Category: Trump

Die Grafik, die Trump ärgern wird

Die Grafik, die Trump ärgern wird:

Der Handelsüberschuss aller 28 EU-Länder mit den USA erhöhte sich im ersten Halbjahr ungeachtet der scharfen Kritik von Trump deutlich.

Wall Street Journal: EU official used colorful, simplified cue cards in trade meeting with Trump

Wall Street Journal: EU official used colorful, simplified cue cards in trade meeting with Trump:

The Wall Street Journal reported Thursday that Juncker relied on more than a dozen of the cards while explaining trade topics to Trump, including automotive trade, ahead of their Rose Garden announcement to hold formal trade talks.

“We knew this wasn’t an academic seminar. It had to be very simple,” a senior European Union official told The Journal.

[…]

EU and US launch talks in bid to quell trade tensions

EU and US launch talks in bid to quell trade tensions:

Details are neither inked nor out yet, so it if probably a bit premature to comment, … but: From what I have heard from the media so far, this basically sounds like Trump just gave the EU everything they ever wanted for the last 20 years with little to nothing in return?

Because of the trade imbalance between the EU and US, every US government since the 90′s insisted that a removal on trade barriers on industrial goods would require the EU to accept American intellectual property and weakening standards (on food, safety and environment) to allow American mass farmed products to flood EU markets.

But from what I read so far, Trump is happy if we promise to buy a bit more LNG and soybeans from them?

EU retaliatory tariffs on raft of US goods go into force

EU retaliatory tariffs on raft of US goods go into force:

The reality of trade wars is that there are no winners, only losers. Trump is a slow learner, but eventually he too will learn.

On March 5, 2002, U.S. President George W. Bush placed tariffs on imported steel. The tariffs took effect March 20 and were lifted by Bush on December 4, 2003. Research shows that the tariffs adversely affected US GDP and employment.[1]

[…]

Impact

In September 2003, the U.S. International Trade Commission (ITC) examined the economic effects of the Bush 2002 steel tariffs. The economy-wide analysis was designed to focus on the impacts that arose from the relative price changes resulting from the imposition of the tariffs, and estimated that the impact of the tariffs on the U.S. welfare ranged between a gain of $65.6 million (0.0006% of GDP) to a loss of $110.0 million (0.0011% of GDP), “with a central estimate of a welfare loss of $41.6 million.” A majority of steel-consuming businesses reported that neither continuing nor ending the tariffs would change employment, international competitiveness, or capital investment.[10]

According to a 2005 review of existing research, all studies on the tariffs “find that the costs of the Safeguard Measures outweighed their benefits in terms of aggregate GDP and employment as well as having an important redistributive impact.”[1]

Steel production rose slightly during the period of the tariff. [11] The protection of the steel industry in the United States may have had unintended consequences and perverse effects. A study from 2003 that was paid for by CITAC, a trade association of businesses that use raw materials, found that around 200,000 jobs were lost as a result.[12][13]

Source: https://en.wikipedia.org/wiki/2002_United_States_steel_tariff

A recent poll by German television revealed that only 25% of…

A recent poll by German television revealed that only 25% of Germans trust the US government.  Slightly more, 30%, trust the Russian one. Reasonably low, but slightly worrying that trust in Russia seems on the rise, without any real reason for it. Neither Putin nor Russia has changed its politics.

One example; At a recent visit to Austria, Putin gave a rare interview to Austrian television (ORF). Unlike Trump he sounded very intelligent and indeed reasonable. One would be forgiven to think that our image of him is not entirely reasonable after all. That is until we have a look at how Russian State media has covered the interview and overall trip to Vienna:

U.S. to pull out of U.N. human rights body: source

U.S. to pull out of U.N. human rights body: source:

The following is a matter of immense public interest and…

Oh, this will be interesting to explain away. While probably meaningless to most lawyers, any software developer will tell you that this is a smoking gun:

Trump lashes out, and threaten to ban US built cars to be sold in the US?

