How President Trump Could Win the Tariff War

As we launch into the 2018 summer season of punishing tariffs and counter-tariffs and with the present bad feelings between the global powerhouses, perhaps a second look at what we are *actually* trying to accomplish is in order — and if a better way of accomplishing our goals appears — would today’s leaders be bold enough to employ such a change-up?

Taking the American position as an example; U.S. President Trump feels that American steel and aluminum are at a competitive disadvantage to countries like, well, every other country in the world, which is why he has instituted import tariffs of 25% on steel and 10% on aluminum. Different tariffs have been levied by Trump on other imported items. All of which is supposed to help American steel and aluminum companies compete in the international marketplace and overcome decades of less-than-stellar reinvestment in U.S. rust belt industries such as steel and aluminum mining and smelting.

The pushback from exporting countries has been considerable and is expected to be matched on a dollar-for-dollar basis. Trade war, much?


The First Rule in Every Crisis: Don’t Make it Worse!

While there is plenty of angst to go around, President Trump must remember that the entire situation was created by every U.S. president since President Carter, and that countries were never told to stop or slow the exports to the United States, nor told to lower their exports to other Western nations.

That means it’s time for President Trump to ‘play nice’ with exporting countries — which have done nothing more than play by the rules that America itself had set.

The problems of the $862.2 billion balance of trade deficit that America is trying to draw-down can be made worse via bad communications, additional tariffs, or clumsy handling of the situation. Let’s not do that.

Rather, let’s try to improve on trade deficit elimination as time rolls forward.


How to Make it Better

Apart from not making it worse, the present uncomfortable situation could be solved to every party’s satisfaction by designing a tariff regime to solve the fundamental problem instead of trying to address each good or service individually — creating a pathway, not only to solve immediate concerns — but to provide additional revenue to assist the above-noted and other American industries stung by poor vision, poor leadership, and poor management of U.S. trade policy from the 1980’s onward.

Instead of piecemeal (and high) tariffs that are seen as exorbitant in some quarters, President Trump should institute a standardized 5% across-the-board tariff on every single good imported into the United States.

The gross total revenue of that 5% tariff would far exceed the revenue that would be collected by the present bric-a-brac collection of deeply unpopular tariffs.

With an annual tariff revenue pool that would far exceed that of the present tariff regime, the United States could allocate generous and proactive funding to several of America’s poorly-performing economic segments, which spending would be completely at the discretion of the Trump Administration and its successors.

That’s an extra $120 billion (approx) for America annually.


Invite America’s Trade Partners to Drop Their Existing Tariffs and Match the New 5% Standardized Tariff

And then, pour yourself a nice cool drink Mr. President because you’ve won.

End of the trade war, the beginning of accumulating billions of dollars that can be directed to American industries that have suffered as a result of heretofore unrestricted imports from economies that benefit from low-cost labour and lower environmental standards.

Be part of the solution.

Nothing would put a salve on the present air of hurt feelings like a major signing ceremony between the U.S. and China where both countries see it’s in their best interests to drop the existing punitive tariffs and support and abide by a standardized 5% tariff regime.

No doubt that the EU, The Commonwealth of Nations, Russia, and other global exporters would enthusiastically sign a matching and standardized 5% tariff agreement with the Trump Administration.

Problem solved. And everyone makes more money!

That’s how to employ the ‘Art of the Deal’ to turn a negative into a positive.

Written by John Brian Shannon | Reposted from JohnBrianShannon.com

Is the US ‘Too Big’ for the G7?

Q: Are the concerns of a superpower relevant to the other G7 members? A: Not really.

Maybe it’s time for a superpower group of the US, China, the EU, Russia, and The Commonwealth of Nations to form up, instead of the G7 group that has worked very well until now.

Even the sage Moses who lived 3400-years ago, suggested, “Thou shall not plow with an ox and a donkey yoked together” and the reason is quite clear to every farmer. Being so dissimilar in size and power, both the ox and the donkey will be miserable the entire time they try to plow forward together and the farmer will spend most of his time ‘arbitrating’ disputes between the two and the plowing enterprise will get little actual plowing done.

