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DT tariff comment by Ken Fisher

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发表于 2018-8-5 11:29:46 | 显示全部楼层 |阅读模式
Real reason for tariff according to Ken is Getting China to force N Korea to follow US.



Trump tariffs: Why their impact is tiny and the tactics aren't all they seem
Ken Fisher, Special to USA TODAY Published 1:00 a.m. ET Aug. 5, 2018

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Virtually all economic commentary on tariffs, both pro and con, is wrong. Here is a simple trick to see through that noise. You can apply it to scads of topics. I call it “scaling.” You might call it fourth grade arithmetic, and it’s scary how all our genius economic pundits seemingly missed elementary school.

Some folks love Trump’s tariffs. Many more hate them. For the love of hate let’s start there.

Envision the “worst case” scenario — that every single tariff even hinted at gets enacted. Then, for giggles and to gauge some supposed upcoming “trade war,” we’ll triple that.  

First, add ‘em all up: Take $11 billion worth of solar panels, washing machines and Canadian lumber. Include $40 billion in steel and aluminum, then $192 billion in autos, $250 billion in Chinese goods. This includes everything that Trump enacted in 2018 or that is under any official investigation.  

Chinese retaliation adds $131 billion of goods to the global tariff pile. EU, Canadian and Mexican retaliation for $20 billion of steel rounds it all out. The maximum potential of goods slapped with tariffs totals $644 billion.


Critics correctly claim that tariffs are a tax — always. But they’re only a tax. These tariff tax rates range from 10 percent to 25 percent. Pretend it was all at 25 percent. Then, the potential annual global max tax is $161 billion (644 X .25 = 161).

Sound big? It’s not. Try multiplication and division. Global GDP was $80 trillion in January.  It’s growing about 5 percent in dollars this year (3 percent real growth plus 2 percent inflation).  

So, 2018 global economic growth is about $4 trillion (80 X 5 percent = 4). Our max $161 billion tax, divided by $4 trillion of growth, is merely 4 percent of 2018’s normal growth. A negative? Yes. But, minuscule relative to normal growth! Way too tiny to cause recession — or even get lathered over. Pundits make mountains from molehills. Even if we triple that, it’s only 12 percent of one year’s growth.   

Total tariff rates probably will average about 16 percent, far below 25 percent. Now we’re down to 2.5 percent of one year’s GDP growth.

But most tariffs won’t be collected. They’re too holey! For many products -- and all commodities -- producers can substitute or ship through third-party brokers cheaper. China’s soybean tariffs? Brokers can sell to Turks, who flip the beans to China for a 1 percent brokerage fee. Or, China buys more from Brazilians, and Americans sell to Brazil’s old customers.  

If you believe most proposed tariffs will ever be collected you must, in parallel, believe there isn’t $50 billion-plus of illegal heroin shipped into America annually. And that black markets don’t exist. Then I have a bridge to sell you. This stuff is all holey.

My April 15 column detailed Trump’s Chinese tariffs and why they weren’t about economics but really all about initiating  talks on North Korean denuclearization. That worked pretty well. None of this is about economics. If it were, would these tariffs be so small?

Like most noise Trump makes, tariffs are his negotiating tactic via diversion. First he prodded China into prodding North Korea. Now he is crow-barring the E.U. toward eliminating tariffs altogether … and going after Iran next.  He uses tariffs like a wild man to force talks and make a very different deal. Then he touts it to his voters. Will his diversions work?  I have no  clue.

But I know tariffs can be reversed. And these are insignificant economically, but gigantic symbolically. The tariff framework blinds and confuses our economic geniuses who forgot their fourth grade arithmetic.

My columns have showed many times that fear of a false factor is always bullish. Tariff terror is big fear of a tiny factor.

That’s bullish too and another reason this bull market keeps rolling, and will.   

Ken Fisher is the founder and executive chairman of Fisher Investments, author of 11 books, four of which were "New York Times" bestsellers, and is No. 200 on the Forbes 400 list of richest Americans. Follow him on Twitter @KennethLFisher
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发表于 2018-8-5 19:44:50 | 显示全部楼层
RE "Getting China to force N Korea to follow US"

I disagree with the assessment because I think DT was trying to force China into submission just like Japan did in the late 60's/early 70's.

It will not succeed because the timing is wrong, if USA tried this 15 years ago, it might have succeeded.  It has now passed the point of no return because China is on the way to become the world's #1 economic power, it can survive without the US market furthermore, tariff is not prohibition of imports from China, it  is just making the product more expensive which the importers would have to pay, who in turn will add onto their selling princes, and ultimately the American consumers will have to pay.

China still has a trump card and that is its holding of US Government Bonds.  Once China starts unloading  that, it will collapse the US economy.

Can US try military force?  Well, if US/DT starts this near the Chinese coast line, USA may not win because China made a very important change in military stance:
China will not wait for opponents to use nuclear weapons first changing from never the first to use nuclear weapons.
China also announced that it has a lot more nuclear warheads than US' estimates (old estimate was 200+).

The message was quite clear, "Don't try and don't even think about it.  I will not wait for you to use nuclear weapons first.  You must be prepared to take a lot more nuclear attacks than you previously anticipated."

No US Presidents is prepared to take that kind of risk, including the mad man Trump.
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 楼主| 发表于 2018-8-6 07:12:53 | 显示全部楼层
dragondick 发表于 2018-8-5 19:44
RE "Getting China to force N Korea to follow US"

I disagree with the assessment because I think DT  ...

Ken Fisher is the founder and executive chairman of Fisher Investments, author of 11 books, four of which were "New York Times" bestsellers, and is No. 200 on the Forbes 400 list of richest Americans. Follow him on Twitter @KennethLFisher

Ken is no DT, phony rich person.  No tax return yet as a president.  Making money off his position.
Heard Trump tower in Manhattan managed to make a profit with stays by Saudi prince.

China is doing EVERYTHING right including auditing about corruption, case in point, HNA, Ambang, Wanda shopping centers etc.  YOU CORRUPT, You will be punished.  General population need to improve their poor living conditions.
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