Trade wars.

There’s a way in politics of appearing to say yes, when what you’re actually thinking is there’s no way will you let that happen. It’s a combination of techniques; prevarication, filibustering, devil in the detail tedious scrutiny of the terms of the deal you’re supposed to be all up for making and of course some outright lies.

It’s as old as politics itself and the usual outcome is whoever it was you’d agreed to do whatever for, through sheer exhaustion with the whole protracted process, loses interest and simply goes away. Problem solved. While that’s an accepted and understood activity in political centres, it rarely works outside of that domain, especially in a business context.

Business is all about deliverables, with an end of year test called the bottom line in the accounts. They’re brutally simple numbers; you’ve either delivered a profit, minimal growth or in the worst case possible, a loss. In the case of the latter, it’s about then your career dissipation light goes off. Watching Trump scissor through the assembled throng at last week’s G7 in Canada was a sparkling example of that technique failing catastrophically.

It was all about trade, and various plans had been plotted to basically fuck Trump over, and he cutthroat razored his way through the lot of them. Looked at from a business prospect, it was actually about the EU versus the rest of the world, and with Trump acting as their spokesman, as is blindingly obvious from the picture heading up this piece. Merkel, Macron and Trudeau tried a gang up attack, and he just stared it down.

Everybody outside America is hyperventilating about Trump saying he’s going to impose retaliatory tariffs on goods coming into America from countries that already have tariffs in place against imports of American goods. The facts are simple and straight forward. For instance, everything being exported into the EU by a country outside it attracts a baseline import tariff of 8%, and there’s a choice selection of goods that get hit with even much higher tariffs.

Canadian dairy products get tariff free access to the vast American consumer market, yet anything dairy going northwards from America gets pranged with a 270% surcharge. As Trump rightly said in the aftermath of G7, everybody has been using America as a piggy bank and he was putting them on notice those days are over. America is a huge consumer market with a sheer mass that makes it questionable whether it actually needs to export goods, though if there’s a level playing field, it would obviously be desirable.

He means exactly what he says and is quite prepared to slam the door on all EU goods entering America. If there was ever any doubt about that, him slapping tariffs on over 900 goods imported from China a few days ago should have dispelled it. The Chinese thought making some token reductions in tariffs against imported American goods would be enough to see off the threat. That proved to be a serious miscalculation on their part.

His contempt for them and their dumb but deep state politics was transparently complete, with him reportedly turning up late to a breakfast discussion about gender equality and skipped sessions on climate change, clean energy and protecting the oceans, all of which enraged the liberal fake news industry. To add insult to injury, he left the summit early, leaving orders behind with his emissaries that America would not be endorsing any closing statement. He seemed to be crazily fixated on pulling the nuclear fangs of the North Korean dictator who had been threatening a few months ago to nuke the island of Guam.

When he was safely out of sight, Trudeau decided it was safe to give his own closing press conference where he said one or two very impolitic things, which I think will turn out to be a very expensive indulgence for Canadian imports into America. Trump has a certain track record for not being good in the forgive and forget area.

The bottom line is Trump can impose tariffs on any goods entering the huge marketplace that is America. If someone inside there has a massive craving for let’s say a now prohibitively expensive Camembert cheese, there’ll almost certainly be a dairy farmer who’ll start catering for that want, just as long as there’s a market for the product.

But the real long-term danger for exporters getting shut out of a huge marketplace like America, is that it’s notoriously difficult to get back in a few years down the line after everyone has finally decided to kiss and make up. By that stage, someone homegrown has already taken your market share of whatever product you’re trying to sell.

©Pointman

Related articles by Pointman:

How to turn around a failing economy.

Zugzwang.

How to get run over by the Trump juggernaut.

Find them, fix them and then destroy them.

Click for a list of other articles.

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Comments
18 Responses to “Trade wars.”
  1. Graeme No.3 says:

    Professional politicians baffled by the real world.
    I see Merkel is on her way out with the coalition fracturing over unwanted (by most) immigration.
    And the Ontario election result should give the Liberals the shivers.

    Liked by 1 person

  2. David Chappell says:

    That photograph is a classic illustration of where the power lies. The EU team did themselves a big disservice releasing it.

    Liked by 1 person

    • Annie says:

      I think they thought it would be interpreted differently. Indeed, there were some supposed body language ‘experts’ who did just that! My interpretation was much as Pointman describes it.

      Like

  3. Politics is about getting the words right and looking good. Business is about making a profit from your work. Trump isn’t a politician, so the fireworks were certain to happen.

