News Review - 16 Mar 2018
tradeWarsContainerShip

Mass production… Low-cost labour… Unfair Competition… Trade barriers… Selfishness… Greed… Depression… Tariffs… Import duties… Protectionism… and then…

TRADE WARS

President Trump Is On The Warpath!

He claims that the US is ready for a trade war.
He claims that trade wars are good…
He claims that trade wars are easy to win…
He claims that the EU enjoys free access to the US market…
He claims that the EU puts up artificial barriers to US products…

But is he right?

The last full-blown global trade war in the 1930’s contributed to the outbreak of World War II.

What Are ‘Trade Wars’?

“A negative side effect of protectionism that occurs when Country A raises tariffs on Country B’s imports in retaliation for Country B raising tarrifs on Country A’s imports. Trade wars may be instigated when one country perceives another country’s trading practices to be unfair or when domestic trade unions pressure politicians to make imported goods less attractive to consumers. Trade wars are also a result of a misunderstanding of the widespread benefits of free trade.

A trade war that begins in one sector can grow to affect other sectors. Likewise, a trade war that begins between two countries can affect other countries not initially involved in the trade war.” ( investopedia.com)

What Is A ‘Tariff War’?

“An economic battle between two countries in which Country A raises tax rates on Country B’s exports, and Country B then raises taxes on Country A’s exports in retaliation. The increased tax rate is designed to hurt the other country economically, since tariffs discourage people from buying products from outside sources by raising the total cost on those products.

One reason why a country might incite a tariff war is because it is unhappy with one of its trading partners’ political decisions. It hopes that by putting enough economic pressure on the country, it can force a change in the opposing government’s behavior. This type of tariff war is also known as a ‘customs war’.” ( investopedia.com)

President Trump: “America First!”

“Critics may carp that Donald Trump skipped economics class, but as the 45th president himself notes, Abraham Lincoln and other historic Republican leaders loved tariffs.

This bill is an American bill. It is made for the American people and for American interests.

That sounds like President Trump. But it’s William McKinley - another ‘America First’ Republican president - on his Tariff Act of 1890.

Going even further back, the first US Treasury Secretary Alexander Hamilton pioneered tariffs to protect infant American industries from foreign competition. So did fellow Founding Father James Madison.

It was Abraham Lincoln who inaugurated the Republican party’s economic nationalism. Yes, the Great Emancipator was also the Great Protectionist. ‘Give us a protective tariff and we will have the greatest nation on earth,’ he said in 1844.

Theodore Roosevelt was another Republican president who extolled tariffs as a buttress to American power, according to a biography of him by Edmund Morris. Despite protectionism’s naysayers, the Gilded Age was one of fabulous prosperity.

The Smoot-Hawley Tariff Act, a Republican measure that imposed hundreds of US import duties, is generally agreed to have worsened the Great Depression. Trump’s critics argue that he has not learned the lesson of Smoot-Hawley.

The multi-billion dollar question is, when and where will Trump’s tariff end?( bbc.com)

Uncompetitive America

Mr Armstrong, writing in a Co-worker Letter in January 1983, pointed out one of the major causes of trade wars. One of the biggest costs in manufacturing is labour. In some Far Eastern countries, workers earn a fraction of what American workers earn. Aided by modern computer manufacturing technology, easy access to world markets, and cheap labour, these nations make it hard for “high wage” America to compete.

Mr Armstrong writes:

“Before World War II the United States had mounted to a position of wealth and power such as no nation ever possessed.

God had blessed us with the natural resources. Selfishness and greed on the part of both management and labor temporarily increased our prosperity. But those very evils are now bringing this country DOWN!

As late as 1969, the American wage was three times that of England and four times that of Japan.

Meanwhile, the Common Market (EEC) in Europe gave that continent a mass market for mass machine production – AT LOW-COST LABOR. Even with machine production, labor had to direct the machines and remained the largest item of cost in production. Development of modern transportation gave Japan a mass market – in fact, a world market.

Now Europe and Japan compete with mass production and LOW-cost labor against the US with its high-cost labor. Not only that, but both in Japan and West Germany, labor is patriotic, regarding conscientious work as a duty to their country.

Result, Japan and West Germany export to the US, underselling US competition with better quality merchandise.( Co-Worker Letter – January 20, 1983)

President Trump: US Is Ready For Trade War

“President Donald Trump today said that the US - which has nearly $800 billion USD deficit with other countries - is ready for a trade war with them, if they retaliate against his decision to impose 25 per cent import tariff on steel and 10 per cent on aluminum. ‘We will have to see,’ Trump told reporters at a White House news conference when asked how he would avoid escalating into a trade war as other countries are saying that they would retaliate against his steel and aluminium tariff.” ( indiatimes.com)

What are the stakes for the US?

