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Free but Fair Trade – Is it Possible?

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Free but fair trade is an expression which we often hear today from President Trump; just as we hear that millionaires and billionaires must pay their fair share from Senator Sanders. When asked what percentage is fair; since these millionaire and billionaires are in the highest tax bracket and pay the most in taxes, we never seem to get an answer. All we hear is from the progressive left that they have too much and need to pay more.

Similarly, the expression free but fair trade sounds great, but the meaning of “fair” is utterly void of any substantive meaning. The idea of a 25% tariff may be fair, but it is by no means free. So the question is, how can we obtain free but fair trade?

The Reality

Before we can answer this question, we must first examine the deficiencies in our current trade policies. The first thing we must realize is that we do not currently have free trade. Think about it like this. If we did have free trade why would we need complex trade agreements? The fact is we have thousands of tariffs in the United States. Just like every other country, we seek to protect some industries over others.

Some are for supposed national security reasons, and others are simply to protect an industry in a member of Congress’ district.

The second and most significant reason we do not have free trade is that true free trade is optimal but not politically expedient. For instance, let us use China and the United States as examples and let us say we currently do not trade with each other.

Establishing trade with one another is beneficial for both countries regardless of tariffs. Since trade never existed, an unfavorable trade agreement is preferable over no trade at all. Reasons being both countries will benefit from trade. Industries may open, and some may close, but there will be a net positive for both countries. It is a mutually beneficial arrangement.

Now instead of unfavorable trade agreements, what if we had free trade. All products coming from China into the United States and vice versa are tax-free. In this situation, you will see the greatest mutually benefit as both countries will have positive net growth. If this situation exists for years, you will see a fluid economy as some industries will be created, grow, decline, or shut down.

The problem that arises is not the creating and growth of some industries but the decline or elimination portion.

If a software engineering firm which sells most of its software to China opens up in a congressional district, you will be sure to see that member of Congress at the ribbon cutting ceremony will a plethora of other politicians stating their policies fostered the creating of this software engineering firm.

On the other hand, you won’t see these same politicians at the factory down the street which is packing up and moving to China. The same policies that opened up the software engineering firm eliminated your manufacturing job. What is an elected official to do?

What they will try and do is give tax incentives and add tariffs to prevent the closure. If they succeed, they will once again take credit; even though the biggest net benefit to the economy as a whole is to allow the factory to shut down, though it isn’t politically expedient.

Back in China, they will also try and protect their software engineering firms by adding tariffs and regulations on the US-based company. The result of all this will be less than optimal, but a long-term net benefit is not politically expedient. So protectionism will inevitably begin.

Possible Solution?

Therefore, how do we create complete free and fair trade? The honest answer is you can’t; as we have demonstrated allowing complete laissez-faire trade policy will never occur because it isn’t politically expedient. Some may be for good reasons and some for bad reasons.

To achieve the most optimal outcome would be to eliminate tariffs. But how do you do that without cheating and allowing politically expedient policies?

Maybe this example trade policy below might help in this endeavor.

All products, goods, materials, and services, entering the United States and its territories shall be free of tariffs. Any fees, including but not limited to docking, storage, and inspection imposed at points of entry shall be uniform at each location regardless of country of origin. Likewise, all products, goods, materials, and services produced in the United States and its territories shall be free of tariffs. Any country that imposes a tax on any of said products shall immediately, have the highest equivalent tax impose on all their goods and services at the same rate plus 10%; until eliminated.

Likewise, any fees should not favor any other country over the United States and its territories. Fees must be uniform or to the benefit of the United States. If fees are to the disadvantage of the United States, those same rates shall be immediately imposed on said country plus 10% until eliminated.

How it works

I postulate this trade policy would allow greater free trade then we have ever seen.

For instance, if China has a combined 20% tariff on mid-sized trucks and 25% on sedans, then since 25% is the highest tax imposed on US products then 100% of all items coming into the United States from China will have a tariff of 27.5% immediately imposed on it. This scheme would also apply to any value added tax or border adjustment tax which would disadvantage the United States over other foreign or domestic products. Therefore, I believe the consequence would be so devastating to China they wouldn’t dare put a tax on American products, and likewise, the United States would not want to engage in a trade war just to protect one industry or factory.

