Recently, President-elect, Donald Trump, took a phone call from the President of Taiwan, and the Democrats and liberal media (and China) went berserk over it. Even going so far as to call Trump stupid for violating a long held official non-diplomatic status. A status which is, in itself, a charade; we know it, and so does China, which claims that Taiwan is their property and subject to their government's regulation. However, in 1979, the then-President Jimmy Carter signed the Taiwan Relations Act into law, in order to establish an unofficial diplomatic status with them and conduct relations through a "front" organization called the American Institute of Taiwan; located in Washington, D.C.
Therefore, we do not have an official relation with Taiwan, but we sure seem to do a lot of business with that country. "Officially", Taiwan is our 9th largest trading partner. We sell them about $26 billion in goods, and,they, in turn, send us about $41 billion in Taiwan-made products. Additionally, many of our major multinational companies have operations there. Companies such as IBM, 3M, and Microsoft. On top of everything else, the United States has sold Taiwan billions of dollars worth of military equipment under every President since 1979, in order to help them defend themselves against China. You don't think that hasn't pissed China off more than a few minutes of conversation between Donald Trump and Taiwan's President?
So, just maybe, Donald Trump will finally expose the folly of not dealing with Taiwan directly. I hope so, because this nonsense of not talking to them is really, really silly. By the way. I wish the Washington Post would take a single stand on this (note the references below). Even going so far as to say it was "brilliant"! Wow! That's saying a lot from a noted liberal media outlet.
References:
Washington Post: Trump speaks with Taiwanese president, a major break with decades of U.S. policy on China: https://www.washingtonpost.com/world/national-security/trump-spoke-with-taiwanese-president-a-major-break-with-decades-of-us-policy-on-china/2016/12/02/b98d3a22-b8ca-11e6-959c-172c82123976_story.html?utm_term=.d34c21b5f16e
Washington Post: Why people are making such a big deal about the Trump-Taiwan call: https://www.washingtonpost.com/news/worldviews/wp/2016/12/05/why-people-are-making-such-a-big-deal-about-the-trump-taiwan-call/?utm_term=.8bbef408152e
Washington Post: Trump's Taiwan call wasn't a blunder. It was brilliant: https://www.washingtonpost.com/opinions/trumps-taiwan-call-wasnt-a-blunder-it-was-brilliant/2016/12/05/d10169a2-bb00-11e6-ac85-094a21c44abc_story.html?utm_term=.fc59b878d738
Washington Post: Trump’s Taiwan phone call was long planned, say people who were involved: https://www.washingtonpost.com/politics/trumps-taiwan-phone-call-was-weeks-in-the-planning-say-people-who-were-involved/2016/12/04/f8be4b0c-ba4e-11e6-94ac-3d324840106c_story.html?utm_term=.f12d06aa85c9
Taiwan–United States relations: https://en.wikipedia.org/wiki/Taiwan%E2%80%93United_States_relations
U.S. Trade with Taiwan: https://www.google.com/search?q=u.s.+exports+to+taiwan&ie=utf-8&oe=utf-8
U.S. Companies in Taiwan: http://www.ustaiwanconnect.org/US-Taiwan-Relations/Investment/U-S-Companies-in-Taiwan
List of US arms sales to Taiwan - Wikipedia: https://en.wikipedia.org/wiki/List_of_US_arms_sales_to_Taiwan
Showing posts with label trade. Show all posts
Showing posts with label trade. Show all posts
Wednesday, December 7, 2016
Friday, April 29, 2016
Obama's Trade Threat With Britain May Hurt Trade
While touring Britain, Barack Obama publicly admonished the Brits for entertaining the idea of exiting the European Union in what is affectionately known as "Brexit" in that country. He said that any trade negotiations between Britain and the United States would "go to the end of the queue". In other words, we would deal with everyone else first before dealing with Britain.
A lot of Brits didn't appreciate that statement, nor his attempted meddling in Britain's affairs. Like a lot of things Obama does It could easily have a negative effect by hurting our trade with Britain. Some may simply stop buying U.S. goods in retaliation; putting us at the back of the queue. It already may have backfired since more Brits now seem to be supporting Brexit than before his remarks. Nice going, Barry!
