MADE IN AMERICA

Fair Trade vs. Free Trade

One of the things you can say about Donald J. Trump is that he’s consistent, but he’s hardly ever right. For example, he thinks he knows a lot about money. The logic runs something like this: “I made a billion dollars, so I know how to fix things.”

It would be different if the stock market wasn’t at all-time highs. It would be different if the unemployment rate was in the toilet. But as the administration rolled out fire trucks and back hoes on the front lawn of the White House to promote their America First dogma, the headline in the Washington Post was “Trump’s ‘Made in America’ week is a hypocritical joke.” None of Donald and Ivanka Trump products are made in America. Ivanka’s shoes, handbags, blouses, dresses, jeans and shirts are made in Bangladesh, Indonesia, Vietnam and China and Donald’s ties and suits are made in China, Bangladesh and Mexico. When confronted with this fact, the two moguls say, “Everybody else does it.” Really?

Why does the press keep slapping this man? It seems like everything our President touches turns into a controversy at least and a bag of flaming crap at worst. Our very own Don “Quixote” Trump is not only fighting windmills, he is attempting to stop Niagara Falls with his bare hands. Our brave hero.

One of the lessons of war that escapes Donald Trump is what happened after the World Wars. The first war led to the losers to disastrous economic plights that turned people inward and voted for people like Hitler and Mussolini.

The nations of victors in WWII knew that they had to help the economies of many countries to make sure that peace would last. The United States basically took Japan on as a special project. We airlifted in experts and technologies to teach the Japanese how to make many products.

The hard-working Japanese culture and South Korean’s post conflict manufacturing produced some of the finest electronics for the world, and still does. The Donald must have been busy being rich in the 1950s and doesn’t remember how America was flooded with cheap products, like transistor radios, that were labeled Made in Japan.

As more and more American companies realized that they could get cheap parts for their products, the flood gates opened. Many of our automotive offerings needed more and more computer technologies, thus the need to import more parts from other countries. We also created giant discount box-stores that sold everything from TVs to T-Shirts at rock bottom prices. How did they do it? They bought products from other countries that were made by low wage workers.

While the United States knew that workers and factories here were being phased out, we kept thinking we could move those workforces to other industries. That only happened when the worker saw the writing on the wall early and had the capabilities to serve the needs of another field.

Training was essential to complete the migration from the agricultural age to the manufacturing age. Did we forget about this? Logic follows that it would take the re-education of millions of workers to pull off the conversion this time. Some people just don’t want to change.

Now, our great Orange Leader wants us to brand all our products with ‘Made in America.’ I get that, but it’s just a Band-Aid. In fact, the Band-Aid was invented in 1920 by Thomas Anderson and Johnson & Johnson employee Earle Dickson in Highland Park, New Jersey. Not all bandages are made in America, but they are a great example of an American invention that the world now uses. And the examples are countless. We design things, we just cannot make them at reasonable prices because Americans demand a wage to match our prosperous economy. Double-edged sword.

When NAFTA (North American Free-Trade Agreement) was signed, products moved from Canada and Mexico into the US without tariff. We also sold tons of stuff to those two countries.

According to the United States of America Trade Representative (an office of the President): The U.S. goods and services trade deficit with Mexico was $55.6 billion in 2016. Mexico is currently our 3rd largest goods trading partner with $525.1 billion in total (two way) goods trade during 2016. Goods exports totaled $231.0 billion; goods imports totaled $294.2 billion.

And their figures on Canada are similar: U.S. goods and services trade with Canada totaled an estimated $627.8 billion in 2016. Exports were $320.1 billion; imports were $307.6 billion. The U.S. goods and services trade surplus with Canada was $12.5 billion in 2016. Canada is currently our 2nd largest goods trading partner with $544.0 billion in total (two way) goods trade during 2016.

As you can see, this cry-baby tantrum about “fair trade” is foolish rhetoric by the President on the NAFTA deal. As far as China and other Pacific Rim countries are concerned it’s a different question, but best not to ask too loudly. With the amount of U.S. debt that Chinese banks hold, and our need for China to control North Korea, we might want to carefully plan what we say. Best not to Tweet.

Why does Trump keep complaining about trade? He skillfully convinced those workers who have been displaced by global trade to vote for him. He has to keep them in the hypnotic trance where he promises to magically take them back to a “better time.”

The mantra of “Jobs, Jobs, Jobs” only means something if the great one can actually create more jobs. Focusing on coal mining is convoluted logic. Coal has been displaced by natural gas and the good news, the US is pumps lots of that resource. The symbolism might be rich, but Trump is regressive in his thinking. Why did China just take the lead on producing solar energy products? Did we miss that?

Trump actually thinks that getting rid of regulations will magically grow plants and jobs. Rules don’t keep people from being successful, global markets do. Even if we got rid of every regulation, we would still have to produce steel at a price that competes. ‘Globals’ will always be able to make things cheaper and we could tax the imports but that would increase the price here. Why make the America consumer pay for your trade myopia?

What Donald Trump really doesn’t understand is that he’s a President for 1959, not a president for 2017. It’s too late to stop the windmills of the world from turning. If they don’t sell to America, they will sell to someone else. The water will keep coming over the falls, because that is what nature does.

Trump’s one man fight against globalization might make him look like Captain America, but in reality he’s just another America businessman taking advantage of Free Trade for his own benefit. Buy one of his ties, you’ll see where it was made.


TRUMP INVADES GERMANY

Attacks Fake News on Twitter

Donald Trump once again has shown the world exactly who he is and it’s embarrassing. This morning (5-30-2017) he proclaimed that Germany is somehow hurting the US economy. This is a funny tweet coming just days after the man was face to face with the Chancellor of Germany. Angela Merkel is surely thinking, “What just happened?”

