Tariffs 101

By Harold Mendelson

It seems a lot of so called knowledgeable people are upset with President Donald Trump’s imported steel and aluminum tariffs. The general viewpoint is the tariffs will start a trade war and the U.S. economy will collapse.

Is it true the tariffs will destroy our economy? Well it is true that businesses generally hate tariffs, because they drive up the cost of imported materials used to make their products. If that is so, why would President Trump want to upset the economy?

If you look at the tariffs he has imposed, you will see there’s is a vagueness to his tariffs. Mexico and Canada are exempt for the time being. Why? President Trump wants to renegotiate NAFTA. NAFTA was the brainchild of then-President Clinton. It was designed to build up free trade between the U.S. and its North American neighbors. In the past 20 years, what has it accomplished? It certainly expanded trade between the nations of North America. It also allowed American companies to move manufacturing jobs off shore, where lower labor costs reduced manufacturing costs and raised net profits. The areas around Detroit and the rest of the rust belt states were turned into ghost towns. Auto plants and steel mills shut down. Supporting industries such as logistic companies shut down as well. You can’t make steel with the coke made from coal. NAFTA was a treaty that was much more beneficial to countries outside the U.S. So what can be done to fix the the disadvantages of NAFTA so the American economy isn’t hurt by the treaty? One way is to renegotiate NAFTA. Up to this point Mexico and Canada have been slow to agree to reopen the talks. After all, both nations realize any changes made to NAFTA will hurt their their economies. So President Trump is using the tariff as a bargaining chip. The same holds true for the rest of our international trading partners, including China. Most of the treaties the U.S. has entered into since NAFTA have put the U.S. at a disadvantage. President Trump has said these treaties were bad for the U.S. and pledges to renegotiate those treaties.

As for China, it has done it’s best to promote its economy at the expense of other nations’ economies. It manipulated its currency; it has been dumping steel and aluminum on the world markets for years. Ratan Tata, an Indian billionaire who made his money in the steel and aluminum industries as well as the auto industry, a number years ago reopened steel plants in the UK. Late last year he announced he was shutting down his UK operations because of the artificially low prices of steel exported from China. President Trump instituted these tariffs to equalize the prices of steel and aluminum coming from China and others nations that have been dumping their exports on the world market. He has publicly announced the tariffs will be ended when these imbalances are eliminated, and when product dumping ends and NAFTA is renegotiated.

Why impose tariffs and risk upsetting the world recovery? Because it puts the U.S. in a position of strength and influence. At long last.

Doer-in-Chief

While corrupt media outlets such as CNN promote their “White House in crisis” narratives 24/7, basking in the Mueller “investigation”, cheering Jared Kushner’s reduced security clearance status and Hope Hicks’ resignation, and staging town halls to exploit grieving and angry high school students from Parkland, Fla., Heritage Foundation staffers have been following an undeniable trend.

Working with Congress when possible (on tax cuts, principally), or through regulatory guidance, the Trump administration “had an extraordinarily successful first year.” That is the assessment of the Foundation’s Thomas Binion, director of congressional and executive branch relations.

The Heritage Foundation, a public policy think tank with a well-deserved reputation for holding politicians accountable, sets a high bar for incoming Presidents. It is known as the “Mandate for Leadership”, and it debuted in 1981 when Ronald Reagan launched his two-term presidency.

The Trump mandate is comprised of 334 unique policy recommendations, nearly two-thirds of which (64%) already have been adopted by Trump and his administration. Reports The Washington Examiner:

At this stage of his presidency, Reagan had completed 49 percent of the Heritage policy recommendations. “We’re blown away,” Binion said in an interview. Trump, he said, “is very active, very conservative, and very effective.”

While not all of the adopted policies received the fanfare of across-the-board tax cuts, or the successful nomination of Neil Gorsuch to the Supreme Court of the United States, they are squarely on Heritage Foundation’s radar. These are the major achievements, according to the Foundation:

