"Trade Not Aid" -- The Answer For Trade War!

Source: Malulu

Last week, President Trump announced the financial bail out of $12 billion for farmers who are losing large profits to the trade war.  At first pass, a majority of Americans were expecting such a measure at the very least.  Especially, since the President himself is to blame for the new trade war between countries who used to have agreements prior to the inauguration of the President.  Not everyone is happy with the aid offered to the farmers negatively impacted by tariff set by President Trump.  In fact, the recipients of the trade relief have been chanting along with sending the message "Trade not Aid."



This slogan should come as no surprise to anyone who has received a large payout.  The money is great in the short run - until the money runs out.  That is, if all of the aid is spent on keeping up the farm output with no money coming in, then the money will run out quickly.  Which brings us to the current state of affairs highlighted in an excerpt by Politico Agriculture sent out via e-mail on Monday shown below:

TRUE TARIFF BAILOUT WOULD COST $39 BILLION: The full cost of a government aid package to help U.S. all manufacturers, farmers and fishermen negatively affected by President Donald Trump's new tariffs on steel and aluminum from around the world and a host of products from China could reach $39 billion, the U.S. Chamber of Commerce reports this morning. That works out to be another $27 billion on top of the $12 billion the Trump administration announced last week to help U.S. farmers.

"While America's agricultural industry has been hit extremely hard by escalating tariffs, it's not alone," Neil Bradley, U.S. Chamber executive vice president and chief policy officer, wrote in a blog post. "Thousands of U.S. companies - including manufacturers, input suppliers, fisherman, and businesses from numerous other industries - are finding it more difficult to sell American made products abroad amid the growing trade war."

Other sectors are feeling the pain: The business group estimates that U.S. automobile, motorcycle and parts manufacturers would need up to $7.6 billion in federal aid if the assistance promised for farmers is extended to other sectors. Chemical manufacturers would need $960 million; prepared food manufacturers, $884 million; fishermen and crabbers, $811 million; soap manufacturers, $725 million; beverage manufacturers, $765 million; shipbuilders, $632 million; and furniture makers, $567 million.

Last week, U.S. Trade Representative Robert Lighthizer told lawmakers at a Senate Appropriations subcommittee hearing the administration had no plans "at this time" to extend its farmer aid package to other sectors.

Bradley, in the Chamber's blog post, made clear what the business group would really wants is for Trump to remove the tariffs and back off from the threat of imposing more. "The best way to protect American industries from the damaging consequences of a trade war is to avoid entering into a trade war in the first place," he said.

Steel needs help ... because of the steel tariffs?: Ironically, some of the biggest recipients of an expanded aid package could be two sectors, steel and aluminum, Trump set out to help with his tariffs. A number of countries have retaliated against U.S. steel and aluminum exports, so companies that produce steel and/or manufacture steel products could need $6.4 billion in federal aid and U.S. aluminum companies could need $2.4 billion, the Chamber said.

... AND MORE ON THE TARIFFS: USDA Secretary Sonny Perdue had been in Argentina since Friday, meeting with his fellow ag ministers from the Group of 20 nations. While there, he told Reuters that farmers shouldn't expect to be completely compensated for their losses. "Obviously this is not going to make farmers whole," Perdue said. He also said that about $7 billion to $8 billion of the aid will be in direct cash relief, while other money will go toward export promotion and buying up excess crops.

War of words, and worlds: Officials of the influential Koch network warned that President Donald Trump's tariffs could result in "long-term damage" to the country.

"When in order to win on an issue someone else has to lose, it makes it very difficult to unite people and solve the problems in this country. You see that on trade: In order to get to a good place on trade, convince the American people that trade is bad, " Brian Hooks, one of Charles Koch's top deputies, said this weekend during a briefing for reporters at the network's gathering in Colorado Springs, Colo., POLITICO's Maggie Severns reported.

Those comments prompted former White House chief strategist Steve Bannon to attack the network in turn. In an interview with POLITICO on Sunday, Bannon called the comments unhelpful. "We can have a theoretical discussion later, OK? This is why they don't know what it means to win, OK?"

The excerpt shown above illustrates the loss or potential loss to the deficit of either $12 billion or $39 billion regardless of who is correct.  Either way, the United States of America has officially opened an unlimited credit card account to "Make America Great Again" -- at least that is what is supposed to be happening.  The opposite seems to be unveiling in reality though.



