Two Billion a Day

“Now it’s our turn to do the ripping.” Donald Trump.

"Now it's our turn to do the ripping."

A market in turmoil, because of one man, Donald Trump. He has increased the tariff for goods from China to 104%. He has accused many countries of ripping the US off by charging tariffs on up to 125%. As usual with Trump, he has told so many lies in the past, you always have to fact check his words. Trump increased the tariff to China saying, “Now it is our turn to do the ripping.”

Don’t be fooled.

This is what actually happens, China sends goods to the USA. What ever the price is that’s the cost China ships it at. Here’s a simple example; the cost of the good China puts on the item is $1.00, Trump adds the 104% to the item. So now the price of the item is $2.04c. You go to the store, hand over $2.04c. The storekeeper hands over the item from China to you the consumer. It is you, the consumers, who pay Trumps 104% tariff.

Two Billion Dollars per Day.

That is how much Trump says is collected each day from tariffs. Two billion dollars each and every day paid to the US government by you, citizens of the US, NOT by the Chinese government or producer.

Supply and Demand

101 economics. The demand for Chinese made goods is huge.

·        Electronics. Including broadcast equipment, computers, office machine parts, telephones and mobile devices, electric batteries.

·        Machinery and industrial products. Machinery and electric equipment, motor vehicle parts.

·        Consumer goods. Furniture and bedding, toys, games and spots equipment, clothing textiles and footwear.

·        Miscellaneous items. Commodities other what is already listed. Packaged medicaments and other healthcare products.

·        Home and industrial products. Plastic products, appliances and household tools.

Estimated value is in excess of 200 billion US dollars. Add 104% tariff and the American consumer, business and private will have to find 400 billion dollars in total to take possession of the Chinese made products.

Trump intends to make America great again by reducing the demand for Chinese made goods and from the rest of the world by using tariffs as a weapon. Appropriate language since he calls the Chinese and others the enemy.

American Made

Trump hopes to bring back manufacturing industries back to the United States. In some ways a futile endeavour. I watched Milton Friedman’s clip on how many countries, communities and industries worked hand in hand to produce a pencil. A team effort pulling together skills, people and resources to make the pencil in the most economical way possible. Then go on to supply to people all over the world at an affordable price. Trump overlooks economies of scale that the USA alone cannot provide at an economic price.

Wrap

Tariffs used as a blunt weapon of economic war is destructive for not only the United States but to all countries. Trumps tariffs will lead to the USA being isolated from the rest of the world, because who wants to do business with such uncertainty, which is the egomaniac that is Trump.

Just in.

Did Trump blink? Trump paused tariffs for 90 days, China tariff increased to 125%, the markets surged. Nothing is certain with Trump.