The European Union will have to commit to buying $350 billion of American energy to get a reprieve from Donald Trump’s sweeping tariffs, the U.S. president said late Monday, dismissing Brussels’ offer of “zero-for-zero” tariffs on cars and industrial goods.
So what will the EU’s counter offer?
I’m surprised we have a trade deficit with Israel. Don’t we get credit for all the fire power we send them?
Whereby the surplus in Services gets swept under the carpet once more.
The Japanese and Indian PMs visited very soon after the inauguration, and agreed to major purchases of US oil and gas. They were whacked with big tariffs anyway. Is this like dealing with an extortionist who, no matter how much you give him, he is soon back, demanding more?
Steve
Reportedly part of his „deal“ strategy is to leave others in maximum uncertainty. The perfect environment for making billion dollar long term investment decisions…
Asked directly if it would be possible for countries to reduce their tariffs below the flat 10 per cent floor, Mr Trump sidestepped the question while emphasising what he sees as the benefits of the levies. “Tariffs will make this country very rich,” he said.
There is that narrative, again. That the tariffs are intended to generate revenue, not be bargaining chips to squeeze concessions out of others.
Steve
“Is this like dealing with an extortionist who, no matter how much you give him, he is soon back, demanding more?”
I know your comment is dripping with sarcasm,lol, but you hit the nail right on the head. Just imagine how Canada feels about it. The great USMCA that Trump hailed as the greatest trade deal ever at the time, and now hailed as a plan that allows Canada to rip America off, spoken by the guy took all of the credit for the original USMCA.
Look back on Trump’s business career. How many times did he refuse to pay contractors for services performed ??
So yeah, why would anybody believe a single word that Trump utters ? Why would anybody believe that a contract
or treaty ( or anything else ) that Trump signs won’t be broken ?
How is your faith in Trump’s promise to not touch SS and Medicare ?? I know, I know, his word is gold LMBO
Vietnam caves.
Japan and India both committed to buying US arms, as well as oil and gas. They were whacked with tariffs anyway.
WASHINGTON, Feb 13 (Reuters) - The United States will increase military sales to India starting in 2025 and will eventually provide F-35 fighter jets, U.S. President Donald Trump said on Thursday.
Addressing a joint news conference after a meeting with Indian Prime Minister Narendra Modi, Trump also said the countries had struck an agreement that includes India importing more U.S. oil and gas to shrink the trade deficit between the two countries.
Steve
Perhaps they ain’t buying enough? The president is intent on really putting the screws to trade partners. Gotta make up for all years the US has been hosed previously.
Art of the Deal.
The trade deficit with Vietnam is over $120 billion (a $22 billion increase over the year prior).
The entire Vietnamese defense budget is less than $8 billion (estimated to surpass $10 billion in 2029).
Vietnam is giving lip service, and low information voters will buy the spin that they caved - while our trade deficit with them continues to grow.
Just like china caved the last time. Then didn’t buy the stuff they said they were going to buy anyway.
And if Vietnam does buy more stuff and tariffs are lowered, then we don’t get the money for his tax cuts and things aren’t produced in America.
You kind of need to go at least one or two sentences past the headlines, doncha’ know.
This is the opening counter offer from Vietnam. And it is quite different than the China response. Vietnam is heavily reliant upon the USA for an export market. Thus an opportunity to really squeeze concessions from Vietnam. The counter offer isn’t sufficient to drop the imposed tariff. Quite a bit of China’s manufacturing has been moved to Vietnam. It is doubtful that the tariff will be entirely eliminated as the US is still conducting its economic war upon China. And Vietnam is now in that war too. Vietnam will be pressed to buy much more than military items.
They don’t have the ability to offer much in concessions. That’s the point.
The Administration’s cockamamie tariff math is based on the assumption that trade imbalances are created because one country is treating the other one unfairly - and that therefore this can be corrected. But that’s not true. Trade imbalances often exist because of macro factors that have nothing to do with trade policy or other economic distortions. Lesotho is the ur-example of this: they don’t buy American goods because they are one of the poorest countries on earth; but because they have some diamond mines, they happen to have something that we want to buy. So they run a big trade surplus with us - and there’s nothing that can be done to change that other than just telling American consumers that they don’t get to buy diamonds from Lesotho. Because the trade deficit results from structural factors, not policy factors.
The same is going to be true of Vietnam. There’s nothing they can do that can materially reduce the trade deficit, other than just cutting down their production. They’re a relatively poor country that simply can’t afford most American goods, and they have a small-ish military that doesn’t need to buy a lot of defense equipment. All they can offer is a fig leaf…and unless the Administration is interested in a fig leaf while still allowing Vietnam to run a $100 billion+ trade surplus with the U.S., there isn’t a deal to be had.
I rather suspect the “victim” narrative is an excuse, not the real reason, just like the “victim” narrative was used 20 years ago, to excuse police state tactics and made up wars.
This is a money grab: either to force other countries to buy from those who bought favor in the US, and/or to help generate enough revenue to cover a really big tax cut.
Steve
I don’t think so.
I think the real explanation is the simple and easy one: DJT doesn’t understand trade. He things trade deficits are prima facie bad, and he conceptualizes them as money that other countries are stealing from us. If we’re running a deficit, they must be taking advantage of us (rather than that being the inexorable result of having an investment capital surplus because we’re one of the best places in the world to invest money).
He wants tariffs, because he genuinely wants Americans to stop buying more goods from other countries than they buy from us. Not to generate revenue, not to make money for his friends. But because he believes that reducing trade deficits is something that should happen. It’s one of the few policy issues he’s demonstrated an interest/passion for his entire life, and it’s been an idee fixe for his entire political career.
“It” can absolutely be more than one thing: the mad king’s motivations plus the gyrations of market participants working on their angles for money grabbing, and these multiple things can be, and most certainly are, interdependent.
I’m very doubtful of any (macroeconomic) ideological purity in leadership’s motivations, but maybe.
I couldn’t agree more. His words and actions reinforce his ignorance.
We’re not dealing with some sort of genius here, and that is breaking people’s brains.
… a zero tariff will NOT generate the income that is needed to cover the putative upcoming income and capital gains tax cut/s.
TIG has repeatedly said he wants to balance the budget, by cutting income taxes and raising $ via tariffs.
So. I propose a reciprocal tariff floor at 10%.
US gets minimum 10% from each country.
And, each country gets “their” 10% cut, too.
And each country claims “the other side is paying the tariffs”.
If need be, the tariffs can be raised on individual countries as the emotions of the moment dictate.
I’m so glad my common sense suggestions can help fix these global problems.
(Ie, tongue in cheek)
ralph
And it may not be enough to satisfy the president.
Netanyahu emerged from the meeting having promised to erase his country’s trade deficit with the U.S. Trump offered nothing in return.