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CAN-USA Tariff Strife (split from various pol threads)

brihard said:
There will be a vote in the Senate on the resolution tomorrow, and Kaine may have the necessary votes from a handful of Republicans. I don’t know the mechanism after that; whether it needs to go to the House for a vote as well to invalidate the emergency. If it does, well, the Republicans in the House as a lot are whipped cowards. But with Trump’s tariff announcement tomorrow, we would have some time to identify house Republicans whose districts are competitive, and also export a lot to Canada. Pick eight or ten such districts and shove retaliatory tariffs up their ass in hopes that four or five of them blink
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The next steps for Congress

www.mayerbrown.com

President Trump’s Use of the National Emergency Act and Possible Congressional Next Steps | Insights | Mayer Brown

Recently, President Donald Trump issued three Executive Orders (EOs) to impose tariffs on Mexico, Canada, and the People’s Republic of China (PRC)
www.mayerbrown.com www.mayerbrown.com
. . . In addition to the president’s authority to declare a national emergency under the NEA, Congress also has a role to play. Specifically, under the NEA, Congress may terminate a national emergency through a joint resolution, which proceeds as follows:
  1. If a Member of Congress introduces a joint resolution proposing the termination of a national emergency, the resolution is sent to the appropriate committees of the House of Representatives and the Senate. In the House, termination resolutions have previously been referred to the Committee on Transportation and Infrastructure, which has jurisdiction over “[f]ederal management of emergencies and natural disasters.”5 The Senate’s referral process varies, as it appears to be influenced by the subject matter of the emergency powers invoked by the president in the national emergency declaration.6
  2. The respective committees report their recommendations within 15 calendar days, unless otherwise determined by the chamber.
  3. The joint resolution becomes the pending business of the chamber in question and is voted on within three calendar days unless otherwise determined by that chamber.
  4. Upon the joint resolution’s passing in either the House of Representatives or the Senate, the joint resolution is referred to the appropriate committee of the other chamber and is reported with recommendations within 15 calendar days. The joint resolution must then be voted on within three calendar days, unless otherwise determined by the house.
  5. Finally, if any disagreement exists between the House of Representatives and the Senate with respect to a passed joint resolution, conferees are promptly appointed and the committee of conference must file a report with respect to the joint resolution within six calendar days after the day on which the conferees on the part of the Senate and the House are appointed. The report is acted on by both chambers within six calendar days. In the event the conferees are unable to agree within 48 hours, they report back to their respective houses in disagreement.
Any joint resolution passed by Congress would be privileged, and, accordingly, receive a vote in both the House of Representatives and the Senate.

Any passed joint resolution would be subject to a presidential veto. If the resolution is vetoed, Congress would need a supermajority (2/3) vote to override the veto to pass the resolution.
. . .
 
Blackadder1916 said:
The next steps for Congress

www.mayerbrown.com

President Trump’s Use of the National Emergency Act and Possible Congressional Next Steps | Insights | Mayer Brown

Recently, President Donald Trump issued three Executive Orders (EOs) to impose tariffs on Mexico, Canada, and the People’s Republic of China (PRC)
www.mayerbrown.com www.mayerbrown.com
. . . In addition to the president’s authority to declare a national emergency under the NEA, Congress also has a role to play. Specifically, under the NEA, Congress may terminate a national emergency through a joint resolution, which proceeds as follows:
  1. If a Member of Congress introduces a joint resolution proposing the termination of a national emergency, the resolution is sent to the appropriate committees of the House of Representatives and the Senate. In the House, termination resolutions have previously been referred to the Committee on Transportation and Infrastructure, which has jurisdiction over “[f]ederal management of emergencies and natural disasters.”5 The Senate’s referral process varies, as it appears to be influenced by the subject matter of the emergency powers invoked by the president in the national emergency declaration.6
  2. The respective committees report their recommendations within 15 calendar days, unless otherwise determined by the chamber.
  3. The joint resolution becomes the pending business of the chamber in question and is voted on within three calendar days unless otherwise determined by that chamber.
  4. Upon the joint resolution’s passing in either the House of Representatives or the Senate, the joint resolution is referred to the appropriate committee of the other chamber and is reported with recommendations within 15 calendar days. The joint resolution must then be voted on within three calendar days, unless otherwise determined by the house.
  5. Finally, if any disagreement exists between the House of Representatives and the Senate with respect to a passed joint resolution, conferees are promptly appointed and the committee of conference must file a report with respect to the joint resolution within six calendar days after the day on which the conferees on the part of the Senate and the House are appointed. The report is acted on by both chambers within six calendar days. In the event the conferees are unable to agree within 48 hours, they report back to their respective houses in disagreement.
Any joint resolution passed by Congress would be privileged, and, accordingly, receive a vote in both the House of Representatives and the Senate.

