The Experts Were Wrong: First Quarter Growth Hits 3.1 Percent

President Trump’s economic agenda has performed better than projected again. First quarter growth hit a solid three percent, staving off fears of a recession and once again showing the U.S. economy is still going strong.

https://townhall.com/tipsheet/mattvespa/...FRsQw7HLH8

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You know trouble is right around the corner when your best friend tells you to hold his beer!!

When big corporate boards meet, they say things like, "there's a Republican in the White House, so let's import less and export more.". Lol.

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My fellow southpaw Mark Brunell will probably always be my favorite Jaguar.

I still worry about the tariffs he's putting in place. They help numbers now, but if other countries reel in their trade with us, whoever's elected in 2020 is going to have a painful term.

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Tariffs may hurt Q2 growth, but it is a necessity that needs to be done. No other foreseeable future president is going to stand up for the trade imbalance we have been getting hosed on for decades.

It is truly a shame that this is a partisan issue.

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Tariffs may hurt Q2 growth, but it is a necessity that needs to be done. No other foreseeable future president is going to stand up for the trade imbalance we have been getting hosed on for decades.

It is truly a shame that this is a partisan issue.

Yes and no.  On one hand I like the fact that President Trump is "playing hardball" with China regarding trade between the two countries.  However in the short term it has at least partially impacted the stock market recently.  It also is causing future higher prices (possibly) to consumers and tough times for some of our farmers.  Hopefully it will turn out to be nothing more than a bit of "short term pain" and a reasonable trade agreement can be made between the two countries.

Regarding the tariff threat to Mexico, that again is kind of a "yes and no" thing for me.  On the one hand it is forcing Mexico to come to the table regarding the illegal immigration crisis.  On the other hand it's not really what trade policy should be used for.  The other thing to keep in mind is that tariffs on goods coming from Mexico will impact a lot of industries and ultimately the consumer.  With that being said it was pretty much all that he could do since the Congress refuses to address the immigration crisis and instead wastes our taxpayer's money on endless and useless "investigations", hearings, etc..  The other thing to keep in mind is if the tariffs increase up to the 25% cap that is being talked about, then perhaps companies will bring manufacturing jobs back to the U.S..

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There are 10 kinds of people in this world.  Those who understand binary and those who don't.

Tariffs may hurt Q2 growth, but it is a necessity that needs to be done. No other foreseeable future president is going to stand up for the trade imbalance we have been getting hosed on for decades.

It is truly a shame that this is a partisan issue.

Yes and no.  On one hand I like the fact that President Trump is "playing hardball" with China regarding trade between the two countries.  However in the short term it has at least partially impacted the stock market recently.  It also is causing future higher prices (possibly) to consumers and tough times for some of our farmers.  Hopefully it will turn out to be nothing more than a bit of "short term pain" and a reasonable trade agreement can be made between the two countries.

Regarding the tariff threat to Mexico, that again is kind of a "yes and no" thing for me.  On the one hand it is forcing Mexico to come to the table regarding the illegal immigration crisis.  On the other hand it's not really what trade policy should be used for.  The other thing to keep in mind is that tariffs on goods coming from Mexico will impact a lot of industries and ultimately the consumer.  With that being said it was pretty much all that he could do since the Congress refuses to address the immigration crisis and instead wastes our taxpayer's money on endless and useless "investigations", hearings, etc..  The other thing to keep in mind is if the tariffs increase up to the 25% cap that is being talked about, then perhaps companies will bring manufacturing jobs back to the U.S..

All of this.

Let me add that both China and Mexico have a lot more to lose. I fully expect these to yield positive results.

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"Why should I give information to you when all you want to do is find something wrong with it?"

Yes and no.  On one hand I like the fact that President Trump is "playing hardball" with China regarding trade between the two countries.  However in the short term it has at least partially impacted the stock market recently.  It also is causing future higher prices (possibly) to consumers and tough times for some of our farmers.  Hopefully it will turn out to be nothing more than a bit of "short term pain" and a reasonable trade agreement can be made between the two countries.

Regarding the tariff threat to Mexico, that again is kind of a "yes and no" thing for me.  On the one hand it is forcing Mexico to come to the table regarding the illegal immigration crisis.  On the other hand it's not really what trade policy should be used for.  The other thing to keep in mind is that tariffs on goods coming from Mexico will impact a lot of industries and ultimately the consumer.  With that being said it was pretty much all that he could do since the Congress refuses to address the immigration crisis and instead wastes our taxpayer's money on endless and useless "investigations", hearings, etc..  The other thing to keep in mind is if the tariffs increase up to the 25% cap that is being talked about, then perhaps companies will bring manufacturing jobs back to the U.S..

