On August 30, 2019, Yusuf Khan writes on Business Insider:
Reuters
- Trump’s trade war has now raged on for over a year, and although talks are set to resume, the American economy has been suffering.
- GDP growth in the second quarter of 2019 came in lower than expected on Wednesday and America’s trade deficit widened — both signs of the drag the trade war is having.
- Now key sectors are fighting back, including farming, manufacturing, and retail, saying that the trade war is damaging their businesses, costing jobs and hurting their wallets.
Trump’s trade war has raged on for over a year and now key sectors of the US economy are hitting back at the president, all arguing that the trade war has been damaging.
In the most recent GDP figures released on Thursday, the US economy had cooled more than expected, growing at 2% in the three months from April to June.
Likewise, the US trade deficit grew in the last quarter — both a sign of the toll the trade war is taking on the American economy.
Now large sectors of the American economy are criticizing the president and his policies, including in key voter areas that Trump pledged to help through his presidency, such as manufacturing and agriculture.
Trump blamed the companies, lashing out on Twitter on Friday that they are “weak” and using the tariffs as an excuse.
Twitter
Here’s a look at five of those areas that are criticizing Trump for the impact of escalating tariffs.
1. Farming
Farmers were key part in Trump’s election and therefore their support in the run-up to 2020 will be crucial. However, farming groups have been hitting out at the president repeatedly, over the fact that China, a key market for soybean, wheat, and other crop growers has been cut off.
The American Farm Bureau said that in the 12 months to June farming bankruptcies have gone up 13% on the previous year.
The president said that “farmers are starting to do great again,” however the head of the National Farmers Unions said “President Trump is making things worse, not better.”
“Instead of looking to solve existing problems in our agricultural sector, this administration has just created new ones,” Roger Johnson, head of the NFU, told Business Insider. He added that Trump was “burning bridges with all of our biggest trading partners.”
Now it looks like support in key states like Kansas, Wyoming, and Nebraska could be waning. In a Farm Journal Pulse survey of 1,153 farmers on Friday, 71% said they still supported Trump. Yet the number of ranchers who strongly approved of the president fell by 10 percentage points, to 43%, from a survey in early July.
2. Manufacturers
After Trump “doubled down” on plans to expand tariffs to almost all imports from China manufacturers came out against the president, warning the tariffs would add unnecessary challenges to an already slowing industry.
Dozens of factory representatives warned US trade officials that the tariffs would put jobs at risk and do “irreparable harm” to their businesses.
Markets Insider reporter Gina Heeb reported that one business leader said: “These tariffs will continue to do irreparable harm to our small business. The Section 301 tariffs from List One and Three have resulted in an unexpected cost of over $600,000, which is significant for a small business like ours. We have determined that an additional cost of the List Four tariffs on our business would be almost $1 million.”
3. Consumers
Earlier this week, Goldman Sachs economists reported that American wallets were to take a direct hit from Trump’s tariffs.
The bank’s research showed that US consumer prices would rise as a result of the tariffs and US growth would slow also.
Planned tariffs that come into effect December 15, which would hit directly in the Christmas shopping season, directly increase the price of cell phones, toys, and computers. EU auto tariffs would also raise the price of cars from Europe.
“The impact of a 5-percentage-point tariff step up (on all Chinese imports except the December 15th tranche) would boost core consumer prices by another 0.05% to 0.10% by mid-2020,” said the Goldman Sachs economists Andrew Tilton and Alec Phillips.
4. Retailers
Like the manufacturers, dozens of US retailers testified before US trade officials in June saying that the tariffs would raise the price tags for businesses and consumers.
The US economy has been held recently by consumer spending, in fact, personal spending rose by 0.6% in July according to data released on Friday. This was mainly driven by retail sales — a rare bright spot in the US economy.
“In imposing tariffs, we will not achieve the goal of protecting IP infringement matters, but penalize US consumers and US companies throughout the, throughout the country,” said Christopher Volpe from United Legwear & Apparel Co.
5. Technology companies
Recently Apple’s CEO warned Trump that the tariffs would be a boost its rival Samsung.
That’s because Apple would see tariffs slapped on the iPhone, macs and other products as most of the products are made in China. Samsung being a Korean company wouldn’t be subject to those.
Consumer electronic tariffs are scheduled to take effect on September 1 and December 15.
Like Cook, other tech companies have warned of the tariffs being harmful.
“For the printing supplies industry, these tariffs do more damage to the consumers and intellectual property holders like HP than it will do to the IP infringing products,” said Andy Binder, Vice President & General Manager of Hewlett-Packard to US trade officials in June.
