Driving to War in a Ford Fiesta!

That’s the rationale, according to the Association of Global Automakers, as quoted in Car and Driver! Mr. Trump declares Section 232 tariffs for automobiles.

Thus, the Secretary found that American-owned automotive R&D and manufacturing are vital to national security.  Yet, increases in imports of automobiles and automobile parts, combined with other circumstances, have over the past three decades given foreign-owned producers a competitive advantage over American-owned producers.

So, far I can’t access the report; in fact the Department of Commerce’s Bureau of Industry and Security website has been down for hours.

Imposition of tariffs has been delayed by 180 days. Until then, expect continued uncertainty.

Figure 1: US Trade Policy Uncertainty categorical index (blue), and global economic policy uncertainty index (red). Trump administration shaded light orange. Source: policyuncertainty.com. 

Given the integrated cross-border nature of the automotive industry, an indiscriminate approach to tariffs will lead to chaos and much higher prices.




70 thoughts on “Driving to War in a Ford Fiesta!

  1. dilbert dogbert

    Please don’t use a Ford Fiesta!!! More appropriate would be an early model VW Bug. There were some interesting imports. I can’t remember the make or model but I remember one coming to a stop at a light with the front wheels shaking back in the 60’s.

      1. Moses Herzog

        Was quite a good car when it came out. The lemon of lemons would be the Ford Pinto. If you owned one, don’t ever tell anyone.

        Most VWs are pretty good cars. The only problem ever with most VWs was the engine noise, which can be annoying when you have to listen to it a lot or talk over it a lot. Germans are pretty good engineers overall but that part of the process seems to have miffed them somehow.

      2. dilbert dogbert

        College friends in the mid 1950’s had one. It ended up on its top when rounding a curve on a rough road. They were prone to have the rear axle tuck under and flip the car. I think the Corvair had the same problem. The most annoying problem with the Corvair was fan drive belt that was over stressed and prone to break. No fan the engine overheated.

        1. 2slugbaits

          The Corvair was prone to oversteer because of the rear engine, so the solution was to underinflate the front tires. The owner’s manual called for only 11 pounds of pressure in the front tires and 32 pounds in the rear. Most people and a lot of mechanics just assumed you needed 32 pounds all around.

          Yes, the fan belts were a problem, but they were easy to replace. Tuning the engine was tricky because it had two single barrel carbs…one on each side of the engine, and you had to use a vacuum gauge to balance the carbs. The rear engine did allow the rear passengers to have their own heat vents, which was handy for those of us who lived in the cold Chicago area.

      3. ilsm

        One spring night about 6 of us carried Stanley’s beetle up 6 steps on to the porch of the frat house, maybe 1970. I had a beetle and 2 vans over my misspent youth. I changed engines in one and adjusted clutch in another.

        I cannot see how imports are associated with the acquisition messes the Army executes buying tactical vehicles.

  2. Moses Herzog

    donald trump makes the big macho announcement of tariffs on Thursday, gets all his macho headlines on Thursday, then “pulls out” with delays on Friday. Gee, this doesn’t seem trumpian at all. And by the way Orange Excrement cannot wait until the Mueller Report comes out—he’s in a big hurry to see that.

    Meanwhile, Mitch McConnell keeps rubber stamping all of trump’s personal defense lawyers to the I.R.S. after getting personal phone calls from donald trump. Does anyone know if any of Mitch McConnell’s “children” actually have any of his DNA?? Because it’s hard for me to believe that Mitch even has a D___

  3. pgl

    Now that’s a title!

    ‘Automaker Groups Fight Trump Tariffs: “America Does Not Go to War in a Ford Fiesta” The duties are going to cost consumers more and limit their car and truck choices, industry groups say.’

    Note the pleas for exceptions. I bet some will be granted in exchange for dirt on Biden.

    2. The report found that automotive research and development (R&D) is critical to national security. The rapid application of commercial breakthroughs in automobile technology is necessary for the United States to retain competitive military advantage and meet new defense requirements. Important innovations are occurring in the areas of engine and powertrain technology, electrification, lightweighting, advanced connectivity, and autonomous driving. The United States defense industrial base depends on the American-owned automotive sector for the development of technologies that are essential to maintaining our military superiority.
    3. Thus, the Secretary found that American-owned automotive R&D and manufacturing are vital to national security. Yet, increases in imports of automobiles and automobile parts, combined with other circumstances, have over the past three decades given foreign-owned producers a competitive advantage over American-owned producers.”

