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PostPosted: Thu Jul 05, 2018 6:59 pm    Post subject: Reply with quote

Trade War Begins In Hours, As Trump Confirms China Tariffs To Start At Midnight
by Tyler Durden
Thu, 07/05/2018

If China was hoping for Trump to relent, and back down in the last minute before the start of tonight's China tariffs, set to take place at 1 minute after midnight, it will be disappointed.

Speaking to reporters aboard air Force One on route to Montana, the president said that the planned tariffs on Chinese goods would go forward just after midnight, as previously reported, and in so doing will deliver on a promise to his political supporters that risks provoking retaliation and, if taken far enough, sending the global economy into a recession.

Trump then said that another $16 billion of goods could follow in two weeks, before suggesting the final total could eventually reach $550 billion, a figure that exceeds all of China’s annual goods exports to the U.S., but is below the total calculated recently by Goldman Sachs, which saw as much as $800 billion in total tariffs on Chinese goods.

As previously reported China has vowed to hit back moments after the Trump decision is enacted - so it does not appears to be the initiator - by imposing its own $34BN of tariffs in kind on goods ranging from American soybeans to pork, which may in turn prompt Trump to raise trade barriers even higher.

“Once these tariffs start going into effect, it’s pretty clear the conflict is real,” Robert Holleyman, former deputy U.S. trade representative under Barack Obama and now a partner Crowell and Moring, told Bloomberg. “If we don’t find an exit ramp, this will accelerate like a snowball going down a hill.”

Which of course is what a trade war is all about. [....]

So ... it's on! And corporate America is preparing for some long-term gain.

Analysts Brace For "Serious Disruption" As Trade Growth Tumbles Ahead Of Tariffs
by Tyler Durden
Thu, 07/05/2018 - 18:05

While the US prepares to unleash its latest salvo in the trade war against China at midnight tonight, business surveys suggest that global trade is already collapsing

JPMorgan's Global Purchasing Managers' Index (PMI) data suggest that trade growth has already slowed dramatically this year, as tensions over tariffs have escalated.

“There is a huge correlation between the performance of Asian exports and Asian earnings. You can extend that analysis from global trade to global earnings,” said Tai Hui, chief markets strategist for Asia at J.P. Morgan Asset Management. Companies in sectors like consumer electronics are already suffering, he added.

As WSJ notes, the data signals that the synchronized world-wide growth that sustained global markets and company earnings for much of last year is already starting to run on empty. And that slowdown is likely to have a greater impact on trade than the developing conflict among the U.S., China and other major economies, analysts and investors say.

The global trade moderation helps explain the recent sell-off in emerging-market bonds and equities better than any fears of rising protectionism, BCA Research, an independent Canadian research firm, argued in a report last week. Any fall in trade is likely to first hit economies integral to globalized manufacturing processes, such as those of several emerging countries in Asia.

“When global trade expands, weak parts of the chain do well. Conversely, when global trade growth dwindles, these same weak links are the first to break,” said Arthur Budaghyan, chief emerging markets strategist at BCA Research.

But while the incessantly-threatened tariffs haven't taken effect yet, some economists arge that there is a link to the protectionist chatter...

“It might be that companies are anticipating trade becoming more difficult with China or with the U.S. and are adjusting their supply chains,” said Joanna Konings, senior international trade economist at ING in Amsterdam.

But one thing seems certain, it is not about to improve anytime soon as 'actual' tariffs are enacted...and retaliated to.

“If the trade dispute becomes more complicated, if both sides are not willing to change their stance, you could end up with a much more serious disruption,” said William Yuen, investment director at Invesco.

All of which seems to be increasingly priced into the bond market... [....]

I believe we have to get out of this maelstrom as soon and as easily as we can. Humility is certainly not our glorious leader's strong points. In fact, he's just the kind of silly ass you'd like to see pie'd. But it's what's needed here.
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PostPosted: Fri Jul 06, 2018 11:30 am    Post subject: Reply with quote

[quote="Bugs"][quote]America Has a Cheese Problem That’s Only Going to Get Worse

Well now....anyone wonder why the Yanks want to dump more cheese on us ?

