The article below is an interesting read. It enumerates some of the effects that potential tariffs on US oil by China could have. Among the more interesting possibilities:
A further rise in oil prices
A loss of revenue for US oil companies as China looks elsewhere for oil
More jobs in Russia and OPEC nations as China considers them as sources for oil
It could produce a boost to Iran’s economy if it turns out to be one of those sources
I thought that last one was really interesting, as Trump has been talking about new sanctions on Iran. So, on one hand he is wanting to sanction Iran. On the other, his push for tariffs could lead to retribution tariffs which would actually help Iran’s economy. Got to wonder who is advising him…
Interesting read. Thanks for sharing this. One thing is certain, our decision to engage in trade wars will result in pain in the pocketbook for many Americans, and potentially some wins for our adversaries on the global stage.
#1. China cares far less about the general welfare of their people
#2 That’s kind of the whole problem to begin with, 90% of rural Chinese populations are not potential consumers for our goods and looking at “trade deficits” is stupid.
I really liked how Mark Levin explained it the other day.
Paraphrasing, he said if an American business imports $1,000,000 worth of oil from Saudi Arabia, and use that oil to make goods and provide services that equate to $5,000,000 in profits for their business, then we have a $1,000,000 trade deficit with Saudi Arabia on that transaction, yet the American business created profits of $4,000,000. And somehow people are screaming that we should charge a tax to this American business on oil they imported, because we now have a trade deficit with Saudi Arabia.
The question for me (totally unanswered and probably unanswerable at this point) is whether the tariffs are going to be long-term, or are just intended to exert pressure on the target countries to reverse existing tariffs on our stuff.
It’s not very well covered in the media, but the USA has already won concessions from some other countries on tariffs, but I wouldn’t disagree that those results are only with nations of smaller economic magnitude in our overall global economy.
Right now it’s a geopolitical game of chicken. Do they need us more than we need them? Or do we need them more than they need us? I’ve been surprised at some of the results Trump has apparently achieved with his “bigger button” posturing. I expected disaster, but so far it has turned out better than anticipated. Will that continue? The problem with hanging hope on past success with this is that one bad gamble can more than offset any wins to date.
If the tariffs end up being long-term, I do not see positive outcomes from this. Not for anyone. But if they manage to loosen up existing tariffs from the target nations, we can all win.
While I can understand the tactic of using tariffs to undo unfair trade practices from target nations, I do NOT support tariffs to “fix” free market trade imbalances. If someone else makes a better product or sells at a better price, more power to him. We need to look at why we cannot do the same, not punish the other party for being better than us.