    Ahem! The reason why companies like Toyota gained market share over GM and Ford was that their R&D was more successful than our R&D. In fact Ford started copying Toyota’a lean production approach. Maybe they should go to war in a Camry!

  4. pgl

    “Trump received a warm welcome from the National Association of Realtors at the trade organization’s Legislative Meetings and Trade Expo in Washington, D.C., where he spoke for more than an hour.”


    I wonder how many of these real estate agents wanted to shout out “you lie” at this:

    “he spent much of his time at the podium touting the strong economy, specifically high employment rates.
    “Many of those people are going to go out and buy houses, right Tracy?” Trump said, gesturing to Tracy Kasper, NAR’s vice president of advocacy.”

    Let’s check the data on Real Private Residential Fixed Investment, which is key for this crowd:


    Trump wants them to believe this is the strongest economy ever. So is residential investment in real terms above $900 billion per year? Oh no – it fell below $600 billion a year. So by this measure – Trump lied. Oh wait – that is what he always does so all is good!

  5. Paul Mathis

    Poor Trump is so confused:

    The Honda Odyssey minivan is built in Lincoln, Ala., with 75 percent domestic parts. Compared to Buick, which is considered to be American, the Buick Envision crossover is manufactured in China with only 2 percent domestic parts. In fact, 40% of the top 10 vehicles with domestic content are made by Honda. The best selling vehicle in America, the Ford F-150 pickup truck, is behind all the Hondas in American content.

    1. pgl

      Good point. I wonder if Trump knows that GM has overseas production facilities in places like South Korea.

      Of course Caterpillar and John Deere produces a lot of their equipment overseas. As I noted yesterday John Deere-US production is down while John Deere-Brazil is up. Something to do with that soybean issue Menzie has been noting!

  6. Moses Herzog

    Interesting how NYT chooses their editorials sometimes. Not only is Jill Filipovich horrible at coming up with original opinion titles (does she consult with her colleagues to ask what they used in the last 2 weeks??). She apparently prefers seeing an anti-abortion president re-elected. I guess Debbie Wasserman Schultz is busy this year, did they want to make Filipovich head of the DNC?? Seems like Filipovich has the characteristics they go for. “If I can’t get MY loser, then I prefer to suffer with laws I hate”. Filipovich has the HIllary “I’m With Me” political masterstroke concept programmed quite well.



    I could copy/paste, at minimum, another 5 NYT editorials links with nearly the same titles written before Filipovich wrote hers., but I feel it’s boring showing you opinion writers who apparently never had an original thought in their entire life. But apparently Filipovich is content with a man scraping Roe v Wade off the law books if she can’t have her way. Filipovich doesn’t like how the broad American electorate play, so she’s taking all her Barbie dolls back home with her. Nyaaa!!!! Nyaaa!!!!

  7. Bruce Hall

    If non-military applications were the only concern, then “national security” would not be an issue. Buy Mahindra; drive Mahindra.

    But… automotive and other technology does spill over to military applications and development:

    It’s not that the U.S. needs a Ford Fiesta. In fact, the car-buying public doesn’t need a Ford Fiesta which is no longer being manufactured in the U.S. https://www.motor1.com/news/240487/ford-plan-axe-focus-fiesta-taurus/

    Rather, it needs the manufacturing capability of U.S. companies for reliable, secure access to military products and components. While the military does much of its own research and development for its vehicles, it does not have the capability to manufacture them. That’s not to say that Ford, GM, and Chrysler are primary for the manufacturing of all military vehicle. Many military vehicles share some commonality with specialty heavy/construction vehicle such as those manufactured by Oshkosh and AM General. However, the “Big Three” do basic research that dovetails with military R&D. https://www.army-technology.com/features/featureinnovation-drive-how-new-engine-technology-is-transforming-military-vehicles-4346630/

    So, I rate this post as three Pinnochios.