All of this.

Let me add that both China and Mexico have a lot more to lose. I fully expect these to yield positive results.

I agree with that, this tariff thing may hurt us in the short term but we are better off in the end. 

I am curious as to other people's thoughts on this tariff/trade war thing, specifically with China. Nowadays, it seems like just about everything is made in China. I recently ordered a new camera, I received it, it's an amazing camera (Sony A7iii if anyone is interested). The entire time I was assuming that this is Japanese made, sure enough to my dismay "Made in China". It's a high end Sony camera, really? Also, all of my lenses, we are talking $1,000+ a pop, all made in China. It seems that the Chinese are now capable of making higher end products and when compared to a similar item made in Germany or Japan (where lots of good optics are made), the price difference just doesn't justify something that is only slightly better. 

As for the whole idea, if we are losing a few hundred billion $ every year with China, eventually they will have a bigger economy than us, thus more money than us. Also considering, it's not like we are making up that difference with other countries as we seem to have a trade deficit with just about every other major country. If this continues at it's current pace I believe the only thing that could stop the deficit from growing is that eventually China will get to the point where they are almost as big as us, meaning making things in China will no longer be economically viable as quality of life and wages grow in China, as with what happened with Japan. Still though, with 1 billion+ people in China, there should always be cheap labor available. I have to say, it's depressing thinking about this type of thing, combine that with the fact that schools in China are very good, I suppose the only deterrent we have is keeping the largest military in the world at all times and at all costs.

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All of this.

Let me add that both China and Mexico have a lot more to lose. I fully expect these to yield positive results.

I agree with that, this tariff thing may hurt us in the short term but we are better off in the end. 

I am curious as to other people's thoughts on this tariff/trade war thing, specifically with China. Nowadays, it seems like just about everything is made in China. I recently ordered a new camera, I received it, it's an amazing camera (Sony A7iii if anyone is interested). The entire time I was assuming that this is Japanese made, sure enough to my dismay "Made in China". It's a high end Sony camera, really? Also, all of my lenses, we are talking $1,000+ a pop, all made in China. It seems that the Chinese are now capable of making higher end products and when compared to a similar item made in Germany or Japan (where lots of good optics are made), the price difference just doesn't justify something that is only slightly better. 

As for the whole idea, if we are losing a few hundred billion $ every year with China, eventually they will have a bigger economy than us, thus more money than us. Also considering, it's not like we are making up that difference with other countries as we seem to have a trade deficit with just about every other major country. If this continues at it's current pace I believe the only thing that could stop the deficit from growing is that eventually China will get to the point where they are almost as big as us, meaning making things in China will no longer be economically viable as quality of life and wages grow in China, as with what happened with Japan. Still though, with 1 billion+ people in China, there should always be cheap labor available. I have to say, it's depressing thinking about this type of thing, combine that with the fact that schools in China are very good, I suppose the only deterrent we have is keeping the largest military in the world at all times and at all costs.

The thing is, labor is CHEAP in China.  When government has as much control over their people that China does it drives that.  Not all products produced in China are good quality.  There are far more products that come from there flooding the U.S. market.  Keep in mind, our society is a CONSUMER based society.  People are going to always buy the lesser expensive product no matter what it is (for the most part).

Consider this.  Say you want/need to buy a set of hand tools to fix something mechanical around your home.  Are you going to buy a good quality set of tools such as Snap-On or the lesser expensive Kobalt (Lowes) or Husky (Home Depot) set of tools?  Most of the latter brand of tools are made overseas in both Taiwan and China.  While they all will get the job done the "Made in USA" tools will perform better and last longer, but they are more expensive.

In our CONSUMER based society people are always going to go for lesser priced goods and lesser quality.  Regarding the labor cost, I'm just going to throw some random numbers out there that are probably not accurate, but in the U.S. factory labor probably averages around $10-$15 per hour.  In China the average wage is probably more like $3.50 per hour.

What that translates to is that to make a "widget" in the U.S. might cost a company $100.00 per unit after paying wages, materials etc.  In a country like China or Mexico that cost is probably more like $30.00 per unit.  Again, I'm just throwing out arbitrary numbers to illustrate my point, the actual costs are probably different.  What tariffs are designed to do is raise the cost of producing that "$30.00 widget" in China closer to or more than the $100.00 that it costs to produce that in the U.S..

With tariffs in place, the camera that you bought might have "justified" you purchasing one made in Germany or Japan and the "price difference" would not be much.

