Category Archives: Economics

Miscellaneous economy stuff

Tariffs on Mexico

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There is some hue and cry over President Donald Trump’s threatened tariff on Mexico in an effort to get the Mexican government to take seriously its role in the crisis on our common border.

Critics of the tariffs, including those within the administration, have said the ratification of the pact would be threatened by the tariffs.

There’s no threat to ratification of the USMCA from these tariffs. There is a threat from the Progressive-Democrats who hate the treaty separately from this.  However, the lack of threat is illustrated by Mexico; since the tariff threat, that government has said it still intends to ratify the treaty.

On the other hand, critics of the present tariff threat are conflating the two purposes of tariffs. One is as protectionist devices; these are the tariffs that are targets of the USMCA, and they remain controlled by the agreement.

The other purpose is as a foreign policy tool used to induce another nation to do/not do the things identified by a particular tariff-as-foreign policy tool’s stated purpose.

The threatened tariff is not at all a protectionist tariff. On the contrary, it’s a foreign policy tool, a take-your-own-immigration-laws-seriously tariff.

Update: The foreign policy tool seems to have worked. Of course, we’ll have to see the realization over time, but that’s the case with all agreements.

Bad Policy

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Recall that President Donald Trump has threatened a sequence of rising tariffs on all Mexican goods in an effort to get Mexico to take seriously its broad contribution to the crisis we have on our border with that nation.

Republican lawmakers are gearing up for a vote to potentially override President Trump’s planned tariff on Mexico this month….

These lawmakers are concerned that the tariffs could jeopardize passage of the USMCA, and they’re worried that they will hurt Americans.  These folks have lost sight of some important facts.

One is that, after the announcement of the upcoming tariffs, the Mexican government said it intended to move ahead with ratification of the USMCA. The only ones in the way of its final acceptance are Congress’ Progressive-Democrats, who generally don’t like the deal in any event, and these Republicans.

Another is that international trade, including tools of international trade like tariffs, have nothing to do with economics and everything to do with foreign policy.

A third is the nature of conflict.  These Republicans need to understand that no conflict is bloodless for either side.   They need to stop worrying so much about their own stubbed toes and consider the effect these particular tariffs would have on Mexico and whether they just might have the intended effect.

Any attempt by Congress to get in the way can only undermine Trump’s foreign policy move to push Mexico to get serious about those whom Mexico is allowing illegally to cross its own southern border and the resulting flow of these illegal aliens north to illegally enter our country.

Senate Majority Whip John Thune (R, SD):

Congress is going to want to probably be heard from.

If Congress wants to be heard from, it should get serious about immigration, beginning with immigration legislation, that beginning with something akin to Trump’s offer of a year or so ago that offered a path to legalization for DACA beneficiaries plus a million more who were similarly situated.  Along with the means to better physically secure our own southern border.

A Nutshell

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On the matter of the House voting up the US Mexico Canada Agreement, the trade agreement agreed among the US, Canada, and Mexico to replace NAFTA, Congressman Gerry Connolly (D, VA) had this to say:

Given his behavior, I don’t see some great groundswell of support for this on our side of our aisle. I’m a free trader and I’m in no rush to approve this agreement.

That is the Progressive-Democratic Party’s hysterical anti-Trumpism in a nutshell. Party opposes the USMCA over Trump’s behavior; its opposition does not consider the merits or lack of merits in the agreement.

Never mind that Mexico’s President Andrés Manuel López Obrador has said his government will proceed with ratifying the USMCA despite President Donald Trump’s threat to impose tariffs on Mexico over the latter’s “migrant” flow failures.

Another Hollywood Culture War Campaign

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[Robert, Chairman and CEO of The Walt Disney Company] Iger told Reuters [last] week that it would be “very difficult” for Disney to continue filming its movie and television content in Georgia if a new state abortion law takes effect.

This is the same Bob Iger whose company enthusiastically operates a theme park and peddles movies in the People’s Republic of China, which government spies on its citizens with, among other things, facial recognition software and which government has locked up millions of PRC citizens—Muslim Uighurs, for the most part, but not exclusively—in “reeducation” camps reminiscent of the worst of Mao’s camps.

Since neither Iger nor Disney has any concern for the lives of aborted babies or for the principles of freedom generally, it will be far more than very difficult (no quotes necessary) for me to patronize any Disney movies, parks, or other product or service.

It will be impossible for me to do so.

Venezuela is not Grenada

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That, there, is a true fact. The University of Georgia’s Emeritus Professor (of Agricultural and Applied Economics) Glenn Ames used that as an argument for why the US ought not invade Venezuela in his Letter to the Editor of The Wall Street Journal.  After all, he wrote,

Venezuela is a large, complex country politically, not a tiny island in the Caribbean.

Also a true fact.  But then he went astray, here and on a couple of other points.  For one, our military is not the disjointed, uncoordinated collection of disparate forces that went into Grenada; it’s much better integrated, and it has demonstrated that improvement many times since.

The Venezuelan military is indebted to President Nicolás Maduro for their perks and subsidies. They are not going to give them up easily.

This badly overstates the case. The Venezuelan military leadership is indebted to Maduro.  The field-grade officers and especially the junior officers and soldiers have no such “loyalty;” they are not going to fight seriously in support of that “leadership”—which steals from their paychecks as much as they do from the civilian citizens of Venezuela.

Cubans and others are embedded in Venezuela’s security apparatus.

As Cubans were in Grenada, and they folded rapidly in the face even of that confused operation.

That Venezuela is not Grenada also is an irrelevant fact.