Anyone wonder why they keep on producing more? Subsidies..... my my.

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PostPosted: Fri Jul 06, 2018 12:13 pm    Post subject: Reply with quote

Russia Joins Global Trade War - Imposes Tariffs On US Energy, Mining Imports
by Tyler Durden
Fri, 07/06/2018 - 09:17

Whether this is a coordinated response is unclear - and certainly on a much smaller scale - but Bloomberg reports that Russian Prime Minister Dmitry Medvedev signed a decree this morning imposing higher tariffs on U.S. products in retaliation for U.S. duties on metals imports, according to Economy Ministry statement.

Reuters reports that Russia's additional duties will apply to imports of fiber optics, equipment for road construction, oil and gas industry, metal processing and mining, according to an economy ministry statement.

Russia will impose duties on goods which have Russian-made substitutes, Economy Minister Maxim Oreshkin is quoted as saying in the statement.

“The compensation measures will be applied in the form of additional, higher rates of import duties ranging from 25% to 40% of the price of imported goods. Duties will be imposed on some U.S. goods, the analogues of which are produced in Russia. In particular, the measures cover some types of road construction equipment, oil and gas equipment, metalworking machines, rock drilling equipment, and optical fiber,” Minister Maxim Oreshkin said as quoted by the ministry.

“The financial damage inflicted on Russian exporters by the U.S. trade restrictions amounts to $537.6 million. This is the amount of additional duties that Russian suppliers have to pay in the U.S.

The current increase of duties allows us to compensate for only part of the damage amounting to $87.6 million. This is compensation that Russia has the right to recover under the WTO rules,” he said.

Russia will be able to compensate for the remaining part in three years since the introduction of the U.S. duties or after approval of the WTO dispute settlement body if it finds the U.S. restrictions violating the organization’s rules, the ministry said.

Makes you wonder how long Russia will stay with WTO - just like Trump - if this is all the response "you're allowed."

Trade wars are like tar-babies -- the stick to you in irritating ways. We don't want to be a part of this. Bureaucrats acting tough is always a bad sign, and trust-fund manchildren acting tough makes people giggle. Not a good thing at the head of a serious nation going into serious negotiations.

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PostPosted: Fri Jul 06, 2018 6:31 pm    Post subject: Reply with quote

Auto tariffs would be 'catastrophic' to Canada and cost 100,000 jobs, dealers warn
If Canadian government responds in kind, it could add $9,000 to sticker price of new car
CBC News · Posted: Jul 06, 2018 2:00 PM ET | Last Updated: 5 hours ago

The U.S. government threat to put a tariff on all Canadian-made vehicles would be "catastrophic" to Canada's economy, costing 100,000 jobs and adding as much as $9,000 to the sticker price of a new car if Canada responds in kind, dealers say.

Following recently announced levies on steel and aluminum, U.S. President Donald Trump has repeatedly threatened in recent months to impose a similar tariff on Canadian-made vehicles, something the Canadian Automotive Dealers Association warned Friday may be enough to tip the entire economy into recession.

U.S. auto tariffs could cut Canada's output by nearly 1 million cars, CIBC says
The metal tariffs saw steel face a surcharge of 25 per cent, while aluminum was hit with a 10 per cent hike. The president has suggested a similar plan for cars, one that would see 25 per cent on cars themselves, and 10 per cent on parts.

"This — or anything close to it — would be catastrophic for not only the Canadian automotive industry but for the economy as a whole," CAPA's chief economist Michael Hatch said at a news conference Friday in Ottawa.

The group, which represents 3,200 Canadian car and truck dealers, says that more than 100,000 manufacturing jobs would be at immediate risk if tariffs are imposed. "Longer term, indirect job losses at dealerships and elsewhere would drive this number much higher," CADA said.

ANALYSISTrump's tariff plan could put a serious dent in the auto industry
Other recent reports from banks have had similar conclusions, with Toronto-Dominion Bank recently calculating that the job toll from auto tariffs could be in excess of 160,000.

Hatch's analysis suggests that Ontario would feel the impact more than anyone, as the province is home to the lion's share of all auto and parts manufacturing in Canada.