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There are 10 kinds of people in this world.  Those who understand binary and those who don't.

Tariffs? You are all left wingers

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Tariffs? You are all left wingers

If you live your life afraid of random people calling you a left-winger, or a right-winger, it will be pretty hard to have a deep conversation about anything.

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My fellow southpaw Mark Brunell will probably always be my favorite Jaguar.

Tariffs? You are all left wingers

Trump leans left on the issue of tariffs. He's not a conservative, although he has mostly governed that way so far.

However, most of us recognize that the tariffs are intended to be temporary; maybe even to the point that Mexico will cave before the tariffs ever kick in. A dedicated left winger would argue for permanent tariffs.

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"Why should I give information to you when all you want to do is find something wrong with it?"

I agree with that, this tariff thing may hurt us in the short term but we are better off in the end. 

I am curious as to other people's thoughts on this tariff/trade war thing, specifically with China. Nowadays, it seems like just about everything is made in China. I recently ordered a new camera, I received it, it's an amazing camera (Sony A7iii if anyone is interested). The entire time I was assuming that this is Japanese made, sure enough to my dismay "Made in China". It's a high end Sony camera, really? Also, all of my lenses, we are talking $1,000+ a pop, all made in China. It seems that the Chinese are now capable of making higher end products and when compared to a similar item made in Germany or Japan (where lots of good optics are made), the price difference just doesn't justify something that is only slightly better. 

As for the whole idea, if we are losing a few hundred billion $ every year with China, eventually they will have a bigger economy than us, thus more money than us. Also considering, it's not like we are making up that difference with other countries as we seem to have a trade deficit with just about every other major country. If this continues at it's current pace I believe the only thing that could stop the deficit from growing is that eventually China will get to the point where they are almost as big as us, meaning making things in China will no longer be economically viable as quality of life and wages grow in China, as with what happened with Japan. Still though, with 1 billion+ people in China, there should always be cheap labor available. I have to say, it's depressing thinking about this type of thing, combine that with the fact that schools in China are very good, I suppose the only deterrent we have is keeping the largest military in the world at all times and at all costs.

The thing is, labor is CHEAP in China.  When government has as much control over their people that China does it drives that.  Not all products produced in China are good quality.  There are far more products that come from there flooding the U.S. market.  Keep in mind, our society is a CONSUMER based society.  People are going to always buy the lesser expensive product no matter what it is (for the most part).

Consider this.  Say you want/need to buy a set of hand tools to fix something mechanical around your home.  Are you going to buy a good quality set of tools such as Snap-On or the lesser expensive Kobalt (Lowes) or Husky (Home Depot) set of tools?  Most of the latter brand of tools are made overseas in both Taiwan and China.  While they all will get the job done the "Made in USA" tools will perform better and last longer, but they are more expensive.

In our CONSUMER based society people are always going to go for lesser priced goods and lesser quality.  Regarding the labor cost, I'm just going to throw some random numbers out there that are probably not accurate, but in the U.S. factory labor probably averages around $10-$15 per hour.  In China the average wage is probably more like $3.50 per hour.

What that translates to is that to make a "widget" in the U.S. might cost a company $100.00 per unit after paying wages, materials etc.  In a country like China or Mexico that cost is probably more like $30.00 per unit.  Again, I'm just throwing out arbitrary numbers to illustrate my point, the actual costs are probably different.  What tariffs are designed to do is raise the cost of producing that "$30.00 widget" in China closer to or more than the $100.00 that it costs to produce that in the U.S..

With tariffs in place, the camera that you bought might have "justified" you purchasing one made in Germany or Japan and the "price difference" would not be much.

Thank you for your reply, your responses are well put and overall a nice read. 

I am very aware of the labor cost in China and the fact that it is much cheaper to make something in China than it is here in US, or in other developed nations such as in Europe or Japan. 

I work in E-commerce and sell a variety of used items, tools being probably my main category so I am familiar with the brands that you mentioned, such as Snap On, Mac Tools, Dewalt, Kobalt, Etc. It's very nice to have nice tools however the cost of for example Snap On, is just outrageous. Even though I hardly ever use them I have a Snap On tool box with quite a few Snap On and Mac Tools in it, they're nice to have and I acquired them at great prices, they hold their value very well so why not. The quality is absolutely there however a full box for a beginner mechanic, easily $20k+ with Snap On. Compare that to maybe a few thousand going with the Chinese or Taiwanese sets, our companies just can't compete because it seems to be such a limited market that can actually afford these American made items. This is ofcourse where the concept of tariffs comes in, to make this gap smaller to encourage consumers to purchase American made. 

