Wednesday, June 5, 2019

Bad Timing for Tariffs


China has to import more chicken and pork due to some domestic problems with porcine herds—a loss of 30 percent of swine herds alone and thus a greater need to import animal protein. However, because of the trade war between it and the US, American livestock exporters aren’t sharing in the opportunity. Overall, exports are down roughly 5 percent. If President Trump wants to do something good for Americans in the agricultural business, it seems he’d pay attention to this lost opportunity.

Overall agricultural exports to China are down 30 percent ($2.5B decrease on $8B exported the year before).

Dealmaker

Early in my career I bought a negotiating course. In it were flash cards describing different preparation and tactics for negotiations. Lately it seems President Trump has reduced the twenty-plus tactics to one: walk out (a practice he honed in business with regards to loans, bonds and construction subcontractor agreements)...maybe two tactics, insult the other party.

What deals has he made? Actually made by negotiating something? He’s walked away from deals to build the wall—or accomplished part by executive order, which isn’t a negotiation—Paris climate change agreement, Iran treaty, Trans-Pacific trade deal, trade with China, North Korean denuclearization, Russian election interference (maybe he hasn’t even tried on this one), government funding (leading to a lengthy shutdown)...and then recently a chance to work on infrastructure with the Democrats. You can’t count the tax cut deal of 2017 because I don’t know if anyone from the White House was actually involved. Maybe you can count the United States-Mexico-Canada (trade) Agreement (USMCA) but he’s on the verge of sabotaging it by increasing southern border tariffs.

According to one report, the trade tariffs have cost an American $731 on average, while the tax cut deal by decreasing the tax rate on $50K AGI household has saved us $200. So it seems he has sabotaged the one deal he has taken credit for.