Trump’s China Trade War – The Facts

The Federal Reserve and the World Bank at the behest of a handful of economists who are decidedly left leaning have published two scathing reports which claim that Trump’s trade war with China is costing US taxpayers upwards of $68 billion annually.

Of course the statements are biased. Of course they represent an agenda and potential fodder. If they are true.

Economists are an interesting breed. They sit in glass houses and create a conclusion without seeming to have a basic understanding of real world business and tend to adamantly disagree with each other on a broader scale while presenting a portion of the facts.

Somewhat like the climate change fiasco.

Trades are business contracts. They may be executed as a one-time transaction, transactions that occur over a series of months, and often are transactions that are locked years.   They take time to execute. Terms are pre-determined. Terms are re-negotiated.

These ‘Economists’ have made a determination based on data that is virtually impossible to track. In addition, their supposition ‘estimates’ an annual cost. But even that is wholly unreliable because the Tariffs were imposed over the course of several months in 2018, with intellectual property, aluminum and steel at the forefront.   They effectively began in July and phased in over a number of months.

China’s “implemented and ‘proposed’ tariffs” would affect $110 billion of imports. That does not mean the US exports stop. It means they will be levied a tariff which will effect the profit margin.

The economist’s reports both extrapolate the outcome as an annual loss. A year has not yet occurred.   In fact, there is only two months of trade numbers in 2019 to analyze. Certainly one can extrapolate based on previous data… right? Yes and no.

It is like a poll wherein a random sample of 1000 Democrats all residing in New York are sampled and the results will determine the US Presidential election…

Example:   During Obama’s reign trade data is available on a monthly basis.   At the end of 2008 when Obama came into office, the US trade deficit with China was roughly $268 billion.   By the end of 2016 when Obama left office, it was $347 billion. Before any tariffs had any measurable impact, by the end of 2017 the deficit had climbed to $375 billion.

This ‘non-important’ deficit has climbed every single year since it began in 1986. Since 2000, it has quadrupled. And not one sitting President did a damn thing.

Suddenly, with two measurable months of data available for 2019, the media is calling Trump’s trade war a calamity.

In actuality, the value of imports for January and February of 2019 were down 10% and 20% respectively compared to the previous year – before any tariffs were imposed.

Lets look at another trading partner – Germany.

When Obama came into power that deficit was roughly $28 billion. By the time Obama left office that deficit had spiked to nearly $65 billion. It torched at $68 billion by the end of 2018, well before Trump’s tariffs took effect. The first two months of 2019, the deficit had lowered nearly 10%.

Even in the world of an Economist, 2 months is clearly not enough of a data set to make any conclusion or opinion.   And yet they do. Why?

Obviously it is an attempt to discredit Trump and provide fodder for Democrats who are bent on finding fodder because they are frustrated with the incorrigible corruption, instead of truth.

What this also reveals is the larger picture in which both the US Federal Reserve and the World Bank are colluding in this massive demonization of all things Trump.     It also reveals that these institutions have provided absolutely no guidance or stipulations or concern for the annual increase in US trade deficit for the last 30 years.

Which technically is a reflection on their incompetence. Economic Policy is their mainstay. Their existence. So obviously they did not have the US in their sights for at least 30 years.

Why?
1) According to it’s own website, the World Bank’s field of study is on ‘Developing Countries’.   So why did they commission a report on Trump’s China trade – two well developed countries outside of the scope of their jurisdiction?

2) The second part of these reports claims that US agriculture farms have been hit hard by Trump’s tariffs.   But the agriculture business isn’t the mom and pop farm of a hundred years ago. Mainstream media have been sounding the alarm on the changing face of farms for a decade or two.

Statistics: Most small farms are ‘hobby farms’.   Tax incentives during the Bush and Obama years gave wealthy elites the ability to classify their compound acreage in the middle of such places as Long Island and the Hamptons as farmland, take a tax benefit, and produce enough to feed a cat.

Secondly, ‘large farms make up less than 4% of all farms and account for more than 66% of all sales. And that number continues to edge higher.   They are corporate farms.

And third, the Federal government continues to subsidize small farms up to $20 billion annually.

The value of agricultural exports to China is roughly $23 billion, which represents about 5% of all production in US.