With that said I have an eye for quality items and recently I have been buying some things from Amazon, half of these items I have bought are literally instant returns. The reviews are good, the prices are decent but as soon as I see the item and give it a feel and look over, it's absolute crap, something that should be sold at a flea market for $5. If you actually care to check, you can find most items on Amazon directly on the Alibaba website.

As someone who is not fully informed on the retail model but still a self employed business minded individual, it seems that with these "gadgets" all these entrepreneurs have to do is hit on 1 out 10, the profit margins can be so ridiculously high considering the production costs that you are able to flop on most, and still make lots of money. 

The reality is, most people in any society are not good at anything so once an industry like manufacturing disappears, there goes the jobs of that "most people".

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Tariffs? You are all left wingers

Trump leans left on the issue of tariffs. He's not a conservative, although he has mostly governed that way so far.

However, most of us recognize that the tariffs are intended to be temporary; maybe even to the point that Mexico will cave before the tariffs ever kick in. A dedicated left winger would argue for permanent tariffs.

That's ok you don't like free markets and want to protect the labour market. It's a justified position. Government intervention can be good.

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Trump leans left on the issue of tariffs. He's not a conservative, although he has mostly governed that way so far.

However, most of us recognize that the tariffs are intended to be temporary; maybe even to the point that Mexico will cave before the tariffs ever kick in. A dedicated left winger would argue for permanent tariffs.

That's ok you don't like free markets and want to protect the labour market. It's a justified position. Government intervention can be good.

The international market is not free when some countries can engage in slave labor practices and intellectual property theft to compete. Our government exists to prevent us from losing to those countries but somewhere along the line we lost our way.

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“An empty vessel makes the loudest sound, so they that have the least wit are the greatest babblers.”. - Plato

That's ok you don't like free markets and want to protect the labour market. It's a justified position. Government intervention can be good.

The international market is not free when some countries can engage in slave labor practices and intellectual property theft to compete. Our government exists to prevent us from losing to those countries but somewhere along the line we lost our way.

Yes, but we've kind of been intentionally "losing."  Trade deficits are what is keeping interest rates low on ~$20 trillion of US government debt.  

Someone who is more of an expert on economics can correct me if I am wrong, but my impression is, IF China (for example) exchanges the excess dollars they have on the world currency markets, that would weaken the dollar and make imports more expensive, and the trade deficit would largely correct itself.  But instead, in order to manipulate their currency against ours, they use the dollars to buy US government bonds.  That keeps the dollar strong and the renminbi weak, which keeps our exports expensive and their exports cheap, and enables China to export lots more stuff to the US.  But if they and everyone else stop doing this, interest rates on US government bonds will go up, and the US government will face bankruptcy because they cannot service the interest on the ~$20 trillion in debt.  

Another way to put it is, a strong dollar policy enables the US government to borrow loads of money at low interest rates, but it also causes trade deficits.  

So, it's not quite such a simple problem as "fixing the trade deficit."  There are loads of consequences that need to be worked through.  

Basically, if we want to fix trade deficits, we MUST also fix US government budget deficits.

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Trump leans left on the issue of tariffs. He's not a conservative, although he has mostly governed that way so far.

However, most of us recognize that the tariffs are intended to be temporary; maybe even to the point that Mexico will cave before the tariffs ever kick in. A dedicated left winger would argue for permanent tariffs.

That's ok you don't like free markets and want to protect the labour market. It's a justified position. Government intervention can be good.

I do not support the use of tariffs to protect the "labour" market, hence my opposition to permanent tariffs. Reading comprehension is your friend. Is this an indication of the level of education in Britain? Or are you claiming to be Australian this week?

I support the current tariffs on China and Mexico because the are intended to end China's theft of intellectual property and Mexico's supporting illegal immigration, and because i expect the tariffs to end as soon as they achieve those goals. National defense is the one legitimate role of government, and tariffs used this way are a form of warfare. In that regard they are in the same class as imposing sanctions, although less offensive. This has nothing to do with "free markets," and I do not support government meddling in free markets.

 

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"Why should I give information to you when all you want to do is find something wrong with it?"

The international market is not free when some countries can engage in slave labor practices and intellectual property theft to compete. Our government exists to prevent us from losing to those countries but somewhere along the line we lost our way.

Yes, but we've kind of been intentionally "losing."  Trade deficits are what is keeping interest rates low on ~$20 trillion of US government debt.  

