Trump No Longer Says A Trade War Is Easy To Win

While I like to blog about religion more than economics, sometimes politicians make such huge mistakes in economics commenting cannot be resisted. Tariffs of trade is an example.

Trump once tweeted a trade war is easy to win. You just stop trading until they give you a better deal.

Then the Chinese raised the tariffs on soybeans. Selling soybeans to China keeps the U.S. price high. South America can produce all the soybeans China needs.

The price of soybean futures fell. Polls in the Midwest, states that put Trump in office, began to fall. Someone must have carefully explained to him his path to political success was being blocked by his ideas on trade. Now Trump is telling us he is getting along much better with China.

Today at our atheist’s group I was chatting with a man who works in John Deere’s IT division. I asked him how John Deere was reacting to the President’s higher tariff policy. He said, “You know, John Deere doesn’t really care. It sounds like Brazil will produce soybeans the U.S. will lose. We make combines in Brazil–fine with us.”

So, by jerking around with tariffs we will lose both our soybean business and the support infrastructure business like farm machinery. Trump has stopped talking tough on trade.

States in the U.S. and countries around the world trade because some areas make things more cheaply than others. The standard of living rises for both areas when they exchange what they each produce most cheaply.

18 Responses

  1. Schurkey

    As long as we have a trade deficit with China, trading with them is overall bad for the USA.

    Best possible solution would be to impose a SUBSTANTIAL import tax on ANYTHING imported from China.

    I will gladly give up the relatively poor US agriculture exports to China to eliminate Chinese manufactured goods polluting our retail.

    The USA could easily subsidize the agricultural sector with what we save on exported bales of money that otherwise leave our economy never to be seen again.

    1. Schurkey 11:14 So much is wrong with this post it is hard to know where to start.

      As long as we have a trade deficit with China, trading with the is overall a bad idea.

      Let’s start with the question, “What do we want to achieve with our economy?” The answer is we want to not be overrun by another country. To maintain our nation’s defense we need a strong economy. Trading with China makes our economy stronger than if we did not. Across the economy, our farms and businesses make tons of money trading with China. The trade deficit is so tiny it is inconsequential.

      The USA could easily subsidize the agricultural sector with what we save on exported bales of money that otherwise leave our economy never to be seen again.

      No it could not. Money sent to China for the shoes made in China I just bought comes back in the form of grain purchases. There is no way we could subsidize farmers, machinery manufactures, etc etc for the loss of sales to China. If you do the math that in more than obvious.

      Why doesn’t someone running for Governor in some state do what Governor Langer of ND did in the 1930’s? Have the National Guard called up to stop exports of wheat to Minnesota? He did this. The reason no Governor has tried that political ploy since is because it’s stupid. It is no different than stopping trade with China.

  2. In the middle of the Obama presidencies, there was this story from CBS News (gasp) entitled, “Abortion tied to sharp decline in women’s mental health” –

    Now, all you left-leaning men and women that want to promote women’s health (euphemism for abortion in your circles), it appears eliminating abortion will DRAMATICALLY improve their mental health. Before you lefties try to push this off on the pro-life culture – small as it is – stigmatizing women to the point of mental breakdown, please produce the science which proves any assertion you make.

    This study included 877,000 women.

    I will be taking sign-ups to the pro-life, pro-women’s mental health, advocacy in the group in the lobby after the lecture.

    1. Matt 10:26 That is an interesting bit of information, but it is anything but a slam dunk finding that “abortions cause mental illness.” Let’s summarize the facts:
      a.) The study was a one-time effort done in 2011. There has been, so far as I know, no follow up to see if the results can be duplicated.
      b.) The study found there was a high statistical correlation between various mental problems and abortions. When it came to causation, it was more circumspect. And, that was wise. What is the cause of mental problems? Our son and a granddaughter from our daughter both have mental problems. They are making their way through life successfully. But what caused the problems in the first place? No one knows. The study went way out on a limb and assigned some causation. They assigned only 10%. That is, if this group had not had abortions, 90% would have had the same mental problems–at least that is one way of looking at it. I didn’t have access to the entire article to see where they came up with “10%”. Interesting they have not come up with an undated study. I’d like to know if they did mental evaluations of women before they became pregnant, both for those who had abortions and those who did not. If we don’t have that data we don’t have anything.