It’s unfair to the US, it’s unfair to the smaller or weaker members of the G7 club and it’s unfair — even to near-superpowers like Japan and Germany which have far different challenges and causes to ‘plow’ than those of the superpowers.

Steve Hilton: Trump’s criticism of G-7 is ‘unprecedented’ scream the elite -- That’s the whole point of Trump!
Trump’s Criticism of G-7 is ‘Unprecedented’ Scream the Elite – That’s the whole point of Trump! | Steve Hilton, Fox News

Shall I list the ways?

If so, this would become a very long blog post indeed!

For just three examples:

  1. Which of the G7 partners have a negative balance of trade of $862.8 billion for 2017? The entire G7 combined doesn’t have a negative balance of trade anywhere approaching that of the United States.
  2. Which of the other G7 members have an inventory of nuclear warheads like the United States which includes 6450 nuclear warheads; 1750 that are retired and awaiting dismantlement, and 3800 that remain part of the U.S. stockpile?
  3. If we’re talking GDP, the US represents 52.8% of the Group of Seven’s GDP, while the next largest country in the group (Japan) represents 13.3% of GDP, with only Germany at 10% remaining as the only other double-digit GDP member of the G7.

Population figures and economic growth indicators may be even more telling than the above indicators of superpower status.


Should the US Join It’s Own 1-Member Club?

That may be a tempting thought for President Donald Trump and certain members of his administration, but there are common concerns among superpowers that only apply to superpowers (and there’s no doubt the US remains the Number One superpower by a significant margin) and it’s those superpowers that must work together to deliver solutions for their large populations.


If we look at a superpower club of 5 members: The United States, China, the EU, The Commonwealth of Nations and Russia, we’re looking at a group that is roughly comparable to each other and have similar challenges.

Let’s look at our three main indicators, just to be certain:

GDP

Big 5 (Nominal) GDP
U.S.A. --------- $20.3 trillion (USD) (Focuseconomics.com)
China ---------- $13.0 trillion (USD) (Focuseconomics.com)
EU ------------- $19.7 trillion (USD) (IMF)
Commonwealth --- $10.4 trillion (USD) (Commonwealth.org)
Russia --------- $1.72 trillion (USD) (IMF/StatisticsTimes.com)

Although there are some disparities in nominal GDP among the five countries, we must remember that China is on an exponential growth curve while The Commonwealth of Nations statistic (provided by commonwealth.org) is from 2017 and their economic group is also growing at a rapid rate ($13 trillion by 2020). Russia is the outlier in this group, however, as we shall see, that country has other (huge) chips on the table when it comes to retaining its superpower status.

Top 10 Countries as ranked by GDP includes G7 countries. Image courtesy of FocusEconomics.com
Top 10 Countries as ranked by GDP — includes G7 countries. Image courtesy of FocusEconomics.com

Nuclear Warheads

Big 5 Nuclear Warheads
U.S.A. --------- 6450 (Federation of American Scientists)
China ----------  270 (Federation of American Scientists)
EU -------------  300 (Federation of American Scientists)
Commonwealth ---  485 (Federation of American Scientists)
Russia --------- 6850 (Federation of American Scientists)

Although nuclear stockpiles vary, the US and Russia were the main protagonists of the Cold War which lasted from 1950 through 1990 which is why they own far more nuclear weapons than all other countries combined. The only EU country to publish their ownership of nuclear weapons is France, with 300 warheads. The Commonwealth of Nations countries that publish ownership of nuclear weapons include the UK, Pakistan and India.

