Matt Cavanaugh wrote: ↑ By chance, came across two economy articles this morning:
The Leftist Elite Globalist New Yorker whining that trump's tariffs won't let China grow, and that OMG Apple & GM might have to find non-chinese sources for parts:
https://www.newyorker.com/news/our-colu ... with-china
The mixed bag Atlantic warning of indicators that our Brave New Economy (which the New Yorker wants to preserve) is headed for an epic collapse:
https://www.theatlantic.com/ideas/archi ... ge/570649/
That New Yorker article seems to be written by someone that isn't really that knowledgeable on the story and it appears that their editor wasn't looking to fact check:
There was no threat to put tariffs on Canadian dairy products. Canada exports a third the amount of dairy products to the US that we import from them. The dispute over dairy is as follows:Talks with Canada are continuing, and the participants are sending out hopeful signals. Trump’s interpretation of these developments is that bullying works: by threatening to pull out of nafta and impose tariffs on European cars and Canadian dairy products, he forced his adversaries to submit. Now he seems to think he can do the same thing to China.
Canada has a regulated dairy market where producers are given quotas. The system is designed so that there is a stable supply that meets the demand and there isn't a problem with oversupply, farmers losing their herds because because they can't afford to feed them when they can't sell their product or get a price to cover their expenses. American producers are allowed to sell a quota into the Canadian market, but when they exceed that limit there is a steep tariff (300%) placed that excludes them from selling above that limit.
The Americans object to this, claiming that Canada is cheating because we don't have a "free" market like theirs. The problem with this, is that the American market is not a free market. Their dairy is heavily subsidized by government tax money and they are producing more than they can consume or sell while creating a market that is flooded with product that is priced at below the cost of production. They want to sell artificially low priced dairy into other markets, a practice that is known as dumping and something that other countries are not allowed to do to the US if they have an industry that is hurt by it.
Ironically, despite the subsidies, a lot of dairy farmers in the US have trouble making their expenses and are calling for a system like the Canadian one to be put in.
The tariffs that have been placed on Canada have been on aluminum and steel, the same as have been placed on Mexico and Europe on the fraudulent premise that it is a threat to national security. Trump is still threatening to put tariffs on autos from Canada.