Thanks to Barry Ritholtz
❝ Trade-policy uncertainty is holding back global economic growth and may weigh on the world economy into 2020, according to a Federal Reserve research note that puts some hard numbers on an argument the US central bank has made for months.
❝ The rise in trade conflicts in the first half of 2018 “accounts for a decline in the level of global GDP of about 0.8 per cent by the first half of 2019.”…
“Had trade tensions not escalated again in May and June 2019, the drag on GDP would have subsequently started to ease,” they add. “However, renewed uncertainty since May of 2019 points to additional knock-on effects that may push down GDP further in the second half of 2019 and in 2020.”
And on and on and on…
Since the start of President Trump’s trade war, China has retaliated against US tariffs by raising tariffs on US goods. Less well known is that China has also been lowering rates for everyone else, putting US companies at an even greater disadvantage when trying to sell to China’s 1.4 billion consumers. Companies in the United States and elsewhere used to be on a level playing field, facing an average Chinese tariff of 8.0 percent. Now, there is a 14 percentage point difference between the average Chinese tariff US exporters face versus all other exporters. Some US goods are facing even wider differences in duties, like soybeans, farm and fish products, and certain manufacturing products.
❝ On Tuesday, the Commerce Department announced the termination of the 2013 Suspension Agreement on Fresh Tomatoes from Mexico…This means the U.S. will impose a 17.5% tariff on imported Mexican tomatoes, a move that experts say may lead to shortages and price hikes…
❝ According to estimates from Arizona State University, consumers could pay 40% to 85% more for vine-ripe and other fresh tomatoes.
Prices could rise 40% from May to December, according to the university analysis by economists led by Timothy Richards, the Morrison chair of agribusiness. During the cooler months, when there are fewer domestic supplies of tomatoes, prices could escalate up to 85%, according to the estimate.
Given that our fake president has the tastebuds of one of the lower species of carrion-eater, you really shouldn’t expect him to support affordable, fresh food delivered across any border.
❝ Hard times for farmers got tougher with President Donald Trump’s trade war. Now Midwestern farmers are filing the highest number of bankruptcies in a decade, according to a Wall Street Journal analysis of federal data.
And farmers aren’t hopeful about this year.
❝ Twice as many farmers in Illinois, Indiana and Wisconsin declared bankruptcy last year compared to 2008, according to statistics from the 7th Circuit Court of Appeals, the Journal reported. Bankruptcies in states from North Dakota to Arkansas leaped 96 percent, according to figures from the 8th Circuit Court of Appeals.
Farmers are being battered by sinking commodity prices — and stiff tariffs from China and Mexico in retaliation for Trump’s tariffs on imports…
Farmers fear it will take years to rebuild those trading relationships.
Don’t worry, be happy, Trump is on your side. Stealing your wallet.
If there’s a running theme in the latest batch of industrial earnings, it’s rising costs…A hodgepodge of higher costs — from rising raw material prices, labor shortages and supply-chain pressure — threatens manufacturers.
❝ Amid a busy day for manufacturers, Boeing Co., General Motors Co. and Pentair Plc had their numbers tarnished by mounting expenses. The culprits were varied: at Boeing, an escalating bill to get the delayed KC-46 Tanker program ready to make deliveries kept the company from raising its 2018 outlook as expected; GM’s profit will take a hit because of fallout from President Donald Trump’s tariffs on steel and aluminum; Pentair said higher input costs would weigh on third-quarter results before price increases recoup some of the lost margin toward the end of the year. United Parcel Service Inc., meanwhile, is still struggling to profitably handle the flood of e-commerce shipments…
❝ Rising costs are not an unusual phenomenon in the late stages of an economic recovery. Generally speaking, these cost pinches seem to be hitting hardest at shorter-cycle companies— such as consumer-goods or automotive manufacturers — that are arguably at or nearing a peak in growth. Whatever the extra source of cost, companies aren’t going to take the hits lying down. Many have used second-quarter earnings calls to pledge counteracting cost cuts and more aggressive price increases to help protect margins. But tariffs and rising trade tensions put us into new territory.
RTFA for the thrilling details. Unless you’re one of the dolts who takes orders from the Fake President. In which case you will be ignoring any analysis from respected business sources like Bloomberg – skipping past any facts counter to the economics dream world which received its best global test from Herbert Hoover.
We all know how well that turned out.
❝ President Donald Trump set off a wave of outrage…among Republican lawmakers, who accused the president of authorizing a “bailout” and “welfare” for Americans caught in the crosshairs of his own tariffs.
“It’s awful. American farmers want markets, not handouts. This is what we feared all along—that this would just turn into more aid programs,” Sen. Jeff Flake (R-AZ) told The Daily Beast.
❝ Reactions—nearly all of them negative—poured in from Capitol Hill after the Department of Agriculture announced that it would authorize $12 billion in “emergency” subsidies to farmers whose businesses have been hurt by the president’s trade policies, which have sparked retaliatory tariffs from China, Canada, Mexico, and the European Union…
❝ “Our farmers have been in non-stop saying they want trade not aid. And now they’re being put on welfare. So the tariff policies that have been put in place by the administration are now causing them to invoke a welfare policy for our farmers, which I’m sure is not what they wish,” Sen. Bob Corker (R-TN), who has proposed legislation requiring congressional approval of some tariffs, told reporters…
“The administration creates a problem for farmers, and now they need to put them on welfare. I think that’s kind of a misplaced policy,” Corker added.
RTFA for even more. When I first heard this silly-ass proposal my hope was that a few Congressional Republicans remained who weren’t full-time Trump pimps – and would raise a fuss. Here we go!