G7 comparison: Estimated Nuclear Warhead Inventories, 2018. Federation of American Scientists
Estimated Nuclear Warhead Inventories, 2018. Federation of American Scientists

Balance of Trade Issues

Big 5 Balance of Trade (in US Dollars)
U.S.A. --------- $-862.8 billion (2017) (Handlesblatt/IMF/WTO)
China ---------- $+98.46 billion (2017) (TradingEconomics.com)
EU ------------- $+44.45 billion (2016) (Statista.com)
Commonwealth --- $-187.5 billion (2015) (Commonwealth.org)
Russia --------- $+115.3 billion (2017) (Statista.com)

GDP and Balance of Trade among the G7 countries in 2017

While balance of trade issues vary wildly between the United States, China, the EU, The Commonwealth of Nations and Russia, very few countries can play in the triple-digit or even high double-digit space occupied by those nations. Especially when analyzed using their (Nominal) and (Purchasing Power Parity) GDP numbers, these are exceptional nations and groupings of nations, which put them in a different category than other countries.


The Big 5 (B5) A Better ‘Fit’ for the United States, China, the EU, The Commonwealth and Russia

There is nothing wrong with small countries and there is nothing wrong with big countries. But small countries have far different challenges than large countries, and everything happens on a truly massive scale for the bigger countries and in country groupings like the EU and The Commonwealth of Nations.

And those differences cause irritations.

Instead of heads of government trying to plow forward with their challenges and issues while ‘yoked’ to dissimilar and dissimilar-sized partners, why not make it easier on everyone and ‘put like with like’ to gain a more comfortable fit?

It’s so obvious this should be done and the latest G7 meeting proves that the problems in that organization are systemic problems and are the sole cause of divisions between the oddly mismatched countries of that group.


The ‘Big 5’ followed by the ‘Next 20’

Every country stuck in a trade or political grouping that doesn’t match it’s particular talents will suffer. Therefore, the Big 5 must form into a group of their own, and the G20 (minus the by-then departed ‘Big 5’ members) must attract ‘the Next 20 nations’ to their refashioned N20 organization.


Helping Every Country and Individual to ‘Become All That They Can and Should Be’

In that way, the top 25 countries in the world can finally become all that they can and should be instead of being held back by arbitrary, mismatched, or outdated groupings.

And, isn’t that’ what it’s really all about?

!!!

Written by John Brian Shannon | Reposted from JohnBrianShannon.com


Read the next blog post: G7 – Please Save Our Seas!

Why American Automakers Should Stop Building Cars in Other Countries

by John Brian Shannon | Reposted from JohnBrianShannon.com

At first glance, the idea that the ‘Big Three’ American automakers (Chrysler, Ford and GM) would stop manufacturing their cars and trucks in other countries might seem like a ground-breaking idea.

But it’s not as shocking as some new ideas that have come to light, such as putting engines in sailing ships enabling them to easily cross entire oceans, or passenger travel by aircraft instead of train, or that man should walk on the Moon by 1970.

Still, the idea that America’s Big Three automakers could stop building their cars in other countries might be seen as a novel idea.


Why Would American Automakers Want to Stop Building Cars in Other Countries?

Let’s take the case of the North American car market:

Chrysler, Ford, and GM have auto assembly plants in Canada, the United States and Mexico where they produce millions of cars and trucks per year. The majority of those vehicles are then sold into the U.S. because it’s a far bigger market than the Canadian and Mexican vehicle market combined.

Which means that many American auto industry jobs are lost to Canada and Mexico.

President Trump wants to lower the unemployment rate in his country and help make his domestic auto industry stronger and more responsive to the American market via high tariffs or restrictions on the number of cars Canada and Mexico could export to the United States.

The trade-off of that move would be worse relations with Canada and Mexico which have long benefited from Big Three auto factories located in their respective countries and Canada and Mexico would be loathe to lose those economic benefits.

And although I see U.S. President Donald Trump’s point on this — I’d rather talk about solutions that could work for all three countries.


What if There’s a Way for Each of the NAFTA Countries to Win?

Let’s pretend for a minute that we’re looking at the North American auto industry from the vantage point of 5-years in the future.

Five years on, let’s say that every Chrysler, Ford and GM car and truck sold in the United States is manufactured in the United States, unemployment is at an all-time low, and the American economy is rocketing along like it was in the 1960’s. Great!

What about Canada?