What is surprising about the situation America finds itself in -- in regards to the 'trade war' is that even if the United States could recover or agree on trade agreements with countries based on the previous tariffs, our country would still lose out.  The trade agreements which the United States previously had with other countries had 'special provisions' attached to them.  The possibility of regaining these 'special provisions' is out the door heading into the future.



Which means that even if similar relations were recovered, the 'special provisions' would be gone.  "Free Trade" is based on certain deficits incurred by various countries.  While the United States appears to be 'a loser' on trade deals, as a country the United States has been a 'winner' in a large amount of situations.  I discussed briefly 'global free trade' in a previous post.  The United States is considered the 'major player' on the world stage -- at least as of 2 years ago.



This position has quite possibly changed over the last 2 years.  The current trade war has not helped us on the international stage.  As the excerpt above states: "When in order to win on an issue someone else has to lose, it makes it very difficult to unite people and solve the problems in this country. You see that on trade: In order to get to a good place on trade, convince the American people that trade is bad" -- The American people are now being convinced by politicians that being taken advantage of is a terrible cost of doing business on the world stage.  That is not necessarily the case.



Conclusion...



Bad news consists of recent events such as China telling shipping boats carrying up to 1.5 million shipping boxes of cherries to turn around.  Which is to say, over night, the demand for cherries all over China dropped to zero.  This results to a HUGE SURPLUS of cherries being dumped onto the United States produce market -- which will drive prices down.  In the short term, cost reduction seems great.  Although, in the long term, profits suffer -- farmers suffer -- then in return -- consumers suffer.  Not great.



Other commodities (products) will face similar fates.  Look for increases in prices for consumer goods as a result.  The Trump Administration has been handing out 'exemptions' to certain corporations which make them 'exempt' toward trade tariffs.  How does that help the United States in a trade war?  The answer appears to be that the exemptions amount to setting us further back as a trade negotiator on the world stage.  Which means in certain cases, the United States looks 'uncertain' or 'unstable' in trade negotiations.  Call your elected congressional leaders and demand that trade agreements be elevated to a top position for our nation.  Follow the farmers lead "Trade not Aid".



Related Blog Posts: 


How Many Cherries Are In 1.5 Million Shipping Boxes?

Parameters: Trade Tariffs Will Affect International Science


Parameters: Tariffs Affect Trade In Both Directions -- In And Out Of The USA


Parameters: Steel And Aluminum Tariffs Are Not Isolated - They Are Tied To Trading Of Other Vital Goods


Parameters: One Parameter Change In The Trade Machine Leads To A 'Re-Adjustment' Of Another

What Is The World Going To Be Like With Autonomous (Self Driving) Cars?

Lately, I have been asking myself this question. Especially, as the idea has started to come to reality with Tesla Motors and GM Corporation (purchasing Cruise Automation) looking to have autonomous cars on the road soon.  People are excited about the prospect of not having to pay attention during driving (the reality is different) contrary to the state of autonomous cars.  Already, we have seen unfortunate events of relying too much on the autonomous capabilities of a Tesla Motor vehicle.  Back to the question at hand:



What will the world look like with autonomous vehicles?



Simple answer: No one knows.



Complex answer: read on to find out.

First Guess At A World Of Autonomous Cars!

Recently, I found a story which to me represents the bridge on the path toward a world of autonomous cars.  The tweet shown below from the news site "NBC Los Angeles" is an introduction to what the world will look like with an abundant amount of autonomous vehicles:

The article titled "Car Drives Through Living Room While Family Watches Chargers Game" carryed the unfortunate news of a car crashing into a house while the residents were watching television.  Here is an excerpt from the article explaining the incident and possible cause:

According to Hurn, when the car approached a stop sign across the street the driver hit the accelerator instead of the brake. The crash may have been caused by a medical emergency.

Both the driver and Hurn’s wife, who was sitting on the couch when the car came through the wall, were taken to the hospital.

“She was sitting right on the other side when it happened,” Hurn said of his wife. “Her knees hurt, her ankles hurt and her back hurts.”

What a terrible event to have happen at anyone's house?



Can you imagine sitting comfortably in your house watching a football game and then POW - right through the wall comes a car?