      1. Moses Herzog

        Menzie?? Are you implying that Grandpa Wilbur is not a master of military provisions and accoutrements??

        Menzie, next you’ll be saying Reagan had backbreaking sized deficits. We will not let you continue on with this heretical behavior during the MAGA regime. Take it back right now or I’ll force you to be White House Chief of Staff. Mulvaney looks haggard lately. Don’t call my bluff!!!!

      2. Bruce Hall

        Menzie, I expected trivial responses from some, but not you. Plus, I haven’t read any proposals to “nationalize” companies.

        1. Menzie Chinn Post author

          Bruce Hall: Look, if Trump were serious about the national security implications, as opposed to heeding Navarro’s cover story of national security, he would’ve sanctioned ZTE to the wazoo way back when (instead of relenting when Trump Org got a multi-million $ loan from the Chinese), etc. I have no particular complaints on Huawei sanctions.

          If we are afraid of some sensitive being produced overseas by unfriendlies (of which I include Russia, China — not Germany, Canada), then perhaps we should entertain the idea of directly producing them within strict government control, i.e., nationalizing. This might be much more secure and cost effective that supporting by protection. If we are protecting steel because we worry we can’t get high quality steel from Canada and Britain, well I think that is just plain stupid.

        2. Menzie Chinn Post author

          Bruce Hall: Gotta ask as well — if it’s national security, why is it not just imports but US-produced under foreign nameplates that are restricted? No German, no Japanese, … und auch keine Juden?

          1. Moses Herzog

            @ Menzie
            Menzie, I’m starting to think there’s something in white people’s genes which affects cognitive processes in the brain, that whenever you (the “individual/singular you” here) type the letters Z-T-E in a consecutive sequence all they can see is a big blank spot on the blog. There has to be some kind of name for this medical malady. Let me know if anything hits you on that postulation.

          2. Bruce Hall

            Menzie, you seem to view China as a trading “partner” and in many respects they qualify as that. My bias, (yes, I’m admitting a bias here), is that their status is an economic as well as political adversary (not enemy, but maybe later).

            There are some legitimate national security concerns for sourcing sensitive electronic, metallurgic, and operating components from China that are not the case with present day Japan and China. As for “Juden”, we have a pretty good relationship with Israel despite some political and intelligence sniping from both sides. The U.S. has benefitted from Israeli technology and vice versa. So, I’m not sure what your point is about Jews.


            However, you are welcome to equip your car (a Ford Fiesta?) with Chinese-made tires, but I don’t expect to see them on U.S. military vehicles and I don’t really recommend them for you.

          1. pgl

            “There are some legitimate national security concerns for sourcing sensitive electronic, metallurgic, and operating components from China that are not the case with present day Japan and China.”

            I guess Bruce Hall does not know the difference between cars and “sensitive” electronics. FYI Bruce – we do not import cars from China and cars were the topic. Yea a car does rely on things like spark plugs but I seriously doubt they can use spark plug technology to undermine our national security.

            And here we once again have another edition of Bruce Hall’s forte – writing a bunch of irrelevant gibberish followed by his usual whining when we mock his irrelevant gibberish.

    1. pgl

      “A Pentagon-led review ordered by President Donald Trump has identified hundreds of instances where the U.S. military depends on foreign countries, especially China, for critical materials, U.S. officials said.”

      So your point is that the US army, US navy, US air force, and our marines are all traitors we presume. The Deep State!

      Hey Bruce – way to provide extreme comic relief!

      1. Bruce Hall

        Moses really??? And I was just beginning to think that you made some good points occasionally.

    2. noneconomist

      Probably about equal to political importance. Given the impact of the tariffs in Midwest farm states, putting the brakes on these tariffs makes more than some political sense.
      A look at the states where foreign companies have staked out considerable economic and political influence include: ( Toyota) Indiana, Kentucky , Texas, Mississippi. ( Honda) Ohio, Alabama, Indiana. ( Subaru) Indiana.( Hyundai) Alabama( VW) Alabama. (BMW) South Carolina. (Daimler) South Carolina.
      Hard to imagine Trump losing any of these states, but not hard to imagine congressional losses in particular districts, given election results in some Southern and Midwestern states in 2018. Combine the effects of auto and other tariffs, and it’s easy to see mounting concerns from Trump’s advisers, if not from the big supposed dealmaker himself.

