Aug. 12, 2019
Permission to republish original opeds and cartoons granted.
Trade in goods deficit with China down 10 percent first half of 2019, or $18.8 billion
The U.S. trade
in goods deficit with China is down 10 percent in the first six months of 2019,
or $18.8 billion, compared to 2018, according to the latest data from the U.S.
Census Bureau. And that’s with the first tranche of tariffs by President Donald
Trump that was in place until May. Then, Trump raised the tariff to 25 percent
for the $250 billion of goods and in July he added another 10 percent tariff on
the remaining $300 billion of goods. If it hurts bad enough, it might be able
to force China to the table, but with China’s devaluation of the yuan, the Fed
has to get the dollar right and not let it get too strong or it could undermine
everything the administration is hoping to achieve.
Video: Are we about to unleash the thought police on social media after El Paso and Dayton?
The Trump
administration is proposing monitoring social media used by tens of millions of
Americans to spot domestic terrorists, but is that really a good idea?
Billionaire leftists are coming for your guns
Limousine
liberals are endangering your Second Amendment rights. While these celebrities
and billionaires can afford armed and trained bodyguards, homes surrounded by
walls, high-tech security and surveillance systems, panic rooms, and even
armored cars, they want to disarm average citizens who live in much more
dangerous neighborhoods and can’t afford such elaborate security measures. And
now in Congress they might be about to get their way in the wake of the El Paso
and Dayton mass shootings.
Washington Post: Democrats struggle to present a united front on Trump’s trade war
“Democrats are
divided over President Trump’s increasingly confrontational approach to trade
with China, a surprising lack of unity for a party that has stood starkly
against most of the president’s positions. Several of the party’s leading
presidential hopefuls have railed against Trump’s trade war, accusing the
president of being erratic in confronting China while causing needless economic
pain. But they are also arguing for a tougher approach to China than Trump has
pursued. It’s a message that may be hard to reconcile with their vows to ease or
reverse the damage caused by the widening trade war. And some top Democratic
lawmakers have only egged him on, as Trump took an action this week — deeming
China a ‘currency manipulator’ — that they have long advocated.”
Trade in goods deficit with China down 10 percent first half of 2019, or $18.8 billion
By Robert Romano
The U.S. trade in goods deficit with China is down 10 percent in the first six months of 2019, or $18.8 billion, compared to 2018, according to the latest data from the U.S. Census Bureau.
And that’s with the 10 percent tariffs President Donald Trump slapped on $200 billion of goods and 25 percent on $50 billion that was in place until May. Then, Trump raised the tariff to 25 percent for the $200 billion and in July he added another 10 percent tariff on the remaining $300 billion of goods, bringing it to a total of almost $550 billion of goods that are now taxed.
In June, the first month of the increased tariff, imports from China actually dropped 0.7 percent, which is significant. In all of the data going back to 1985, imports from China have never dropped in the month of June, so there’s a definite impact taking place.
Overall imports from China for the year are already down $30 billion this year. At the current pace, exports to the U.S. could drop by $66.5 billion, or 12 percent this year. That amounts to a half a percentage point of China’s $13.6 trillion Gross Domestic Product, but the feedback loops are likely being felt on the production side of China’s economy as well.
That is undoubtedly great news for the Trump administration after 2018 had the largest trade in goods deficit with China in history at $415.9 billion, which led this author to speculate that perhaps the tariffs were not great enough to make a dent.
At the current pace, the trade in goods deficit in 2019 might come in at $375 billion or so, but that is with the first tranche of tariffs. We still have not measured the impact of the most recent tariffs, which could have an even greater impact that remains to be seen. Time will tell.
Taken together, this could be dealing a significant blow to the Chinese economy, which is dependent on exports to fuel growth. It is definitely slowing the economy down in China, which posted its slowest growth rate in close to 30 years in the second quarter of 2019.
Speaking to CNBC on Aug. 6, National Economic Council director Larry Kudlow cited the tariffs as the direct cause for the slowdown, saying, “the economic burden of these tariffs is falling almost 100 percent on China. So their economy, which has been deteriorating, you can look at any long chart of Chinese investment, retail sales and so forth, and you see a steady downdraft. Their GDP, which is probably inflated by several points, is coming in lower and lower. In other words, my point is with respect to our disagreements and with respect to the president's tough negotiating with tariffs, I think China is getting hurt significantly much more than we are, as I said before.”
Kudlow added, “It's just not the powerhouse it was 20 years ago, everybody knows that, and as I said before, supply chains are moving out, the demand for their goods is moving to other places, [and] a lot of people are coming back home.”
