Categories
Business

Trump’s Treasury secretary just admitted the tariff rationale is hogwash

Classic Car Convertible

Meanwhile, in non-impeachment news, Catherine Rampell, The Washington Post reports:

Perhaps distracted by the beauty and billionaires of Davos, Switzerland, this week Treasury Secretary Steven Mnuchin let slip an embarrassing admission: President Trump’s justification for his trade wars is hogwash.
For two years, the administration has offered increasingly ludicrous explanations for its tariffs. Sometimes tariffs are designed to shield pet U.S. industries from unfair competition. (Those industries are still shuttering plants despite the tariffs, but no matter.)

Sometimes, tariffs are instead intended to raise revenue from abroad. (That additional tax revenue is being paid by Americans, not foreigners, but whatever.)

Perhaps the most farcical rationale, however, has been that massive tariffs are necessary to safeguard America’s “national security.”

First, the Trump administration argued that it needed to impose worldwide tariffs on steel and aluminum on these bogus “national security” grounds. After all, Trump explained, “If you don’t have steel, you don’t have a country,” whatever that means.

Loyal allies, such as Canada and Britain, were understandably offended to learn that their metal products somehow threatened U.S. national security and would thus be tariffed. 

Last year, at Trump’s request, the Commerce Department produced a report determining that imports of autos and automotive parts somehow also put America at grave risk, and that it thereby needs to do something to increase “American-owned” production. Precisely how your Subaru or Honda, or some foreign-made part buried somewhere in your Ford, compromises U.S. security is unclear; that Commerce Department report has never been released.

To be clear, the auto industry does not want these tariffs. Industry groups — comprising both U.S. and foreign companies — have called them “absurd” and “spurious,” particularly because these imports support millions of American jobs in auto manufacturing, parts and sales.

(click here to continue reading Trump’s Treasury secretary just admitted the tariff rationale is hogwash – The Washington Post.)

Chrysler Imperial

Bullshit from these professional bullshit artists. And yet corporate America still supports the political party that regularly screws them because, you know, tax cuts for millionaires is popular in most corporate boardrooms.

Rust Bucket

And Mnuchin’s “slip of the tongue”:

At a Davos panel Wednesday, Mnuchin finally acknowledged the obvious: that the administration’s official rationale for auto tariffs was made up, a legal fiction designed to let it bully or retaliate against opponents whenever Trump felt like it. In the context of a discussion about digital service taxes proposed by European countries, Mnuchin told the audience: “If people want to just arbitrarily put taxes on our digital companies, we will consider arbitrarily putting taxes on car companies.”

GM

Categories
Business Food and Drink

Wine Business Fears a Possible Disaster in Potential Trump Tariffs

In Honor of National Drink More Wine Day

Eric Asimov, The New York Times, reports:

the last month has passed in a blur of fear and dread as the industry contemplates the Trump administration’s threat to impose 100 percent tariffs on all wines imported from the European Union, along with a variety of other goods including foods, spirits and clothing.

Make no mistake, a tariff of that size, or any number close to that, would be catastrophic for Americans in the beverage and hospitality industry. A 100 percent tariff would double the price of wines in shops and restaurants, with disastrous ripple effects.

Consumers may be furious if confronted with a $25 bottle of Fleurie that has doubled in price to $50. They will have to adapt, or drink wines from somewhere else. But that hardly matters when compared with the American jobs that may be lost and the businesses that could be threatened if the tariffs go into effect.

The fear does not stop with importers. An entire chain of businesses are built around the acquisition and sale of European wines and foods, from distributors to retail shops and restaurants, and all the associated workers — not to mention dock labor, forklift drivers and others.

(click here to continue reading Wine Business Fears a Possible Disaster in Potential Trump Tariffs – The New York Times.)

The Dotard is about to fuck up another industry. Granted, he claims to have never had a drink, but I imagine Trump properties like Mar-A-Lago and Trump Hotel etc. make a lot of their annual profits on selling 1%ers and hangers-on overpriced bottles of European Union wine.

Thinking With A Dirty Glass (Variations on A Theme - Vernal Equinox)

A favorite local independent grocery (Green Grocer Chicago) said this in their newsletter yesterday:

Please be aware that the current administration is considering putting 100% tariffs on wine imported from the European Union on JAN 14 (next week!)