Let us say that we just succeeded in creating Free Trade the vague notion of Fair Trade can never be quantified or defined.

For instance, if China is subsidizing its steel industry and shipping Chinese steel into the United States cheaper than the free market can produce it, is that still Fair Trade?

Is it Fair?

It’s still Free Trade because no taxes or tariffs are imposed but is it fair?

Some would argue that it is not fair for China to subsidize their steel industry because that puts the US steel industry at a disadvantage. The US could impose a tariff but as stated that would eliminate free trade. The only other option would be for the United States to subsidize the US steel industry or let it possibly collapse. Sidenote, we only receive 2% of our steel from China, and U.S. Steel production makes up 70% of the steel used in the United States.

Some might see this as unfair; others see this as a plus benefit to the United States.

American economist and Nobel Memorial Prize in Economic Sciences recipient Milton Friedman viewed this as reverse foreign aid. If China wants to tax their citizens to provide US citizens and companies with subsidized steel why not let them. In a Milton Friedman perspective, this might seem unfair to Chinese taxpayers and more than fair to US taxpayers.

Some may argue that US steel production is vital to US national security. Having enough steel is crucial to our national security, but that doesn’t mean that we can’t stockpile Chinese steel. Also, it neglects the fact that other countries like South Korea protect their steel industry by subsidizing steel in their country to prevent monopolization by Chinese firms. The US can also buy from South Korea or even Canada.

Countries may also put strict regulations on how steel is produced in their countries as well as impose those rules on foreign producers. These policies may not have a defined numerical value as a tariff but in a sense act as a protectionist trade barrier. Since there is no quantitative value to these types of regulations, having US laws automatically trigger countermeasures would be impossible.

So can we truly have Free but Fair Trade? As we have seen having Free Trade is possible, but Fair Trade is really in the eye of the beholder. Ultimately, the best interest of the United States and its continued success is by having a free trade policy, maybe something like I have spelled out in this article, as well as, limiting regulations and limiting government interference in the economy.

Nothing can be put in place to be completely fair and balanced, but the most reasonable thing to do for the overall benefit of America and Americans is to maximize laissez-faire economic policies void of politically expedient measures.


Konstantinos Roditis is a candidate for California State Controller. You can learn more about his campaign at cacontroller.com, and you can follow him on Twitter & Facebook.

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Democrats

After ICE raids, Koch Foods has job fair, receives hundreds of applications

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After ICE raids Koch Foods has job fair receives hundreds of applications

The false narrative that illegal immigrants are the only people willing to do certain jobs was quickly debunked this week as Koch Foods held a job fair that garnered them hundreds of applications from people who are legally capable of working in the United States. Though they did not cite it as a reason, it’s clear the job fair was in response to over 200 of their employees apprehended during the ICE raid last week.

But even as they moved to get legal employees on board, they noted the strong economy has made it necessary to proactively seek qualified applicants.

Koch spokesman Jim Gilliand told the Associated Press, “In this environment of relative full employment, most businesses are looking for qualified applicants; Koch is no different.”

The company is requiring two forms of valid IDs for all prospective job seekers and is trying to eliminate loopholes in their E-Verify system.

After ICE Raids, US Citizens Flock To Jobs

The fair raked in 200 applications before noon, according to local media. The company says it will require applicants to present two forms of identification before being hired, according to CNN. MDES will also vet all Mississippi workers for legality using the state’s E-Verify system, according to USA Today.

Democrats like to point to racism as a motivation for deporting properly adjudicated illegal aliens set for removal, but the real racism is in denying American citizens, many of whom are minorities, the opportunity to support their families.

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Economy

AP: Trump’s stance on Hong Kong shows his focus on China trade

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AP Trumps stance on Hong Kong shows his focus on China trade

Editor’s Note: This wire story does not necessarily reflect the opinions of NOQ Report or staff. It’s intended to relay news that is best relayed through the resources of the Associated Press, and while their tendency to editorialize news often taints their content, we are confident our readers can see through the deceptive techniques and garner insight into what’s actually happening in the world.

