Tariffs

[Bob In PA]

Regardless of whether one is for or against these new economic policies, I have a big concern that they appear to be implemented solely by executive action. They can be undone by the next President in a day, which would further complicate our economic direction in the eyes of the world. Reciprocal tariffs being imposed by some other nations may not be so easily removed, especially if the US economic policy is viewed as transient, now subject to the whims of the latest President. That includes any President who had a change of heart after championing his policies in earlier years.

"The period of exclusiveness is past... commercial wars are unprofitable. Reciprocity treaties are in harmony with the spirit of the times; measures of retaliation are not." - President William McKinley, 1901.

bama: Correct. We'll have to wait and see if any of them are "enshrined" into law. Bob

[MightyGiants]

Regardless of whether one is for or against these new economic policies, I have a big concern that they appear to be implemented solely by executive action. They can be undone by the next President in a day, which would further complicate our economic direction in the eyes of the world. Reciprocal tariffs being imposed by some other nations may not be so easily removed, especially if the US economic policy is viewed as transient, now subject to the whims of the latest President. That includes any President who had a change of heart after championing his policies in earlier years.

"The period of exclusiveness is past... commercial wars are unprofitable. Reciprocity treaties are in harmony with the spirit of the times; measures of retaliation are not." - President William McKinley, 1901.

I think Congress needs to unite to remove the tariff power from the President.  The power of the purse rests with Congress, not one man.  The Constitution never intended to allow one man to unilaterally impose the biggest tax increase the American people have ever had to endure.

[Bob In PA]

I'll broaden your statement for clarity. You shouldn't listen to anyone who says tariffs are a tax on the populace of the country imposing the tariffs.  The correct statement is something like this (off the top of my head... I'm certainly no economist..."With the wrong tax policy and other erroneous economic and fiscal policies like overspending by the government, it is possible that tariffs can raise prices"). Bob

So I shouldn't listen to conservative experts?


"It's an extraordinary tax increase," said Douglas Holtz-Eakin, a conservative economist with the American Action Forum and formerly the director of the Congressional Budget Office.

Incidentally, there is no such thing as a "conservative expert [economist]."

'Conservative' is a political term, and we'll all trying to (and supposed to) avoid politics.

Who an economist votes for has no relation to which theory of economics he espouses.

Bob

[MightyGiants]

Incidentally, there is no such thing as a "conservative expert [economist]."

'Conservative' is a political term, and we'll all trying to (and supposed to) avoid politics.

Who an economist votes for has no relation to which theory of economics he espouses.

Bob

Bob,

I once read a profound suggestion when it comes to who to listen to.  The author suggested seeking out experts as much as courts seek out experts.  Before a witness testifies under the heading of an expert witness, they need to testify as to their qualifications.  As for the man whose opinion I cited (I believe most would acknowledge the man as an expert witness on economic matters):


Holtz-Eakin established his academic career with appointments at Princeton (1984–89) and Columbia University (1985–90).[5]

From August 1989 to July 1990, Holtz-Eakin served as a Senior Staff Economist on President George H. W. Bush's Council of Economic Advisers.[6] From 1986 to 2001 he also served as a Faculty Research Fellow and research associate at the National Bureau of Economic Research. Holtz-Eakin was tenured faculty at the Maxwell School of Citizenship and Public Affairs at Syracuse University from 1990 to 2003, where he was appointed professor in 1995 and chair of the department of economics from 1997 to 2001.

In 2003, Holtz-Eakin left Syracuse University to become director of the Congressional Budget Office.[7] Under his leadership, the budget office undertook a study of tax rates, which found that any new revenue that tax cuts brought in paled in comparison with their cost.[8] He left the appointment in 2005.

Holtz-Eakin is also the President of DHE Consulting, LLC, and has served as director of the Maurice R. Greenberg Center for Geoeconomic Studies and the Paul A. Volcker Chair in International Economics at the Council on Foreign Relations, as well as a senior visiting fellow at the Peterson Institute for International Economics from 2007 to 2008.[9] In 2009, he joined the Manhattan Institute's Center for Medical Progress as a fellow focusing on healthcare reform issues, but left later that year to found his own think tank.[10]

Senate Minority Leader Mitch McConnell appointed Holtz-Eakin to the Financial Crisis Inquiry Commission in 2009.

In 2007, Holtz-Eakin was hired as chief economic policy adviser to U.S. Senator John McCain's 2008 presidential campaign.

In early 2010, Holtz-Eakin became president of American Action Forum,[12] a conservative think tank focused on fiscal and public policy issues.[13]

[Bob In PA]

I think Congress needs to unite to remove the tariff power from the President.  The power of the purse rests with Congress, not one man.  The Constitution never intended to allow one man to unilaterally impose the biggest tax increase the American people have ever had to endure.

Rich: There is no tax increase. Stop watching television.

These are some of the laws which give the President varying degrees of authority to regulate tariffs:

Section 232 of the Trade Expansion Act of 1962;
Sections 122, 201, and 301 of the Trade Act of 1974;
Section 338 of the Tariff Act of 1930;
The International Emergency Economic Powers Act of 1977.