I’m sure many of Trump’s rich friends drive Mercedes Benz and BMW cars, so why the post G-7 attack on the country that makes these quality automobiles? Mr. Know-It-All President says his trip was such a success, while the leaders in Europe are wondering what this guy is on.

Let’s just take a look at the concept of cars. Sales people at Mercedes dealerships are some of the highest paid people in automotive sales. The technicians at dealerships are also highly paid specialists. They are American workers who benefit from the products that Germany makes.

Mercedes claims that more than 350,000 Mercedes cars are sold in the US every year, while Media Monitors says there are 360 Mercedes dealerships in this country. Lots of jobs there.

We also built Mercedes Benz vehicles here. The Mercedes-Benz GLE-Class Sport Utility and the full-sized GL-Class Luxury Sport Utility Vehicle are built at the Mercedes-Benz U.S. International production facility near Tuscaloosa, Alabama, the home state of Attorney General Jeff Sessions.

It’s simple. When a news story is negative, it is fake news. When he tweets, we are asked to assume the position of, “this tweet speaks for itself.” Really? What does it mean to say that we have a “Massive Trade Deficit” with Germany?

According to the CNN Money web site: in 2016, the U.S. trade gap with Germany was $67.8 billion, the second largest in the world. America’s trade deficit with China, at $310 billion, was the only one larger.

But Germany also bought $80.4 billion worth of American goods and services last year, more than was purchased by any other European country except the United Kingdom.

Does Donald Trump really understand how trade works? We are starting to see that his priorities on policy are based on how things make him look, rather than what is the most important aspects for America. Rather than putting America First, it appears that putting Donald Trump first is more important.

His rants and tweet storms may be fun for him and his 30% devout followers they call his “base” but what about the 70% of America who just want him to do a good job? Every decision he makes is driven by the penchant to disrupt rather than lead.

You can’t keep attacking friends, like Germany and expect every news story to be bright and positive. Sean Spicer can pronounce that the 9-day trip was a success, but in reality, the damage that Trump left behind will hurt us for years to come.

Who is the real enemy here? Russia seems to be winning. Why is that?

 


PRESIDENT OUT OF TOUCH

Has Trump Ever Read the NAFTA Agreement?

He fails to see that the world has changed. He may love Twitter and uses it as a weapon, but that’s only the tip of the technological iceberg that’s floating toward his ship. He has the technology to know every fact, but fails to take the time to use it to our advantage.

His weakest point is the fact that he sells his misinformed opinion before getting the facts. I truly wonder if he has ever read the NAFTA treaty and fully comprehends how it works for American businesses.

Mexico purchased an estimated $2.4 billion of corn from the U.S. in 2015, according to Forbes Magazine. Now Mexico is threatening to take their corn business to Brazil. Mexico is currently our 3rd largest goods trading partner with $531 billion in total (two way) goods trade during 2015. Goods exports totaled $236 billion; goods imports totaled $295 billion.

The United States buys $297.7 billion worth of goods from Canada, which is 76.3% of total Canadian exports. Canada is currently our 2nd largest goods trading partner with $575 billion in total (two way) goods trade during 2015.

What NAFTA did in a nutshell was to create a “National Treatment” of all goods and services from the three countries: US, Canada and Mexico. The agreement basically means that for traders outside the zone, they had to treat all three countries as equal when it comes to the rules and regulations.

It also eliminated any tariffs on goods and services. For example, if Mexico makes a car and sells it in the US, they pay no tax on that good. As well, if Canada produces lumber and sells it in the US, they pay no tariff on the shipment. Why is this good?

Well, imagine that if all the US products and services were taxed by Mexico and Canada. We would be most likely also pay a tax to ship, therefore increasing the price of our goods in those two countries and would stimulate an opportunity for other countries to worm into Mexico and Canada with a better price and displace US companies as the preferred vendor. The additional taxes we might impose would not protect the bulk of profits our companies are making right now by selling goods to Mexico and Canada. This would hurt the US economy.

NAFTA helps settle disputes between our three nations and not to belittle another advantage by mentioning it last, but we have Intellectual Property Rights Protections under NAFTA. Without NAFTA, a Canadian or Mexican factory could produce knock-offs of our products and ideas and sell them around the world without much pushback from a world court.

Like the fat kid at the table, the Donald wants to take all the cookies from the other kids. And after he has taken all the cookies, he gets all huffy when he realizes that the other kids will get their own cookies from someone else and he will get none. He never comprehended that his actions hurt him, even when he felt he was getting his unreasonable share.

Trump floated the threat of signing an executive order (4-26-2017) to withdraw from NAFTA and got calls from the President of Mexico and the Prime Minister of Canada to discuss the renegotiation of the treaty. The President Goof-ball smiles, because he thinks he has won something. He once again has only been shown to be the bully he wants to be.

As these countries look to their Plan B, which means opening up trade with other nations to secure the goods they purchase daily from the US, Trump sits in his little oval office with his big plans that will eventually increase prices on everything we import. He is out-of-touch with the global world that was created by technology, not ideology. If you are a free-market capitalist, then you will certainly see that Agent Orange is putting something in the punch bowl.

If he was truly for the common man and on a quest to create new jobs, he wouldn’t keep cutting the budgets and destroying our relationships with customers for our products. He may think he knows how it works, but when Mexico stops buying corn from US, what will he tell that Iowa farmer?

Can we really afford to stop $500 Billion in trade with our NAFTA partners? I’m still waiting for all the greatness and winning. Markets want certainly, not gamesmanship and insolent deal making.