Economists usually like data and studies. Navarro’s approach is new: Thoughtful commentary usually does not commence with “these garbage studies.” The corollary to fake news is, I guess, fake econ. How do you like them apples?
P.S. The origin of “how do you like them apples“: In World War I, some of the mortars resembled apples with a stick in them. In the 1959 movie Rio Bravo a guy tosses a hand grenade and says “How do ya like them apples?”
Chad Bown,Senior Fellow, Peterson Institute for International Economics (Washington, DC), discusses retaliation WTO style (not to be confused with all options for retaliations that other countries might have).
He predicts potential retaliation for the new “border tax” proposal that is making its way through Congress, if the WTO rules against the US.
Source: @NickTimiraos, @josephncohen;
WASHINGTON – President Donald Trump was confused about the dollar: Was it a strong one that’s good for the economy? Or a weak one?
So he made a call ― except not to any of the business leaders Trump brought into his administration or even to an old friend from his days in real estate. Instead, he called his national security adviser, retired Lt. Gen. Mike Flynn, according to two sources familiar with Flynn’s accounts of the incident.
Flynn has a long record in counterintelligence but not in macroeconomics. And he told Trump he didn’t know, that it wasn’t his area of expertise, that, perhaps, Trump should ask an economist instead.
Trump was not thrilled with that response ― but that may have been a function of the time of day. Trump had placed the call at 3 a.m., according to one of Flynn’s retellings ― although neither the White House nor Flynn’s office responded to requests for confirmation about that detail.
The WSJ cites a trader who asserts that
“A shift towards a ‘weak dollar policy’ is at odds with the imposition of tariffs (which tend to lead to exchange-rate appreciation—ignoring for the moment the possibility of retaliation),” said Vasileios Gkionakis, London-based global head of FX strategy at UniCredit Bank, in a note. ”And needless to say, a stronger [U.S. dollar] is difficult to reconcile with the creation and protection of manufacturing jobs domestically. So the market smells political inconsistency…and this is happening at a difficult point for the dollar.”
Use the Mundell Fleming Model to see if you can replicate the trader’s reasoning
Brad Setser has the thorough analysis. In true NS-I=TB manner he states: A national savings rate that still approaches 50 percent of output increasingly implies either bubbles in credit domestically or large capital surpluses that have to be exported.
Trade Policy gone awry is now being expressed in chicken parts – America’s great exports to the world.
First Bush Legs, now Trump Feet. When the US imposed countervailing duties on Chinese tires, the Chinese “counter-sanctioned” the US with their own tariff on, you guessed, chicken feet.
Of course, the tire tariff reduces only Chinese tire imports but not total US tire imports, as Brad Setser documents. And while Chinese imports of US chicken feet have declined dramatically, the US saw a mysterious, huge, increase of chicken feet to Hong Kong… How surprising, the Chinese+Hong Kong chicken feet exports are essentially constant.
In the most recent installment of this short course in trade policy, the original trucks-for-chicken-tax is coming home to roost. This time around, American manufacturers are hurt by the tariff, as they want to produce in Mexico and import their Rams to the US.
[pls read all associated articles in the links].