Monday, April 9, 2018

International Trade

A couple of opinion piece from the US recently cited the risk to President Trump represented by China's response to his various and many tariffs introduced on Chinese manufactured goods.

In particular, the writers refer to the inscrutable cleverness of the Chinese in imposing a tit for tat tariff on American soy beans, nearly all of which are grown in the mid western states which thrust Donald Trump into the oval office.

According to their logic, if China stops buying American soy beans, American growers will go broke and therefore will not vote for the Republicans in November 2018 or the President in2020.  Or so the story goes.

Image result for soy beans

Maybe these writers have never seen what really happens in international trade. 

Try this on for size.  China shifts it's soy bean purchases from the US to Brazil which seems to be the next largest exporter.   Brazil fills the China orders but not by way of a sudden massive increase in production - which happens to be physically impossible.  No, Brazil cuts back on supplies or puts up prices to some of its other customers.

Woopee-doo!  Those mid western soy bean growers who were supposed to be going broke slip in and make a killing, selling their production to Brazil's erstwhile customers.

But here's the kicker.   Thanks to China's buggering about in the market, the Yank growers get a better price from their new customers than they were getting from China.

And that's how they are making America great again.

21 comments:

The Bunbury Baker said...

Why doesn't Trump slap tariffs on the things Americans could make? Like Suits and ties. Shoes. Handbags. Eyeglasses. Shirts.

Yeah, because that would hurt his and the Princesses pockets.

Trump will be gone by the end of the year. Mueller is getting closer, day by day.

Wilbur said...

"Trump will be gone by the end of the year. Mueller is getting closer, day by day."

How's life on Neptune ?


Andrei said...

"Trump will be gone by the end of the year. Mueller is getting closer, day by day."

The way things a looking we all might be gone before the end of the year - the crazies might get the war they have been craving

Anonymous said...

I don't think Putin actually wants war, it just seems like he does in order to boost his power at home. He is an egotist like the Orange one.

Anonymous said...
This comment has been removed by a blog administrator.
Andrei said...

"I don't think Putin actually wants war, it just seems like he does in order to boost his power at home. He is an egotist like the Orange one."

LOL VVP's popularity derives from the fact that he has significantly raised the standard of living for ordinary people

What most people don't grasp is that people in Russia are for the most part a lot poorer than people in the West nut their standard of living has improved markedly since VVP came to power

And another thing people don't grasp is that people in Russia fear war far more than people in the West

For Anglos - particularly North Americans, Australians and New Zelanders the image of WW2 is John Wayne, Brad Pitt and Tom Hanks heroically killing Germans - it is something that happened a long time ago and far away

Whereas Russia was ground zero for WW2 and European Russia was devasted by it - there is not a family in European Russia who didn't loose family members in that conflict - VVP himself was born after it was over but he had two older brothers who died of starvation in Leningrad - he grew up poor in a city still devasted by that war

Think about the contrast between the world Donald Trump grew up in, wealthy in a wealthy country unscathed by WW2, that had grown rich of the devastation of Europe - compared to Vladimir Putin growing up poor in a city much of which was still in ruins where 1.5 million people had died - you think that that doesn't have an impact on your thinking

NATO is a money spinner for the USA but to survive it needs an enemy to provide a reason for its existence and that is what is going to kill us all

Anonymous said...

Got to hand it to you there mate......While our best mates the Yanks were supplying war materials to the Germans while London was being bombed our next best mates the Russians signed the the Molotov-Ribbontrop non aggression pact. Meanwhile the British commonwealth stood alone facing the worlds crazies......thanks pal

David said...

...British commonwealth stood alone ...

Do you know your history?

There was no British commonwealth at that time, it was still the British Empire and that was a different relationship altogether.

Can you count?

Australia
Canada
New Zealand
South Africa
Rhodesia
India
Malaya
Ceylon
Kenya

and so many others contributed men and materiel

Also the M-R pact was signed before the formal out break of war, which meant that much of Europe was also arrayed against Germany.

Adolf Fiinkensein said...

Well spotted David. Another anonymous idiot. I'm unsure what it thinks the M-R pact has to do with tariffs on Chinese goods.

Andrei said...

What has got something to do with it Adolf is China has stopped buying American Government Bonds about a month ago

And what else has got something to do with it is that China is buying Russian and Iranian oil and gas and paying for it Renminbi not dollars - Sanctions and trade wars can blow back in your face

Meanwhile Mueller has raid Donald Trumps offices while Nikki Haley is threatening to start WW3 at the UN

Very interesting times

Gerald said...

Here's one I'm sure your will be interested to hear Adolf

Gerald said...

https://www.aemo.com.au/-/media/Files/Media_Centre/2018/Initial-operation-of-the-Hornsdale-Power-Reserve.pdf

Anonymous said...

Why does David sound like Andrei?. Of course there was a British commonwealth of nations
that stood alone, whats your point?

Nick

Anonymous said...

http://www.bbc.co.uk/history/ww2peopleswar/timeline/factfiles/nonflash/a6651218.shtml

Anonymous said...

David, signed four weeks before hostilities. Explain this one away.https://en.wikipedia.org/wiki/German%E2%80%93Soviet_Commercial_Agreement_(1940)

David said...

Anonymous Nick, the British commonwealth of nations did not exist until 1949. As I pointed out, it was the British Empire back then, and given the member states it was hardly "standing alone". Who else do you think should have stood with Britain in 1939?

Your 7:07 doesn't need "explaining away", is a different beast to the Molotov Ribbentrop Pact, which was signed August 23, 1939.

Maybe you'd like to "explain away" Operation Barbarossa.

If you want to see an example of "standing alone", that would be Australia after Britain abandoned Singapore and left Australia to face the Japs alone. Churchill refused to allow Australians to return home, declaring that Britain must be saved above all else.

That fat, pompous, and bloated war criminal was quite content to see Australia, New Zealand, Malaya, The Philippines, all fall in to Japanese hands.

If you get such basics of history wrong maybe you should go back to playing in the sand pit.

Andrei said...

My purpose was not to relitigate WW2

My purpose was to suggest that we are living in very dangerous times, this "trade war" is a minor symptom of that

Part of the problem is that Americans and Kiwis have not experienced war on their home turf but only in movies and a gung ho about what might be about to happen and that is a very real danger!

For Russian people it is different - even Russian and Soviet war movies are different, try watching "Come and see" for example - it is almost horror movie as much as a war movie

I can tell you people in Russia are expecting war

People in the West think it is only A-rabs who are going to be blown up and they are uncivilized anyway according to Western Hubris

https://youtu.be/KwpgwBZTyqM

Andrei said...

The whole speech

https://youtu.be/kb6ZVfDQ86M

Psycho Milt said...

For Russian people it is different - even Russian and Soviet war movies are different, try watching "Come and see" for example - it is almost horror movie as much as a war movie

It's "different" but not necessarily "better." The Germans took a lesson from WW2, the Russians didn't. That's shown itself plenty of times since, not least within the last few years. The fact that the western allies were even more impervious than the Russians to learning from WW2 should be a source of shame to us, but there's plenty of shame to go around.

Andrei said...

Who has Russia attacked Milt?

Anonymous said...

David you are just nitpicking and sounding like Andrei everyday. I said the the British commonwealth stood alone in 1939. The Commonwealth of nations was formed in 1926 with the Balfour treaty..http://www.open.ac.uk/researchprojects/makingbritain/content/british-commonwealth-nations-1931

If you can't get your own way you just invent stuff and use emotive words like "bloated" so pull your head in and Google the list the entire list of Commonwealth countries at that time