WASHINGTON (AP) — Rather than speak up strongly for the Hong Kong protesters, President Donald Trump on Thursday suggested the answer to their complaints of Chinese oppression is simply for Beijing’s “great leader,” Xi Jinping, to meet with them and peacefully sort out the unrest that has been decades in the making.

Trump’s comments were a far cry from the tougher stances taken by some fellow Republicans — and his predecessors in office — to stand with pro-democracy protesters during moments of unrest. His words are emblematic of a foreign policy approach that focuses narrowly on a trade deal with China, putting it above promoting American values.

Trump has fixated on the state of trade negotiations and at times has ignored the counsel of some of his most senior advisers to lower the temperature of the trade dispute with Beijing. Amid stock market volatility this week and talk of a looming recession, worries have grown within the West Wing that escalating trade tensions and tariffs could undermine Trump’s best argument for reelection — a strong U.S. economy.

In June, Trump indicated to Chinese President Xi on the sidelines of an international summit in Japan that he would not overtly criticize the Chinese government’s efforts to silence the protests in Hong Kong, according to two administration officials not authorized to speak publicly about private discussions. As the demonstrations ratcheted up this week, Trump stayed mostly quiet, referring to the moment as “the Hong Kong thing.”

As he has in the past, Trump retreated to the role of observer to an international crisis, chiming in on Twitter with reactions to what he saw on cable TV but not injecting the United States into the moment.

National Security Adviser John Bolton and economic and diplomatic aides have urged the White House to back the protesters.

The State Department on Wednesday expressed deep concern about reports of Chinese paramilitary movement near the Hong Kong border and offered a measure of support for the protests, saying they “reflect the sentiment of Hongkongers and their broad and legitimate concerns about the erosion of Hong Kong’s autonomy.”

The top Democrat and Republican on the House Foreign Affairs Committee jointly placed the blame squarely on Beijing and recalled the violent crackdown on Tiananmen Square demonstrators in 1989.

“We are concerned that China would consider again brutally putting down peaceful protests,” said the statement Wednesday by Reps Eliot Engel of New York, the committee chairman, and Michael McCaul of Texas, the ranking Republican. “We urge China to avoid making such a mistake, which would be met with universal condemnation and swift consequences.”

Other Republicans have spoken out, including House Minority Leader Kevin McCarthy, hitting the notes usually associated with a president:

“To the thousands of young people in Hong Kong who are speaking UP for human rights and speaking OUT against the Communist Party of China: we see you waving the American flag, and we hear you singing our national anthem,” McCarthy tweeted this week. “America stands for freedom. America stands with Hong Kong.”

Trump took a more active role Thursday — but in an appeal to Xi, whom he has repeatedly flattered and was careful not to criticize. In a tweet, he urged Xi to meet with the protesters to deliver “a happy and enlightened ending to the Hong Kong problem.”

Meanwhile, the United States and China appear no closer to a trade deal. Despite Trump’s claims to the contrary, the pain of the tariffs is being felt by American consumers and businesses, and forcing companies, when possible, to reconfigure their global supply chains.

And the talk of recession, perhaps arriving just months before Americans decide if Trump will get a second term, is worrying his advisers. They’re concerned that a slowing economy could cause the campaign to shed voters who were willing to give him a pass on some his incendiary policies and rhetoric because the economy has been doing well.

Trump, in an interview Thursday with a New Hampshire radio station ahead of a rally in the state, blamed, as usual, any economic sluggishness on his predecessors and on the Federal Reserve for keeping interest rates too high. But he also defended his approach to handling China and dismissed the recent stock market tumble.

“We had a couple of bad days, but we’re going to have some very good days ’cause we had to take on China,” the president said. “It should have been done by Obama and Bush and everybody else. It should have been done long before I came along. But I’m the one that gets stuck with it and I’m the one that’s going to do it.”

“China, frankly, would love to make a deal,” he continued. “And it’s got to be a deal on proper terms. It’s got to be a deal, frankly, on our terms.”

