"The 20% tax on imports will strengthen the dollar" according

[Ilsa]

to a CNBC reporter who was parroting other business people. She said the stuff from Mexico sold at walmart would be cheaper.

I can't cut and paste from WSJ, and this article is from December, but it would be interesting to see the argument if anyone has access to it.


Why the House Tax Plan May Not Boost the Dollar That Much
Will the dollar really jump 20% to 25% to offset a new 20% tax on imports? Chief economics commentator Greg Ip’s view: almost certainly not.

By GREG IP
Dec 22, 2016 2:26 pm ET

House Republicans are working on a new corporate tax overhaul that would be border-adjustable. Exports wouldn’t be taxed, but imports would be. This has fueled speculation about how the economy and markets will respond. Economists say underlying trade deficits are set by consumption and saving patterns, not tax systems ...

(I cannot access any more of the article.)

[randome]

1. Trump said the dollar was too strong. He's clearly trying to weaken our economy.

[hr][font color="blue"][center]“If you're not committed to anything, you're just taking up space.”
Gregory Peck, Mirage (1965)[/center][/font][hr]

[DetlefK]

4. Exporting countries need a weak currency. Importers, like the US, need a strong currency.

[randome]

5. I don't need to be an economist to know that sounds right.

I guess Trump's very big brain is too distracted by other things.
[hr][font color="blue"][center]“If you're not committed to anything, you're just taking up space.”
Gregory Peck, Mirage (1965)[/center][/font][hr]

[CountAllVotes]

2. INFLATION

That is what it will cause, massive inflation on imports.

Not everyone will be in a position not to buy the imported items they need being they cannot seem to make a lot of this stuff in the USA.

before you take a Dump would ya tRump??

[Ilsa]

10. Massive inflation is what I thought, as well, including stuff from

Other countries. They may not go as high as 20%, but that price increase gives them a chance to raise their product 19%.

And you're right: too many people, esp those living on the edge now, won't be able to manage the increase. I would expect crime to increase with it.

[CountAllVotes]

12. yep

One thing that comes to mind is car parts.

I have an old Honda that I still drive. If anything goes wrong, many of the parts needed do come from Japan.

What a horse's arse we have in that White House!

[Ilsa]

13. Unless we have a good trade agreement with Japan, what is

to keep them from raising prices when the US is already experiencing inflation.

Mexico produces tires for multiple tire companies, appliances, pharmaceuticals, autos, etc.

www.worldstopexports.com

[dawg]

3. And a stronger dollar kills exports ...

and all those rust belt factories remain shuttered.

[bravenak]

6. And if they reopen, robots will be working there, not humans

[Yavin4]

7. Do you think that wages will rise to meet the inflated cost of goods?

If you do, I have a bridge to sell you.

[RDANGELO]

9. They need to raise the minimum wage.

[Yavin4]

20. With this congress??!?!?!?

Consider yourself lucky that they don't bring back debtor prisons.

[RDANGELO]

8. They need to couple that with a raise in the minimum wage.

I have a hard time believing most Republicans would go along with this.

[sarcasmo]

11. Pretty sure Paul Krugman would disagree.

[Ilsa]

14. Economic reporter on cnn said 40 million jobs would be at risk. NT

[muriel_volestrangler]

15. "not by that much" is the important thing; in theory, it should do it a bit

but not by 20%. The idea is that imports do become more expensive for US consumers, making it easier for US manufacturers to sell their goods in the USA at higher prices, employing Americans. With less demand to exchange dollars for other currencies, the price of those other currencies will go down a bit, relative to the dollar - ie the dollar will strengthen. But since the rate is not set solely by the imports and exports, you wouldn't expect it change enough to fully offset the import tax.

[vlyons]

16. Smoot-Hawley Traiff Act of 1930, Signed by Herbert Hoover

Those who do not learn from history are fated to repeat it.

"Other countries retaliated and world trade shrank enormously; by the end of 1934 world trade had plummeted some 66 percent from the 1929 level."

http://americastradepolicy.com/did-the-smoot-hawley-tariff-cause-the-great-depression/#.WIt2-n2QsfI

[Ilsa]

17. THIS RIGHT HERE!

Maybe it'll get tweeted to @dumbdonald.

[vlyons]

19. post the link on your social media platforms

The web has a lot of info on the Smoot-Hawley tariffs. It's been hotly debated for decades. But the trade and jobs numbers don't lie.

[grantcart]

18. The idiocy of this approach is the assumption that other countries won't

reciprocate when we know that they will.

These superficial moves not only trigger trade wars but currency wars.

One of the main reasons for the European was to kill cross currency leveraging and speculative currency trading.