      1. CoRev

        Menzie, I didn’t need to read more than a paragraph to find this: “… a move that benefited a Chinese government-backed manufacturer with a plant in his district, according to multiple people familiar with the matter.” Only a Dem would knock a representative for protecting his constituents.

        1. Menzie Chinn Post author

          CoRev: I’m going to bookmark this comment by you, where you defend a congressman for selling out his country in order to save a few jobs in his district. Thanks for confirming my impression about your inclinations.

          1. noneconomist

            “My Kevin” McCarthy, so concerned about his constituents?
            He really doesn’t have to be since he’s in a safe red district in the southern SJ Valley. It’s one of the richest agricultural areas in the country, as the Chinese have noticed.
            They’ve upped the tariff ante on numerous district exports, most notably tree fruits, specifically almonds and pistachios. Numerous California MC have asked Trump to consider help to these growers, much as he’s offered bailouts for farmers in the Midwest.
            Not surprisingly, McCarthy is not among those MC seeking help. Nor was he one of those MC last year who warned the administration about negative effects if the tariffs remained for an extended period.
            In Kern County, McCarthy’s home, about 25% of all jobs are connected to agriculture. Not surprisingly either, McCarthy and the MC dimwit next door are all in on wall building. At the same time, the number of undocumented workers in their districts–who are absolutely necessary to maintain profit and production–are likely in the six figures. It’s more low comedy with serious consequences.
            But that’s “MyKevin” at his very best. Or worst. Barring some incredible turn of events (he weathered an adultery scandal–one that sent his congressional partner back home to North Carolina) he’ll be around for some time to come, seriously concerned about Chinese influences on national security. Unless, of course, he can profit or such connections aid in his re-election.

  8. 2slugbaits

    Bruce Hall Several points:
    (1) Your link to the article on military engines refers to BAE. FWIW, BAE is a British owned multi-national. Also, TARDEC does not do the kind of engineering that you have in mind. TARDEC primarily reviews tech data produced by defense contractors, approves deviations & waivers and assembles tech data for procurement solicitations. I believe you’re familiar with the Detroit area, so TARDEC is in Warren, MI just off Van Dyke Blvd. I can’t tell you how many times I’ve been there. It’s near where the old Detroit Arsenal tank plant used to be years ago.

    (2) The discussion seems to bounce back and forth between critical raw materials, and sometimes components, and at other times it’s about R&D. These are three different issues. Regarding raw materials, the obvious solution is to establish strategic reserves if the source is an unfriendly or unreliable supplier. I don’t think Canada is either of those. And I don’t think Israel is an unreliable supplier of germanium, which is a critical rare earth metal used in target acquisition and fire control components. And I don’t think Fabrique Nationale (a Belgian company) is an unreliable source for exotic steels used in armaments. But you could make a good case for maintaining a strategic reserve for some raw materials from China and Russia. As to components, keep in mind that the US government does not usually own the rights to the tech data for most advanced systems. As a practical matter a defense contractor can be just as unfriendly as China or Russia. Don’t believe those patriotic Boeing ads you see on the Sunday morning talk shows. Their first loyalty is to their shareholders. That’s just a fact of life. So if you’re really worried about national security, then you’d want to nationalize those industries and/or compel defense contractors to sell proprietary tech data at a price that wouldn’t make Al Capone blush. Make no mistake about it, those big defense contractors play hardball. They also make a habit of just skirting the edges of the law when it comes to courting government project managers. This is a huge problem. Finally, some of the best basic R&D comes from universities. Companies are good at applying R&D to solve problems, but not especially good at basic R&D.

    (3) There are essentially four Army arsenals: Edgewood, MD (chemical weapons), Pine Bluff, AR (chemical defense equipment), Rock Island, IL (armaments), and Watervliet, NY (gun tubes). Most of them have massive excess capacity but cannot effectively use it because of some crazy G8 accounting rules and pressure from Congress. Warm-basing those arsenals is extremely expensive and more and more of that excess capacity gets mothballed with each BRAC cycle. Another problem is the somewhat artificial distinction between arsenals (which manufacture things) and depots (which overhaul, repair and upgrade things). Within DoD the political infighting over the organic industrial base is about as maddening as it can be.