“Such a result would conflict with the administration’s goal of minimizing economic harm to consumers and would not be effective in advancing the goals of the Section 301 investigation,” he added.
Gary Reber Comments:
This article is yet another hit piece pleading that the tariffs on Communist China-manufactured goods and products be resented so that “business as usual” can continue without objection to the gutting of our manufacturing capabilities and investment in and support for Communist China enterprises/\.
In order to decouple from our decades long build-up of dependence on manufacturing in Communist China and other slave-wage labor countries who have histories of human rights and environmental ruination, we must stay the course and use tariffs and denial of access to our American markets.
I do not understand how the elite wealthy capital asset ownership class, who control all manufacturing in the United States, continues to abandon the American people by investing in the development of slave-wage labor countries and moving American supply-chain parts and finished products manufacturing to Communist China and other slave-wage labor countries, without feeling guilty of gutting our manufacturing capabilities and destroying 8 million jobs since 1975? To me these are traitorous actions that certainly do not respect United States citizenship and the pledge of allegiance to the United States of America. And the blame for our continued downward performing economy, with 40 million Americans in poverty and millions more on the edge, should be squarely put on the “hoggish” actions of the elite wealthy capital asset ownership class.
A commentary in the Communist Party mouthpiece People’s Daily on September 2 said Beijing needed to stand up to the United States and not give in to pressure. Communist China as with the United States, if they reform their economic systems, would be able to develop each respective country using the most advanced technologies, with their people universally, as individuals, owning the means of production, and engage in fair trade independent of one another.
But Communist China is determined to conquer the world’s economies with its Made In China initiative, attracting “hoggish” capital owners to move their manufacturing from their homelands to Communist China in order to gain more profitability using slave-wage labor and unprotected workers and environmental conditions. It’s about time we get tough with a totalitarian Chinese Communist Party/People’s Republic of China-controlled human right violator, not least of which because the Chinese abuse their own people who regularly disappear and block personal freedoms.
Communist China’s position to reinstate trade talks is the United States must rescind ALL tariffs on Chinese-manufactured goods and products imported into the United States. This means back to the old days of “free trade” and no tariffs.
As well, there is no fair dealing with Communist China who just cannot and refuses to play fair. The Chinese Communist Party government cannot be trusted and strong responses such a tariffs are absolutely necessary and perhaps further totally decoupling and terminating all trade with Communist China. In any case, the controlling owners of American companies have been directed to remove productive capital assets in Communist China with this directive incentivized with harsh, increased tariffs, which will go into effect sooner than previously announced.
The Communist State-run Xinhua News Agency and the People’s Daily, the Communist Party’s mouthpiece has been commenting on the trade disputes.
A front page commentary from the Communist Party’s propaganda department headlined “No Power Can Stop The Chinese People From Achieving Their Dream.” “The trade war will not cripple China, it will only strengthen us as we endure it.”
We should be asking ourselves do we even have a dream for the American people?
If we do not reverse course or we will lose America. We need to stop investing in Communist China, using their slave-wage labor for manufacturing our supply chain parts and finished products and completely off-shoring manufacturing there. This is not the way to strengthen our own economy. American corporations should be investing in Americans and begin building the most advance technological automated manufacturing capabilities that are broadly owned by employees and other citizens, recognizing that tectonic shifts in the technologies of production will increasing eliminate the necessity for masses of human workers––replacing workers with “machines” of all descriptions.
As a democratic nation we have always been adverse to State-owned socialism and totalitarian communism, yet American capitalists have invested trillions in the build-up of Communist China’s manufacturing sector and as a result gutted our own manufacturing capabilities, leaving millions of American workers jobless and without opportunity to earn to achieve an affluent life for themselves and their families. Rather than broaden personal ownership of the productive capital assets resulting from investments in manufacturing capabilities in the United States, the only Americans benefiting from investment in Communist China and other slave-wage labor foreign countries, are the already wealthy capital asset ownership class––a tiny few who have concentrated ownership among themselves, representing less than 10 percent of the United States population.
This should be a wake-up call for American corporations to develop internal supply capabilities and wean themselves more quickly from Communist China and other slave-wage labor foreign countries. We must begin the process of de-incentivize American companies from investing in such countries to produce cheaper and more profitable, and return to investing in American-made manufacturing capabilities, with “Made In The USA” a mark of superior quality.
