Wait, they’re not conflating the deficit with the debt?
Are we actually making progress!
I said in another thread, and I’m only about 50% joking: I think that Trump believes that applying a tarriff to another country means they have to cut a check to the Trump Foundation every time they want to import something. Milton Friedman, Adam Smith and Jed Bartlett he ain’t.
I tried to explain this in simple terms: imagine each household is like a country. The man (remeber I am keeping this simple: don’t accuse me of sexism please) is, as the pater familias, the government of the household. All American households run a deficit with WalMart (except, of course, the employees of WalMart, assuming they get paid more than they spend at WalMart, and the owners/shareholders of WalMart). The deficit turns into debt, as expressed in the credit card balance of the household at the end of the month.
Assuming that WalMart is unfair because you don’t get nothing for your money is absurd, is it not? You have bought things to incurr in the deficit. In fact, your deficit is exactly as high as the value (price) of the things you have acquired. You have the things. WalMart has the money. Is that not fair?
Now the man imposes tariffs on WalMart. Because he thinks it is not fair. It seems fair to you, but he feels it is not, and and according to modern economic theotrumpy feelings are more important than facts. How does that solve his deficit? Who pays the tariffs? Where does the money for the tariffs come from, and where does it go? What happens to the prices you pay to WalMart when you impose tariffs on them? Are you sure this is not socialism, communism even?
This is the moment they stop listening and want to punch me in the nose.
I run away.
Yes. We are also living in a world where most newspaper readers (WSJ included) have absorbed a bias in favor of free trade without a decent understanding of its underpinnings. Which is ok: I don’t expect most people to have eg taken coursework in introductory and intermediate economics, along with an elective in international economics. I don’t understand how my television works either.
It’s not that difficult: it just requires a little study. This isn’t quantum mechanics or even Newtonian mechanics.
Interestingly, some of the people around Trump like Scott Bessent or Stephen Miran have a better understanding of the underlying issues than Wilbur Ross did back in 2017. I’m not sure how much this matters though. Matt Yglasias on the Ezra Klein show:
But Bessent has talked about tariffs as a negotiating tactic. And Stephen Miran, the economist, wrote an article for his hedge fund or something. And what the article “says” is that the liberals are wrong, and tariffs are really good.
But then the analysis is that tariffs actually won’t raise prices because exchange rates will adjust. And that means that you want to make the tariffs phase in slowly so that financial markets have time to adjust to the tariffs. And it all just seems like a way to say that you’re for tariffs while actually acknowledging that they’re bad.
One view is that Trump was tricked by these guys. I don’t know. I feel like I’ve been looking at all the obsequious flattery that different chief executives have been throwing Trump’s way. And I’m like: Do I really think that Donald Trump is such a naive patsy as everybody is saying? Does everyone know the way to Trump’s heart is with completely disingenuous flattery? Or does he just enjoy this and think it’s funny that he can make the monkeys dance by putting it out there that if you say nice things about Trump, he’ll like you?
I’m guessing it’s the latter. To understand the authoritarian mindset, study Vladimir Putin. To understand Vladimir Putin, look to Kamil Galeev. Putin doesn’t care what you believe. Putin cares what you do for him and say about him. Same for Trump I maintain.
Isn’t one of those wingnut theories about the trade deficit that countries artificially reduce the value of their currencies to disadvantage the US … and now with these heavy tariffs applied, exchange rates will adjust (ie the USD will strengthen) and this will advantage the US?
I’m not sure: I haven’t read the original article.
But if tariffs are imposed you would expect the currency to become stronger than it otherwise would have been, blunting the bad effects of your policy, though not eliminating them. How much? That’s an empirical question.
This is an exercise in smoke blowing: pump in a lot extraneous but not obviously wrong analysis to obscure the underlying negativity of your policy. Word smithing can be used to understand, but also to deceive. Modern conservatives figure that they are in on the joke, but that’s rarely the case when they are discussing policy structures that pad Trump’s pocket.
This is not the thread for deportation talk, please keep it on tariffs.
Moderating.
Note: The OP requested we keep this thread from be derailed by deportation and I agreed. There are other threads for deportation. including this very active one: The Trump deportation news thread
This topic was automatically opened after 33 minutes.
News reports agree that Trump’s tariff thread against Columbia was, from a MAGA POV, fully successful. This originally appeared in the Miami Herald:
He swore he wouldn’t give in to Trump, but Colombia’s imminent ruin forced Petro’s hand
The tariffs would have hurt Colombia’s economy far more than that of the U.S., so it was in Colombia’s national interest to cave.
I grasp that MAGA are pumping their fists, but facts on the ground differ.
Bloomberg, bolding added:
A deportation arrangement with Colombia that the White House on Sunday night presented as a total victory for Donald Trump is looking less clear in the light of day.