  • Leaving the Paris Climate Accord: In August 2017, Trump announced the U.S. was ending its funding and membership in the Paris Agreement on Climate Change.
  • Repealing Net Neutrality: In December 2017, Trump’s Federal Communications Commission chairman proposed ending the 2015 network neutrality rules.
  • Reshaping National Monuments: Heritage’s recommendation to prohibit Land Acquisition (Cap and Reduce the Size of the Federal Estate) was adopted by Trump when he issued two executive orders effectively shrinking the size of national monuments in Utah.
  • Reinstating the Mexico City Policy: This executive order prevents taxpayer money from funding international groups involved in abortion and ending funding to the United Nations Population fund. On Jan. 23, 2017, in his first pro-life action, Trump signed an executive order today reinstating the Mexico City Policy.
  • Increasing Military Spending: Trump’s budget calls for a $54 billion increase in military spending to improve capacity, capability, and readiness of America’s armed forces.
  • Reforming Temporary Assistance for Needy Families Program (TANF):The Trump administration adopted and is in favor of strengthening existing work requirements in order to receive benefits.
  • Allowing Development of Natural Resources: The Trump administration opened off-shore drilling and on federal lands. Executive Order 13783 directed Interior Secretary Ryan Zinke to commence federal land coal leasing activities.
  • Reforming Government Agencies: Trump tasked each of his Cabinet secretaries to prepare detailed plans on how they propose to reduce the scope and size of their respective departments while streamlining services and ensuring each department runs more efficiently and handles tax dollars appropriately.
  • Withdrawing from UNESCO: In October 2017, Trump announced he was putting an end to U.S. membership in the United Nations Education, Scientific and Cultural Organization (UNESCO).

These are but a few examples of what former Trump deputy assistant and strategist Sebastian Gorka characterizes as the Trump “revolution” playing out before our eyes. If Republicans will continue to embrace Trump’s ambitions to steamroll reform through Congress and deliver for his supporters, Gorka forecasts a dismal November 2018 for Democrats in the mid-term elections. Writing for The Hill, Gorka opines:

If Republicans understand just how revolutionary and system-smashing an event like the election of Trump was, and they hitch their future to his brand of anti-establishment leadership, there will be no hope for the Democrats come November.

Donald Trump has demonstrated a remarkable capacity to learn at the wheel. Now the question is, have the professional politicians learned and internalized just how revolutionary the times we are living in actually are?

 

A $5.7m windfall

Christmas is arriving early in 2018. About 11 months early, to be precise. On Thursday, January 25, North Carolina retirees began receiving their monthly state retirement benefit payments.

According to the office of North Carolina State Treasurer Dale R. Folwell, payments to retirees have increased by a total of $5.7 million this month. The windfall was triggered by two developments. One is the very well publicized federal tax reform signed by President Donald Trump after Congressional Republicans came through with a bill late last year.

The other development flew under the radar. An obscure state entity, the Retirement Systems Division (RSD), simply did its job beating the clock on an IRS deadline that was set after Trump signed sweeping tax cuts into law.

Among those cuts are federal taxes deducted from 2018 benefit payments to North Carolina retirees and benefit recipients. The RSD Operations Team within the N.C. Department of State Treasurer was able to update the tables ahead of the IRS’s deadline.

“I’m very proud of our team for taking the initiative so quickly after the new tax law was passed by Congress and signed by President Trump. While we are in the check delivery business, it involves more than just buying ink and stamps,” said Treasurer Folwell. “This is a testament to the outstanding job that our career public servants do to serve government workers.”

More than $500 million is paid out each month to more than 312,000 retirees and benefit recipients.

“Our team, led by Tom Causey and Susan Fordham, decided not to wait until February to enact this increase in our members’ benefit payments,” explained Steve Toole, Executive Director of RSD. “By updating these tax schedules sooner, our members will see larger January benefit payments.”

Washed away

“For centuries,” writes our frequent RESOLVE contributor Walter B. Bull Jr., “rapid radical change has been designated as a sea-change.” In fact, William Shakespeare used the phrase as long ago as 1610 when penning a lyric.

American society is witnessing a dramatic sea-change that has been intensified by the election of President Donald Trump and the mainstream media’s intent to derail, if not end, his presidency. But the change, writes Bull, began toward the end of the previous century.

“Various electronic devices were developed to record, categorize, store and analyze large amounts of data at light speed. … At the same time, information delivery systems, mainly televisions, became available to most households for use as an entertainment gathering focal point.”

Radio and television changed the way we experienced historic, including tragic, events, such as the assassinations of President John F. Kennedy and presidential candidate Robert F. Kennedy, the Vietnam War, the space shuttle Challenger’s mid-air explosion and, most chillingly, Sept. 11, 2001.

Now, in the era of Trump, news and analysis delivery, extending to laptops, tablets and smartphones, is being de-emphasized, replaced, Bull points out, by “brash claims or subtle messaging (Trump is mentally unstable) with an intent that goes beyond delivery of basic facts.”

