Monday, July 22, 2019

Unintended Consequences of Trump's Trade Wars





Unintended Consequences of Trump’s Trade Wars
                                                     Junious Ricardo Stanton

Vietnam has benefited from a surge in exports and foreign investment as businesses look to scale back their China operations or relocate to avoid higher U.S. tariffs. But it’s also fighting claims that Chinese exporters are routing their goods via Vietnam and slapping fake labels on their products to bypass the tariffs.” https://www.thestar.com.my/business/business-news/2019/06/27/trade-war-winner-vietnam-is-now-a-target-for-trumps-tariffs/

President Trump’s ongoing trade wars are resulting in numerous unintended consequences such as other nation’s leaders being both leery and weary of Trump’s policies and aggressively scrambling to circumvent his tariffs against China, the EU and other nations.
As I mentioned in a previous commentary, China, Mexico, India and places like Viet Nam are not “stealing American jobs” as Trump disingenuously claims. Investors, venture capitalists, corporations and multi-national businesses seeking cheaper labor, access to cheaper raw materials, lower taxes, less government regulation and cheaper operating costs have shipped capital and jobs overseas to increase their bottom line.
Trump plays on the ignorance of his voting base and Americans in general to demonize foreign leaders because the US has massive trade imbalances with their countries. But when you look past Trump’s jingoist rhetoric, you discover the trade imbalances are due to Western globalization (neocolonialism) which was pushed by the US ruling class, backed by American politicians at the expense of American workers!
 Trump’s response has been to threaten, demonize and impose tariffs which so far are not having the desired results of bringing China to the negotiating table and caving in to Trump’s demands or boosting US trade around the world. Trump’s tariffs against China and China’s tit for tat responses are negatively impacting the bottom line of US farmers, businesses and investors and will hurt US consumers. The raising costs of the trade wars and concurrent inflation will severely impact US consumers because it is the consumers who pay the added costs of the duties and tariffs not the exporting nation!
To avoid the added expense of Trump’s tariffs some US companies placed large orders prior to Trump’s Tariffs going into effect. Some US businesses are rerouting their Chinese made products through Viet Nam and changing the labels to avoid paying the tariffs while others are increasing their investments in Viet Nam and setting up their manufacturing plants and factories there.
Viet Nam is experiencing an economic boom in part due to the US - China trade war.  Vietnam is flying high these days on nearly all metrics. Gross domestic product (GDP) is projected to grow 7%, foreign direct investment (FDI) is fast rising and a newly signed free trade agreement with Europe promises new privileged access to rich export markets. The only fly in the anointment comes from across the ocean in Washington, the capital of its former battlefield adversary where the unpredictable US President Donald Trump is waging trade wars on various fronts. Vietnam has so far been a big winner of the Sino-US trade war. That’s been seen in booming Foreign Direct Investment (FDI) inflows from China, both from foreign and Chinese companies relocating their production facilities to Vietnam to avoid US tariffs, and subsequent rising exports to the US. Vietnam has so far been a big winner of the Sino-US trade war. That’s been seen in booming FDI inflows from China, both from foreign and Chinese companies relocating their production facilities to Vietnam to avoid US tariffs, and subsequent rising exports to the US. ” No Stopping Viet Nam’s Trade War Juggernaut- Peter Janssen  https://www.asiatimes.com/2019/07/article/no-stopping-vietnams-trade-war-juggernaut/ 
            Viet Nam offers cheaper labor, cheaper even than China. “Vietnam has a large, fairly well-educated work force who earn factory wages that are one third of China’s, half of Thailand’s and less than Indonesia’s or the Philippines.” Ibid 
Viet Nam is making deals with Europe and its’ Asian neighbors and interestingly enough now Viet Nam has a growing trade surplus against the US. “The country has gone from being the 12th largest source of US imports in 2018 to ranking 8th at the end of May this year, with the US importing $25.8 billion worth of Vietnamese goods and only sending $4.2 billion of exports to Vietnam in return. That’s made Vietnam 5th worldwide in terms of trade surpluses with the US, trailing only China, Mexico, Japan and Germany, according to US Census Bureau figures.” Ibid
            Now Trump is casting a menacing eye towards Viet Nam! If the only tool you have is a hammer you tend to treat everything like it’s a nail. This is what Trump is doing with global trade. “Just last month, the U.S. Treasury added Vietnam to a watch list of countries it’s monitoring for possible currency manipulation. The nation's benchmark VN Index slumped 1.7% Thursday, to the lowest since Feb. 12.” https://www.thestar.com.my/business/business-news/2019/06/27/trade-war-winner-vietnam-is-now-a-target-for-trumps-tariffs/
            Currency manipulation is another one of Trump’s disingenuous charges what is the Federal Reserve Bank’s Qualitative Easing and Qualitative Tightening but inflationary and deflationary monetary policy? Keep an eye on this situation because it could mean another nation Trump will antagonize and alienate with his misguided tariffs and trade policies.