To begin the process of restoring, developing and enhancing our own manufacturing capabilities, if its from China simply do not buy it. No doubt, in the short-term, American consumers will suffer, as prices will rise due to the tariffs on a wide spectrum of supply chain parts and finished products manufactured in Communist China, who we have become dependent on. Instead, we need to support predominantly “Made In The USA” products and other fair trade products, as much as possible, that were not produced with slave-wage laborers and countries who violate human rights and lack in environmental regulations regarding manufacturing. We need to resume manufacturing products in the USA.
It is important to remember that the future is what we make it. The challenge is great but then Americans have always had tough challenges.
Also remember that Communist China’s founding leader, Mao Zedong (also known as Chairman Mao), was responsible for an estimated 35-45 million deaths in the 20th century during the Great Leap Forward socialist experiment, and even after he died, political dissent was suppressed repeatedly, most notably at Tiananmen Square, and continues to be suppressed today. Yet none of that deters the American corporate ownership oligarchy to seek to profit from investing in Communist China.
Since the crushing of the Tiananmen Square protests in 1989, the American corporate ownership oligarchy has used Communist China as a giant sweatshop, exploiting and extracting profits from its massive working class while using the threat of “offshoring” manufacturing to drive down wages within the United States and internationally. Such manufacturing now spans high-value-added industry sectors, such as semiconductor design and production, cell phones, high-end machine tools, medical devices, optics, etc., which has placed Communist China companies, including State-owned enterprises and State subsided enterprises, in direct competition with United States-based technology companies, threatening their control of the pool of profits sweated out of the international working class, who are not the owners of the technologies and manufactories.
Some argue that fighting Communist China is a recipe for losing everything. After all, the country already produces millions more engineers than we are (yet Chinese communist leaders denounce our values but send their children to our colleges); has more Initial Public Offerings (IPOs) reflecting more technology startups; builds whole new cities and is the manufacturing center of the world. Communist China has become more feared than loved. Terror must be continued and the aura of invincibility maintained in order to persuade more client States, especially in Africa, to come under the strong Chinese umbrella. Unfortunately, the rise of Communist China to the second largest economy in the world has been built on government debt and “ghost” investments, particularly from American and other Western wealthy capitalists, that waste precious resources and polite the Earth. Like every other pyramid scheme, the Chinese economy must either keep expanding or collapse … and it is reaching the point of maximum feasible expansion. As a result of imposing tariffs, their economy now is struggling. Imposing trade barriers is the ONLY way to fight Communist China.
The reason our people are producing less and less is because the controlling owners of American corporations have either moved their manufacturing capabilities to Communist China and other slave-wage labor countries who can produce goods and products with better prices because of lower, much lower, labor costs OR contracted for their needed manufacturing of supply chain parts and finished products to assemble in the United States. Think of how many, many years production of our products have been manufactured overseas (at least 40 years), which benefits the wealthy capital asset ownership class and is bad for workers because American workers are effectively in competition with slave-wage workers. If it’s not China it’s another third world country. The impact has been to gut our manufacturing capabilities and consent to sharing our technological know-how, with the result being millions of American workers losing good-paying jobs so that these endless greedy controlling owners can make more profit.
Yes, the problem should squarely be blamed on “hoggist” capitalists. Communist China, as a primary pillar of their economic reform program, which began in 1979, created the environment to encourage foreign manufacturing investment. Because of that, the United States companies came in droves to take advantage of an opportunity to manufacture at a low cost and increase profits. Did they come to help Communist China grow? Of course not! They came purely for the profits. It was Communist China, an authoritarian-controlled State, that created the opportunity for the controlling owners of American corporations and other Western companies, as a strategy for Communist China’s growth. Both leaders and the wealthy class that comprise the Communist Party of China and their authoritarian collectivism and the wealthy American monopoly capitalists have benefited from American investment in Communist China.
The people and trade groups arguing against imposing tariffs and returning to “free trade” are protecting the profit interests of the wealthy capital ownership class who control the corporations who have moved their manufacturing or have contracted with Communist China firms for parts and finished products. They do not want to stop our dependence on Communist China and instead continue as they have over the past decades. I hope the American people, the vast majority who are propertyless (in the capital ownership sense), realize that this path will eventually completely gut our manufacturing capabilities and make us totally dependent on a totalitarian Communist Party-dictated government who, by their own admission, seeks to dominate the economies of the world and make all countries and peoples dependent on them.