Fortunately, none of the residents were injured severely.  Evidently, this was not the first occurrence at this particular house.  Here is another excerpt describing the last event a year ago:

Amazingly, this isn't the first time someone has crashed into the family's home. 

"It happened about a year ago. Had a guy hit-and-run somebody up the street and he was trying to get away from the scene, drove through our neighbors yard, flew off the wall and hit the corner of our porch."

Taking the facts in based on the reporting in the news, the design of the street was flawed in the neighborhood.  The placement of the stop sign directly in front of the house was not a good idea.  At the same time, this design should be a major consideration in the event that autonomous vehicles become a reality.  Which appears to be the case.

The Reality Of Autonomous Vehicles

We do not yet have autonomous vehicles yet on the roads in the United States today.  The reason why is centered around the complexity in design of the cars and the infrastructure to ensure the dangers are mitigated.  First and foremost, the infrastructure (roads, signaling, signage, laws, etc.) would have to change dramatically.  Simple questions like the following remain unanswered by autonomous car manufacturers:



In the unfortunate even of an accident, whose fault does the accident rely on -- the driver or the autopilot?



How culpable is the automaker for disasters involving the autonomous features installed in vehicles?



How culpable is the government (local, state, and federal) for allowing the automakers to release deadly features on vehicles?



If a problem occurs, what happens then?



Do we wait for a recall?



Some proponents of autonomous vehicles have argued that once an accident has occurred, that will be the only time that type of accident happens.  Why?  Because instant changes can be made to all other similar types of autonomous vehicles that will eliminate that type of accident from occurring in the future.



Does the car learn from each accident?



As of right now, the current state of autonomous vehicles is appropriately summarized in an article discussing the unfortunate accident of Tesla in Florida months ago:

The accident occurred on a divided highway in central Florida when a tractor trailer drove across the highway perpendicular to the Model S. Neither the driver — who Tesla notes is ultimately responsible for the vehicle’s actions, even with Autopilot on — nor the car noticed the big rig or the trailer "against a brightly lit sky" and brakes were not applied. In a tweet, Tesla CEO Elon Musk said that the vehicle's radar didn't help in this case because it "tunes out what looks like an overhead road sign to avoid false braking events."

Because of the high ride-height of the trailer, as well as its positioning across the road, the Model S passed under the trailer and the first impact was between the windshield and the trailer. Tesla writes that if the car had impacted the front or rear of the trailer, even at high speed, the car’s safety systems "would likely have prevented serious injury as it has in numerous other similar incidents."

Based on the logic provided by Tesla in the excerpt above, would you place your life in the hands of Elon Musk?



Elon musk has genuine intentions to reach Mars and provide the world with cheaper energy along with amazing cars.  Although, the pace at which he is going on both fronts is rather scary.  Additionally, the Tesla car corporation has not been totally upfront and on top of reporting unfortunate incidents in which their cars are involved.  Did you hear about the death of a resident in China who was in a Tesla vehicle with the autopilot engaged?  Why not?



I would be more likely to believe car data coming out of GM corporation who has recently been slogged through years of skepticism regarding the safety of their vehicles.  They have more to lose and should be on top of their game in terms of regulations and safety procedures.



Although, the "bottom line" is what counts as success in business unfortunately -- not peoples lives.  In the excerpt above, the car company Tesla amounts of the death of the driver to 'not paying attention' and says that had the car not made the mistake of recognizing the trailer as an overhead traffic sign, the car would definitely have performed well.  Really?



This begs the need for infrastructure to change too.  At the same time, the government should hammer Elon Musk for his disrespectful behavior in regards to the death of a soldier in one of his cars.  Laying the blame by claiming his vehicles have traveled millions of miles on autopilot is arrogant and untrustworthy.



Lets hope that Elon Musk returns to planet Earth with a sensible and logical approach with safety in mind.  He needs to meet the rest of his potential customers with a safe reliable car that will return them back to their family at the end of the day.



In regard to autonomous vehicles occupying our streets in the future.  We are far off from a truly autonomous vehicle showing up in front of our houses.  The future of technology is exciting.  At the same time, the future of the rise of technology is scary too.  Lets be as measured and engaged as concerned citizens as possible.  Until next time, have a great evening!