Any passed joint resolution would be subject to a presidential veto. If the resolution is vetoed, Congress would need a supermajority (2/3) vote to override the veto to pass the resolution.
. . .
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The National Emergency could also constitute a trigger for Force Majeure in a large number of commercial contracts. I’m not sure how that might play out between contracting parties performing bi-national and interdependent work for defence contracts, but you can bet Carney has tasked lawyers with looking at that.
 
Why this is an inflection and not just a disturbance.

en.wikipedia.org

Robert Lighthizer - Wikipedia

en.wikipedia.org en.wikipedia.org

Carlson:
What about our current system needs to be changed? Why is it important to do this, to institute tariffs, to rethink trade?
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Lighthizer:
has the system failed? And to me, it's an emphatic yes.
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this system doesn't work, we have this giant transfer of wealth from the United States overseas. And that is in the form of trade deficits. And the way the system is supposed to work, no one should have large trade deficits for long periods of time.
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that's a transfer of wealth from Americans overseas in return for current consumption. And it has nothing to do with economics. It's entirely the result of industrial policy of other people and our being defenseless.
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There's a data point called the International Investment Position of a country. And that is how much, for us, all Americans own throughout the entire world versus how much everyone else owns here. That number is a negative $23.5 trillion. And if you said, what was it 20 years ago, it was probably a negative $3 trillion. So we have transferred about $20 trillion worth of our national wealth, and I would say the future income of that wealth overseas in return for current consumption.
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n 2003, Warren Buffett did an article on this point, and he was worried about the trade deficit because it was leading to a negative net International Investment Position of Americans. And it was basically transferring. Well, it's the same thing I am.

When he was worried about it in 2003, the number was a negative $2.3 trillion. So since he sort of raised the red flag on this and said, we've got to get back to balanced trade, the situation has gotten geometrically worse.
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this system has really slowed economic growth in the United States.
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Which brings to mind Herbert Stein's proposal.

“If something cannot go on forever, it will stop.”​

― Herbert Stein, What I Think: Essays on Economics, Politics, and Life
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And Margaret Thatcher's corollary

“The problem with socialism is that you eventually run out of other people's money.”​

― Margaret Thatcher
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....

It doesn't really matter, the rights and wrongs of the economic situation.

The problem is that there is a substantial body of thought in the US that believes the US is in economic trouble and that change, and significant change at that, is necessary.

That is where we are now.

This is not just Orange Man and flights of fancy. This is a supported position that has weaponized Trump as an agent of change, as a disruptor.

We need to look to ourselves and revert back to Adam Smith's primary proposition - at least in my opinion.

It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages. Nobody but a beggar chuses to depend chiefly upon the benevolence of his fellow-citizens. Even a beggar does not depend upon it entirely.
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To believe in a particular order of things being maintained, liberal or otherwise, is to depend chiefly on the benevolence of others.
 
First of all....

There is a plan.

Implications of the analysis for Canada


it is dangerous for small countries to become too dependent on any large trading partner,

there is one economist whose work is very relevant in this moment: Albert Hirschman, author of a striking book published in 1945, National Power and the Structure of Foreign Trade.In recent decades, this work has gone largely ignored,

.... The economist Orris Herfindahl later used Hirschman’s ideas to create an index measuring corporate concentration, which was adopted by the US Department of Justice, among others.

... Neoliberal thinkers often see politics as a derivative of economics. But Hirschman viewed this in reverse, arguing that “so long as a sovereign nation can interrupt trade with any country at its own will, the contest for more national power permeates trade relations”.And he viewed “commerce as . . . a model of imperialism which did not require ‘conquest’ to subordinate weaker trading partners”, as Adelman says. This is close to how the Trump advisers parse economics. But it is very different from how Adam Smith or David Ricardo saw trade flows (which they assumed involved comparably powerful players).Some economists are leaning into this shift.

Just after Trump spoke, a trio of American economists — Christopher Clayton, Matteo Maggiori and Jesse Schreger — released a paper outlining the growing field of “geoeconomics”, inspired by Hirschman.

... three themes that investors should pay attention to.

First, and most obviously, the trio’s analysis shows that it is dangerous for small countries to become too dependent on any large trading partner, and they offer tools to measure such vulnerability.

Second, they argue that the source of America’s hegemonic power today is not manufacturing (since China controls key supply chains) but is instead financial and structured around the dollar-based system.Trump’s tariffs, therefore, are essentially an attempt to challenge another hegemon (China), but his policies around finance are an effort to defend existing dominance. (The hegemony in technological power, I would argue, is still contested.) This distinction matters for other countries trying to respond.

Third, the trio argue that hegemonic power does not work in a symmetrical manner. If a bully has an 80 per cent market share, say, it usually has 100 per cent control; but if market share slips to 70 per cent, hegemonic power crumbles faster, since weaklings can see alternatives.