Reference:
Barack Obama's trade threat to Britain has increased support for Brexit as a string of polls show voters are ignoring the US President's claims: http://www.dailymail.co.uk/news/article-3559099/David-Cameron-s-election-guru-accuses-pro-EU-campaign-celebrating-victory-Obama-s-threats-trade-warns-s-soon-bunting.html
A lot of Brits didn't appreciate that statement, nor his attempted meddling in Britain's affairs. Like a lot of things Obama does It could easily have a negative effect by hurting our trade with Britain. Some may simply stop buying U.S. goods in retaliation; putting us at the back of the queue. It already may have backfired since more Brits now seem to be supporting Brexit than before his remarks. Nice going, Barry!
Reference:
Barack Obama's trade threat to Britain has increased support for Brexit as a string of polls show voters are ignoring the US President's claims: http://www.dailymail.co.uk/news/article-3559099/David-Cameron-s-election-guru-accuses-pro-EU-campaign-celebrating-victory-Obama-s-threats-trade-warns-s-soon-bunting.html
Saturday, December 20, 2014
Think Twice About Any Real Trade With Cuba
Shortly after President Obama announced a normalization of trade relations with Cuba, U.S. businesses began salivating over the fact that they now have a new market for their products. However, this assumes that we will be able to trade with Cuba as if it were a normal partner. Nothing could be further from the truth.
First and most importantly, Cubans are poor as a result of Communism.
Because Cuba is a communist country, the government sets the wages; and because of this, the per capita income is less than $7,000 a year. After buying necessities, there's probably not a lot of room left to spend on expensive imported goods from the U.S. I really can't see the average Cuban buying even the cheapest GM car, the Spark, which sells for almost twice what the average Cuban gets paid in two years. Also, understand that China is a major trading partner with Cuba and, as such, the prices of U.S. products will have to be lower than theirs in order to compete.
Additionally, the Cuban government decides what will be sold to its citizens, and access to any approved goods is rationed. If the government says you can only buy 2 pencils a year, that's all you get. The government also sets the prices of any goods sold there.
For these reasons, Cubans will probably see very few imports from the U.S. At best, the airlines, with flights to and from the island, stand to benefit the most.
On the other side of the coin, Cuba will most likely benefit the most from this deal. They could experience increased exporting of products such as rum and cigars. Although, I'm guessing they already export as much product as they now produce to their existing trading partners like China, Russia, Venezuela and other central and south American countries. For sure, Americans visiting the island should help the tourism business; assuming that the current ban on tourism is lifted and accepted by Raul Castro. Whether or not those visitors will be able to buy anything but a handful of Cuban products while visiting there is questionable since, again, all products are rationed.
Lastly, I don't think American companies will be able to set up businesses in Cuba. Again, because of communism, most business are government owned; with some cooperatives and some self-employment allowed. Not hardly a business model that would be compatible with any form of U.S. business.
References:
U.S. Companies Consider the Possibilities of Cuban Trade: http://www.wsj.com/articles/u-s-companies-consider-the-possibilities-of-cuban-trade-1418856872
UN Data: Cuba: https://data.un.org/CountryProfile.aspx?crName=CUBA
Economy of Cuba: http://en.wikipedia.org/wiki/Economy_of_Cuba
First and most importantly, Cubans are poor as a result of Communism.
Because Cuba is a communist country, the government sets the wages; and because of this, the per capita income is less than $7,000 a year. After buying necessities, there's probably not a lot of room left to spend on expensive imported goods from the U.S. I really can't see the average Cuban buying even the cheapest GM car, the Spark, which sells for almost twice what the average Cuban gets paid in two years. Also, understand that China is a major trading partner with Cuba and, as such, the prices of U.S. products will have to be lower than theirs in order to compete.
Additionally, the Cuban government decides what will be sold to its citizens, and access to any approved goods is rationed. If the government says you can only buy 2 pencils a year, that's all you get. The government also sets the prices of any goods sold there.
For these reasons, Cubans will probably see very few imports from the U.S. At best, the airlines, with flights to and from the island, stand to benefit the most.
On the other side of the coin, Cuba will most likely benefit the most from this deal. They could experience increased exporting of products such as rum and cigars. Although, I'm guessing they already export as much product as they now produce to their existing trading partners like China, Russia, Venezuela and other central and south American countries. For sure, Americans visiting the island should help the tourism business; assuming that the current ban on tourism is lifted and accepted by Raul Castro. Whether or not those visitors will be able to buy anything but a handful of Cuban products while visiting there is questionable since, again, all products are rationed.