The sea change playing out before us as 2018 begins is driven by two forces working in lockstep. The Democrat Party, now completely devoid of moderates, is lurching further and further into a state of frothing-at-the-mouth, radical progressivism. And the mainstream media, of similar mindset, questions nothing and gleefully advances the agenda.

These two camps, so obsessed with diminishing Trump, seem no longer to care they are diminishing themselves. The FBI and Justice Department, as evidenced by the existence of the phony “Steele dossier”, apparently are not afraid of being diminished, as well.

No single news story demonstrates the impact of the media-fueled Democrat agenda to obstruct Trump and the Republican Congressional majority more than the passage of tax cuts at year’s end.

The media’s forecast on corporate and household tax cuts looked like this: Tax-Reform Bill is Unpopular Because Media Mislead Americans (National Review, Dec. 20, 2017).

It’s very clear that the tax bill passed by both the House and Senate (Dec. 19) is indisputably unpopular among Americans. But the reasons for that unpopularity are much less clear. Left-wing bias in the media likely has a lot to do with it.

National Review further pointed out that formerly reliable wire service Associated Press reported passage of the bill via Twitter as providing “steep tax cuts for businesses, the wealthy”. Talking points, not journalism.

As we move into mid-January, about a month after the bill’s passage, most media outlets are straining to avoid almost daily evidence that tax cuts for businesses are having the effect Republicans forecast all along (even as polls reflected a skeptical public). Thankfully, the Washington Examiner shared what its reporters learned when they reviewed a meticulous bit of tallying by Americans for Tax Reform.

list of 40 firms offering millions of employees bonuses and customers fee cuts has surged to 164 in just 10 days as the likely financial benefit of President Trump’s tax reform has started to settle in.

Perhaps, retorts the media’s mainstreamers, adrift in their turbulent sea. On to other narratives they turn even as Americans rejoice in economic liberation. Trump is a racist, an insane one at that.

And, of course, Russia, Russia, Russia.

Tired of winning yet?

The Washington Examiner unwrapped an early Christmas present today, publishing a list of 81 major victories by the Trump administration in 12 categories since President Donald Trump was inaugurated last January 20.

Jobs and the economy

  • Passage of the tax reform bill providing $5.5 billion in cuts and repealing the Obamacare mandate.
  • Increase of the GDP above 3 percent.
  • Creation of 1.7 million new jobs, cutting unemployment to 4.1 percent.
  • Saw the Dow Jones reach record highs.
  • A rebound in economic confidence to a 17-year high.
  • A new executive order to boost apprenticeships.
  • A move to boost computer sciences in Education Department programs.
  • Prioritizing women-owned businesses for some $500 million in SBA loans.

Killing job-stifling regulations

  • Signed an Executive Order demanding that two regulations be killed for every new one creates. He beat that big and cut 16 rules and regulations for every one created, saving $8.1 billion.
  • Signed 15 congressional regulatory cuts.
  • Withdrew from the Obama-era Paris Climate Agreement, ending the threat of environmental regulations.
  • Signed an Executive Order cutting the time for infrastructure permit approvals.
  • Eliminated an Obama rule on streams that Trump felt unfairly targeted the coal industry.

Fair trade

  • Made good on his campaign promise to withdraw from the Trans-Pacific Partnership.
  • Opened up the North American Free Trade Agreement for talks to better the deal for the U.S.
  • Worked to bring companies back to the U.S., and companies like Toyota, Mazda, Broadcom Limited, and Foxconn announced plans to open U.S. plants.
  • Worked to promote the sale of U.S products abroad.
  • Made enforcement of U.S. trade laws, especially those that involve national security, a priority.
  • Ended Obama’s deal with Cuba.

Boosting U.S. energy dominance

  • The Department of Interior, which has led the way in cutting regulations, opened plans to lease 77 million acres in the Gulf of Mexico for oil and gas drilling.
  • Trump traveled the world to promote the sale and use of U.S. energy.
  • Expanded energy infrastructure projects like the Keystone XL Pipeline snubbed by Obama.
  • Ordered the Environmental Protection Agency to kill Obama’s Clean Power Plan.
  • EPA is reconsidering Obama rules on methane emissions.

