are equal to a trade deal -- he's happy to have one OR the other, because he thinks both are equally good.

If there was a shred of truth to your claim that Trump "is absolutely not in favor of tariffs", then you would have seen evidence of it in Trump's descriptions of tariffs. Yet at no point has Trump EVER expressed that he was "not in favor" of them. Not once.

 
Trump can believe that tariffs are a negotiating tactic while also supporting the general concept of tariffs.

But it's clear from these quotes that Trump does not see tariffs as merely a negotiating tactic. Look at the quote where he says "I'm happy either way". He thinks that tariffs are equal to a trade deal -- he's happy to have one OR the other, because he thinks both are equally good.

If there was a shred of truth to your claim that Trump "is absolutely not in favor of tariffs", then you would have seen evidence of it in Trump's descriptions of tariffs. Yet at no point has Trump EVER expressed that he was "not in favor" of them. Not once.
Let's revisit this once we get a trade deal.  OK?

 
The exact same argument could and has been made against environmental improvements. 

Not working to make the future better for short-term gains is how we ended up in an environmental imbalance and a trade imbalance.
People’s 401k’s aren’t tied to the environment in such a direct way. My criticism is mainly around the fact that Americans retirement is so coupled to the stock market, which is actually the part that’s broken. But under that broken system, that means influencing the markets heavily like Trump is doing is messing with people’s retirements directly. So no, it’s not the exact same argument. 

 
With that said, why is Trump so strongly in favor of tariffs?
This is something he raised in the late 80s. It’s been the one consistent part of his politics. The Dems rejected it when he was with them, the Reform Party rejected it when he was with them, and even now he has almost no support among Congressional Republicans for this. It’s been outmoded and debunked as an approach since the Depression.

Joe you’re going to have to figure out a way to elucidate what is wrong with this guy without making trolling noises. You say it all in your OP except the conclusion. - Please just say it so we can proceed with an honest discussion.

 
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Nope. Maybe this will help ya.: https://www.nationalreview.com/2019/05/china-trade-talks-america-must-take-hard-line/

Better than I can explain it. But since Chuck Schumer said he agrees with what Trump is doing, then it seems they do know how tariffs work are doing the right thing.
This article doesn't explain why China's trade practices are "unfair."  Half the article is devoted to human rights abuses and their growing military influence.  It seems the argument is that China uses tariffs on our goods. If anything this just hurts the people of China.

 
No. But I think he's shown repeatedly he loves pointing to the "scoreboard" of the stock market. 
“Why does that guy keep sticking his hand in that hot stove when he knows it will burn him?” Gosh, yeah why would someone do that.

 
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I'm no economist, but it seems like most people agree Tariffs are bad for the stock market. This isn't a republican or democratic point. This is a practical point. "Stocks dip on fear of tariffs" seems common.

With that said, why is Trump so strongly in favor of tariffs?
The market moves on perception, not reality. Tariffs are not bad for the market per se, but economists think they are bad for the economy, thus the perception that this will do long term damage to the economy drives the market lower. Minor quibble but too many people associate the stock market with the economy (including DJT). 

Trump favors tariffs because he doesn't understand basic trade economics -- which is pretty hilarious when you realize he has an undergraduate degree in Economics from one of the foremost schools in the country. His misunderstanding of key economic concepts - long before ever running for President - has made me quite aware that his father bought the degree. 

 
It also needs to be noted that Trump believes that tariff reduction led to World War I and the Great Depression (link) -- and that tariff increases helped get the country out of the Depression. (Anyone? Anyone? Bueller?) At no time during any of that pontification does Trump ever talk about the fact that the tariff reduction led to increased trade and a better economy.

 
I think it’s the idea of strong arming China and he thinks he can do it and force them to deal.  He can keep telling everyone that China is paying the treasury directly and enough people will believe him.  Stock market up enough during his presidency and the last jobs report was good so he can keep claiming those are great for him as well (ignoring the previous job report that was awful).

The truth is secondary to the narrative. 
This is the correct answer.  He drew a line in the sand that he would renegotiate our trade relations.  He thought he could push China around and instead they're in for a fight.  This is the win he's looking for.  The stock market action makes him look bad, but he can't lose the fight against the Chinese.  He'd rather see the market tank and blame Obama and Biden (see this morning's tweet) than accept a negotiation loss.  

 
The market moves on perception, not reality. Tariffs are not bad for the market per se, but economists think they are bad for the economy, thus the perception that this will do long term damage to the economy drives the market lower. Minor quibble but too many people associate the stock market with the economy (including DJT). 

Trump favors tariffs because he doesn't understand basic trade economics -- which is pretty hilarious when you realize he has an undergraduate degree in Economics from one of the foremost schools in the country. His misunderstanding of key economic concepts - long before ever running for President - has made me quite aware that his father bought the degree. 
Huh? The markets are a derivative of the overall economy.  You hurt the economy, you hurt future earnings prospects of businesses which are assessed through stock prices.  

 
It also needs to be noted that Trump believes that tariff reduction led to World War I and the Great Depression (link) -- and that tariff increases helped get the country out of the Depression. (Anyone? Anyone? Bueller?) At no time during any of that pontification does Trump ever talk about the fact that the tariff reduction led to increased trade and a better economy.
>>During an aside on his administration's steel and aluminum tariffs, Trump ran through the changes in tariff policy in the early 1900s. 

"Tariffs ended in 1913. They then went to a different system in 1918, totally unrelated," Trump said. "In 1928, you had the Great Depression. For a lot of differently reasons. Not necessarily our country's fault, but a little bit our country's fault. Then in the 1930s, they said we better start charging tariffs. We need money to come into our country again."<<

- It’s still astounding this guy is running the country.  And of course these bizarro beliefs obfuscate the role of nationalism which totally frees him up philosophically to advocate it today.

 
I am not a fan of Trump, but I don't think Trump believes a healthy stock market is the goal. He wants the country to have jobs, instead of losing them to other countries. And it would be odd if he succeeded in that goal and the stock market was down. 

 
People’s 401k’s aren’t tied to the environment in such a direct way. My criticism is mainly around the fact that Americans retirement is so coupled to the stock market, which is actually the part that’s broken. But under that broken system, that means influencing the markets heavily like Trump is doing is messing with people’s retirements directly. So no, it’s not the exact same argument. 
Tariffs don't directly affect the stock market or 401ks.  They may do so indirectly as analysts and economists widely view tariffs as a negative for the economy, but that's more of a side effect.  A healthy stock market isn't necessarily an indicator of a healthy economy.

 
The market moves on perception, not reality. Tariffs are not bad for the market per se, but economists think they are bad for the economy, thus the perception that this will do long term damage to the economy drives the market lower. Minor quibble but too many people associate the stock market with the economy (including DJT). 

Trump favors tariffs because he doesn't understand basic trade economics -- which is pretty hilarious when you realize he has an undergraduate degree in Economics from one of the foremost schools in the country. His misunderstanding of key economic concepts - long before ever running for President - has made me quite aware that his father bought the degree. 
We don't know that as he has threatened anyone that releases his scripts, yo. 

 

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