On the consumer side, CADA estimates that if Canada responds with similar tariffs of their own on U.S. cars — just as they did in retaliation to the metals tariffs — he expects the average price of a car to increase by between $5,000 and $9,000, depending on the make and model. The average new car in Canada currently costs about $40,000, CADA says.

"Impacts on industry on both sides of the border will be significant but in the end it is the American consumer that will pay by far the biggest price if tariffs are imposed," Hatch said. "These figures aren't alarmist, they are the reality that we face."

Trump tariffs could tip Canada into recession, trade committee told
Car dealerships employ 156,000 Canadians, CADA says, and as many as 30,000 of those jobs could immediately be at risk if any car tariffs come to pass.

"In a trade war, we point the guns at ourselves," Hatch said.

The American consumer may pay a higher price for cars, but there will be more Americans working, and new investments coming into the country, whereas in Canada's case, we have even higher prices, plus unemployment, a declining dollar, and investment leaving the country. That's what they mean when they say nobody wins a trade war. It means -- negotiate!

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PostPosted: Mon Jul 09, 2018 12:31 pm    Post subject: Reply with quote

Canada should be embarrassed: Trudeau needs to smarten up on defence and pay our share to NATO
Diane Francis: Trudeau says Canada is doing its bit, but he's dead wrong

U.S. President Donald Trump just sent tough letters demanding that Canada and the other NATO allies live up to the two per cent of GDP spending commitment they made at their Wales summit meeting in 2014. This will be the subject of intense discussion at next week’s NATO summit.

The President’s letter said the U.S. “is increasingly unwilling to ignore this Alliance’s failure to meet shared security challenges.” He added that while he appreciates Canada’s contributions to defence around the world, they “do not excuse any of us from our commitments to ensure NATO has the resources it needs.”

“This frustration is not confined to our executive branch,” the letter continued. “The United States Congress has taken note and is concerned as well.”

He, like all his predecessors, have repeatedly ignored American requests to pony up more. In June 2016, the diplomatic former President Barack Obama also made it clear that Canada was not doing its part and said in his speech to Parliament: “The world needs more Canada and NATO needs more Canada.”

Adjustments should have been made years ago, but were not. Now, with an aggressive president in the White House, countries like Canada need to pay up.

By contrast, Australia (not a NATO member but reliant on U.S. military help) puts Canada to shame and will reach defence spending of two per cent of GDP by 2021. Already, Australia is spending twice as much as Canada — roughly $35 billion in 2018 — compared with Ottawa’s paltry $17 billion.

Frankly, this is embarrassing and explains why Trump is so upset.

Japan, also not a NATO member, realizes it is dependent upon U.S. military protection and Prime Minister Shinzo Abe is abandoning its domestic military sector and going on a buying spree for American-made weaponry, systems, and technology. This will also dramatically reduce its trade surplus with the U.S.

Meanwhile Canada, without any bargaining position in terms of trade because of its failure to even try to meet NATO commitments for four years, pouts and whines about Trump and his team, thus threatening to damage Canadians and ruin the two countries’ relationship for years to come.

The link between trade and defence contributions is totally clear. U.S. Treasury Secretary Steve Mnuchin last week said if NATO member countries are seeking exemptions from U.S. steel and aluminum tariffs they will be asked to step up their contributions to NATO.

Canada’s on the bottom third of the NATO spending list:

U.S. 3.6% of GDP
U.K. 2.1%
Greece 2.25%
France 1.75%
Poland 2%
Estonia 2.25%
Canada 1.25%

Meanwhile, Germany, Italy and Spain are laggards that spend less than Canada.

Germany is under huge pressure to get its act together and is faced with the withdrawal of 35,000 American troops.

“The United States continues to devote more resources to the defence of Europe when the continent’s economy, including Germany’s, are doing well and security challenges abound. This is no longer sustainable for us,” wrote Trump to Chancellor Angela Merkel.

John Bolton, Trump’s national security adviser, said that underpaying NATO members, not the U.S., have undermined the organization in the face of the Russian threat.

Frankly, Trudeau had better smarten up and soon.
The bolding was added.

This is part of the trade picture. You can't expect the US to shoulder almost the whole burden itsel, and be democratic about the trade of 'the West'.

