Saturday, June 1, 2019

Dotard Doubles Down On Crashing The Economy By Imposing Escalating Mexico Tariffs.

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"I know I'm a stupid pig!  But I love tariffs even if the economy crashes"

It now appears certain that Donnie Dotard is determined to destroy the only remote reason for his re-election:   the economy,  We know a marginal number of independents are willing to give this slime a pass if the once roaring economy (mistakenly attributed all to Trump) preserves their 401k balances.   We also know the Republican voters will put party over country whichever way the economy goes. Hence, Trump's ability to escape indictment  for his obstruction crimes in 2021 hinges on his re-relection.

But he's on a tear to destroy it with his latest gambit, an absurd escalating tariff on Mexico.

Unable to control himself as a group of 1,306  migrants were apprehended crossing the border in El Paso, fleeing brutal conditions in Central America, he pulled the tariff trigger.   This as thousands of people remained stranded in the southern Mexican state of Chiapas, unable to obtain immigration documents, while asylum seekers waited in northern Mexican border cities .  So unable to use his "border wall" (since a federal judge blocked it) Trump lashed out using his old standby means of  retribution: tariffs.. Thus he bellowed in a  belligerent tweet:

"Mexico has taken advantage of the United States for decades. Because of the Dems, our Immigration Laws are BADMexico makes a FORTUNE from the U.S., have for decades, they can easily fix this problem. Time for them to finally do what must be done!
All of which is bollocks and B.S. given the U.S. enjoys as much or more trade benefits, namely in lower prices for many fruits and vegetables (especially those precious avocados). And yes, cars too - which will now cost an extra $1,300 each on importation.  Bear in mind these are American automobiles but made in Mexican plants set up by U.S. auto companies. Trump, Wharton grad that he is, still hasn't grasped that tariffs do not punish the nation on which they are imposed but the consumers of that nation's goods.  For perspective, a  5% tariff would amount to a tax increase of more than $17bn that will largely be passed on to U.S. consumers. (Last year Mexico sent about $346.5bn of goods such as avocados, tomatoes, clothes and cars across the border.)   As a piece in today's NY Times points out:

"The United States imported more than $345 billion in goods from Mexico last year, and shipped $265 billion the other way. But if anything, those numbers understate the interdependence. American refiners process crude oil from Mexico, then sell it back as gasoline. Automakers ship parts back and forth repeatedly during manufacturing. About 30 percent of the content of Mexican exports originated in the United States, according to a recent study."
Further noting:

"General Motors has three Mexican plants that make some of its most important models, including the highly profitable Silverado and Sierra pickup trucks and the new Chevrolet Blazer sport-utility vehicle. G.M. and Fiat Chrysler rely on Mexico for about a quarter of their North American production, and Ford for 10 percent."

So Dotard is actually firing at AMERICAN car makers, but is clearly too dense to see it.

Nonetheless on Thursday Dotard announced that he was placing a 5% tariff on “every single good coming into the United States from Mexico” starting on 10 June, to pressure the country to do more to curb immigration into the U.S.   Worse, this buffoon who somehow broke into high office with Russian help and covering up lies about payoffs to porn stars, intends to escalate the tariffs every month thereafter. Thus, by July 10%, then August 15%, September 20% and October 25 %.  Avocado toast? Millennials won't even be able to afford the damned toast, let alone the avocado..
Even before Herr Swine's reckless tariff announcement investors were skittish and seeking safety. According to a WSJ Business & Finance front page report (May 30, p. B1) nervous investors fled to bonds and cash, as opposed to a stock market (equities)  that would surely be riled by this asshole's words. Sure enough,  as he blurted out his decision to  impose new tariffs on Mexico  stock markets worldwide suffered a selloff, with the DOW going down nearly 355 pts. and below 25,000 for the first time in years.  This as  the FTSE 100 in London dropped 0.8% according to The Financial Times.
At least a few Republicans  (like Sen. Charles Grassley) appear to have summoned a few micrograms of testosterone to mount complaints. It's wondrous to hear these cowards at least complain about something Trump does. Meanwhile, The Business Roundtable-  one of Washington’s most influential lobby groups-   called the decision a grave error.  A statement put out stated in part:

Business Roundtable strongly urges the administration not to move forward with these tariffs, which would create significant economic disruption and tax US workers, farmers, consumers and businesses,

Unilateral tariffs on all Mexican imports will not solve the urgent problems of securing our border and fixing our broken immigration system. We urge the administration to engage constructively with our neighbors and allies to resolve trade, migration and security issues in ways that will benefit Americans, not cause economic damage."
Trump’s insanity - which is what it is, let's call a spade, a spade - comes as the U.S., Mexico and Canada are still negotiating the United States-Mexico-Canada Agreement (USMCA), a trade pact to replace the North American Free Trade Agreement (NAFTA). It also comes on the heels of ramping up the trade war with China which has now threatened to use its "nuclear" option, i.e. withholding trade in any rare earths. These are the critical ,materials for a host of electronic gadgets, including those iPhones millions are so mesmerized by. Well, enjoy them while you can, kiddies!
Mexico’s President, Andrés Manuel López Obrador,  responded to Trump with a two-page letter in which he wrote: “The Statue of Liberty is not an empty symbol … With all due respect, even though you have the right to say it, ‘make America great again’ is a fallacy because, until the end of times, and beyond national borders, universal justice and fraternity should prevail.

López Obrador, however, was also blunt about the crisis. “President Trump, social problems aren’t resolved with taxes or coercive measures,” he said, defending his administration’s handling of the migration issue."
The news elicited support for Mexico from China, the other target of Trump's imbecilic tariffs., In Beijing, the foreign ministry spokesman, Geng Shuang, said: “The United States has repeatedly taken trade bullying action. China is not the only victim.”  He didn't say so in any veiled threats, but the Chinese also hold the ultimate weapon: the rare errths.

Will Trump back off an avoid calamity? Doubtful, his ego is too invested and he has to "win" - even if the majority of Americans lose.

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