    (4) We need to think of companies as though they were separate countries. For example, BAE is a British company, but they do business with many countries. Airbus is the prime contractor for the Army’s UH-72A helicopter. Fabrique Nationale is the prime contractor for many of the Army’s machine guns. The German company Henschel Wehrtechnik is the prime for the M93 Fox series chem/bio/nuke recon vehicle. Does the US government have any more control over so called “American companies” like General Dynamics or Raytheon or Boeing then they do those so called “foreign owned” companies? I’m gonna say no. For all practical purposes all of those companies only fly their own corporate flag. This isn’t the 1940s when American companies only responded to American security aims.

    (5) Most modern weapon systems actually use components from many different companies…many of which are foreign owned. One good thing that comes from this is that there ends up being a lot of interoperability across our NATO allies. Interoperability is an important military consideration that often gets overlooked in these discussions.

    (6) Finally, the aggregate supply curve is not infinitely elastic. If you want the US to become more self-sufficient with regard to defense, then you’ll have to accept greater foreign reliance for non-defense stuff. You can’t increase domestic production of defense without also having to reduce the domestic production of oil, agriculture, finance, consumer R&D, education, etc. You’ll also have to accept much higher taxes.

    1. dilbert dogbert

      Thanks for the reminder of the tank plant. I viewed a cold weather test on an M113 there in the 60’s. My first trip east of the Sierras and first flight in a jet. The test was a dud. No need to do the test. Lead acid batteries don’t have any juice at -20degs. Afterwards I was the design engineer adding a diesel heater winterization package to keep engine and battery warm.
      I talked to our company rep and he told me about the experience of a Detroit winter. He got the sads and it did not lift until the sun came out.

    2. CoRev

      2slugs points out the obvious. NAT/otherwise allies are sources for some of our military equipment. Above we see China listed as an ADVERSARY. Does anyone see the difference of relying on an ally or an adversary?

      1. 2slugbaits

        CoRev You might have missed it, but Menzie’s post was about the supposed threat from our allies, which was the basis for Trump’s Section 232 tariffs. Judging by your comment it sounds like you agree that Trump’s rationale for tariffs on automobile imports from our allies is misplaced.

        1. pgl

          In Trump world, Canada becomes the enemy and China becomes his ally. Western Europe is Trump’s enemy but Putin’s Russia is Trump’s #1 ally. Treason? Perhaps but RTDS types like CoRev will fall in line.

        2. CoRev

          2slugs still misses the obvious. “…rationale for tariffs on automobile imports from our allies is misplaced.” Automobiles are not often key “… military equipment.” Ford Fiestas not withstanding in Menzie’s mind. BTW, Ford Fiestas are manufactured in Brazil, Mexico, China, India and South Africa.

          I dunno, can you remember which of these are economic allies and which are adversaries?

          1. 2slugbaits

            CoRev Once again you’re pulling a CoRev and wandering all over the barn lot. Trump is the one who seemed to believe that automobile imports from Canada and Mexico represented a national security threat. You’re arguing with Trump, not Menzie. That was his rationale for invoking Section 232. What part of that do you not understand? As to Ford Fiestas, my understanding is that Ford Fiestas built in China are intended for the Chinese market, not the US market. BTW, if you want a more nuanced and complicated case, let me suggest learning something about MRAPs. In order to meet the immediate need we had to import them from various foreign sources:
            Incidentally, driving and riding in the Canadian and South African MRAPs is quite an adventure. You have to take an “egress” training class before riding or driving one because the things are designed to flip over. And they do flip over. A lot. You don’t sit down in them, you’re suspended by a harness. And when you go across a river or stream you just hope you can get out of the harness before he water fills the cabin. Not for the faint of heart.

          2. CoRev

            2slugs, now wandering at all. I am pointing out SPECIFIC poor points by actually quoting. Who? Why you of course. Riding in a MRAP is an adventure, but taking a HumVee in the same environment is beyond dangerous.

