Sneak Preview Of Trumpism In Action

“After three centuries, the Lloyds of London will no longer be “of London.” The company is moving its headquarters, its CEO Inga Beale confirmed on Friday.
Talking to Bloomberg TV on the sidelines of the World Economic Forum in Davos, Beale confirmed that following Prime Minister May’s announcement last Tuesday, Lloyds was going ahead with its contingency plan.
Many insurance companies will be moving a big part of their operations, since passporting rights and licensing are key to the sectors’ business in Europe. Lloyds stands to lose as much as 11% of its premiums that come from Europe or little under 1bn Euros.”
See Lloyds of London are leaving London
Trump can break trade deals and impose tariffs but businesses can relocate to continue enjoying free trade and avoiding tariffs. Trump urged UK to jump off a cliff with Brexit and now UK is reaping their own whirlwind.

What will be the blow to USA GDP and jobs? It’s a guess, but I would expect ~20% reduction sooner or later. 28% of USAian GDP depends on trade, so I could be a bit high but tariffs not only reduce trade but also reduce free cash-flow in the economy so there’s a multiplier effect. Of the hundreds of $billions in total trade via NAFTA, the trade deficit of the USA is a tiny percentage. Meanwhile millions of jobs depend on that trade. Trump will cut off workers’ noses to spite their faces. NAFTA increased trade threefold since inception. Trade is good for workers.

So, be warned USAians. You voted in a guy who had almost nothing to do with trade for his real estate business. Of course he has no qualms about fracturing trade. You told him you hated trade taking away your jobs after all… Now you will reap the whirlwind but the world will carry on with USA imposing sanctions on itself. We will thrive even if there are a few years of disruption as we build more seaports to get around USA.

About Robert Pogson

I am a retired teacher in Canada. I taught in the subject areas where I have worked for almost forty years: maths, physics, chemistry and computers. I love hunting, fishing, picking berries and mushrooms, too.
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4 Responses to Sneak Preview Of Trumpism In Action

  1. dougman wrote, “X% tariffs doesn’t stop trade with any other country does it?”

    I didn’t write “stop”. You did. I wrote “reduce trade” which translates to business, jobs, GDP…

  2. dougman says:

    “What do you think 35% tariffs will do? It will reduce trade.”

    Why do you care? X% tariffs doesn’t stop trade with any other country does it?

  3. dougman wrote, “Nothing is going to stop that.”

    What do you think 35% tariffs will do? It will reduce trade. Not all of it but many $billions and many jobs will be lost. Consider it a 70% tax. 35% going to the government for nothing and 35% not available to buy other goods. I remember the days of tariffs. Almost nothing we bought came from abroad but wages were very low because one had to take a job whether one wanted it or not. People worked like slaves. You just don’t have efficiency when you are limited to the local market. Smaller businesses are less efficient and the pension and healthcare benefits are less too. Huge markets give everyone much more opportunity. Putting up the tariffs won’t bring the coal-miners back either. Natural gas put them out of business.

  4. dougman says:

    “What will be the blow to USA GDP and jobs? It’s a guess, but I would expect ~20% reduction sooner or later.”

    Where do you think this shit up? 20% job losses you say? The United States exports about $2 trillion a year which supports an existing 14 million US jobs. Nothing is going to stop that.

    Trump wants to create 25 million jobs in a decade and nearly double economic growth to four percent a year, by cutting taxes on all income earners and slashing regulations.

    NAFTA contributed to job losses, lost manufacturing and economic decline, and threatened to impose big tariffs on imports from Mexico. To say otherwise shows your ignorance.

    The United States currently runs trade deficits with all major trade partners, Canada, Mexico and China, with the latter amounting to more than $30 billion a month. That’s the rub. Nothing wrong in renegotiating a treaty is there? Imagine if you could renegotiate your terms for your home loan, for a better deal. Of course you would do so in a second.

    “but tariffs not only reduce trade”

    True perhaps to a degree, but it forces the local market to supply a product, keeping local business available. Only you go out of your way to order shit from China. Me, I jump on Craiglist and by a used John Deere tractor and have it the next day.

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