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PostPosted: Mon Jul 09, 2018 12:42 pm    Post subject: Reply with quote

The interesting part about the entire NATO discussion is that had we simply moved ahead with:

-The CF-35's that we will likely end up with as replacements for the CF-18s (despite all the chest thumping to the contrary)

-Moved up the time table to replace the Lockheed CP-140 Aurora Aircraft (these have been in service longer than the CF-18s)

-Replaced the Kingston-class ships with the same timeline as the Iroquois & Halifax class ships;

You make your commitment to NATO and you also don't repeat the mistake of the Government in 2001 by sending your troops into harms way in incredibly dated equipment.

None of it is frivolous spending and all of it has been deemed as required (by way of equipment replaced) by Governments of both political strips.

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PostPosted: Wed Jul 11, 2018 3:20 pm    Post subject: Reply with quote

Good video by a knowledgable Canadian commentator on the fiasco that our trade negotiations have become.

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PostPosted: Wed Jul 11, 2018 5:03 pm    Post subject: Reply with quote

Is the video any better than the first time you posted it? (It wasnt very good then )

Ya know...back on June 13th or so?

Probably not. :D

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PostPosted: Wed Jul 11, 2018 6:26 pm    Post subject: Reply with quote

Sorry, I thought it was a more current continuation, made at a later date.

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PostPosted: Thu Jul 12, 2018 11:33 am    Post subject: Reply with quote

Jack Mintz: Canada has already picked a losing strategy for Trump's trade war
Canada accounts for less than two per cent of world GDP and any tariffs we impose ultimately hurt us by increasing import costs for businesses and consumers

Jack M. Mintz
July 12, 2018
8:20 AM ED\

With a newly elected left-wing Mexican president, a tariff war in full swing, and hopes fading for the ongoing NAFTA negotiations, it’s time to remind ourselves of economic and strategic issues related to free trade.

Retaliation against President Donald Trump’s tariffs is ultimately a failing strategy, especially for small countries like Canada. We might feel better defending ourselves with reciprocal tariffs, but the result is shooting ourselves in the foot.

First, let’s remember that while Canada might be the world’s 10th-largest economy, we still only account for less than two per cent of world GDP. We have little influence on world prices for anything except the one or two commodities where we control major market share, such as potash or uranium.

That means any tariff we impose hurts us without hurting others. Higher import prices increase costs to Canadian businesses and consumers. But foreign producers still enjoy the same net price, since any loss in Canadian sales is easily made up with sales to the large global market.

This point was recently made in an amusing Wall Street Journal article showing American reactions to Canada’s newly enacted tariffs on licorice, lawn mowers, inflatable boats, playing cards and assorted other consumer products. The United States Playing Card Co. reacted to Canada’s tariffs by asking “Is that the best you can do?” — since Canadian sales were only a small share of its overall demand.

Other American producers are a bit more concerned, such as Hershey Co., which already faces struggling global demand and whose Canadian customers make up 10 per cent of its sales. But overall, even in chocolate as with so much else, we are still pretty small in relation to the U.S. market.

Large countries get to play by different rules. As a net importer with a 20-per-cent share of the global market, the U.S. could optimally impose a tariff that would force down imported prices, thereby reducing prices paid to producers in other countries. The tariff would therefore increase national income as tariff revenues and cheaper imported prices offset any economic consumer losses from displacing cheap imports. Unlike small countries, it is optimal for a large country to impose tariffs on a unilateral basis.

Trade intervention can also be good for a large exporter like China. To grab market share, China has heavily subsidized products like rare-earth metals, steel and aluminum. It can now exploit its market power by taxing exports.

Small countries like Canada are best off pursuing unilateral free trade, not by retaliating

Small countries like Canada are best off pursuing unilateral free trade, not by retaliating. Just because another country might wish to mess up its economy with taxes and subsidies doesn’t mean we should mess up our own.

The Trump administration has been schizophrenic in trade policy. While saying its tariffs are designed to promote reciprocal free trade, it bargains for more protective policies for the auto industry in NAFTA negotiations. This is not free trade.