Bob

[bamagiantfan]

The markets appear to be gearing up for a strong reaction to the tariffs this morning. We'll see. Since the markets were up yesterday, I don't think this is a reaction of the US investors. I would think any selloff is foreign money leaving the US markets.

[MightyGiants]

Rich: There is no tax increase. Stop watching television.

These are some of the laws which give the President varying degrees of authority to regulate tariffs:

Section 232 of the Trade Expansion Act of 1962;
Sections 122, 201, and 301 of the Trade Act of 1974;
Section 338 of the Tariff Act of 1930;
The International Emergency Economic Powers Act of 1977.

Bob

Bob,

Why should I stop listening to expert-qualified witnesses (as I have already laid out that case)?

I was referring to the Constitution and its intentions.  As I said, the Founding Fathers were keen to get away from a monarchy and all the power resting in one man.  They are no doubt turning over in their graves, seeing the American people being levied the biggest tax increase in history, all on the whims of a single man.  Particular bills that have been passed over the years don't really negate the point I was making.

[MightyGiants]

The markets appear to be gearing up for a strong reaction to the tariffs this morning. We'll see. Since the markets were up yesterday, I don't think this is a reaction of the US investors. I would think any selloff is foreign money leaving the US markets.

No doubt, losing foreign capital is a big driver.  No doubt American 401Ks have enjoyed major boosts because people around the world wanted part of the US Stock Market action and their historical world-beating returns.  That advantage has snowballed over the years as the access to cheap capital (from all the foreign investment) helped drive the US economy.   Still, even domestic investors understand that tariffs lead to higher prices and economic slowdown.

[Bob In PA]

Bob,

Why should I stop listening to expert-qualified witnesses (as I have already laid out that case)?

I was referring to the Constitution and its intentions.  As I said, the Founding Fathers were keen to get away from a monarchy and all the power resting in one man.  They are no doubt turning over in their graves, seeing the American people being levied the biggest tax increase in history, all on the whims of a single man.  Particular bills that have been passed over the years don't really negate the point I was making.

Rich: The Constitution grants Congress the power to write laws, and one subject enumerated is tariffs. The Constitution grants the President the power to enforce the laws passed by Congress. The laws relating to tariffs can be changed by Congress at any time, but until they are changed the powers granted by Congress in the laws I cited may be wielded by the U.S. President, and that is what happened yesterday. Bob

[MightyGiants]

Rich: The Constitution grants Congress the power to write laws, and one subject enumerated is tariffs. The Constitution grants the President the power to enforce the laws passed by Congress. Congress can change the laws relating to tariffs at any time, but until they are changed the powers granted by Congress in the laws I cited may be wielded by the U.S. President, and that is what happened yesterday. Bob

This is why I said Congress needs to strongly unite (to pass a veto-proof) bill that reigns in the power that is being used to the detriment of the US economy and the American people.   When such measures need to go before Congress, there is public debate and inertia that helps limit dangerous and damaging actions.  Congress helps to moderate the radical or extreme.

[bamagiantfan]

I think Congress needs to unite to remove the tariff power from the President.  The power of the purse rests with Congress, not one man.  The Constitution never intended to allow one man to unilaterally impose the biggest tax increase the American people have ever had to endure.

The inaction of our Congress over the last 40 years on everything from immigration to exercising their power of the purse has led us to this point. I'm not looking to the Congress for anything. They have been a disappointment, with very few exceptions, for most of my lifetime.

[MightyGiants]

The inaction of our Congress over the last 40 years on everything from immigration to exercising their power of the purse has led us to this point. I'm not looking to the Congress for anything. They have been a disappointment, with very few exceptions, for most of my lifetime.

Mitch,

I agree that various factors (like Gerrymandering and other political issues) have hobbled Congress.  Still, it's really the body that needs to be addressing these issues.   As the old saying goes, you don't throw the baby out with the bath water. 

[Bob In PA]

The picture is not clear yet, but it is certain that SOME countries that export to the U.S. will "eat" the tariffs (they won't raise prices). The issues are which countries and on which (if not all) products they export. Not being an economist, I don't want to speculate, but what I have written is true. Bob

[Trench]

I am talking about signing the new tax bill into law (which includes Trump tax cuts from his 1st term).

If congress doesn't do this we will see the greatest tax hike in history.

Regarding tariffs, he was elected to do this. The man deserves a chance to implement his policy. It will be rocky for a bit until other countries come to the table and wanna make a new (FAIR) trade deal. Then the market will recover as will jobs and lower inflation.

[bamagiantfan]

The picture is not clear yet, but it is certain that SOME countries that export to the U.S. will "eat" the tariffs (they won't raise prices). The issues are which countries and on which (if not all) products they export. Not being an economist, I don't want to speculate, but what I have written is true. Bob

They may also agree to "eat" the tariffs but raise their base price which will give the appearance that they are working with the US. The end result to the US consumer will be the same.