          3. CoRev

            2slugs, now wandering at all. I am pointing out SPECIFIC poor points by actually quoting. Who? Why you of course. Riding in a MRAP is an adventure, but taking a HumVee in the same environment is beyond dangerous.

            BTW, you didn’t even notice your confirmation of the point supply from and ally.

  9. Moses Herzog

    If you can get past the NYT paywall, this will tell you why China’s quoted growth rate and GDP numbers have been a running joke for quite awhile now. 80% empty office space in “prime” location area of Tianjin city is probably not a good thing. I can’t tell you what that equates to in either soybean volume or soybean weight, but I can tell you it’s a bad thing. I can also tell you an “official” count of $4.5 trillion in municipal government debt is a bad thing and/or that $10 trillion in “unofficial” estimates of municipal government debt is a bad thing.

    The good news is, if you travel to Beijing (I was at the airport there for maybe two hours once) they will let you breathe in all the air you want there for FREE, even if your white T-shirt is a different color at the end of an afternoon stroll there. Say hi to the kids for me, will yeh?? If you see any “mother-in-law from hell” types from the Chaoyang area there on holiday, tell them I said “Go…….. ” Aaaaaaaaaaahh!!! Nevermind!!!!

  10. Bruce Hall

    2slug, you made some good observations. A few thoughts on those:

    Points 1 & 2 – I presume you are referring to the National Interest link on the U.S. need to foreign source. I don’t have a problem with sourcing materials and technology from trusted allies. I do have a problem with sourcing such from adversaries. The U.S. is both a supplier and a customer to those allies.
    Point 3 – I’ll take your word for that; however, the military does “mothball” (a separate issue) extensively for strategic reasons.
    Points 4 & 5 – same vein as points 1 & 2
    Point 6 – while the supply curve may not be “infinite”, there is amply room for expansion given the right incentives, policies, and regulations. I don’t propose shutting off imports of consumer goods, but I think an examination of the sources is in order. If Germany or India started stealing IP from the U.S. and undermining our industries, I would have serious issues with those countries, too.

    1. pgl

      So if the Chinese come up with some incredible break through technology or an incredible cure for AIDS, we should avoid it just because it was designed in China. I guess we would never be guilty of “stealing” IP or even licensing it. Hey – why not just go back to the stone ages since a lot of technology comes from Germany and Japan and they were our mortal enemies in the 1940’s. And given Trump’s insane foreign policy – we may be enemies with all of Western Europe and East Asia in a couple of years!

        1. pgl

          I have done some consulting work for Israeli multinationals who are great at R&D. But once again – you have diverged horribly from the topic at hand. Not sure why you always do this. Do you have ADD?

        2. pgl

          Bruce Hall brings up some 2016 story on treatments for HIV. Why is he always a couple of years behind as he suggests the rest of us are clueless? Something from the summer of 2018:


          ‘A Phase I/IIa trial found that an Israeli biotech’s drug reduces a patient’s HIV levels by up to 99%, and might one day be a cure for the infection. The trial, run by Zion Medical, found that the synthetic peptide drug reduced the level of viral RNA in patients’ blood by up to 90% after five weeks. In combination with the approved HIV drugs lopinavir and ritonavir, it reduced viral RNA levels by up to 99% after five weeks. Not only did the drug reportedly lack side-effects, but it also increased the amount of T cells in the patients, a sign of a healthy immune system.’

          Hey Bruce – make a play on Gilead Sciences as I suspect they may purchase Zion Medical. And yea – I have done some consulting for them too but not in a while so this is not insider information.

          You can thank me if you make a stock market killing. Glad to help the otherwise incompetents like you!

        3. pgl

          Something else the research impaired Bruce Hall does not know!


          “Developed by Hebrew University, Gammora demonstrated groundbreaking results—killing HIV infected cells without harming healthy ones. Developed at the Hebrew University of Jerusalem by professor Abraham Loyter, the company received a substantial investment in 2017 by China-based Shenzen International Institute of Biological Research in late 2017. In a statement then Zion Medical reported an approximate $440 million valuation.”

          $440 million sounds cheap for what may become a path breaking cure for AIDS. But Zion Medical is barely at phase II so there is a lot of future R&D expenses and a low probability of ultimate success. But Bruce’s alleged point is that the Chinese are not involved in this? Shenzen International Institute of Biological Research made a substantial investment in this research!

