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International Trade Piracy and Greed

August 1st, 2017
International Trade Piracy and Greed

At what point does greed become rapaciousness? At what point does overlooking a pattern of “partner” abuse become an enabling of masochism and a destruction of self?

Last week CP-Idaho ran commentary on foreign trade, using China by way of example. We mentioned that China’s predatory trade with the United States is by no means the only example.  Almost on cue, Fox Business News reported late last week, a blindside punch thrown by Japan, allegedly one of our trading “partners” (so-called).

Effective August 1st (today, Tuesday), Japan is going to jack import tariffs on U.S. frozen beef up to 50%.  50%!  (They already impose a 38.5% tariff on American beef and we’re just supposed to accept that.)

So, what is Japan’s excuse to justify this new adversarial tariff–if not a hostile  level of sanctions we should expect from an enemy nation versus a so-called partner?

Incredulously, Japan claims its purpose is to strong arm passage of a “free trade agreement”…defined as the Trans Pacific Partnership (TPP) which Congress does not seem willing to do.  The punitive tariff amounts to a de facto meddling by Imperial Japan into our Congress by extracting punishing and unjustifiable tariffs.  These actions are not those by a friendly state.

The Japanese seek to impose themselves into our congressional legislative process. Who here elected the Japanese?  At the very best, these attempts amount to extortion, by employing a crushing tariff on U.S. beef exports as leverage to get their way.  Again, how much is enough for these Imperial Japanese?

Worse, the underlying insinuation certainly is that our “partner” Japan is not currently getting enough share of the U.S. market.  We at CP-Idaho flat out deny that insinuation as a shameless lie, an orchestrated falsehood which requires not only a “suspension of disbelief,” but also requires a wholesale taking leave of one’s senses…a hallucinatory dissociative howling lunacy.

Of what need does Japan have to attempt to force America into agreeing to the TPP throat cutting, to which Japan refers falsely as a “free trade” agreement?

Is their “paucity” share of American markets now so feeble?  Are they consigned to so thin a gruel?  No.  As we speak, Imperial Japan has run long-term, absolutely enormous and apparently systemic annual trade deficits with the United States.  How much more is enough?

Currently, the U.S. Census website (https://www.census.gov/foreign-trade/balance/c5880.html ), lists these imbalances with Japan annually in monthly tables dating as far back as 1985—that is over 31 years!  And not one single solitary positive net annual trade with the United States anywhere in the record?

The average annual Japanese trade imbalance with the United States is $63.6 billion…year in and year out.  Surely the Imperial Japanese are not telling us that this enormous trade imbalance (naturally always in their favor) is an unfair share of our American markets?  It is so unfair that it warrants punitive,  unjustifiable and long-standing tariffs on American beef?

According to Japan, however, unless we ratify the TransPacific Partnership (TPP) they will keep the 50% tariff imposed upon American beef.  Doubtless Japan is demonstrating “friendly” benevolence to America.

Japan promises that all we have to do is: (1) accept their incredulous imposition of extortive tariffs, and do nothing to ward off their hostile acts at controlling our Congressional legislation on trade; and (2) once we succumb to their invasive and hostile acts, Japan will kindly return to an American beef tariff at 38.5%.

Only later, if America minds its manners, will the Japanese agree to talk about reducing the beef tariff to 9%…but even at that only over a 16-year phase in.  9%!  If America even imposed that much on Japanese products, we would be pilloried for protectionism.  Yet Japan openly admits they do so, and do so at a 50% rate!

Assuming Japan does not concoct some other reason for barring American beef, an agreement to “allow” Japan to punish American beef production for any length of time whatsoever is an outrage.  And it ought not to be done.

Who are the Imperial Japanese to demand any such control over American markets? We’ll tell you.

Japan is among the absolute worst of America’s so-called trade “partners” for predatory trading and abuse, importing less than half the dollar value of what they export into American markets.  Meanwhile, any parsimonious tariff on the order of 1.5% on this side of the ocean is bewailed as if it was racist genocide.

This restrictive trade with Japan is not merely academic.  The Japanese scheme to punish American beef over not less than 16 years of unjustifiable blockage of open markets there could literally destroy our struggling producers.  Idaho, we must remind, is on that list.

Idaho is a major beef state (we rank 13th).  According to University of Idaho Extension Bulletin 892 (December 2016)…15,800 jobs and $142.8 million in wages in Idaho are linked to livestock production.  The value added is $2.2 billion.  And Japan apparently wants to prevent even that.

2017_Trade_Japan

Market predation from these so-called international “partners” in Japan has been permitted by both the duopoly parties. In order, the Administrations during this holocaust of American trade markets from 1995 through today have been: Republican-Democrat-Republican-Democrat-and now Republican (if that is what it is today).  It does not seem to matter.  But it is time to stop it.

For decades, Japan has used “Kobe beef” as the mechanism to exclude U.S. beef. At this very hour, Japan continues its protectionist tariff rates at a startling 38.5% base tariff…which by extension they see as benign.   Japan also set in place trade legislation to deny market growth to U.S. beef exports into Japan.  If U.S. beef imports exceed the previous quarter (year-to-year) the Japanese tariff is to be increased to 50%.  What if the United States did that to them?

The hard truth is that U.S. beef does not have now, has never had, and never will have free market access in Japan. Whenever American beef begins to recover from the body blows that the protectionist Imperial Japanese politicians continue to throw at it, the Japanese concoct yet more ways to cripple American production…and hurt American farming families.

Given the Japanese seem okay with 38.5% tariff rates, fine.  The United States must base rate its tariffs on every single Japanese manufactured product entering our markets at 38.5%.  Fair is fair.  That’s the base new rate.

Further, to restrict expansion in our domestic market share by this foreign competitor, we too must establish an equivalent tariff protection control at 50% on Japanese manufactured goods.  Set to kick in whenever imports of Japanese manufactured goods exceed 17% of their total from the previous year (quarter to quarter)…just exactly like they do now.

As a baseline, we recommend using the trade figures from the devastating 2008-2009 recession, since this was the last and only instance in which a significant decline in foreign imports took place in the United States economy in recent memory.

These baseline tariffs must be imposed effective immediately.  Anything in the containers bound to Long Beach, as soon as it hits the shore, it’s time to  sequester  38.5% of that merchandise price.  If not paid, then get it out of here.

Wilbur Ross has some solid comments today regarding the unfairness of U.S. trade policies to our own people.  It is time to start taking this foreign trade seriously.  The same remedy applies to our so-called “partners” in Europe, China and Timbuktu as well.

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