Lastly, I don't think American companies will be able to set up businesses in Cuba. Again, because of communism, most business are government owned; with some cooperatives and some self-employment allowed. Not hardly a business model that would be compatible with any form of U.S. business.
References:
U.S. Companies Consider the Possibilities of Cuban Trade: http://www.wsj.com/articles/u-s-companies-consider-the-possibilities-of-cuban-trade-1418856872
UN Data: Cuba: https://data.un.org/CountryProfile.aspx?crName=CUBA
Economy of Cuba: http://en.wikipedia.org/wiki/Economy_of_Cuba
Wednesday, February 27, 2008
NAFTA or No NAFTA?
In lasts night's Democratic debate, Hillary Clinton and Barack Obama were scrambling on top of each other to prove that "each" would eliminate NAFTA (the North American Free Trade Agreement) if elected. NAFTA and all other Free Trade Agreements (FTA) are now on the "outs" with all Democrats because of the pressure coming from the labor unions such as the AFL-CIO. The unions blame "this" trade agreement for the loss of high-paying union jobs in America. And this hearkens back to a quote from the Independent candidate for President, Ross Perot, during the 1992 election cycle who said that there will be the "giant sucking sound" as we lose jobs and money to Mexico and Canada if NAFTA is approved. Lost in this debate is the fact that President Bill Clinton "and" a Democratic Controlled Congress approved NAFTA; an achievement Bill Clinton had always pointed to in his "legacy" of accomplishments.
The question of whether or not union jobs were lost under NAFTA is somewhat disputable. Those jobs might have been lost, anyway, as a result of cheap international labor and all other active foreign trade. What "is" known about NAFTA is that the previous trade barriers and other mechanisms that had either blocked or penalized American products were eliminated. As a result, American businesses have substantially increased trade with Canada and Mexico under NAFTA. I find it interesting the State of Ohio, the seat of last night's debate over NAFTA, has benefited the most under this agreement. Since NAFTA was passed, Ohio has quadrupled trade with the NAFTA countries. That means more jobs (maybe, not union) in Ohio and and an increase in revenues which has benefited both the tax coffers of Ohio and our Federal government. Also, NAFTA created "good" jobs in Mexico. And, the more "good" jobs we can create in that country, the slower the influx of illegial aliens across our border for those seeking higher-paying employment in the United States.
Given the tenor of last night's debate over NAFTA, it is obvious that we will see "no" more FTA's approved if we elect a Democrat as President and the Democrats still control both Houses of Congress. Currently, FTA's are being blocked by the Democratic-controlled Congress for Columbia and other Latin American countries. As a result, we will become economic isolationists. And, the result of that will be the continuance of trade barriers against American products and, I believe, the loss of jobs and the loss of taxable business revenues. And, the only "sucking sound" we'll actually hear will be that of Americans left "sucking their thumbs" after the loss of trade in a world where trade is so important to us.
The question of whether or not union jobs were lost under NAFTA is somewhat disputable. Those jobs might have been lost, anyway, as a result of cheap international labor and all other active foreign trade. What "is" known about NAFTA is that the previous trade barriers and other mechanisms that had either blocked or penalized American products were eliminated. As a result, American businesses have substantially increased trade with Canada and Mexico under NAFTA. I find it interesting the State of Ohio, the seat of last night's debate over NAFTA, has benefited the most under this agreement. Since NAFTA was passed, Ohio has quadrupled trade with the NAFTA countries. That means more jobs (maybe, not union) in Ohio and and an increase in revenues which has benefited both the tax coffers of Ohio and our Federal government. Also, NAFTA created "good" jobs in Mexico. And, the more "good" jobs we can create in that country, the slower the influx of illegial aliens across our border for those seeking higher-paying employment in the United States.
Given the tenor of last night's debate over NAFTA, it is obvious that we will see "no" more FTA's approved if we elect a Democrat as President and the Democrats still control both Houses of Congress. Currently, FTA's are being blocked by the Democratic-controlled Congress for Columbia and other Latin American countries. As a result, we will become economic isolationists. And, the result of that will be the continuance of trade barriers against American products and, I believe, the loss of jobs and the loss of taxable business revenues. And, the only "sucking sound" we'll actually hear will be that of Americans left "sucking their thumbs" after the loss of trade in a world where trade is so important to us.
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