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Ok, Again: This Is How Foreign Government Subsidies Are Awful for the US
All Governments - Not Just Ours
It is becoming more than a mite tiresome - dealing with the knee-jerk, talking-point-screeching alleged “free traders.”
Who oppose President Donald Trump attempting to alter the ongoing, rolling nightmare mess that is this country’s global trade policy.
The US has spent the last half-century-plus - cutting trade deals that cut our own throat.
Nigh every other nation tariffs our stuff. Nigh every other nation imposes teeny, tiny import limits on our stuff. And nigh every other nation subsidizes the excrement out of the stuff they send us.
While we do…nearly none of any of this. Every other nation can send as much stuff to us as they wish - nigh completely free from US government impediments.
If you are an American producer of…anything at all - this is horrible for you.
When you try to sell overseas - you’re crushed by tariffs and teeny, tiny import limits.
When you try to sell here - you’re crushed by massively-subsidized goods from everywhere else on the planet.
So American producers have spent the last half-century-plus - becoming ex-American producers. Relocating overseas - and taking with them tens of millions of jobs.
Why fight uphill against anti-US US trade deals - when you can join with the rest of the planet in taking advantage of US?
In response to President Trump’s so-far-quite-successful efforts, the knee-jerk, talking-point-screeching alleged “free traders” - screech really deep and informed things like “Tariffs are taxes!!!”
When we say that President Trump (and we who back him) are playing chess - and our opponents checkers - this is what we mean.
Checkers players - are only concerned with the next move. Chess players - are thinking several moves ahead.
The fake free traders - aren’t even concerned with their next move. They’re far too busy freaking out about Trump’s last.
President Trump imposes tariffs as a means to an end - not an end.
The newly tariffed - don’t like it. So to make it stop - they renegotiate the awful deals President Trump inherited. To the betterment of…the US.
The fake free traders - are robustly defending every other nation on the planet screwing us.
Their response to anti-US tariffs and teeny, tiny import limits is…”So?”
Which is nothing remotely resembling free trade - or a defense of it. Which is but one of the very many reasons we call these people fake free traders.
Their response to our importing foreign government subsidies - is even less intelligent.
Fake free traders defend foreign countries screwing US with subsidies - because “Cheaper stuff!!!”
Which is nothing remotely resembling free trade - or a defense of it. Which is but another of the very many reasons we call these people fake free traders.
“Cheaper stuff!!!” seems to be a great thing…for about six months. And then every US company that makes the stuff being foreign-subsidized - shuts down. Because they can not hope to compete with the subsidized stuff.
Gone are the American companies - either overseas, or simply out of business. Gone are the jobs they provided for American families.
Sacrificed by the fake free traders on the phony altar of fake free trade.
Lather, rinse, repeat for a half-century-plus.
And we have fake free traders bewildered by a barely growing US economy - with incessantly flatlining wages.
And then the election of President Trump - to clean up their titanic mess.
One particularly pernicious example of foreign government subsidy importation?
“Late last year, the U.S. Department of Agriculture (USDA) published a report about the global sugar market. The report noted that Brazil, the world’s biggest sugar supplier, would decrease production by an enormous 8 million metric tons in 2019.
“A decrease of that magnitude should move the market, much like if China made a big change in cotton or Russia cut wheat sales drastically.
“But sugar prices didn’t bounce back. In fact, sugar prices sank even lower and are now trading at about half the world average cost of production.
“Let me state that again. Current world sugar prices barely cover half of the cost of producing sugar.
“The reason: Subsidies fueled production increases elsewhere.
“India, a long-time sugar importer, is now making an unprecedented move to supplant Brazil as the world’s dominant supplier. Through export subsidies that appear to be WTO-illegal, soft loans, tariffs, and other new policies, India increased production and more than made up for Brazil’s decline….
“India isn’t alone. More than 100 countries produce sugar and every single one of them subsidizes production in some way. With so many subsidized producers and so many different forms of subsidization, it can be hard to keep it all straight.
“That’s why Texas Tech University compiled a new foreign sugar subsidy handbook to give trade negotiators and policymakers a tool that can serve as a quick reference….
“Countries examined include the world’s biggest players – Brazil, India and Thailand – as well as those currently involved in U.S. trade talks – China, Japan, Europe, Mexico and Canada.
“During our research, we found that import tariffs designed to keep subsidized world market sugar at bay were present in each country. Many also had price control systems in place to boost returns for domestic producers.
“Indirect subsidies, which provide debt forgiveness and payments for input purchases, were likewise common. And, there’s been a noticeable uptick in ethanol-related programs to push more sugar into fuel production instead of food.
“These subsidies all affect the world market….
“The United States does not export sugar, so we did not include U.S. sugar policy in the report.
“But each of the profiles affect America’s sugar policy. That’s because U.S. sugar policy – consisting of import quotas and loans to producers that are repaid with interest – exists as a direct response to subsidies elsewhere.
“U.S. sugar producers, including those in my home state of Texas, are highly efficient and are lower-cost producers than most of the countries we examined.
“But no producer in the world is efficient enough to survive prices that are chronically depressed and prone to extreme volatility.
“In short, the global sugar market is broken and is in need of change. Targeting the government programs and trade barriers highlighted in our report would be a great place to start.”
The global sugar market is broken - in exactly the same way the entirety of the global trade market is broken.
To the extreme disadvantage of the US.
In the exact same way President Trump is trying to fix everywhere else.
Faced with this wall-to-wall global assault on the US, the fake free traders respond as they always do.
By calling for US - to yet again cut our own throats.
They ignore the tens of billions of foreign dollars annually spent destroying US production.
And instead call for us to unilaterally give up our comparatively minuscule counter-measures.
And our Lack of Self-Awareness Award goes to:
The fake free traders say:
“The rest of the planet can absolutely continue dropping nuclear bombs on us. We must rid US producers of their water pistols.”
All of this is fake free trade.
From the same fake free traders - who made the titanic mess we just elected President Trump to address.
And we elected President Trump - over the strenuous objections of the fake free traders who made the titanic mess we just elected President Trump to address.
Ok - we may have to reconsider our Lack of Self-Awareness Award winner….
This first appeared in Red State.