As the Big Three factories presently located in Canada would still remain, new licensee companies approved by Chrysler, Ford and GM could build all the Chrysler, Ford and GM vehicles required for the Canadian market and build 100% of them in Canada, while still keeping to U.S. auto company specifications and quality. Such licensee companies would be required to meet the same manufacturing standards and warranty terms.

Canadian companies like Magna International already produce a significant number of the parts required for all of the Big Three automakers; Extending their license to include vehicle assembly on behalf of one of the U.S. auto companies would be an easy transition.

Or, entirely new companies could be formed; One company (‘Chryton Co.’) could build all Chrysler cars and trucks for the Canadian market by purchasing the existing Chrysler manufacturing plants in Canada and paying the required per-unit license fees to Fiat Chrysler USA, while Canadian-owned ‘FordX’ could build every Ford car and truck for its Canadian dealers after paying its per-unit license fee to Ford USA. Likewise, GM vehicles would be built by a Canadian-owned and GM-approved company (‘AC Delco’) that would pay a license fee to GM USA for each vehicle it builds for the Canadian market.

In that way, all Chrysler, Ford and GM vehicles destined for the Canadian market would be manufactured in Canada by Canadian workers — and other than paying license fees to the respective USA auto manufacturer — the Canadian automotive manufacturing industry would be 100% Canadian. That’s 100% Canadian-owned and 100% Canadian-staffed. (They would still need to match U.S. manufacturing and warranty standards however)

Exactly the same could be done in Mexico for Mexican companies and consumers. (They would still need to match U.S. manufacturing and warranty standards)

And all Chrysler, Ford and GM cars and trucks destined for the U.S. market would be manufactured in the United States by American workers and the U.S. auto industry would find itself in the middle of an economic boom!


In an Era of 3D Printing, License Fees Will be Everything

Welcome to the future!

If you live in Canada and you want a Ford car you’d simply order the car online and the Ford-approved Canadian company 3D prints and otherwise assembles your Ford car and the car arrives at your local dealership a few days later.

You might even choose to watch it being 3D printed, painted, and assembled on your tablet or laptop computer.

Yes, other than upholstery and tires, etc. all 3D printed cars and trucks will be made from aircraft grade aluminum alloy as aluminum works better than steel for 3D printing.


Not Only The Big Three, But European and Japanese Automakers Too!

Imagine if EVERY new car and truck sold in Canada is built in Canada by Canadian companies that pay a license fee to the respective American, European, or Japanese automaker. That equals full employment in the Canadian auto sector, without the (understandable) griping by President Trump about American job losses.

Imagine if EVERY new car and truck sold in the U.S.A. would be built in the United States by American workers, and even European and Japanese vehicles sold in the U.S. would be built by U.S. companies that paid for the rights to 3D print and assemble those cars. That equals full employment in the American auto sector.

Imagine if EVERY new car and truck sold in Mexico would be built by Mexican companies that pay a license fee to the respective American, European, or Japanese automakers. That equals full employment in the Mexican auto sector, without any griping by President Trump about American job losses.

NOTE: I understand that hand-built cars like Rolls Royce, Ferrari, Aston Martin, etc. would decline to take part in such an arrangement, but those cars account for less than 1% of the North American market share. They would simply continue to export their cars to their North American customers as usual.

Again, manufacturing and warranty standards would need to be carefully vetted by the licensor before granting manufacturing rights to licensees. Even so, every country in this equation would ‘Win-Win-Win’.

And consumers could purchase a locally built vehicle that wasn’t shipped across the continent or thousands of miles of ocean.

Shop Local, and still get the ‘foreign’ car of your dreams!


Auto Manufacturers Would Make the Same Per Vehicle Profit in Foreign Countries as Now — But Via License Fees (only)

The era of ‘things-based’ globalization is morphing into ‘ideas-based’ globalization where things are designed in country ‘A’ by a company that retains 100% rights over who is allowed to 3D print and assemble its products in country ‘B’ — which could be literally anywhere on the planet.

