Tag Archives: trade

12/16/19

Understanding US Trade

The last two weeks have been monumental in the arena of trade, but the country was too enmired in the shallow grave of impeachment to really focus on it.

Three things happened:

 1. The USMCA (United States Mexico Canada Agreement) was passed by the United States House of Representatives.

This deal replaces NAFTA (North American Free Trade Agreement) and does great things for agriculture with Canada and US product content in goods (cars) whose final assembly is done in Mexico as well as prevailing wages.

 2. The US and China had a first date on trade — nobody is renting reception halls for the marriage, but it was a first step on the crawl, walk, run continuum.

 3. The US neutered the World Trade Organization by refusing to nominate members thereby destroying the quorum and preventing the WTO from taking any action against the US, a brilliant move. This is one that is completely overlooked.

The guy who did this is the man on the right, Robert Lighthizer.

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07/28/19

Tech, Taxes, Tariffs, Trade — And French Wine

France has imposed/threatened a “digital services tax” on the likes of Amazon, Apple, Facebook, and Google — all American companies.

The tax is 3% of gross revenues from digital services earned in France, but only for companies with more than 25MM Euros in French revenue and 750MM Euros in worldwide gross revenue. The tax money goes to France.

When you work through the math it puts a bullseye on Amazon, Apple, Facebook, and Google while giving a pass to many European companies who collectively are just as big as these digital behemoths. This is not an accident.

This tax was discussed for some time period, but its enactment caught a lot of folks by surprise. One who was not caught by surprise was President Donald J Trump.

President Trump had spoken to the French President Emmanuel Macron cautioning him that such a tax would be met with an American response.

Image result for images macron

President Trump, in his inimitable fashion said, “Don’t do it because if you do it, I’m going to tax your wine.” Macron blew him off. French wine is a huge industry.

The French Finance Minister, Bruno Le Maire, sniffing at the ruffian DJ Trump, suggested that taxes and tariffs were completely unrelated. Good luck with that, Bruno.

Taxes and tariffs are core elements of trade while technology, digital services are a critical element of American commerce.

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08/3/16

Trade — Fair, Free, Trump Trade

Today we speak of trade — fair trade, free trade, Trump trade.

It has been a little time since your Big Red Car has posted. Please accept my apology. I will do better in the future.

So, here we are with the issue of trade becoming a big argument in the Presidential election of 2016.

One candidate, Crooked Hillary, was/is for TPP (the TransPacific Partnership) while Donald Trump has been a huge critic of all trade deals suggesting they are one of the root causes of the offshoring of American jobs. Crooked Hillary is now not so much for the TPP and other trade agreements because a focus group told her her opinion.

Let us reason together, beloved readers, and see what a few facts may throw on the situation.

We shall focus on the famous Maquiladora economy on the Mexican side of the border with the United States.

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