The Colombians the US tried to deport by military flights on Sunday will start traveling back to Colombia on Monday on the nation’s own planes, according to the South American country’s ambassador to the US.
That’s different than what the White House announced on Sunday night when Press Secretary Karoline Leavitt said Colombia accepted “all of President Trump’s terms,” including “on US military aircraft, without limitation or delay.” She made no mention of Colombia sending its own planes. The agreement came in exchange for Trump sparing the nation from 25% tariffs and financial sanctions.
For future reference, understand that Trump lies, his press secretary lies, and that their announcements should be ignored. Look at what happens and what they do, not what they say. That means delaying conclusion for a couple of days at least.
Finally, track the damage that Trump does to US national interests:
While the US is historically Colombia’s top trade partner, Petro has already been strengthening ties with China. During the period on Sunday when US tariffs looked imminent, Petro called for deepening his nation’s connections with other markets. Having seen Colombia’s experience, other countries may follow suit.
Trump is driving the world into the arms of China.
Overpriced Valentine’s day flowers would have been a disaster for Trump’s popularity and a bigger disaster for Petro’s economy, so I’m not surprised that calmer heads were allowed to prevail. Nor do I assume that to be the case forever moving forwards.
(Of course Colombia has to be realistic given Trump’s insane spur-of-the-moment threats. I won’t mention this here again, but Colombia’s problem was not accepting deportees. My understanding is it was because they arrived by military plane, unannounced, and were reportedly handcuffed and denied basic services. Threatening 25-50% on coffee, flowers and oil would make anyone reconsider. But others have taken note that Colombia is a pretty staunch American ally and this was over almost nothing, since if the usual practice of civilian planes was used there was little issue.)
Fair enough. I was wondering if something like that was up, but every news story said the same thing. That now has changed, as you correctly tell us.
You are correct to advise waiting to see if Trump administration statements are false, but I’m afraid that the story could change again. If too many news stories effectively say that Pedro got the last laugh, Trump may renew tariff threats.
Thank you for posting the terribly misleading Miami Herald article. Those reading it would have little idea what the Colombian government was after, that they had no problem with inflights to the country, that the US had flown returnees in with civilian aircraft for years, and that the underlying dispute was one of human rights and human dignity. I’m not claiming media bias: I’m claiming funhouse mirror distortion of the underlying situation.
This sort of thing needs to be tracked as well. Trump made his decision without calling for any sort of national security meeting: he had his own agenda. The threatening of tariffs by Trump is an extension of dominance politics: a media win counts as a win, regardless of the inaccuracy of the initial media reports. Large swaths of the reporting community, formerly serving truth and accuracy, have now been cowed by a leader hostile to democratic rule. Those in Baltics have seen this movie before. Patriots need to keep an eye out at news organs showing fealty to a man rather than their profession.
If Trump goes ahead with his tariff threats, perhaps the first response to tariffs from the affected nations should be a 100% duty on all Teslas and Tesla parts.
That article on what Trump, at least, sees as a deal with Colombia, was written by a highly anti-Trump opinion writer:
It seems there was some sort of semi-secret deal and the substance varies depending on which anonymous source a reporter trusts. Maybe Trump lost, but maybe acceptance of military flights was just been delayed a bit. The anti-Trump camp needs to be a big tent and I would not rush to exclude someone like Antonio Maria Delgado because of one article that was hardly a Trump endorsement.
But how is that supposed to work? Okay, I devalue my BuyingUnits to disadvantage the US. Fine, okay, good plan.
The US then strengthens the dollar vs. my BuyingUnits. That means my BuyingUnits have been further devalued, and thus disadvantages the US even more. When it was 100 BuyingUnits to the US dollar, you could buy a pound of Product. Now that it’s 200 BuyingUnits to the US dollar, you can buy two pounds of Product. So US producers of Product see their sales drop by that one pound per customer.
Ever notice how the headlines never report a currency trending favorably for a country? Never happens.
@PhillyGuy: Yeah, I don’t want to apply purity tests. I still maintain it was a misleading article. Generally speaking, smart diplomats don’t look for wins - humiliating other countries isn’t a sustainable strategy. They look to further their national interests, preferably without humiliating other countries. That’s what diplo-speak is about. Trump upends this approach because he doesn’t care about US interests, only domestic flattery during the current news cycle.
And it’s actually pretty hilarious to see that in action, live.
I had a friend who married an actual, honest-to-god diplomat, worked in various embassies around the world type. Once, we were in a discussion with another friend of mine on some issue or other, and it amazed me how she made my other friend think she was on his side, even though she was contradicting everything he said. It’s like an artform.
Tariffs now put off until March 1.
I wonder how much money Trump and company make manipulating the foreign currency markets.