One potential headwind could the currency wars currently being waged, particularly with China’s new devaluation. The People’s Bank of China has attempted to compensate for the tariffs by devaluing the yuan against the dollar close to 5 percent since May, which earned it a currency manipulator designation from the U.S. Treasury for the first time since 1994. Time will tell if it is enough to offset the tariffs being imposed.
On Twitter, President Trump encouraged the Federal Reserve to weaken the dollar versus the yuan, euro and other currencies to keep the U.S. competitive globally, “As your President, one would think that I would be thrilled with our very strong dollar. I am not! The Fed’s high interest rate level, in comparison to other countries, is keeping the dollar high, making it more difficult for our great manufacturers like Caterpillar, Boeing, John Deere, our car companies, & others, to compete on a level playing field.”
Trump added, noting the current rate cut by the Fed, “With substantial Fed Cuts (there is no inflation) and no quantitative tightening, the dollar will make it possible for our companies to win against any competition. We have the greatest companies... in the world, there is nobody even close, but unfortunately the same cannot be said about our Federal Reserve. They have called it wrong at every step of the way, and we are still winning. Can you imagine what would happen if they actually called it right?”
Here, Trump has a really good point. Competitive devaluations from overseas can increase that country’s exports, lower unemployment and give a boost to growth, and can have the opposite effect on trading partners like the U.S. where they export to. That puts the U.S. squarely in the crosshairs and could exert deflationary pressure on the economy here. Similar trends appeared to play out in the Great Depression and during the 2000s leading to the financial crisis, when overseas the ending of the gold standard and more recently China’s low peg coincided with sharp rises in U.S. unemployment and drops in prices.
Already, in June inflation only came in at 1.6 percent for the past 12 months, and so that is something the Fed should be keeping an eye on. As seen in the Great Depression, overseas devaluations can have a far greater impact than tariff policy in shifting the trade balance. Then, the U.S. attempted to compensate for declining import prices with the Smoot-Hawley tariff, but it was not until the U.S. came off the interwar gold standard in 1933 that deflation stopped and unemployment began dropping.
On monetary policy, the Fed and Treasury might need more firepower to counteract China’s foreign exchange market interventions and potentially devalue the dollar if necessary. Matt Phillips of the New York Times on Aug. 6 pointed to the Economic Stabilization Fund at the U.S. Treasury as an area with potential shortcoming: “The People’s Bank of China has the ability to print renminbi to weaken the currency if the exchange rate gets too high. On the flip side, Beijing has $3 trillion in reserves it can deploy to keep the currency from getting too weak. Right now, the United States doesn’t operate that way. It has some capacity to intervene in financial markets by using the Exchange Stabilization Fund, a vehicle under the control of the Treasury secretary, with about $100 billion of buying power.”
Phillips quoted Joseph Gagnon, senior fellow at the Peterson Institute for International Economic, suggesting, “Unless Congress gives Treasury authority to beef up the Exchange Stabilization Fund, it just doesn’t have enough firepower.”
I have encouraged the President and Treasury Secretary Steven Mnuchin to consider proposals to bar China from U.S. treasuries markets if the currency manipulation continues to remove one of Beijing’s tools.
But for now, the President can take solace that the tariffs are having their intended effect of reducing the trade deficit with China — for now. If it hurts bad enough, it might be able to force China to the table, but the Fed has to get the dollar right and not let it get too strong versus foreign currencies or it could undermine everything the administration is hoping to achieve, and take the U.S. economy with it.
Robert Romano is the Vice President of Public Policy at Americans for Limited Government.
Video: Are we about to unleash the thought police on social media after El Paso and Dayton?
To view online: https://www.youtube.com/watch?v=ek2Z3NmpaHU
Billionaire leftists are coming for your guns
By Rick Manning
Limousine liberals are endangering your Second Amendment rights. While these celebrities and billionaires can afford armed and trained bodyguards, homes surrounded by walls, high-tech security and surveillance systems, panic rooms, and even armored cars, they want to disarm average citizens who live in much more dangerous neighborhoods and can’t afford such elaborate security measures.
And now in Congress they might be about to get their way in the wake of the El Paso and Dayton mass shootings.
In 2013, then-New York City Mayor Michael Bloomberg spent $12 million on an advertising campaign promoting background checks. The following year, Bloomberg announced his plan to spend $50 million on gun control and founded Everytown for Gun Safety. Everytown was formed from the merger of Moms Demand Action for Gun Sense with Mayors Against Illegal Guns, which Bloomberg had co-founded in 2006. Bloomberg also recruited Warren Buffett to the advisory board of Everytown.
In 2015, the Everytown for Gun Safety Action Fund began meddling in Virginia politics. That year, the Action Fund spent $2 million to help Democrats running for the Virginia Senate. Just two years later, the Action Fund spent $1 million to help elect Democrats Ralph Northam and Mark Herring to statewide office; Virginia voters subsequently learned that both had worn blackface. Also in 2017, it was reported that Bloomberg had spent $135 million on gun control.