Trump’s quiet approach on Hong Kong should not be a surprise. He has repeatedly deprioritized human rights in American diplomacy, from talks with North Korea and Saudi Arabia to China. And he has publicly refused to weigh in on the heavy-handed actions of other nations as he espouses a foreign policy more focused on a narrow view of sovereignty and national interest.

The president has repeatedly praised strongmen like leaders in Russia and Turkey for their control over their people and has turned authoritarian tendencies into a punch line.

___

AP Diplomatic writer Matthew Lee contributed to this report.

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Democrats

Democrats hope recession cries will become a self-fulfilling prophecy

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Democrats hope recession cries will become a self-fulfilling prophecy

There’s a little-known secret about the economy that Wall Street knows all too well. Perceptions become reality even when reality runs contrary to perceptions. Fear of a crash prompted by rumors and speculation can cause a crash even if no other outside forces intervene. Valuation fluctuations are as influenced by media reports as they are by P&L statements. A Tweet by a powerful person can send the economy soaring or plummeting, depending on the direction of the Tweet.

Controlling the flow of information and keeping investors as accurately informed as possible has been a staple of our strongest economies for decades. But in today’s news-on-demand world, it doesn’t take much to muddy the waters with false reports and poor analyses, whether intentionally poor or not. In other words, how we feel about the economy has as much effect over it as the key indicators attached to it.

This isn’t just known by Hollywood. Washington DC knows it very well, which is why the push has started to predict a coming recession. It’s easy to find signs of on impending recession at literally any given moment; if you want to find something to latch onto that says the economy is on the verge of slowing or even collapsing, look hard enough and there will be indicators that point in that direction. But it requires a biased disregard of other factors in order to make the case that the economy is looking poorly, especially in today’s fiscal atmosphere in which most signs are pointing to an uptick.

President Trump’s delay of additional Chinese tariffs was not a reaction to the economy. It was a reaction to the current reactions about the economy. Things are wobbly right now because progressive economists, Democratic lawmakers, and leftist journalists have been saying things are wobbly. As a result, the President was forced to delay tariffs, thereby weakening his hand against the Chinese government in negotiations.

Thankfully, China is feeling real pressure. Instead of a political party trying to convince people things are worse than they really are, China has a unified government trying to convince their people things are better than they appear. Now, we’re faced with a race to the prevailing falsehood. Will the left convince the American people the economy is bad before the people of China realize their economy truly is bad?

To the economic layman, this story from CNN reads like a dire warning of an inevitable collapse that’s going to come before the election. They want this out there and will join the chorus of other leftist “warnings” until they can convince enough people to believe it’s going to happen, thereby creating the self-fulfilling prophecy they need for 2020.

Bad economic news raises political risks for Trump

Both China and Germany — the world’s second- and fourth-largest economies — delivered disappointing economic data overnight. Germany, which relies heavily on exports to China and the US, reported a slight contraction in the second quarter, opening up the possibility that it might tip into full-blown recession.

That news came after three central banks last week — in India, New Zealand and Thailand — all aggressively cut rates more than expected over trade fears and growing economic uncertainty.

The US has continued to see positive economic growth and a hot job market, thanks in part to Trump’s 2017 tax cuts, but that’s been largely driven by consumer demand that could be dashed by a slowdown abroad.

Analysts say Trump’s decision to delay some tariffs may have been too little too late — and that he risks losing his most powerful argument for reelection: the economy.

This story is not the standard full-blown fake news we’ve grown accustomed to seeing from CNN. It’s a lie by omission; they highlight the negatives that point to a recession while ignoring the positives that are clearly pointing to continued economic growth. It’s important to them that they plant the seed that interest rate cuts will not have a lasting effect and that tariff delays are not going to act as long-term fixes to Wall Street’s skepticism.

As patriots, we need to keep the people informed. That’s what NOQ Report is all about, and conveying the truth about deceptive tactics progressives are utilizing to harm the economy for political expediency is at the top of our to-do list. But we need help. We need continued donations so we’re able to push these truths out to the masses.

Progressives will continue to beat the drum about an upcoming economic crash until they can make it happen through the influence they have with their propaganda. We must fight these reports knowing we have the truth on our side.

We are currently forming the American Conservative Movement. If you are interested in learning more, we will be sending out information in a few weeks.

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