Whether it’s T-shirt graphics electronically transmitted and licensed to a company thousands of miles away (as is done now) or whether licensed companies 3D print and assemble your foreign car in the city where you live — globalization might finally become all that it can and should be — creating hundreds of thousands of jobs in each country for workers in 3D printing/manufacturing factories that could literally build anything, anytime, for anyone, as long as they have purchased the proper license.

Such ‘On Demand’ manufacturing might become the biggest job creator ever and lower the tensions brought on by the endless competition between the world’s free trading nations.


Ready for the future? Order your locally-manufactured foreign car here.

(OK, just kidding… But it might be that easy in only a few years!)

Is NAFTA a Bad Deal for America?

by John Brian Shannon | Reposted from Letter to Britain

There seems to be only one man in all of America who thinks the NAFTA agreement between the three North American economies is a bad deal for the United States. Which would be a very ordinary thing except that man happens to be the president of the United States of America. At least for now.

The one great thing about the American electoral system is that U.S. presidents can serve only two concurrent terms in office, so no matter how bad or popular a U.S. president is, he or she can stay in office for a maximum of 8 years. Although nothing prevents them from running for their old job once another president has served, other than the fact that American voters have never returned a previous two-term president to office.

That law is a tiny part of what makes the United States exceptional in the world. The most meritorious or most popular presidential candidates rise to the top — but unlike other countries where leaders can serve several terms in office — the American system is refreshed by new leadership every 4 or 8 years. And that’s what makes America great.

‘New blood’, a ‘new vision’, a ‘breath of fresh air’, or however you wish to describe it, occurs at regular intervals. No wonder America is exceptional! It’s too bad they don’t do the same thing with members of the Senate and Congress — and yes, even the office of Mayor in every U.S. city. If they did, the United States would be twice as exceptional on account of all that new blood and fresh enthusiasm.

Alas, because only one office in the land is refreshed regularly, America is great from the top down only — not up and down and in the middle — at least where governance is concerned.


Where Donald Trump is Wrong

President Trump arrived on the scene 13 months ago and with no particular government experience behind him, declared that many things are wrong with America and he’s just the man to fix it. And he may be that man, but only time will tell.

Yet, we’re seeing a man who sees symptoms and sincerely wants to treat the symptoms instead of wanting to solve the underlying condition that created the symptoms in the first place.

Certainly no one can fault Donald Trump for being enthusiastic about America, about America’s history in the world, and no one can deny he’s a breath of fresh air to the Oval Office.

But we need to have a conversation about the present symptoms in order to ascertain what the underlying condition may be in present-day America, and for that, we must travel back in time to see how America lost its way.


When Henry Ford was right: Creating the American middle class by filling a transportation need

Henry thought that ‘everyman’ should own an automobile, instead of only railway barons with their obscene personal wealth able to afford motorized transportation. During a downturn in Ford company fortunes, Henry decided to increase the pay of his workers to $5.00 per day, and was thereafter able to cherry-pick whatever workers he wanted from Louis Chevrolet, Buick, General Motors, Cord, Packard, and others.

Once Henry had created a whole new economic classification which later came to be called ‘the American middle class’ so many people bought Ford vehicles that 16.5 million Model T’s were produced in less than 20 years of production.


The moral of this story? Paying higher wages created ‘the middle class’ — a growing cohort of workers earning good wages and able to afford a car, which catapulted Ford’s fortunes into the stratosphere.


The Post-war Boom

Early in the 20th-century, the U.S. became the most powerful manufacturing nation in the world and surpassed even longtime patent leader Germany as the country that received the most annual patent applications.

This occurred only because of strong patent law in the United States. Any inventor with a worthwhile invention brought their idea to America for one reason — because out of all the countries in the world only the U.S. offered the maximum level of legal protection for their idea, design, system, or machine.

Even German scientists brought their ideas to America to have them registered with the U.S. Patent Office!

For countries other than America, the existence of a strong U.S. Patent Office created a ‘brain drain’ in their own countries, meaning that all their scientists and inventors headed to America instead of registering their contraptions in their home country.