This explains why the US has failed to control Russia via financial sanctions. And the pattern may play out more widely if other countries react to Trump’s aggressive tariffs by imagining and developing alternatives to the dollar-based financial system. Bullies seem impregnable — until they are not.
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The world needs to build a trade ring fence around the US and let them figure out how they're going to trade with people who don't want to trade with them.
 
Can it work?

Not all companies choose profit over patriotism. Many, such as Nokona baseball gloves, Airstream travel trailers, Harley-Davidson motorcycles, and All-Clad kitchen pans, have long embraced the argument Trump is making now: “Yes, you may pay a bit more, but you’re supporting American jobs and families while receiving superior quality.” The continued success of these companies proves that Trump’s tariffs can work.
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Is it working?

There are already clear signs that Trump’s tariffs are yielding results. Since Trump took office in January, more than $1.7 trillion in new investment has poured into the United States. General Motors is ramping up vehicle production in Indiana. Apple has announced a $500 billion investment that will create 20,000 American jobs. GE Aerospace is investing $1 billion across 16 states. Even foreign firms, including Japan’s SoftBank and Taiwanese semiconductor giant TSMC, are increasing their investments in the U.S. economy.
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Has it always been an off the wall idea?

Only if you consider the pre-Obama Democrats off the wall.

Democrats once sounded a lot like Trump when warning about the dangers of trade deficits and unfair tariffs. A resurfaced clip from 1996 shows Nancy Pelosi arguing against granting China Most Favored Nation status, lamenting that while the United States imposed a mere 2 percent tariff on Chinese goods, China levied a 35 percent tariff on U.S. exports. In 2008, Barack Obama labeled NAFTA a Wall Street scam. Bernie Sanders has spent decades excoriating free trade.
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For the record

In 1999, he (Trump) changed his party affiliation to the Independence Party of New York. In August 2001, Trump changed his party affiliation to Democratic. In September 2009, he changed his party affiliation back to the Republican Party.
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en.wikipedia.org

Political positions of Donald Trump - Wikipedia

en.wikipedia.org en.wikipedia.org
 
Nobody is going to ringfence the US any more than they did when Nixon trashed the gold standard in 1971.

Countries, including Canada, the UK, Australia and the EU are lining up to renegotiate trade deals.

Elizabeth MacDonald
@LizMacDonaldFOX

A dozen nations now talking tariff and trade deals with the Trump White House: Cambodia, Vietnam, Thailand, Japan, India, South Korea, Australia, the U.K., Israel, Argentina, Canada and Mexico
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Kirkhill said:
Nobody is going to ringfence the US any more than they did when Nixon trashed the gold standard in 1971.

Countries, including Canada, the UK, Australia and the EU are lining up to renegotiate trade deals.
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Canada & Mexico had negotiated a trade agreement with Trump, and Trump dropped a steaming coiler on that. He is not a man of his word, and he will flip on his own agreements. The countries lining up to negotiate with Trump today are either still in some state of denial or they think “ya, sure - fool me thrice.”

You spend a lot of time sane washing Trump’s antics. He is not a stable genius nor multi dimensional chess player (probably struggles in 2D). His objective is personal enrichment & glory, not a national best interest. He is unrestrained by any belief that he should understand a complex system before turning it on its head to make to “better”. He has a trail of failed business endeavours in his wake and he is making good progress toward adding a whole country to his legacy of failure.

… of course, he is good at downloading the consequences of his failure onto poorer people while he walks away with fatter pockets.
 
McG said:
of course, he is good at downloading the consequences of his failure onto poorer people while he walks away with fatter pockets.
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If you control the occurrences of financial disasters as well as the steps of recovery, you and your co-conspirators can accumulate an unbelievable amount of wealth. It boggles the mind to consider how many enablers this nonsense has and how, in all likelihood, they will get away Scot-free.

🍻
 
But from a rest of the world perspective, the takeaway is the US cannot be trusted under Trump, and other nations are best to work around the US. If North American companies want unfettered access to global trade markets, they are best served moving to Canada or Mexico … and we should be telling them as much.
 
McG said:
But from a rest of the world perspective, the takeaway is the US cannot be trusted under Trump, and other nations are best to work around the US. If North American companies want unfettered access to global trade markets, they are best served moving to Canada or Mexico … and we should be telling them as much.
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We can try. The instant some sort of resolution is reached that removes the tariff pain point, all the reasons companies have for locating in the US remain and the one big reason for moving out disappears. If Canada wants to attract foreign companies, it should aim to provide all the advantages that US presence provides. To do that, we'd have to understand what those are, and then we might find we are culturally incapable of adjusting. But first enumerate what those are.
 
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