It isn’t just the US Swamp that is fearful of Trump. It is The Swamps that exist globally.   He has turned their power off. He has broken the rules. He does not recognize their structure. And he wants to fix the chaos that they have so dedicatedly created for well over a hundred years.

Certainly there have been a few anomalies in the US; Kennedy, surely. But his fate and that of his brother reveal how determined the International Swamp is to maintain their brotherhood as is.

Lastly, the Federal Reserve Bank:   What is their job? Primarily – to address ‘banking panics’. Secondarily to manage money supply.   In 2012 when Obamanomics was considered an economic catastrophe the response of the Federal Reserve was not to commission economist papers, but to ‘do something’ to leverage that catastrophe. They have no business commissioning reports – outside of their Banking duties.

Trump recently threatened to take down the Federal Reserve; his animosity for that corrupt regime has been no secret.

The Enemy of my Enemy is My Friend.

Trump has been in office two+ years. He has fought for The People while being verbally attacked, legally attacked, his family in jeopardy, his life threated, and still he rose for us.  They are – running scared.

China and US Trade Alliance – Powerhouse!

The World Socialists are teetering precariously as their internal bastion of corruption leaks through Holland’s Dyke. 

France’s Macron is being splashed across European headlines as he touts a ‘European Renaissance’ amidst the crumbling infrastructure and political chaos that is devouring his own country.  The Deutsche Welle media outlet is spouting terminology such as ‘revival’ and ‘visionary’ to emphasize the greatness of what is essentially Macron’s EU Nationalism. The dirty word.   The core of Macron’s vision which isapparently ‘on everyone’s lips’ is …. drum roll… ‘Climate Change’.   The initiative?  A Climate investment bank.   Problem? There already is a Climate Investment Bank, it is called The Green Climate Fund which is administered by the UN.

Macron’s speech goes on to demand that the EU protect itself from US and Chinese competition through a Nationalized trade agreement, Aachen, between Germany and France.

Somehow the rest of the EU countries weren’t included in this EU vision.  Odd.

Canada’s Social darling Trudeau is embroiled in his own seascape of flooding waters as implications of bribery and corruption in a case between Trudeau, his government, and a company, SNC-Lavalin, unfolds.  Treasury cabinet Minister, Jane Philpott, has resigned her position stating the ‘current circumstances’ make her ability to defend the Cabinet ‘untenable’.

SNC-Lavalin paid bribes to the Canadian government in the form of illegal contributions in order to assure that the Canadian government wouldn’t prosecute them for paying bribes to obtain contracts in Canada and Libya.

This is how Socialism works in reality.

In the meantime, the US Socialist plant, Ocasio-Cortez, and her campaign manager, Chakrabarti, are being investigated for transferring $885,000 worth of campaign contributions to various self-controlled LLC’s through their PAC Justice Democrats.  Basically, it is a Ponzi scheme of moving money between various companies in order to evade FEC regulations concerning finance reporting requirements.  Oops.

Not only could this ‘arrangement’ result in significant fines, but jail time is also a possibility.

Socialism.  It is an art form.

Amidst the surge of socialist flooding, Trump continues to hold the helm toward Making America Great Again despite the media rhetoric and constant defamation.

Trump is doing what he does best – negotiating.  While the political purities who have no business acumen deride and find fault, they reveal their utter lack of understanding anything outside political bribery.

Trump is negotiating the deal of the century with China’s Xi Jinping.  This deal is revolutionary given China has never entered into a government modeled trade agreement with any nation ever.   It is considered one of the most legally complex negotiations in history and marks a true Champion of an alliance.  Aligning the world’s two largest powerhouses would in effect completely redefine the world.

The naysayers are squeezing through the thumbhole of the Dyke giving all sorts of explanations why the China-US trade deal is no big deal.   Shearing claims such a deal will not ‘jolt the global economy’.  And perhaps the key point is the term ‘global’.  True, it won’t benefit the EU.  It won’t benefit Canada.  But isn’t that the point?  Trump isn’t working to benefit the globalization globe, he’s working to benefit the US.  Period.

In addition, these naysayers are quick to point out that a deal hasn’t actually materialized yet.  Details are scarce.  And North Korea didn’t succumb to Trump’s demands.  Yet.