“Mr Trump has lamented the decline of the US steel industry, which since 2000 has seen production drop from 112 million tons to 86.5 million tons in 2016.

But experts say far more Americans work in industries that depend on steel products, than are employed in steel plants.

Steel mills in 2015 employed about 140,000 Americans, according to census data.

But 6.5 million Americans work for manufacturers who make things using steel.( bbc.co.uk)

President Trump: The EU Is NOT Innocent

Germany’s hard earned prosperity is under threat…

“Donald Trump delivered a relentless attack on the state of the EU as the president ramped up his rhetoric against the Brussels elite for trying to ‘act innocent’ when they are ‘taking $100 billion of trade a year from the US’.

Donald Trump issued his most critical assessment of the EU to date during a campaign rally last night, as his rant against Brussels drew huge applause.

‘You hear European union, sounds so innocent. It’s not innocent. They’re very tough. They’re very smart. We lose $100 billion a year.

‘We charge them practically nothing. We sell things into them, number one, you can’t get it through the barriers. They have artificial barriers.

‘That’s not a monetary barrier, that’s other things, environmental, they come up with things you wouldn’t even believe. We can’t get our product in there.’

‘So I said open up your barriers, get rid of your tariffs, and we’ll do this.’

If you don’t do that we’re going to tax Mercedes Benz, we’re going to tax BMWs. Cars are the big money item’.( express.co.uk)

President Trump: EU Sets High Tariffs

President Trump points out the EU’s tariffs… 74.7 percent on steel from China as an example!

“US President Donald Trump’s threat of a trade war with the EU could be about to ‘dramatically escalate’ with a huge tariff placed on Germany’s car industry. According to Ted Malloch, a Donald Trump insider, the ten percent tariff on automobiles would make a ‘significant’ dent in the German economy.

Speaking on the BBC’s Daily Politics this afternoon, Ted Malloch, once a favourite to become US ambassador to the EU, said that the US leader’s steel tariffs were only the beginning.

He said: ‘The EU plays this game too. They have a 74.7 percent tariff on Chinese steel. But, it’s not a trade war yet’.( express.co.uk)

Brussels Threatens To SUE Britain

If Britain is given an exemption on these new tariffs, the situation with Brexit negotiations will be a whole lot more difficult. If Britain is not given an exemption, then the relationship between the US and Britain will suffer…

“Furious European Union officials have threatened to take Britain to court if Liam Fox secures an exemption from Donald Trump’s steel tariffs. The UK Trade Secretary has promised to go to Washington to argue for Britain to be left out of Mr Trump’s aggressive hikes.

The US president has promised a 25 percent tariff on steel and 10 percent on aluminium in a move which has angered Brussels.

And EU sources have said if Britain secures favourable terms then EU negotiator Michel Barnier will see it as a ‘breach of trust’.

This could see Brussels look to punish the UK in all future talks.

And one senior official from the bloc even said Brussels would see such exemptions as breaking EU law.

This could lead to hauling Britain to the European Court of Justice, which could see the UK hit with a huge fine.

The official told the Telegraph: ‘The UK has to respect the rules’.( express.co.uk)

Trade wars: There Are No Winners

“In announcing sweeping new tariffs on imported steel and aluminum, President Donald Trump last week tweeted that ‘trade wars are good, and easy to win.’

But who wins a trade war?

The lesson of history is clear: Trade wars have no winners. And they are certainly not good. They tend to damage the economies of all countries involved, raising tensions and increasing the risk of international conflict.

The last full-blown global trade war was sparked by the infamous Smoot-Hawley tariff of 1930. As the US slid into the Great Depression, two members of Congress introduced a bill whose goal was to protect struggling American farmers by raising tariffs on agricultural imports.

As the bill moved through Congress, the limited farm protection bill snowballed into a protectionist behemoth, raising nearly 900 tariff lines covering 20,000 agricultural and manufactured products. Over the objections of economists, trade advisors, and foreign governments, President Herbert Hoover signed the bill into law.

The reaction from around the world was swift and punitive. Canada, America’s leading trade partner at the time, imposed retaliatory tariffs that cut US exports to Canada by half. Several other European countries enacted protectionist policies in retaliation to the new US tariff. A trade war had begun.

Who won this war? As the tragedy of the interwar period makes clear, everyone lost. In the US, the Great Depression worsened, and economists agree that trade protection not only deepened the country’s economic collapse but prolonged it.

Global trade almost completely collapsed and the tariff was likely responsible for about half of the free fall. US exports fell by about 40% over the course of the next year, crushing American industries. US imports fell by nearly the same amount, devastating the economies of our trading partners.