Protecting the U.S. homeland

  • Laid out new principles for reforming immigration and announced plan to end “chain migration,” which lets one legal immigrant to bring in dozens of family members.
  • Made progress to build the border wall with Mexico.
  • Ended the Obama-era “catch and release” of illegal immigrants.
  • Boosted the arrests of illegals inside the U.S.
  • Doubled the number of counties participating with Immigration and Customs Enforcement charged with deporting illegals.
  • Removed 36 percent more criminal gang members than in fiscal 2016.
  • Started the end of the Deferred Action for Childhood Arrival program.
  • Ditto for other amnesty programs like Deferred Action for Parents of Americans.
  • Cracking down on some 300 sanctuary cities that defy ICE but still get federal dollars.
  • Added some 100 new immigration judges.

Protecting communities

  • Justice announced grants of $98 million to fund 802 new cops.
  • Justice worked with Central American nations to arrest and charge 4,000 MS-13 members.
  • Homeland rounded up nearly 800 MS-13 members, an 83 percent one-year increase.
  • Signed three executive orders aimed at cracking down on international criminal organizations.
  • Attorney General Jeff Sessions created new National Public Safety Partnership, a cooperative initiative with cities to reduce violent crimes.

Accountability

  • Trump has nominated 73 federal judges and won his nomination of Neil Gorsuch to the Supreme Court.
  • Ordered ethical standards including a lobbying ban.
  • Called for a comprehensive plan to reorganize the executive branch.
  • Ordered an overhaul to modernize the digital government.
  • Called for a full audit of the Pentagon and its spending.

Combatting opioids

  • First, the president declared a Nationwide Public Health Emergency on opioids.
  • His Council of Economic Advisors played a role in determining that overdoses are underreported by as much as 24 percent.
  • The Department of Health and Human Services laid out a new five-point strategy to fight the crisis.
  • Justice announced it was scheduling fentanyl substances as a drug class under the Controlled Substances Act.
  • Justice started a fraud crackdown, arresting more than 400.
  • The administration added $500 million to fight the crisis.
  • On National Drug Take Back Day, the Drug Enforcement Agency collected 456 tons.

Protecting life

  • In his first week, Trump reinstated and expanded the Mexico City Policy that blocks some $9 billion in foreign aid being used for abortions.
  • Worked with Congress on a bill overturning an Obama regulation that blocked states from defunding abortion providers.
  • Published guidance to block Obamacare money from supporting abortion.

Helping veterans

  • Signed the Veterans Accountability and Whistleblower Protection Act to allow senior officials in the Department of Veterans Affairs to fire failing employees and establish safeguards to protect whistleblowers.
  • Signed the Veterans Appeals Improvement and Modernization Act.
  • Signed the Harry W. Colmery Veterans Educational Assistance Act, to provide support.
  • Signed the VA Choice and Quality Employment Act of 2017 to authorize $2.1 billion in additional funds for the Veterans Choice Program.
  • Created a VA hotline.
  • Had the VA launch an online “Access and Quality Tool,” providing veterans with a way to access wait time and quality of care data.
  • With VA Secretary Dr. David Shulkin, announced three initiatives to expand access to healthcare for veterans using telehealth technology.

Promoting peace through strength

  • Directed the rebuilding of the military and ordered a new national strategy and nuclear posture review.
  • Worked to increase defense spending.
  • Empowered military leaders to “seize the initiative and win,” reducing the need for a White House sign off on every mission.
  • Directed the revival of the National Space Council to develop space war strategies.
  • Elevated U.S. Cyber Command into a major warfighting command.
  • Withdrew from the U.N. Global Compact on Migration, which Trump saw as a threat to borders.
  • Imposed a travel ban on nations that lack border and anti-terrorism security.
  • Saw ISIS lose virtually all of its territory.
  • Pushed for strong action against global outlaw North Korea and its development of nuclear weapons.
  • Announced a new Afghanistan strategy that strengthens support for U.S. forces at war with terrorism.
  • NATO increased support for the war in Afghanistan.
  • Approved a new Iran strategy plan focused on neutralizing the country’s influence in the region.
  • Ordered missile strikes against a Syrian airbase used in a chemical weapons attack.
  • Prevented subsequent chemical attacks by announcing a plan to detect them better and warned of future strikes if they were used.
  • Ordered new sanctions on the dictatorship in Venezuela.

Restoring confidence in and respect for America

  • Trump won the release of Americans held abroad, often using his personal relationships with world leaders.
  • Made good on a campaign promise to recognize Jerusalem as the capital of Israel.
  • Conducted a historic 12-day trip through Asia, winning new cooperative deals. On the trip, he attended three regional summits to promote American interests.
  • He traveled to the Middle East and Europe to build new relationships with leaders.
  • Traveled to Poland and on to German for the G-20 meeting where he pushed again for funding of women entrepreneurs.