Having received their patent protection in the United States, it was a natural step to have their inventions manufactured in America. Although not its primary mandate, the U.S. Patent Office was often excellent at matching inventors with such suppliers or manufacturers as they required.

It was a clear case of the American government passing the right legislation at the right time to attract the best and brightest in the world.


The moral of this story? Not a tariff in sight!


Because the postwar economy was booming and expectations were high, the Baby Boom generation went on a buying spree that is unparalleled in history

All of which worked to make all those patent-holders and their manufacturing companies obscenely rich. And good for them! When you work hard, you should see a positive return for your effort.

The favourable consequence of powerful U.S. patent protection combined with a huge and growing manufacturing base, created a booming economy and concomitant high consumer confidence which provided an unexpected result — usually about 9 months later.

Yes, during the boom times when one family member earned enough to support an entire family, the birthrate in America skyrocketed, creating even more demand as Americans began to have more children per fertile woman.


The moral of this story? When one breadwinner could support a spouse and up to 4 children, afford a new car every 3 years, a couple could own their own home via a 10-year mortgage and enjoy a refreshing vacation every year, the American economy was operating at full output!


American Foreign Policy in the Postwar Era

In the 41 years leading up to 1974, the Saudi government had been selling their oil to America for only the price of production (sans profit) as their contribution to the Cold War effort.

Interestingly, they were allowed to reinvest their cost of production payments in crude oil deliveries and refined oil products — so although they made zero profit on the crude oil as it came out of the ground — they were able to amass considerable wealth by speculating on oil stocks.

But that ended when it was perceived by the Saudis in 1973 that America was favouring Israel, a country that had never delivered billions of barrels of free oil to America.

When America’s oil supplier felt slighted, they decided that they wanted to get paid for their oil after all. ‘Oh, and, we’re pulling back on our Cold War commitment too.’

Which is why the Soviets thought they could successfully invade Afghanistan and tone the world’s opium supply down to almost zero.

When the Saudis suddenly wanted to be paid for their oil and they simultaneously lowered their Cold War commitment to America, the U.S. economy slowed.

With 20/20 hindsight, the ensuing economic disaster was only a symptom of a bungled foreign policy that caused a dramatic increase in new car registrations of foreign cars (with their better gas mileage) moving from 4% of all U.S. new car registrations in 1970 to 65% of new car registrations by 2017. Not only that, but up to 75% of the parts used in today’s American cars are made in Asia.

Therefore, the problem clearly isn’t NAFTA which came into effect in January 1994.

Here’s how that looks expressed as a math equation:
America -10 trillion dollars Japan +10 trillion dollars
(If you’re not into math, the symbol means ‘therefore’)

It could be argued that the United States took a highly principled stand on account of the people of Israel, but it was America’s decision alone, and it cost America 10 trillion dollars and poisoned relations with their oil-producing and Cold War ally, Saudi Arabia.


The moral of this story? The problem of offshoring American manufacturing jobs began in 1973 due to an American foreign policy decision which took place long before NAFTA had been created. Blaming Japan for American capital flight since 1974, or blaming NAFTA (which wouldn’t be created for 20-years) is disingenuous.


Social problems in 1960’s and 1970’s America: Racism, weak civil rights for women, and the Vietnam War worked to reverse America’s earlier gains

A lost generation occurred in the 1960’s where The People lost faith in their elected representatives, but they didn’t lose faith in the institutions of government.

President Carter worked to restore the faith the American people felt toward the executive branch of government by working on some very noble causes and meeting with some success. President Reagan moved things forward by strengthening the U.S. economy, infusing Americans with newfound confidence by offering loan guarantees to struggling American automobile manufacturers and dramatically increasing military spending.


The moral of this story? President Carter and President Reagan didn’t fix America by blaming other countries — they did it by empowering American citizens with tax changes and supporting American industry with loan guarantees to at-risk corporations, with huge defense spending increases, and plenty of positive exhortations about what made America great in the first place.


Every American, Canadian, or Mexican captain of industry wanted NAFTA back in 1994

If NAFTA was so grievous to be borne, why did almost every CEO in North America want NAFTA?