These dire economic straits around the world increased antagonisms between countries, led to nationalist economic policies designed to impoverish other nations, facilitated the rise of fascist strongmen promising to restore economic growth by any means necessary, and contributed to the outbreak of World War II.( fortune.com)

Those Who Don’t Learn The Lessons Of History…

As the previous article pointed out:

Trade wars have no winners. They tend to damage the economies of all countries involved, raising tensions and increasing the risk of international conflict.

These dire economic straits around the world increased antagonisms between countries… facilitated the rise of fascist strongmen promising to restore economic growth by any means necessary, and contributed to the outbreak of World War II.( fortune.com)

The Warning Is Coming To Pass!

Over 50 years ago, trade wars and a new Nazi-led Germany were predicted to happen. It now looks like that trade war may be about to commence!

Seventy years after the end of the second World War, Nazis are back in the German parliament! The right-wing nationalist AfD (Alternative for Germany) party is the largest opposition party.

As the largest opposition party in the German Parliament, the AfD party has control of the budget, tourism and legal affairs committees. For the first time since the dark days of Hitler’s Nazi Germany, a right-wing nationalist (NAZI) party is centre stage in German politics.

Right-wing extremism in Germany has surged to its highest level since the downfall of the Third Reich…

December 1963: A New Nazi Germany Prophesied!

“So long as present German prosperity continues… the Nazi takeover will not be possible! But — should any severe THREAT to that hard-won prosperity come — the picture will change — and change VIOLENTLY, in Germany! Remember! It was the afterwash of the disastrous stock market crashes of 1924 and 1929 that fanned the flames of violence in Germany to pave the way for Hitler!

HISTORY REPEATS ITSELF, they say. And your Bible predicts a great TRADE WAR between the burgeoning economic power in Europe and the United States. It predicts terrible financial COLLAPSE for this country [USA]! Make no mistake! Germany, and all Europe, would not escape unscathed in a hot trade war between the Common Market and the United States. Terrible economic disasters would result! And the result from such disasters? A NEW NAZI GERMANY!

You need to be WATCHING — and keeping your eyes on developments in EUROPE — as never before! You, at least, have been WARNED!( The Plain Truth, December 1963)

Be alert! It’s happening right now!

End Time Traders

At the end of the age, it’s the traders, the merchants, and by extension, the bankers who finance all this trade – they are the ones weeping and wailing…

The merchants of these things, which were made rich by her, shall stand afar off for the fear of her torment, weeping and wailing…

And every shipmaster, and all the company in ships, and sailors, and as many as trade by sea, stood afar off…

What city is like unto this great city! … for thy merchants were the great men of the earth…” (Revelation 18:15-18)

The Dangers Of Trade Wars

The dire economic straits caused by trade wars increase antagonisms between nations. This leads to nationalist economic policies designed to impoverish other nations. In the 1930’s, this led to the rise of a strong leader who pushed nationalism and promised to restore economic growth by any means necessary…

And the result? World War II.

84 Years ago - The warning went out…

The message has not changed…

The warning still stands!

Front cover of First Plain Truth Magazine, Is a World Dictator About to Appear?

In a sermon entitled: “United States Of Europe Is Coming”, given on 27 November 1982, Mr Armstrong referred back to that first issue of the Magazine.

“Now, the very first issue of ‘The Plain Truth’ was published in February 1934. It came out right on the 1st of February, l934. That is practically 49 years ago, just almost 49 years ago. I’d like to read you what I said …I was rather astonished when I once again read what I had written there, very close to 50 years ago. [Now 84 years ago!]

Well, the heading is: ‘ Is a World Dictator About to Appear?

‘Everybody senses that something is WRONG with the world… that some mighty event is about to occur. What is it? Bible prophecy tells! Here is a solemn warning… and it is the plain truth!

…Three or four short years ago many laughed and scoffed when we said that there would be another world war in five to seven years. They do not laugh and scoff today. Everyone KNOWS the next world war is coming, and SOON.’

And it did come in 1939, and this was written… just five years after I wrote that. So once again ‘The Plain Truth,’ even in its first issue, was way ahead of its time. It was predicting what was going to happen. People scoffed and said, ‘That’s a crackpot. He doesn’t know what he is talking about.’ But World War II did happen. It did come.

We live today in the most strenuous, anxious, momentous hours of the earth’s history.( Sermon - November 27, 1982)

Remember The Lesson Of The Fig Tree

“And he spake to them a parable; ‘Behold the fig tree, and all the trees; When they now shoot forth, ye see and know of your own selves that summer is now nigh at hand. So likewise ye, when ye see these things come to pass, know ye that the kingdom of God is nigh at hand’.” (Luke 21:29-31)