But if one reads inside the China landscape and the markets that have just now become significantly more positive, the wall would seem to have been razed.  It is a complicated lengthy process, but one that would see both sides working toward a new future.  And unlike the Iran deal, in which Obama gave Iran $150 billion without Congressional approval, China is a cutting edge economy rivaling the US for first place.    The Iran deal was basically a bidding war by European and US businesses to grow their economy while reaping profits.  It had no relative benefit to the US or the US citizens.  I wonder if Obama bought shares in some of those bidding companies?

China’s economy is worth $12,237.7 billion.  Iran’s economy is worth $430.7 billion, or 3.5% of China’s.

Figure it out.

DEBT vs GROWTH – which is better?

While America’s debt now stands at 105% of GDP, Europe is quickly catching up. The UK debt hovers over 96%, France is closing in on 95%, Greece is at 196%, Italy is 140%, and Germany is at 68.7%. But some of the largest and smallest numbers are not always talked about. For example; Japan tops out at 199.4% and Russia lingers at just 11.3%. Part of the problem is in the numbers – as in, who is reporting the numbers? The Japanese government is reporting debt at 199.4%, while Bloomberg and The Economist say it is 240%, but not to worry because public debt is really only 140%. Well that puts them over Italy and no one is saying that Italy has nothing to worry about. But then Italy’s ‘public’ debt is 114%, so while Japan is ‘really only’ – well, Italy is ‘really only’ – less.

The Scandinavian countries routinely come in low, although not the lowest with 20-50% ratios. Even Pakistan and South Africa come in under 40%. Low debt does not equate to a good standard of living, but it does equate to a theory of management. High debt certainly creates the aura of near implosion. So why does the mainstream news keep plugging the failing economy of a country that has the lowest debt to GDP ratio in the world and virtually ignore the country with the highest debt?

Because information molds views and more than anything the view that the media wants to extol is that – Russia is imploding. But it’s not.

Japan has a low inflation rate and low unemployment. But on a comparison basis, consumer prices for food and rent are 25-39% higher in Japan. In 2014, Japans growth rate went into negative territory. While the rate is back in the positive, it is a barely there number at .6%. Italy’s growth rate is currently at .3% whereas the US is lingering at .2%. The countries with the highest growth rates include Senegal at 22% and Kazakhstan at 8%. While the Ukraine’s growth rate had ranked in the positive at 3.3 before the coup, it now lingers in the toilet at -17.6%. In the wisdom of Dr. Phil – ‘How’s that coup workin’ for ya?’

So where do these statistics leave us? Correlations seem to be lacking.

Simply looking at one number obviously fails to tell anything of worth. So what can we learn from Italy and Japan?

While high debt is an indicator, in combination with stagnant to negative growth, a country is doomed. What stimulates growth? What lowers debt?

Growth is stimulated by competitiveness and private sector returns, public sector investments in education, infrastructure and technology are all drivers. So, how do you do that? Well, for one thing taxing out the public and private sectors is an obvious faux pas. What can hamper these natural stimulations? According to a Nobel Laureate Economist, quality government is the key. Governments that abuse their power, make decisions for the elite, and favor the special interest groups, will create the implosion no matter where the debt stands.

Within the government initiative there is the obvious – demand. Demand is high when wages are more indicative of a thriving economy. Low wages = low consumer spending = low consumer confidence = low overall growth rate.

How do we increase wages?

The Obama solution is – redistribution of income through taxation. It’s an economic absurdity to even consider this a solution. Taxing a corporation reduces their bottom line more which will effectively redistribute nothing to anyone but the government. Corporations are motivated by profit. They want a greater return if they are going to pay more wages. They want increased productivity to justify the wage increase. Right or wrong – that’s how their mind works. Resume writers want their clients to show how they created greater wealth for their previous employer because that’s what sells an employee’s worth.

Stagnant wages make for low morale and stagnant growth. Corporations don’t have the American morale any longer, they see cheap India labor as their driver. If the government spent more time and money ‘incentivizing’ corporations to pay better wages and keep them in the US, entitlement programs could begin to fall away thereby redirecting the entitlements to incentives. It might be a breakeven for the government, but that would be their ‘job’, and moral, confidence and earning power would be the end result for the citizens the government represents.