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THERE ARE ‘NUGGETS OF TRUTH’ TO WHAT TRUMP SAYS ABOUT TRADE

Pray that U.S. trade policy be wise and truly beneficial to the U.S.

“An honest witness does not deceive, but a false witness pours out lies.” (Prov 14:5)

President Trump has managed to enrage most of America’s closest allies by hitting them with name-calling, Twitter outbursts and steep tariffs on their steel and aluminum. In the past 24 hours, he has escalated his hardball tactics further, telling Canada and the European Union that if they don’t reduce their trade barriers, he’ll hit them with more tariffs….

Editorial Staff: Not true, some believe the tariffs are needed.

“Why isn’t the European Union and Canada informing the public that for years they have used massive Trade Tariffs and non-monetary Trade Barriers against the U.S. Totally unfair to our farmers, workers & companies,” he tweeted Thursday. “Take down your tariffs & barriers or we will more than match you!”…

Editorial Staff: People should know this.

“There are tiny nuggets of truth in Trump’s trade policy,” said Scott Lincicome, a trade lawyer and fellow at the Cato Institute, a libertarian think tank that is a strong advocate of free trade. “He has some good points.…

The U.S.-Canada dairy spat

For example, Trump called out Canada on Twitter for its 270 percent tariff on milk, a steep penalty that has made it difficult for American dairy farmers to sell to Canada. For years, U.S. farmers got around this restriction by selling ultrafiltered milk, which is high in protein and fat and often used to make cheese and yogurt, since that wasn’t subject to Canada’s tax.

Editorial Staff: Trump called out Canada on Twitter for its 270 percent tariff on milk!!!

But all of that changed in recent months after the Canadian government tweaked its laws, causing ultrafiltered milk sales from the United States to drop substantially. The Canadian government tightly controls the volume of dairy products in the country and the price. Canada dropped the price that its farmers receive for ultrafiltered milk below the global level, making it nearly impossible for U.S. product to compete anymore.

Editorial Staff: Making it nearly impossible for U.S. product to compete anymore – people need to know this.

Agriculture has long been one of the thorniest issues in global trade. Historically, countries wanted to protect their food supplies, and farmers proved a powerful political voice. In addition to Canada’s restrictions on dairy imports, the European Union has more than a 33 percent tariff on U.S. dairy products. (In contrast, the U.S. tariff on E.U. dairy is 17.5 percent.) The E.U. also prevents most genetically modified American crops from entering its borders.

Editorial Staff: 33 percent tariff on U.S. dairy products. (In contrast, the U.S. tariff on E.U. dairy is 17.5 percent – people need to know this.

Manufacturing has been another tense one. The E.U. currently has a 10 percent tariff on American auto imports, while the United States has a 2.5 percent tariff on imported European cars, a point Trump makes often.

Editorial Staff: 10 percent tariff on American auto imports, while the United States has a 2.5 percent tariff on imported European cars – people need to know this.

The explosion of non-tariff barriers

Bown and Crowley found that all of these countries subject some agricultural products to import quotas, meaning that only so much of the item can enter before hefty tariffs kick in. In the United States, only 4.5 percent of agricultural products fall under these tariff quotas. That’s far below the 9.5 percent falling under quotas in Canada and the 11.3 percent in the EU.

Editorial Staff: 4.5 percent of agricultural products fall under these tariff quotas. That’s far below the 9.5 percent falling under quotas in Canada and the 11.3 percent in the EU – people need to know this.

Of course, the United States isn’t a total saint on trade, either. Michael Strain of the American Enterprise Institute pointed out that the United States has wildly high tariffs, such as 350 percent on smoking tobacco, 130 percent on peanuts and 99 percent on prepared groundnuts.

Editorial Staff: Good explanation of past administrations.

Foreign companies have also complained about all the state and local regulations and the Buy American Act, which make it hard for foreign companies to bid on some government projects. And the United States has plenty of its own subsidies and protections for agriculture (especially on sugar).

Editorial Staff: Makes it hard for foreign companies to bid on some government projects – GOOD!!!!

Trump’s tactics appear to be backfiring

Trump might be calling for nations to tear down their trade walls, but so far, he has managed to get other countries to make the existing walls higher.

Editorial Staff: This is not true.

“Negotiating with a gun to someone’s head doesn’t usually work,” said Carlos Gutierrez, who served as commerce secretary under President George W. Bush and now advises companies and foreign governments. “We’re trying to improve trade, but the way it’s being done is backfiring on U.S. companies and the U.S. economy.” (Excerpts from Heather Long article ‌ Washington Post)

Editorial Staff: This is opinion, not news.

 

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