If this actually is enacted, it will change the wine industry in fundamental ways for all companies in the space (producers, distributors, and retailers like us).

If this comes to be we will have to tilt our portfolio towards wines from other areas such as South Africa, South America, and of course the good old USA that offer affordable wines at prices our customers like to purchase at.

My suggestion: stock up on Rioja, Chianti, Bordeaux, and other good wines from Europe this weekend!

Hmm, probably Cognac too. Damn it.

Season's Greetings!

Categories
Business politics

Trump’s trade war is hurting the dairy industry

CE Zuercher  Co Wholesale Cheese
CE Zuercher & Co Wholesale Cheese

As part of our continuing mocking of Trump-voting industries being screwed by Trump, Slate reports:

As the Wall Street Journal reports Thursday, Mexico and China have decided to target up to $986 million worth of American dairy exports with tariffs as retaliation for the Trump administration’s protectionist moves. Mexico is increasing its duty on cheese, while China is hitting cheese and whey. With their growing middle-class populations, both countries have become important markets in recent years for the U.S. dairy industry, which has found itself struggling with overproduction in the face of declining domestic milk consumption. Milk futures for July are down since Mexico announced its tariffs earlier this year—the last time the country imposed similar tariffs on U.S. cheese, shipments fell by 26 percent—and companies are already fretting. The president of Wisconsin’s BelGioioso Cheese called the situation “a nightmare.”

This is part of a larger pattern for the Trump administration, which the New York Times documents at length. So far, the administration’s efforts on trade and regulation have ended up hurting the very industries they claim to be helping. The 10 percent tariff Trump placed on aluminum, for instance, has made raw materials more expensive for most of the companies that actually produce aluminum products in the U.S., since they’re generally in the business of importing those raw materials and shaping them into more valuable upstream products. Steel tariffs have made pumping crude more expensive for oil companies by adding to the cost of building rigs and buying equipment. Soybean prices are crashing in response to Chinese tariff threats. Detroit’s car-makers are worried about potential tariffs on foreign autos, with executives warning about possible retaliation. The law of unintended consequences is playing out, or about to play out, in sector after sector of the economy.

(click here to continue reading Trump’s trade war is hurting the dairy industry..)

I would guess many dairy company owners and employees in Wisconsin are starting to regret voting for the Trump trauma train… 

Global Cheese
Global Cheese, Kensington Market, Toronto

WSJ:

 Cheese makers that rely on foreign sales are suffering as China and Mexico raise tariffs on U.S. mozzarella and provolone.

 BelGioioso Cheese Inc., a second-generation family company in Wisconsin, has seen sales to Mexico drop since officials there implemented tariffs of up to 15% in early June on most U.S. cheese. The levies were a response to tariffs the U.S. placed on Mexican steel and aluminum.

 On Thursday, Mexico was slated to raise its levy on most U.S. cheese to as much as 25%, while China on Friday is implementing tariffs on $34 billion of U.S. goods, including cheese and whey, a dairy byproduct often fed to livestock.

 “It’s a nightmare,” said BelGioioso President Errico Auricchio.

The Trump administration’s trade agenda is threatening that growth, dairies say. The Mexican tariffs affect as much as $578 million in U.S. dairy goods, while China’s duties could hit $408 million of cheese, whey and other products, according to U.S. Chamber of Commerce data.

July milk futures have dropped 12% since Mexico announced May 31 that it would strike back with tariffs. The price for a barrel, or 500 pounds, of white cheddar last week hit its lowest level since 2009. More cheese is in cold storage in the U.S. than any time since the U.S. Department of Agriculture began keeping track in 1917.

U.S. dairy exports last year totaled $5.5 billion, including $1.3 billion to Mexico, the top market, according to the Export Council. China, meanwhile, bought more than $577 million in U.S. dairy products last year, nearly half of it whey. (The recent tariffs don’t affect all dairy exports to Mexico and China.) Almost half of U.S. whey sales went to China last year, the Export Council said. The threat of the Chinese tariffs that take effect Friday has already hurt those sales. 

 

(click here to continue reading Take Our Cheese, Please: American Cheese Makers Suffer Under New Tariffs – WSJ.)