But some U.S. Congressmen and Senators were nervous prior to NAFTA on account of so many job losses in the American economy since 1974 and they were concerned that even NAFTA could go wrong. And let’s face it, some members were creating a negative stir so that new U.S. president Bill Clinton would feel compelled to direct more federal funding to their districts in advance of the accord, in case NAFTA failed.

In reality, the only U.S. and Canadian companies that lived in fear of NAFTA were ones that didn’t keep up with the times. In the booming 1980’s and 1990’s economy, some companies decided they wouldn’t modernize and consequently continued to spend millions per month on electricity costs (for example) instead of reinvesting their (then record) profits in newer, energy-efficient factories or foundries.

For other corporations in the mergers era, it seemed a time to slow capital spending in order to maintain high profit margins and pay record-high dividends to their shareholders. But when the bull market finally came to its end, many businesses were suddenly cash poor and couldn’t afford a new, energy-efficient factory or foundry. Which was brilliant tactical thinking, but abysmal strategic thinking.

So… the question is; If corporations employ poor strategic thinking, should taxpayers be forced to bail them out?


Why should U.S. taxpayers bail out industries that choose high shareholder returns over sound financial management?

In the 1970’s and 1980’s, some American automakers needed the federal government to subsidize them with billions of taxpayer dollars to save them from implosion. That’s only one example out of thousands of U.S. companies that accepted or have lobbied for federal subsidies. Canada is just as bad as the United States on this point. Governments in both countries spend more on corporate welfare than they do on citizen welfare — times two!

Now in 2018, President Trump wants American taxpayers to pay even more for their cars (and anything else made of steel or aluminum) via a 25% tariff on steel imports and a 10% tariff on aluminum.

For one example, Trans Canada Pipeline will be forced to pay the tariff on the steel pipe for the proposed Keystone XL pipeline. Although steel is a small part of the overall cost of building a pipeline, the cost of the multi-billion dollar project will now rise by 5% or more. Just for comparison, 5% on 10 dollars is 20 cents — but 5% on 5.4 billion dollars adds 270 million dollars to the overall project cost.


The moral of this story? While Donald Trump’s motives are obviously ultra-pure, tariffs are simply a de facto form of taxation that U.S. citizens will pay because a few American corporations preferred high profits/high shareholder returns over competitiveness


Is there ever a good case for tariffs?

In a word, yes. Everything that’s imported into the U.S. (or any country) should face a globally standardized 5% tariff because every government needs money to improve port facilities, to streamline customs, and to maintain the transportation corridors that are essential to trade flows.

Even countries with free trade agreements like the NAFTA countries should institute a standardized 5% tariff on every good that crosses their border — and be required by legislation to use that money to improve transportation corridors and border security.

Consumers would find that presently high tariff items would drop in price, and zero tariff items would rise by 5%, but the trade-off would be astonishingly better roads, bridges, tunnels, rail links, airports and seaports, complete with better security. Every citizen would like to spend fewer hours per week stuck on congested highways, in airports, and enjoy faster and more secure delivery of goods.

Suddenly we wouldn’t be talking about ‘trade wars’ we’d be talking about improved trade, improved infrastructure, and a complete standardization and levelization of tariffs between every country.

And instead of heated rhetoric from politicians, we’d become more efficient throughout our countries and less efficient corporations wouldn’t continue getting rewarded for not re-investing in their businesses.

Could North Korea become the ‘Accidental’ Nuclear War?

by John Brian Shannon | Image Credit: ICAN

During the height of the Cold War, nothing was more feared than the accidental nuclear war where *someone* somewhere misinterpreted a radio call, or misunderstood a communication emanating from the other side.

While this may seem implausible to some, miscommunication and misreading of the other side’s intentions did occur during the 40-year, tension-filled Cold War.

It happened during the Cuban Missile Crisis, and again when the Three Mile Island nuclear facility exploded, and again when President Reagan famously proclaimed during a speech rehearsal, “I have today signed legislation declaring the Soviet Union illegal… the bombing begins in five minutes,” on live radio. Little did the President know that *someone* had accidentally left the microphone switch in the ON position. (See how easy it happens?)