Since the crushing of the Tiananmen Square protests in 1989, the American corporate ownership oligarchy has used Communist China as a giant sweatshop, extracting profits from its massive working class while using the threat of “offshoring” manufacturing to drive down wages within the United States and internationally. Such manufacturing now spans high-value-added industry sectors, such as semiconductor design and production, cell phones, high-end machine tools, medical devices, optics, etc., which has placed Communist China companies, including State-owned enterprises and State subsided enterprises, in direct competition with United States-based technology companies, threatening their control of the pool of profits sweated out of the international working class, who are not the owners of the technologies and manufactories.
Few cast blame on America’s traitors––the wealthy controlling ownership class who run American corporations who have gutted our manufacturing capabilities over the past decades and the government officials, both elected and those in the bureaucracy, who have allowed the weakening of our capabilities to produce for the needs and wants of American citizens.
All you hear is what a bad decision to impose tariffs on Communist China. Never is their talk about why this is a necessary action if we want to establish a fair trade relationship. But no one points out the disparities between labor costs there and in other third world slave-wage labor countries with no regulation over manufacturing and the environment. The disparity in income levels is EXACTLY why we in the United States cannot compete with slave labor! WE MUST stop dealing with, trading with slave labor countries or institute effective tariffs to de-incentivized American corporations producing in slave labor countries. How can an American corporation producing wholly in the United States pay workers $15 to $30 per hour when the American corporations who outsource their supply chain parts and finished products or completely off-shore production, pay as low as $1.10 a day for workers? Even if the highest hourly rate in Communist China is $4.00 per hour, this remains a huge difference.
Another reason for our debilitating dependency on third world developing economies is greed. The controlling wealthy owners of American corporations would rather maximize profit over affordability or job and ownership creation here in the United States.
Yes, the problem should be squarely be blamed on “hoggist” capitalists. Communist China, as a primary pillar of their economic reform program, which began in 1979, created the environment to encourage foreign manufacturing investment. Because of that, the United States companies came in droves to take advantage of an opportunity to manufacture at a low cost and increase profits.
Did they come to help Communist China grow? Of course not! They came purely for the profits. It was Communist China, an authoritarian-controlled state, that created the opportunity for the controlling owners of American corporations and other Western companies, as a strategy for Communist China’s growth.
One has got to question if people who support going back to “free trade” and no tariffs really understand the long-term consequences for our children and grandchildren. With or without D. Trump as President, if we do not decouple from dependency on manufactured supply chain and finished products produced in Communist China and other third world slave labor countries, we will continue on the path of economic decline. We will have no manufacturing and slide into a third world country with the masses living in poverty, dependent on the controlling-ownership power of oligarchs for their subsistence.
We must stay the course to de-incentivize the controlling owners of American corporations who have moved their production of supply chain parts and finished products or contract with companies operating in Communist China and other slave-wage labor countries, all of which has had the impact of gutting our manufactories and destroying millions of American jobs.
“Ellen Brown writes in “Neoliberalism Has Met Its Match in China,” that the Chinese government owns 80 percent of banks, which make favorable loans to businesses, and subsidizes worker costs. The US views China subsidizing its economy as an unfair trade advantage, while China sees long-term, planned growth as smarter than short-term profits for shareholders.
“The Chinese model of state-controlled capitalism (some call it a form of socialism) has lifted 800 million people out of poverty and built a middle class of over 420 million people, growing from four percent in 2002, to 31 percent. The top twelve Chinese companies on the Fortune 500 are all state-owned and state-subsidized including oil, solar energy, telecommunications, engineering, construction companies, banks, and the auto industry. China has the second-largest GDP, and the largest economy based on Purchasing Power Parity GDP, according to the CIA, IMF and World Bank.”
As a recent Fortune article attests, China is Communist. 82 of the Chinese firms in the Global 500 are “SOEs” or State-Owned-Enterprises—which receive generous subsidies from the State that advantage them over the West’s private sector.
Communism is a political and economic system in which the major productive resources in a society—such as mines, factories, and farms—are owned by the public or the state––synonyms: collectivism, State ownership, socialism.
In the United States, as in all of the Western nations, individuals enjoy property rights as in ownership of productive capital assets––the non-human means of production. This is not true in China’s State-controlled economy. Over the last three to four decades we have become overly dependent on the outputs of manufacturing in China, whether it be supply chain parts or finished products imported into the United States. The controlling owners of American corporations have invested in the development of manufacturing in China, though their companies must be majority owned by Chinese. As a result, shared technologies and manufacturing know-how have been transferred to the Chinese. The wealthiest people in the United States all have invested in the development of Chinese manufacturing.
Of course, the result has been the gutting of American factories and the loss of millions of American jobs. Instead of manufacturing within our homeland, this wealthy capital asset ownership class has moved their productions to China.