                                                            -30-










Monday, July 15, 2019

Trump's Tariffs In An Era of Economic Decline






Trump's Tariffs In An Era of Economic Decline
Junious Ricardo Stanton

“A tariff is a tax on imports, often known as a duty or a trade barrier. The purpose of a tariff is to protect domestic production and jobs, though economists say other domestic sectors and customers ultimately pay for tariffs.” What Is A Tariff, Who Pays and What Is the Purpose of A Tariff? Jed Graham https://www.investors.com/news/economy/what-is-a-tariff/


            Donald Trump campaigned on the slogan “Make America Great Again” and promised as the world’s greatest dealmaker, he would renegotiate existing trade agreements, do away with NAFTA and get better deals with trading partners like China and the European Union. Some people liked Trump’s feel good message and fell for his okey-doke not realizing Trump has not telling the whole truth even though his America First message sounded good. 
            Once he was elected Trump embarked on his plan to Make America Great Again by threatening, lambasting and denigrating other countries’ leaders and his predecessor’s policies, deals and agreements. But most people forget the policies of Bu$h, Clinton, Bu$h and Obama were a direct response to the ruling elites’ agenda of globalization.
            Corporations and companies made the decision to shutter American factories deindustrialize America and ship those jobs and the investment capital needed to sustain them overseas! The US also failed to embrace technological innovation.  For example, US steel makers refused to employ new recycling processes which were much more efficient so the older plants closed. https://microeconomicinsights.org/productivity-impact-new-technology-evidence-us-steel-industry/
America went from an industrial economy to a service economy because Wall Street decided to make that change and fatten their profits using cheap overseas labor.  The truth is, China did not steal American jobs. CEO’s, financiers and politicians conspired to reinvest their money, to build factories, plants and call centers in places like India, Mexico, China, Malaysia and Viet Nam rather than pay American workers decent wages and provide benefits that would boost their standard of living and the American economy.
Businessman and former US presidential candidate Ross Perot recently made transition. When he ran as an independent candidate for president in 1992 he warned the American people about the devastating impact the North American Free Trade Agreement (NAFTA) and the General Agreement on Tariff and Trade (GATT) which was replaced by the World Trade Organization in 1995 would have on the US economy. The corporate media downplayed Perot’s insight and the duopoly political parties pushed the global agenda of their corporate patrons.
These high level decisions are the reason we are in the mess we are today. Globalization, economic imperialism, the off shoring of capital and operations (plants, factories, and transportation logistics) has been the downfall of the American economy. The deliberate redirection of capital (investment) and factories overseas has resulted in massive deindustrialization, the loss of millions of jobs and employment opportunities for Americans. Disruptive technologies are also major factors.  Read https://microeconomicinsights.org/productivity-impact-new-technology-evidence-us-steel-industry/  and https://larouchepub.com/other/2009/3645globztion_destroy_labor.html to glean additional perspectives on this issue.
 Trump ran on restoring American economic viability and stature; but his policies belie his grasp of macroeconomic principles. Trump chose to pick fights with US trading partners, Mexico, Canada, the EU and China. He has threatened or imposed tariffs on steel, aluminum and other products from these countries. His negotiations with China are currently at a standstill and the deal he negotiated with Mexico and Canada (USMCA) to replace NAFTA is not that radical. The US can sell more milk to Canada and the percentage of cars manufactured in North America (US, Mexico and Canada) has increased and workers making those cars must make an average of $16 an hour and the USMCA discourages currency devaluation but that’s it.
 The reality is globalization has gutted US factories and industries and tariffs are not a short term solution because there is no US industry to protect. There has been no massive repatriation of investment back to the US like Trump promised. His tariffs and trade wars will further shrink US capabilities because the reinvestment and capitalization Trump promised is not happening on a large enough scale. Don’t confuse deregulation or inflated stock market prices with domestic economic stability; there are too many other factors at play such as overseas cheap labor, investment, the status of the US dollar,  US interest rates, resources, raw materials, international politics and relationships.
To make matters worse debt burdened US consumers are the ones who will pay the costs of Trump’s tariffs not the exporting nations! These rising consumer costs plus worker’s decades’ long stagnant wages are putting a hurting on Joe and Jane Sixpack.  
To add insult to injury, Trump’s trade war with China has cost US farmers billions in losses. Trump’s tariffs have not produced the desired results and his ever escalating sanctions on more and more countries are making it difficult for other nations to view the US as anything but an arrogant schoolyard punk. As America’s strongest rivals like China stand up to the US, it will become more evident the US is a paper tiger.   