    It’s obvious to me at least that if you can’t make your own steel and Aluminium, then your country can be subject to hydraulic despotism, and much the same applies to any product that may be needed in war or indeed during peacetime. If you can’t build your own ships, then in war you have a limited supply and in peace you’ll have to accept what you can get. Energy supply is another thing a country must own.

    It’s interesting watching the show, and how the media don’t seem to see the realities of what’s happening.

    Liked by 2 people

    • philjourdan says:

      “Trump isn’t a politician”

      It is sad that virtually no one in the US understands that. Or perhaps not. By not understanding who Trump is, they will be condemned to be wrong about him at every turn.

      The G7 leaders are learning that, but because they are politicians, it is taking them a long time. But even at that, they are learning faster than the US opposition.

      Like

  4. rapscallion says:

    Don’t you just love Trump? That photo say’s so much, but basically it’s Trump saying “Yeah, and whatcha going do about it punks?

    He’s right of course, why the hell should he have to pay such tariffs when the EU doesn’t. Trudeau made a massive mistake and boy is he going to regret it.

    Lastly we have all the lefty heads exploding after his meeting with Kim Jong Un. First US president to do it. I hope it all comes off, and whilst Kim Jong Un is a nasty, odious reptile, if he manages to do Trump’s bidding and drag N Korea into the 21st century and improve the lot of the North Koreans whilst being protected by Trump, then it’s better than the current situation.

    The Left are going berserk – great isn’t it!

    Liked by 2 people

  5. Margaret Smith says:

    The press here in the UK, put a different spin on the picture: they saw Trump as being ‘uncomfortable’ under the steely stare of Merkel. I saw Trump as being mildly amused at these pigmies trying to change his mind.
    Then he walked out leaving them to talk about their scams as he had important things to do in Singapore – how galling.
    Trump’s opponents haven’t realised yet they can’t browbeat him and they have to learn the world is changing fast and the carefully constructed left-wing paradise is now receding. We owe this transformation to President Trump. No wonder the left is so frantic to oust him. But nothing they do has the slightest effect – it’s wonderful.

    It is a long time since we have had someone truly great to look up to. Thank you Donald Trump!

    Liked by 2 people

  6. hoppers says:

    I enjoy seeing Trump slap down the Euro Goons as much as the next man, but it is telling that in almost every statement he made he emphasized that everyone was being unfair to American Farmers.

    This seemed to be his main gripe and is an entirely self-inflicted wound.

    I won’t eat GMO crap (around about 90% of US corn and soy production), and fully support the EU, who I disagree with on just about everything else, in wanting to keep the stuff out of the Euro zone. Don’t much like hormone laced meat either.

    Why the American people put up with it is frankly beyond me.

    Apart from the toxic round up laced agriculture, he is completely correct.

    Like

    • The Quiet Farmer says:

      Sorry to disappoint, but the EU ban on GMO is largely cosmetic, according to some EU farmers I met over there in 2015.

      Like

    • hoppers says:

      Thanks Catweazle. Yes, I absolutely understand that the EU is a disgusting corrupt institution. May I recommend “Adults in the Room” by Yanis Varoufakis for anyone who doubts how appalling the EU is. Well worth the read.

      None of which changes the fact that Trump is continually banging on about how unfair the EU is to American farmers, which is his major gripe. Given the choice, no-one wants to consume GMO garbage, and that is what American farmers happen to be producing.

      If you want the market, produce what consumers want. Simple supply and demand, as Pointman eloquently pointed out.

      Like

  7. Margaret Smith says:

    Sorry Pointman, I and my clumsy fingers have done it again – I accidently hit 3 stars. Can you correct this as I meant to hit the title. Thanks.

    Like

  8. gallopingcamel says:

    The news today is that the Chicoms pushed back against Trump’s tariffs on steel and aluminum.

    That is something they may come to regret as Trump responded by a $200 billion “raise” on imports from China.

    China’s logical response would be to slap tariffs on $200 billion of US imports to China. That won’t happen as the total US exports to China average about $150 billion per year.

    You don’t have to be a genius to figure out who is going to win this trade war.

    Anyone who has played poker will understand what is going on. Trump is a much better poker player than any US president since Ronald Reagan or John F. Kennedy.

    Like

  9. Pointman says:

    A pm wearing fake eyebrows ?????

    Pointman

    Like

  10. Pointman says:

    Trump refuses to back G-7 declaration, calls Trudeau ‘weak’ and threatens car tariffs

    https://www.cnbc.com/2018/06/09/us-signs-g-7-declaration-calling-for-reduction-of-tariffs.html

    Pointman

    Like

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