Trump lashes out, and threaten to ban US built cars to be sold in the US?:

The Mercedes-Benz factory in Tuscaloosa, Alabama. https://mbusi.com

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And the largest BMW plant is the “Zentrum” in South Carolina, which just expanded last year to raise its capacity to 450,000 vehicles a year. They also got a factory in Greer. https://www.bmwusfactory.com

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How BMW Became the Largest Exporter of US-Manufactured Autos.

Oh Trump, did you really not learn anything?

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US on brink of trade war with EU, Canada and Mexico as tit-for-tat tariffs begin

US on brink of trade war with EU, Canada and Mexico as tit-for-tat tariffs begin:

So here we are again, is there anything different this time?

I actually grew up in Linz, a steel producing area in Austria, which doesn’t make me an expert, but it does mean that local newspapers are covering this in far more depth. I do for example remember that this isn’t the first time this happens. The last time it was G.W. Bush in 2002:

On March 5, 2002, U.S. President George W. Bush placed tariffs on imported steel. The tariffs took effect March 20 and were lifted by Bush on December 4, 2003. Research shows that the tariffs adversely affected US GDP and employment.

The problem is that steel isn’t steel, the same way iron ore or even sand isn’t. (Did you know that the skyscrapers in Dubai are built with sand shipped from Australia?

So the problem with import tariffs is that your companies relying on these products in their production chain are the ones who pay them. So if you for example need specialist steel for crash protection in cars, you have no other option but to keep buying it at 25% markup. This means the end product is more expensive, and any amount on tariffs will reflect manifold on the finished product due to VAT and so on. So just like Brexit, this is a lose-lose situation. But while there is no winner, it is very clear that one side has more to lose than the others. 

This time round is no exception, with the Wifo-Model predicting a damage to the EU economy of up to €10 billion and a damage of €40 billion to the US economy, directly effecting up to 180000 workers in the US. And that is without the EU counter measures.

So what is different this time?

Well, apparently the tariffs put in place by Trump are different to the ones put in place by Bush. For once, the reason he used to defend them is national security. Something that is almost certainly not going to stick at the WTO

But this in itself could be a danger to the continued existence of the WTO. If the WTO decides to deem them unlawful, and the US is simply ignoring its decision, what then? The reason the WTO system worked for so long was that all the major players obeyed its ruling. If one of them decides to no longer do that, the trust in the institution could be irreversibly damaged.

Trump’s tariffs are also claimed to be more damaging to the economy than Bush’s were. I didn’t quite understand why though, but I am going to believe the actual experts on that one.

And lastly, the EU, Canada and Mexico are preparing counter measures. This is very different to what happened last time, where they just waited for the courts to settle this and the damage biting the US economy, telling the US that we can stop this nonsense any time. This time however the ‘allies’ are going into the offensive. The EU prepared counter measures to deliberately hit US areas that voted for Trump. And Canada is doing things along the same line. I wonder to what end?

If Trump doubles down, this will end in a full blown trade war of the US vs. the World. And while I can not see how the US can possibly win it, I am not sure this will discourage a narcissist like Trump. Every measure will hit the US harder than the other way round. At the end we will have an isolated US, not just in terms of trade, but also politically. A US who still has the largest military in the world. 

I assume that the rest of the world will want to pick up diplomatic relations with whoever follows Trump. But with an already deprived working class in the US, pushing them below the poverty line, can’t be a good omen for future elections.

Twitter Bots Helped Trump and Brexit Win, Economic Study Says

Twitter Bots Helped Trump and Brexit Win, Economic Study Says:

National Bureau of Economic Research working paperhttp://www.nber.org/papers/w24631

This paper studies information diffusion in social media and the role of
bots in shaping public opinions. Using Twitter data on the 2016 E.U.
Referendum (“Brexit”) and the 2016 U.S. Presidential Election, we find
that diffusion of information on Twitter is largely complete within 1-2
hours. Stronger interactions across agents with similar beliefs are
consistent with the “echo chambers” view of social media. Bots have a
tangible effect on the tweeting activity of humans but the degree of
bots’ influence depends on whether bots provide information consistent
with humans’ priors. Overall, our results suggest that the aggressive
use of Twitter bots, coupled with the fragmentation of social media and
the role of sentiment, could contribute to the vote outcomes.