In less than a minute dozens of Soviet nuclear missile silo doors popped open ready to fire at the press of a button and annihilate the United States (just in case Reagan’s words were true and the U.S. was preparing to fire on the Soviets) fortunately, the Soviet ambassador in Washington phoned the White House to ask if it was a communication error. The problem was solved because somebody thought enough of the human race to pick up the phone and call the office. Phew!


It’s not inconceivable that something similar could happen in our 21st-century. U.S. President Donald Trump posts many times per day on Twitter and none of those tweets are invitations to North Korea’s leader Kim Jong-Un for tea at the White House.

With U.S. warships and aircraft patrolling the South China Sea and tensions throughout the region set to ‘HIGH’ (permanently, it would seem) there is plenty of potential for negative interaction that could set off a sequence of events that couldn’t be stopped. Resulting in the extermination of all life on planet Earth in the worst-case scenario.

‘All life on Earth’ is too important to leave in the hands of Donald Trump and Kim Jong-Un, we see how many times politicians fail (as normal humans do) and that failure could result in the end of humanity and all other life on the planet.

We’re living in a time where one wrong tweet or one wrong retort, could end all life on the planet.

Are we content to sleepwalk towards a nuclear confrontation between an old and trusted nuclear superpower on the one hand, and a brave, brash, and new, nuclear power on the other hand? Because that’s what’s happening. We’re sleepwalking towards nuclear war.

America might be lucky and lose only Guam, Honolulu, and the west coast cities of North America; Certainly, all of North Korea would be pounded into dust, and even if Seoul, South Korea wasn’t directly impacted by nuclear weapons it would likely sustain millions of casualties from the nuclear fallout caused by nuclear detonations in the north.

And Japan might face millions of casualties in the worst-case scenario as both North Korea and Japan have some terrible (ancient) history between them.

Shouldn’t Rex Tillerson, America’s excellent Secretary of State be speaking weekly to the UN General Assembly to convince them of the need for urgent, high level diplomatic talks between North Korea, other countries in the region, and America?

Hey, maybe it’s all handled, and we’re all concerned for nothing.

But how would we know, when all we read are angry tweets from one President (how can you blame him, when out of the blue his country was threatened with nuclear attack?) and even angrier retorts by North Korea’s leader.

Something is going on between North Korea and America and it isn’t good. And it isn’t public.


The Cold War was an immeasurably bigger problem than the present Korean crisis and it was completely solved by some of the brightest minds that ever lived, taking only months to handle once they had made up their minds to solve it.

On a much smaller scale than the North Korean situation, solving ‘The Troubles’ in Northern Ireland took 30 months once both sides had fully committed to negotiating and end to that toxic conflict.

There is no reason that diplomacy couldn’t solve the North Korean crisis, it’s just that there isn’t any public pressure on politicians to do so. (Yawn) “Pass the milk, it’s just a potential nuclear war.”

Hot-headed rhetoric between nuclear powers isn’t going to solve anything, but failing to bring negotiators from both sides to the negotiating table only works to prolong the number of months that the world remains imperiled by the threat of accidental nuclear war.


The Sum of All Fears

If you haven’t watched that old but great movie lately, maybe now is a good time to review what could occur when a third party covertly attempts to trigger a nuclear conflict between two adversaries.

Once the missiles have left their silos, it’s too late to stop them — even if the main protagonists find out seconds after launch they’ve been duped by a third party.

“Oops, boom!” if you’re an English-speaker and “죄송합니다” if you speak Korean.


There are plenty of good causes out there in the world, but helping to prevent a nuclear war that could wipe out all life on Earth must rank as the very best of good causes.

If you care about life on Earth, please take a few moments to email or call your government representatives and tell them you’d rather not live in a post-nuclear-apocalypse.

Thanks!

Signed: All life on Earth


Related Article:

  • North Korea Catches America’s Attention (kleef.asia)
  • See what Donald Trump is Tweeting right now (Twitter)