US Politics Thread 2021-24

[Skybird]

Some facts to unmask the many lies and half-truths Trump ripplefires in his trade war of aggression against the EU. From the Frankfurter Allgemeine Zeitung.



https://www.faz.net/aktuell/wirtscha...110497155.html

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1. The US trade deficit with the EU, which Trump finds so terrible, looks larger than it actually is. Last year, the EU exported significantly more goods to the US than it imported from there. The US trade deficit last year was $236 billion, according to US Census figures. This year, the gap has widened even further: in the first three months alone, the cumulative deficit was $96 billion. The obvious reason is that US importers, in anticipation of Trump's tariffs, wanted to quickly import goods under old conditions. In trade in services, however, the US has a trade surplus with the EU of $76 billion. If goods and services are combined, the trade deficit is reduced to $161 billion. Still, that's it.

2. Trump doesn't need tariffs to shrink the trade deficit. He could save instead. The trade deficit arises because the United States spends more money than it earns. This additional spending, by definition, must be spent on foreign goods and services. This spending is financed either through loans from foreign lenders or through foreign investment in US assets and companies. As economists Clyde Hufbauer and Zhiyao Lu show, if higher government spending increases the federal budget deficit, it leads to a lower national savings rate and an increase in the trade deficit. Trump's proposed tax reform, which has just passed one chamber of Congress, will significantly expand the budget deficit again.

3. Trump should urgently take a closer look at Ireland . Trump's 2017 tax reform created tax incentives specifically for US pharmaceutical companies to relocate their production, profits, and patents to Ireland. As a result, American pharmaceutical imports more than doubled between 2017 and 2024, according to balance of payments expert Brad Setser. They now account for almost one percentage point of US gross domestic product. The result: After Germany, tiny Ireland has the second-largest trade surplus with the US.

4. Trump could be nicer to foreigners, even if they are not rich sheikhs. More than a million young people from other countries are currently studying in the USA. Most of them pay high tuition fees, which they use to subsidise the education of Americans. The approximately 50 billion dollars that this raises are an export performance of the USA, which reduces the trade deficit and is provided almost entirely by workers in America. This distinguishes them from motor vehicles, which, although exported somewhat larger, contain many inputs from other countries. Trump's policies against Harvard University and other elite universities, as well as his series of visa cancellations, are frightening current and future students. The same applies to tourism, which is suffering from the decline in foreign visitors.

5. Trump is absolutely right: the EU's trade barriers are too high. The EU has erected more so-called non-tariff trade barriers than the US. The greatest differences between the two economies exist in the areas of footwear, machinery, and electrical equipment, according to economist Fernando Leibovici in an analysis for the Federal Reserve. The EU has also established significantly higher barriers to exports in the food sector. In fact, EU countries themselves suffer greatly from barriers imposed by other EU countries. Experts at the International Monetary Fund estimate and calculate the level of non-tariff trade barriers within the EU at 45 percent in tariffs.

6. When it comes to car tariffs, Trump is only telling half the truth. Pickup trucks, like the Ford F 150, have been among the best-selling cars in the US for many years, and topped the sales charts for years. One in three cars sold in the US is a pickup truck. They have the advantage that imported pickup trucks are subject to a 25 percent tariff. Trump always forgets to mention this while complaining about EU import tariffs on cars. These currently amount to 10 percent, while the US long charged only 2.5 percent on imported cars. Generally, the average tariff level in the two economic areas is between 2 and 3 percent.

7. Trump is wrong: VAT does not discriminate against Americans. European companies must pay it just like American companies.

8. Who wins the trade war? In trade wars, there are only losers. The Kiel Institute for the World Economy shows that the 50 percent tariff shock will have a negative GDP impact on the US (1.5 percent), which is twice as high as for the EU (0.78 percent). Price pressure is rising in the US, while it is falling in the EU. This does not take into account any possible retaliation.

9. At least Trump is raising money . The United States has collected exactly $67.3 billion in tariff revenue this year through May 22—nearly 77 percent more than in the same period last year. But this isn't a dramatic relief for the federal budget. By comparison, federal income taxes in 2024 amounted to approximately $2.4 trillion.

10. Finally, a bit of history. The EU was not founded to rip off the US, as Trump claims. European unification and economic strengthening were a core element of US foreign policy after World War II. The aim was to create a bulwark against communism and Russian imperialism.

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I am quite relaxed about thjis trade war. If The Americans want to rumble, okay, let them bring it on. Its not as if the EU is a lightweight (thats why Trump hates it so much, it is not as weak as he wants it). So far the commission did not want to needlessly escalate and deal with it on a tit-for-tat basis. That should not let anyone mistaken this with weakness. It isn't.

[Dargo]

In the face of Trump's tariff threats, the European Union has always used a tactic in three parts:

1. Throwing as little oil on the fire as possible and not responding to Trump's provocations.
2. Working out countermeasures that hurt European citizens and businesses as little as possible by only imposing tariffs on US products for which there is also a good European alternative.
3. Impose as many tariffs as possible that affect Trump's supporters.

Don't go thinking Europe is weak, we former colonial powers have been playing this game for centuries. Please don't make it possible for us to come back to that table that has horrific consequences as we can see in our history.

[Dargo]

[Otto Harkaman]

"They’re robbing us blind!" Trump bellows at dawn,
Counting deficits like sins the EU spawned.
Ignore the services, the students, the rest—
"If we’re not winning big, we’re being oppressed!"

[Dargo]

The fuel for that strategy is emotion, not a coherent ideological conviction. Ultranationalism and a sacred belief in ‘the right of the strongest’ are always part of it, but apart from that, it has no unified narrative. Trump just needs to be a story ‘teller’. His words matter, in the sense that they should provoke anger. But what he tells, and whether what he says is true, is less relevant. He simply has to touch a nerve and know how to hold it.

We have created our own myth. That myth is not a reality, but a belief, a passion, which we want to turn into an all-encompassing reality. To that myth, I submit everything.

A people that elect corrupt politicians, whiners, imposters, thieves and traitors are not victims but accomplices!

[Otto Harkaman]

Originally Posted by Dargo

A people that elect corrupt politicians, whiners, imposters, thieves and traitors are not victims but accomplices!

I couldn't agree more!

[Dargo]

You will still get your ich habe nichts gewusst moment if not karma is a biaach.