Someone who is more of an expert on economics can correct me if I am wrong, but my impression is, IF China (for example) exchanges the excess dollars they have on the world currency markets, that would weaken the dollar and make imports more expensive, and the trade deficit would largely correct itself.  But instead, in order to manipulate their currency against ours, they use the dollars to buy US government bonds.  That keeps the dollar strong and the renminbi weak, which keeps our exports expensive and their exports cheap, and enables China to export lots more stuff to the US.  But if they and everyone else stop doing this, interest rates on US government bonds will go up, and the US government will face bankruptcy because they cannot service the interest on the ~$20 trillion in debt.  

Another way to put it is, a strong dollar policy enables the US government to borrow loads of money at low interest rates, but it also causes trade deficits.  

So, it's not quite such a simple problem as "fixing the trade deficit."  There are loads of consequences that need to be worked through.  

Basically, if we want to fix trade deficits, we MUST also fix US government budget deficits.

Very much so. I read one economist about, gosh, 30 years ago now who made a pretty strong case that the only path for the US out of their budget deficit would be intentional hyper-inflation cause by almost complete Isolationism. I can't remember the name, but it was a decent presentation of a rather extreme view point.

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“An empty vessel makes the loudest sound, so they that have the least wit are the greatest babblers.”. - Plato

That's ok you don't like free markets and want to protect the labour market. It's a justified position. Government intervention can be good.

I do not support the use of tariffs to protect the "labour" market, hence my opposition to permanent tariffs. Reading comprehension is your friend. Is this an indication of the level of education in Britain? Or are you claiming to be Australian this week?

I support the current tariffs on China and Mexico because the are intended to end China's theft of intellectual property and Mexico's supporting illegal immigration, and because i expect the tariffs to end as soon as they achieve those goals. National defense is the one legitimate role of government, and tariffs used this way are a form of warfare. In that regard they are in the same class as imposing sanctions, although less offensive. This has nothing to do with "free markets," and I do not support government meddling in free markets.

 

If tariffs against China really are retaliation for them not respecting IP laws, the punishment at least fits the crime.
That's not the case with Mexico.
Whether or not Mexico prevents Central Americans from reaching its northern border has nothing to do with the cost of producing things in Mexico.

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My fellow southpaw Mark Brunell will probably always be my favorite Jaguar.

I do not support the use of tariffs to protect the "labour" market, hence my opposition to permanent tariffs. Reading comprehension is your friend. Is this an indication of the level of education in Britain? Or are you claiming to be Australian this week?

I support the current tariffs on China and Mexico because the are intended to end China's theft of intellectual property and Mexico's supporting illegal immigration, and because i expect the tariffs to end as soon as they achieve those goals. National defense is the one legitimate role of government, and tariffs used this way are a form of warfare. In that regard they are in the same class as imposing sanctions, although less offensive. This has nothing to do with "free markets," and I do not support government meddling in free markets.

 

If tariffs against China really are retaliation for them not respecting IP laws, the punishment at least fits the crime.
That's not the case with Mexico.
Whether or not Mexico prevents Central Americans from reaching its northern border has nothing to do with the cost of producing things in Mexico.

But we definitely want the Mexican government to stop Central Americans from coming through Mexico's Southern border on their way to the United States.  So Trump is taking advantage of the presently strong US economy to pressure Mexico to do something.

If the Mexican government didn't know for sure that these hundreds of thousands of migrants from south of them were definitely going to leave Mexico at the Northern Mexican border, they would have sealed their Southern border by now, right?  They just let them walk through, because they're not staying in Mexico.  Pretty inexcusable, don't you think?

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I do not support the use of tariffs to protect the "labour" market, hence my opposition to permanent tariffs. Reading comprehension is your friend. Is this an indication of the level of education in Britain? Or are you claiming to be Australian this week?

I support the current tariffs on China and Mexico because the are intended to end China's theft of intellectual property and Mexico's supporting illegal immigration, and because i expect the tariffs to end as soon as they achieve those goals. National defense is the one legitimate role of government, and tariffs used this way are a form of warfare. In that regard they are in the same class as imposing sanctions, although less offensive. This has nothing to do with "free markets," and I do not support government meddling in free markets.

 

If tariffs against China really are retaliation for them not respecting IP laws, the punishment at least fits the crime.
That's not the case with Mexico.
Whether or not Mexico prevents Central Americans from reaching its northern border has nothing to do with the cost of producing things in Mexico.

Mexico's aiding Central Americans in illegally entering the US is a (mild) form of warfare, as is the US response of tariffs. That it has nothing to do with the cost of producing things in Mexico (or any other trade considerations) is immaterial.

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"Why should I give information to you when all you want to do is find something wrong with it?"