Tariffs, More Tariffs!

Just when negotiations were going so well, or so they said. Here.

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6 hours ago, Marina Schwarz said:

Just when negotiations were going so well, or so they said. Here.

Alternative hypothesis: the "negotiations" were a diversion to buy time.  Trump and private industry needed a couple years to get supply chains in order.  While they were doing so, they needed consumer confidence to remain high.  With two years for US companies to prepare, Trump can now raise tariffs with minimal short-term impact. 

Of course, the West Coast will suffer, but I suspect Trump will count that as a bonus. 

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Usa knows that out product are highly demand.

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In my opinion, there were several factors in play which caused the President to threaten to increase the tariff level.

First, the economies of both countries were doing better than expected. This reduced the pressure on China to resolve the 'trade war' in a timely fashion.

Secondly, China has historically played the 'long game'. That coupled with a 'President for life', no election  cycle in China, and the fact that campaigning in the US has already begun may have fostered a 'wait and see' mentality.

The situation with Ms. Weng of Huawei in Canada may have played a part as well.

I would assume that Trump's increasing tariffs from 10% to 25%, which has always said was an option and is nothing new, is to get China to seriously re-engage in negotiations...NOW.

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That. and he's adding more goods to the tariff list.

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If Trump had not taken his recent action I feel that discussions would have become meaningless as would have any agreement.

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What you are seeing is the result in large part of the suggestions, or back-room influence, of Larry Kudlow.. I view Kudlow as somewhere between an opportunist and a flake.  Not much of what he says has any element of truth or objectivity.  This guy actually started out as some left-winger, palling around with BIll Clinton.  He suddenly became a right-winger when Reagan become the President.  He worked for Bear Stearns on Wall Street, the investment bank that went bust at the start of the financial collapse, as one of their economic analysts; all his financial prognostications there were spectacularly wrong.  Bear Stearns fired him.  The public excuse was that he was a cocaine user.  Hey, inside Bear Stearns, all those guys were users.  It would be true to form if the guys that fired Kudlow did that after using.

I fully expect The Donald to pump up the tariff wall to 25%  It is likely a good move. It will force those reliant on the China trade to develop US sourcing, especially for manufactured goods.  A number of those plants will be either located in, or started up in, the rural parts of the country, thus providing rural employment.  That is good for the Trump voter base. But I don't get the impression that that is the big motivator.  I suspect that Trump is getting frustrated with the Chinese approach of stonewalling.  That they misread him is going to backfire.  The Chines do need access to the US market, not the other way around.

As to the issue of loss of US markets for LNG, that is easily solved by granting what are known as "waivers" for foreign ships in the coastal marine trade.  With waivers, LNG carriers can transport US as to places beyond pipeline reach, such as Boston.  Kudlow is too useless to do that; if the right (smart) person is somewhere in the bowels of the White House, then that idea just might percolate and become policy. 

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1 hour ago, Jan van Eck said:

What you are seeing is the result in large part of the suggestions, or back-room influence, of Larry Kudlow.. I view Kudlow as somewhere between an opportunist and a flake.  Not much of what he says has any element of truth or objectivity.  This guy actually started out as some left-winger, palling around with BIll Clinton.  He suddenly became a right-winger when Reagan become the President.  He worked for Bear Stearns on Wall Street, the investment bank that went bust at the start of the financial collapse….

As to the issue of loss of US markets for LNG, that is easily solved by granting what are known as "waivers" for foreign ships in the coastal marine trade.  With waivers, LNG carriers can transport US as to places beyond pipeline reach, such as Boston.  Kudlow is too useless to do that; if the right (smart) person is somewhere in the bowels of the White House, then that idea just might percolate and become policy. 

How old would he have been to pal around with Clinton before Reagan was elected president? Was Clinton even a governor yet? Maybe they met at Yale? Just curious, but not enough to bother googling…

Fixing the Jones Act would fix the LNG problem. People think oil markets are supply and demand. But there's a geographic element, WHERE the demand is becomes more important than where the supply is. I don't know if IEA has analyzed this but I'm always curious how much energy is consumed moving our energy sources from production to consumption. 

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1 hour ago, Ward Smith said:

How old would he have been to pal around with Clinton before Reagan was elected president? Was Clinton even a governor yet? Maybe they met at Yale? Just curious, but not enough to bother googling…

22.

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1 hour ago, Ward Smith said:

I don't know if IEA has analyzed this but I'm always curious how much energy is consumed moving our energy sources from production to consumption. 

Roughly 5%.  It is not insignificant.  Up to now, the amount needed was furnished by burning refinery sludge, a heavy residual oil technically known as HFO 380.  The current problem is that after this year, straight HFO and Intermediate fuel oil will be banned unless the sulfur is removed.  As that is unlikely, it appears the surface fleet will move over the marine gasoil, basically diesel #2. 

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On 5/7/2019 at 10:35 PM, Jan van Eck said:

I fully expect The Donald to pump up the tariff wall to 25%  It is likely a good move. It will force those reliant on the China trade to develop US sourcing, especially for manufactured goods.  A number of those plants will be either located in, or started up in, the rural parts of the country, thus providing rural employment.  That is good for the Trump voter base. But I don't get the impression that that is the big motivator.  I suspect that Trump is getting frustrated with the Chinese approach of stonewalling.  That they misread him is going to backfire.  The Chinese do need access to the US market, not the other way around.

 

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