Secret Squirrel has heard of the Donald Trump comments concerning application of 25 per cent taxation on all imports from China.Squirrel has some firm grounding in economics, and,being already an MRL politician,is skilled in the ways and means of politics and finds Donald Trump to be sadly lacking in both areas,Here Squirrel turns his political and economic savvy towards the analysis and consequences of Donald Trumps harsh,rash, and foolishly made,unthoughtout reactionary statement of
an economic policy and direction he has most certainly made.
Well now,firstly, to get a firm grounding as the basis of this dessertation,let's talk taxes,tariffs, and Valued Added Tax.Tariffs are a form of selective tax, applied to the import of certain items, such that it is an attempt to balance out
and protect local business from the effect of the cheaper foreign imports,tariffs may also be applied by the exporting nations on products exported to other nations,being selective to certain products,but being referred to on occasion as a
tax rather than actual name applied tariff.Tax is just that, a general sale tax, applied at an end product sales to consumer. In between there is Value Added Tax which is applied internally in a specific nation, such as France(France generates 50% of tax income from VAT),where the tax is applied to the product at specific stages in it's development to the final sale,so is cumulative in the final result,much being hidden from the consumer,and still yet may or may not be taxed
by whatever name on the final purchased product.
Donald Trump has stated (should he become President,when and if he decides to run, and assuming he should so dazzle the general American elector with such a display of political bull fertilizer that he should win), he will raise a tax on
China,chinese goods, made in China, 25%.Now where will he raise it, at the source,the lower cost sector...as in first supplier, or when it hits importer/distributor, or at the final the point of purchase. Now the cost of any item starts small, then as each gets it, they add profit margins/cost to it, a sort of value added......till it reaches the retail sales sector, you.You will pay the highest.Of course the cost of those available goods to YOU,will go up.A good idea for you the consumer in these dire times of recession, rising prices,no,but it would benefit any existing American business.
The idea isn't by any means new, nor Trumps really, take U.S. Sen. Charles Schumer, D-N.Y.,as an example.Schumer's plan: Place a 30 percent tariff on Chinese goods entering the United States. To Schumer, one of the main reasons Chinese manufacturers are able to edge out American businesses is that their government keeps the value of its currency artificially low.“It’s against the rules and against what every other country does,” he said of the practice, which he believes allows Chinese goods to undersell American ones by 30 percent." Schumer even yet offered a reason for it,an economic reason,and Schumer,a politician,elected, carefully considered the public,his stature, and his image, in avoiding blasphemy,foul language,swearing in general.Politicians may not exactly be holy men,but it is best to keep up appearances.Here he wishes China to increase the value of it's currency,but then the stronger currency could purchase more from those with a weaker currency,for less. In short purchases from America, as China does, would then suffer due to the increased value of the currency.And, seeing the undervalued currency at an advantage,Schumer wouldn't suggest lowering the value of the American currency,to improve things, which should work just as much, since then America could purchase even less for it's dollar than it does.This is in the global economic view. America is best to remain in the tunnel vision view, and go with tariffs.Schumer has a sound basis in economics,here he was referring to tariffs on lumber imports affecting constituents, and that of applying tariffs to what are seen to be economic danger areas,a wise and sound grounding in economics reveals itself.
Consider Trumps economic system, is he a financial genius? He is portrayed as such.He's been bankrupt, and.recovered, sort of. You see he lost money, but he didn't loose any of his money, he lost, or would have, and did, loose money, yours in a figure of speaking, investment money, by those who foolishly invested in his businesses...he didn't loose his own money and suddenly have a vast fortune, a fortune great enough to run for President with,a fortune so vast he can afford to easily loose what he frivolously expends running for public office, that of The President Of The United States.
So in some ways his business savvy is exceptionally great, with respect to his own finances.However in cases where he is manipulating and using investment funds of others, they get the business, they get and take the loss.He looses, and he doesn't loose, he looses for you, your money, not his own, which waxes greater according to the system of the day.
So is it such a good idea to tax Chinese goods,made in China, in the United States,raising costs of the goods to you, 25%?Not really, the principles of laissez faire, the business practices of subsidies etc that America is so strictly
against in other countries, is,in effect,violated, as in raising the costs of goods from other nations, in effect subsidizes those of all other nations.
The point here is this does not affect goods from any other nations, in any sector, and so does NOT really protect US businesses.But would he do that now. No,I don't think so,for here we see his words.........
'“We are being ripped off by the rest of the world to the tune of trillions of dollars,” Trump said. “I am not talking about the old word, billions. I am talking about the new word, trillions.” Trump says he knows just how to fix things, starting with China. “Twenty-five percent tax on China, unless they behave,” he told O’Reilly.Trump is advocating total taxation, on everything,rather than a system of balancing and countering tariffs, as have been successfully applied in
economics in past times.Tariffs have proved tried and true in equity and equality for all nations.
However what Trump advocates and envisages is a form of war with another nation,not an economic tool for the improvement or betterment of America and Americans, but rather a political action directed against another nation,a nation with a higher power economy than America's declining one, and he does not expect nor believe that an economically superior nation could not effectively retaliate,He's obviously not well schooled,heeled, nor grounded in the reality of economics and economic systems.
Trump's reactions and ideas, are just that, radical,reactionary,born out of a hot headed, unthinking simple idiocy, founded and based in only one thing, that of playing to the crowd.Can Trump challenge my economic thoughts? Well Now I was taught by John Kenneth Galbraith, that great economic illuminary,in general business economics,the self- same John Kenneth Galbraith, writer of a great many economic tomes,and the economic advisor to President Kennedy, and also in my college days by Dr. Sani,who became Canada's economic advisor, this versus Donald Trump who's successful bankruptcies enriched his
fortunes far yet more greatly, and who didn't loose a cent of his own monies in those bankruptcies, loosing, rather, those who were foolish enough to invest by and through him.Face it, we are,most assuredly, hardly, compares as it were.
So...meaningless political blurb, double speak,the old, "unless they behave."Behave, this is a reason for an action.What
kind of behaviour,refrain from invasions of foreign lands, military intervention sin foreign lands?Behave? What is behave?Is America behaved?Will Donald Trump behave?. I do believe they will be behaved in his days, from the get go of a
Trump Presidency, won't be the very first thing he does when and should,he become President, no indeed.Political bluster,so much empty rhetoric,interspersed with a lot of swearing,blasphemy, and the like.The usual promises all make and don't
keep.One of Obama's was to get rid of the Mexicans,rid America of the illegal immigration problem.From the get go he didn't,he hasn't and is yet proposing and espousing amnesty, which is to absorb the problem and hence make them all
legal..so problem solved, no illegal immigration if it's declared and made legal is there..imagine, Obama kept his promise.
So what is America to do with respect to China? Obviously a system of well planned,well thought out,tariffs,in short economic protectionism, placed to encourage,assist in the development of, and protect, American better business
interests,protectionist tariffs which Reagan and Bush removed.
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