                                                -30-



Monday, July 08, 2019

A Novel Approach To Resolving America's Bullying Crisis




A Novel Approach to Addressing America’s Bullying Crisis
                                                Junious Ricardo Stanton

            I recently attended my wife’s maternal family reunion in Patterson Louisiana. This was our first time attending so we met a lot of her relatives she did not know. She met one cousin two years ago through Ancestry.com and they maintained regular communications.
When her cousin, who is a lay genealogist, told her about their family’s history of biennial reunions we made plans to attend the 2019 reunion.  My wife recruited her siblings, her nieces and great nieces and nephews to attend. Twenty three of her family members traveled from New Jersey, Pennsylvania and Georgia to Patterson Louisiana to the 2019 Elmore Family Kin and Friends Reunion. We had a great time.
The reunion planners provided opportunities for family members to promote their businesses, avocations, hobbies and interests. My wife created and brought a photographic display of her maternal relatives which included her parents, her maternal uncle, his wife and her siblings. Even though she saw people that looked like her and her immediate family, these relatives did not know her mother and uncle because her mother and uncle left Louisiana and resettled in Illinois and Pennsylvania respectively in the late 1940’s. While their roots were in Louisiana most of the people her mother and uncle knew, who knew them, made transition years ago.
One of her cousins Sandra Johnson Morrison had a display and promotional materials about her program for bullying prevention, intervention and postvention called R.E.H.A.B. Bullying Buddy System. Her program stands for Recognize, Expose, Handle, Alert and Believe in rehabilitation. She felt it was her responsibility to raise awareness and address bullying because she and her brother were bullied as youngsters when the Patterson Louisiana schools were integrated. She developed the concept when she discovered her grandson was being bullied at the middle school so she went to the school to bring the situation to the attention of the teacher and principal.  
“The young man that bullied my grandson was bullied and his parents put him in a Tae Kwon Do class. My grandson was his friend and he started practicing and picking on my grandson. It (the bullying) affected him emotionally, physically and psychologically. It affected him in school because he was bullied in the classroom, on the playground and we found out the teachers knew he was being bullied and they didn’t do anything to prevent it.” shared Mrs. Morrison. That’s when she found out about the code of silence and threats of violence and retaliation, the “snitches get stitches” mentality. 
It was placed on her heart to do something about it. “You can’t let kids keep getting away with bullying other children. There have to be consequences. We’re not trying to single out a child and say that child is bad, we’re trying to find out why that child needs to bully someone, and why a child feels the need to allow someone to bully them, what’s really going on?”
When you factor in cyber-bullying which is a rising phenomenon in this country, bullying is reaching crisis levels. As Mrs. Morrison envisions it, her program must include active family, church and community engagement and intervention. She wants people to know that it is important to break the silence, that both the abuser and the victim need rehabilitation and support. “The goal is to set up an elite leadership organization, to make a safe haven for the children, to get counselors to come in and counsel the kids like mentors and rehab bullies so that child knows they are doing wrong so they can correct their behavior. We want to focus on their potential and help them develop their God given talents, gifts and skills.”
 Mrs. Morrison is adamant the abusers must be identified, monitored and made to face the consequences of their actions in a way that encourages the child to reorient their negative behavior and re-channel their energies into positive values and activities. She feels the target of the abuse needs support and reaffirmation also because they suffer emotionally and psychologically as well as physically.
“If you find out your child is being bullied, do something immediately, handle that situation immediately, bring it to the attention of the school or take them out of that school. Bullying is cruel and it is ugly, too many children are killing themselves because of bullying.”, emphasized Mrs. Morrison.
Studies show that bullying has long term affects for the abuser, the target and society as a whole. Mrs. Morrison has created a program that addresses bullying. She believes if her program is implemented, it could go a long way in reducing bullying and at least discourage the code of silence and retaliation when one speaks out. For more information about the R.E.H.A.B. Bullying “Buddy System” contact Sandra Johnson Morrison at (985) 498-9661.
                                    -30-