      At the time the study was published, 2011, an official from a woman’s rights organization made this statement which so far as I know as not been refuted: The best scientific evidence published indicates that among adult women who have had an unplanned pregnancy the relative risk of mental problems is no greater if they have a single elective first trimester abortion or deliver that pregnancy.

      1. Oh, but it is a slam dunk in terms of “mental health”. You are the one you injected the more perjorative term “mental illness”.

        Every study is a stand-alone study. One can have a multi-phase study but most are single-phase studies whose results are known, analysis performed and conclusions reached, if possible.

        As for cause and effect, most studies are very flawed in this regard. But that is exactly what Planned Parenthood hopes to communicate when they call abortion “health care”.

  3. John Deere profits and sales are both way up since the announced tax cuts. The ag and construction industries are way up since Obama left and Trump took over. A short term ripple in soybeans can be managed in at least 1 of 2 ways; (1) price support or (2) planting a different crop next season. It is much harder for China to overcome the loss of steel exports to the USA it is much more difficult to re-tool a steel plant to another purpose in the span of 1 year.

    At least we don’t have a bag of rocks running the country anymore.

    1. Matt 10:35 A short term ripple in soybeans can be managed in at least 1 of 2 ways; (1) price support or (2) planting a different crop next season.

      Spoken by a man who knows nothing about either agriculture or politics. What, pray tell, would be the other crops farmers would plant instead of soybeans. The land and equipment used for soybeans is best suited for corn. Corn prices have been low. So double the acres of corn planted and guess what?

      Oh, here is a solution that you might think would work. Tell people we are going back to using horses instead of cars. The price of oats would skyrocket and farmers could plant that.

      On price supports, did you happen to notice the news item that was all over the place last week? I’ll high light it here so you will now be informed: THE U.S. HOUSE DID NOT APPROVE A FARM BILL!!! So, in Matt’s mind it was not approved because it did not give a large enough payment to farmers. No, it was not approved because the politics of our time is to give less to farmers. More subsidy for lost soybean sales is not in the cards.

  4. Just reading up on the atheist’s best known activist outside of Margaret Sanger. His name is Adolf Hitler. Wikipedia has a great write-up on Hitler’s “faith”. He was also a vegetarian according to the recent study of his remains:

    Just some things to keep in mind when reading blogs written by atheists. Jon would object but then he likes to ignore atheism and concentrate on the sins of Christians. Sin is an equal opportunity scourge but it sure seems to me that the worst sinners are those who don’t even start from a moral base, i.e. atheism.

    1. Matt 1:33 Learning that Hitler was a vegetarian certain puts me into his camp. Tonight I read a articles in National Geographic about the tons of plastic breaking up in waterways around the world and the particles finding their way into animal’s bodies.

  5. Henry

    Soybeans are just fine. No significant change since the steel tariff announcement march 1. Sky is not falling. Three principle exporters of soybeans in the world. Two of them are having a drought, now buying from us to resell to China. The future looks bright. Trump couldn’t have timed this negotiation any better, and China screwed themselves. Of course, any time would have been good. We had nothing to lose, previous people negotiated so poorly. If one wants insight from boots on the ground, listen to Eugene Graner on these recent ag econ matters. It is going to be a great year.

    1. Henry 11:09 Sky is not falling

      Actually, I agree with that. The sky is not falling and will not fall because Trump will not do anything substantial and there will be nothing for the Chinese to respond to. That is what is being reported. He will make the impression he is doing something, the Chinese will do what is done in that culture, pretend to make concessions and let Trump pretend he got something.

      P.S. After I wrote the above the New York Times published an article with the identical conclusion. The Trump pattern is make headlines with an outlandish claim, fuss around a while and then settle for what little you get to avoid embarrassment and make big claims.

      I’d advise people to do what I am doing, and what I did during the W. Bush administration. When the President or a mouthpiece says something, assume the truth is exactly the opposite.

      1. If it is of any interest to anyone, this blog will now scroll on the letters to the editor page of the Forum Communications webpage. This is a temporary arrangement until the software of a new blogging page is completed.

Comments are closed.