We need to decouple from a reliance on Communist-controlled China for supply chain parts and finished products used in manufacturing and in the assemblage of finished products in the United States.
We need to focus on the future development of “green” manufacturing development, forming new productive capital asset using insured, “pure”, interest-free capital credit financing, solely repayable with the full pre-tax earnings of the investments, that creates new owners, as in employees and other citizens, without the requirement of past savings pledged as loan security. It is not enough to call for investing $2 trillion in “green” manufacturing without ensuring that the ownership of the physical capital assets created are broadly owned, and not simply the ownership further concentrated among the already 1 to 5 percent of the population.
We do not need to rely on the wealthy capital asset owners for investment in the development of feasible economic development projects in the United States, which, otherwise will only ensure the 1 percent will get richer through further concentrating their ownership of new wealth-creating, income-producing capital assets. If an investment is solid and expected to self-liquidate and pay for itself with its earnings within an reasonable capital asset acquisition period –– three to seven years –– then it is inherently financeable.
We only need to apply financial mechanisms that provide access to insured, “pure”, interest-free capital credit, solely repayable with the earnings of the investments, and without any requirement of past savings pledged as collateral loan security. This can be achieved by extending equal access to EVERY citizen to such insured, “pure”, interest-free capital credit. The means to achieve this are embedded in the proposed Capital Homestead Act.
Until we understand that in a modern, technological era it is the ownership of productive capital wealth, not the labor of people, that is the primary creator of affluence, we will continue to see inequality widen and deepen. We need to understand that it is access to ownership of productive capital wealth, not to jobs, wherein the national economic policy guidelines for the 21st century ought to lie.
No one can say that the task of decoupling our dependency on Communist China will be easy or painless, as moving extensive supply chains, built up over decades to meet compliance standards and deliver quality products, is incredibly complicated and expensive, but it is the only way to reclaim our manufacturing prowess. This is all about economic survival in an age of tectonic shifts in the technologies of production, in which robotics, artificial intelligence, and other advances in technology will continue to destroy jobs and most citizens will become more dependent economically on the monopoly wealthy capital ownership class or as Marx put it, on a “dictatorship of the proletariat.” We can set the standard for economic democracy, in which EVERY citizen is a capital owner, and show the world how to self-develop and realize inclusive prosperity, inclusive opportunity, and inclusive economic justice for their citizens.
Our end game needs to be our decoupling from dependency on supply chain parts and finished products manufactured in authoritarian, State-controlled Communist China, especially with respect to the manufacturing investments made by the controlling owners of American corporations, and imported to the United States. And instead embark on a “Marshall Plan” effort to democratize and broaden individual capital ownership using “pure”, interest-free capital credit investments that self-liquidate and that are tied to creating new American citizen owners, with the long-term objective of empowering EVERY child, woman and man to become an owner of new wealth-creating, income-producing capital assets. In this way, we can embrace the deployment of the most technologically advanced automation and “machine” production, which does not require mass worker input, but provides a new source of income earnings for EVERY citizen.
We have the potential today, as we had in 1941, to build new manufactories and renew the ones put out of business by our buying non-American goods and products. But that potential is constantly weakening without a strong manufacturing “infrastructure.” To strengthen our position, we only have to stop buying slave-wage labor goods and products from Communist China and other Asian countries whose owners practice the same un-fair manufacturing. Manufactories are not true infrastructure, which also needs repair, renewal and expansion, but either way you evaluate it, we can create new money, and finance new investments broadly owned, backed by the physical assets created, to support any and all needs Americans have. If an investment in rebuilding, renewing or building anew is viable and will pay for itself over a relatively short span of years out of its own earnings, then is is feasible no matter who ends up owning it.
The Western advanced economies should form a global coalition aimed at stopping Communist China’s unfair practices, such as State-owned enterprises and State subsidies, as well as technology transfer requirements, and put a stop to overseas investment by the Chinese.
We must not let up on tariffs, and actually strengthen tariffs on ALL goods imported into the United States from Communist China and ALL other slave-wage labor, lower cost production countries. This is necessary to de-incentivize further American investment in those countries with the intent to manufacture supply chain parts and finished products, instead of investment in manufacturing in the United States.
Otherwise, Americans will be disabled from building a future economy that can support general affluence for EVERY citizen and instead will continue to empower Communist China to achieve its goal of solidifying itself as the world’s manufacturing center and its deployment of the Belt and Road Initiative to make countries dependent on it.