Neither is Canada a pure free-trader. We impose limits on foreign ownership in banking and telecommunications. We protect dairy, egg and poultry producers, who are now each worth an average of $5 million in wealth. And we restrain log exports, lowering production costs for our forest-product producers.

Negotiations could improve free trade for Canada and the U.S. Game theory provides two useful insights.

First, the “threat” point at which a country is better off without NAFTA. About a quarter of our GDP is exported to the U.S. versus American exports to Canada which make up about two per cent of U.S. GDP. Thus, NAFTA is far more important to us, leaving us with little credible leverage.

Further, Canada has developed few alternatives for our major global exports: One-third are in energy and vehicles and parts, both of which are overwhelmingly sold to the U.S. (95 per cent and 83 per cent respectively). In particular, regulations have prohibited the development of alternative markets for oil and natural gas exports, and auto-trade pacts have historically joined the U.S. and Canada at the hip.

Second, the long-run game. Co-operative agreements can be enforced by tit-for-tat strategies, such as responding to tariffs with tariffs. However, for Canada, this is a losing strategy. The Trump administration knows we would suffer much more in a trade war than the U.S. would. Putting on auto tariffs and killing off Keystone XL would be far more devastating than any retaliatory tariff policy we could pursue. Retaliation can’t work.

One option is to offer to remove trade irritants on a tit-for-tat basis. The Canadian government has wisely cultivated many influential friends in the U.S. to support NAFTA. However, more is needed. Prime Minister Justin Trudeau, as the current chair of the G7 group, could take up Trump’s suggestion to eliminate tariffs among G7 countries. Or he can offer to remove some Canadian trade irritants to get a deal done.

Canada, being a small trading partner with little bargaining leverage, can’t easily master The Art of the Deal. If NAFTA collapses and we retaliate with tariffs, we become the biggest loser of all. The federal government’s primary focus must make sure that never happens.

Jack. M. Mintz is the president’s fellow at the University of Calgary’s School of Public Policy.

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PostPosted: Fri Jul 13, 2018 9:24 am    Post subject: Reply with quote

It looks like the premiers are stepping up ...

N.B. Premier Gallant calls for unified First Ministers front as trade battle with U.S. heats up
Premiers to meet in New Brunswick next week for the annual gathering
Elise von Scheel · CBC News · Posted: Jul 13, 2018 4:00 AM ET | Last Updated: 6 hours ago

Despite the conflicting policy views held by some of Canada's premiers, New Brunswick's Premier Brian Gallant is urging them to remain united as Canada faces an onslaught of trade challenges from the U.S.

Tensions between the provinces have been high in the past year — especially out west, where British Columbia and Alberta have been feuding over a thwarted expansion project for the Trans Mountain pipeline. Ottawa ended up buying the pipeline from Kinder Morgan for $4.5 billion.

Gallant, who is hosting next week's annual premiers meeting in New Brunswick, said he fully expects that topic to come up, along with the perennial irritant of interprovincial trade.

"I think it's going to be very important as premiers to be as united as possible," he told CBC Radio's The House on Wednesday.

"There's a lot more that binds us together than divides us."

Remaining cohesive is key, given the trade war percolating between Canada and the U.S., Gallant said.

"Trade in all of its aspects will be top of mind next week."

Canada moved forward at the beginning of the month with $16 billion in tariffs against our southern neighbour — retaliation for U.S. tariffs on Canadian steel and aluminum imposed a month before.

Gallant is advocating a "quicker" approach to getting an interprovincial free trade agreement up and running and said he expects his counterparts will agree, given the sour atmosphere hanging over trade talks with the U.S.

This will be interesting to watch. There will be some frank talk amongst the premiers along the way, meetings after the sessions perhaps, etc ... it will be well worth watching to see if Justin senses opposition, and how it is handled.

What is hard for the Liberals to see is that our whole trade situation has changed -- already -- and their approach goes NOWHERE! They have to abandon their position and that has ramifications for their tax policy, and everything. If they are sensible, they will end up doing what Stephen Harper was doing -- irony on irony. And when you're a star like Justin, that's a hard pill to swallow.

The smart politics is is giving him a face-saving 'meaningless win' ...
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A trade war that we can't win

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