Last year was a busy one for Everytown. The gun-grabbing group teamed up with the March for Our Lives and the March for our Lives Action Fund to organize the anti-gun rally in DC. Everytown also joined with the Giffords Center and NextGen America to register high school students and spent $5 million to defeat Republican members of Congress. Finally, Everytown partnered with Levi Strauss to try to ban all private gun sales except for those made in retail stores.
Of course, many well-known names joined Everytown in its support of the March for Our Lives. For example, George and Amal Clooney, Jeffrey and Marilyn Katzenberg, Oprah Winfrey, and Steven Spielberg and his wife Kate Capshaw, all contributed $500,000 to the march. Taylor Swift also contributed.
Fortunes created by Microsoft have been used to fund anti-gun ballot measures in Washington State. In 2014, billionaires Bill and Melinda Gates, Steve and Connie Ballmer, and Paul Allen gave over $2 million collectively to an anti-gun ballot measure. Four years later, Allen and the Ballmers once again collectively gave over $2 million in support of another anti-gun ballot measure.
Gabby Giffords’ anti-gun super PAC has also proven popular with liberal billionaires. Unsurprisingly, Bloomberg and Connie Ballmer have given hundreds of thousands of dollars to the super PAC. Sean Parker, the former president of Facebook, and Marc Benioff, the chairman of Salesforce, have also contributed hundreds of thousands of dollars.
Last year, the Laura and John Arnold Foundation announced that it would be contributing $20 million to the National Collaborative on Gun Violence Research. The Arnold Foundation planned to raise an additional $30 million from other funders. While gun violence research might not sound very concerning, one need look no farther than the Arnolds’ choice to lead their research effort to see in which direction the research is likely to go. They have hired Jeremy Travis, an anti-gun extremist, to serve as the Executive Vice President of Criminal Justice at the Arnold Foundation. Travis clerked for Ruth Bader Ginsberg and played a key role in crafting New York City’s gun ban.
Of course, no list of liberal billionaires who oppose gun rights would be complete without George Soros. In 2013, Soros’ Open Society Foundations gave $150,000 to the Joyce Foundation’s Fund for a Safer Future, which was set up to advocate for gun control. Soros also gave $50,000 to the Brady Center to Prevent Gun Violence.
These celebrities and billionaires represent just a tiny fraction of the hordes that would happily seize your guns, but they represent a significant source of funding for the anti-gun agenda. Be sure to keep the contributions of these people in mind the next time you are considering going to a movie starring George Clooney or to a Taylor Swift concert, buying a pair of Levi’s or insurance from Geico (which Buffett owns), or watching Oprah or Bloomberg’s TV channels.
Billionaire leftists like George Soros, Bill Gates, Michael Bloomberg and John Arnold are spending millions of dollars to exploit the tragedies of El Paso and Dayton to undermine the individual right to keep and bear arms. Whether it be Soros' campaign to elect anti-gun prosecutors who fail to fully enforce the law against violent criminals while aggressively pursuing enforcement of fraudulent red flag claims without due process, or Gates, Bloomberg and the Arnold Foundation that have spent their resources convincing so-called moderate Republicans that they can be just a little bit pregnant when they support slippery slope measures leading to gun confiscation, it all leads to the same outcome.
Every American gun owner who simply believes in individual liberty should contact their Congressmen, Senators and the President and tell them to say no to the billionaire leftists and support the right to keep and bear arms and due process.
Rick Manning is the President of Americans for Limited Government.
ALG Editor’s Note: In the following featured report from the Washington Post, Democrats are struggling to figure out what to say about President Donald Trump’s trade policies that they advocated but never enacted for years in favor of before he became president:
Democrats struggle to present a united front on Trump’s trade war
By Jeff Stein
Democrats are divided over President Trump’s increasingly confrontational approach to trade with China, a surprising lack of unity for a party that has stood starkly against most of the president’s positions.
Several of the party’s leading presidential hopefuls have railed against Trump’s trade war, accusing the president of being erratic in confronting China while causing needless economic pain. But they are also arguing for a tougher approach to China than Trump has pursued. It’s a message that may be hard to reconcile with their vows to ease or reverse the damage caused by the widening trade war.
And some top Democratic lawmakers have only egged him on, as Trump took an action this week — deeming China a “currency manipulator” — that they have long advocated.
“They’re stuck. They want to say the dramatic steps taken by the Trump administration haven’t been effective, but they also say we need to renegotiate with China,” said Ernie Tedeschi, who served as a Treasury Department economist in the Obama administration. “With trade wars, there’s a tension between helping domestic manufacturers and keeping pain away from consumers. That’s their dilemma.”