          Bruce Hall – the most clueless troll ever!

          1. Bruce Hall

            pgl, the Chinese are making investments everywhere and very smart about them. China buys into a lot of strategic plays around the world and are quite adept at leveraging them. However, the actual innovation in this case and most others was not done by your sponsors, the Chinese government.

            You are correct that the trials are basically just entering Phase 2 and I’m glad you were able to research this without my help. I found this shortly after my first comment and the 2016 link, but didn’t think it was necessary to make the point, but I guess it is (https://www.pharma-iq.com/clinical/articles/gammora-shows-999-elimination-of-hiv-virus-in-first-clinical-trial), but that’s pretty much beside the point which was… drum roll… we do not have to be dependent on China for our needs.

            So, it appears that you are playing the troll for China.

          2. Menzie Chinn Post author

            Bruce Hall: We don’t have to rely on China. But the idea of …comparative advantage…is that it is more efficient to release some resources from high cost sectors to use in low cost sectors. Everything (from toothpaste to epaulets) can be termed “essential” — but are they really? Especially if we can get the toothpaste (or Chobham armour) from the UK instead of domestically producing.

          3. 2slugbaits

            Bruce Hall we do not have to be dependent on China for our needs.

            I see where Menzie addressed this in referencing “comparative advantage.” Please note that “comparative advantage” is often confused with “absolute advantage”, so be sensitive to the difference.

            If you’re really worried about China as a strategic threat, then you should want to revoke the Trump tax cuts. Who do you think has been funding our deficits, although recently China has cooled on US Treasuries? And our overall trade deficit isn’t because of bad trade deals or “unfair” competition; it’s from our fiscal deficits. The point is that taking China as a serious strategic threat requires more than wearing a MAGA hat and reciting slogans at campaign rallies. It means real sacrifices in terms of economic welfare, and I don’t see or hear anything from Trump supporters that tells me they are willing to make those kinds of sacrifices.

            As to patents, you might want to take a look at this:

  11. Dwight L. Cramer

    Oddest endorsement for a vehicle I ever read was on a camping discussion forum, in a thread about rough road/off road vehicles, and one guy bragging on Toyota, wrote in saying, if a Toyota 4Runner was rugged enough for the Taliban to go to war in, it was rugged enough for him to go camping in.

    A more serious point would be that a problematic Achilles heel has developed in the technologies of the overall American Defense posture as a result of the reversal of the flow of R&D benefits, between civilian and military sectors. In the mid to late 20th century, the flow went from an advanced defense/government sector to a recipient civilian sector (think DARPA, trivially remember Tang, the breakfast drink of NASA). That flow was aberrational–historically economic ( industrial production and before that agricultural surplus) strength was the basis for military might. But that aberrational experience is the basis for the current American regulatory framework. And that aberrational direction was the learned experience of the (now elderly) generation around Trump. Nobody is going to teach those old dogs new tricks.

    1. Barkley Rosser

      Ah, but CoRev has been charging many of us of having not done so in his RTDS frenzy.

        1. pgl

          Of course you need to live rent free given your have zero employable skills! Of course your mind was lost years ago!

          1. CoRev

            Pgl’s losing it. I knew he couldn’t resit responding to my posts, even though it was one of my fondest hopes. 😉

          2. pgl

            “I knew he couldn’t resit responding to my posts”???? Glad to amuse our lonely little Russian bot but please learn to spell. Resit? Lord!

        2. Barkley Rosser

          For the record, CoRev, I have read a large chunk of the Mueller Report, but not the entire thing.

          OTOH, from your comments on it you seem to have read only AG Barr’s four page summary of it and then been listening to Trump, Barr, Hannity, and the rest chant “no collusion! no obstruction!” This is the very essence of RTDS, and you are indeed a prime example of it.

          1. CoRev

            D/RTDS wow! Your Discrimination is everywhere or every thing. Discrimination:

            the unjust or prejudicial treatment of different categories of people or things, especially on the grounds of race, age, or sex.” and political affiliation.

            We hear it is very prevalent on today’s campuses.

          2. Barkley Rosser


            “D/RTDS”? This is your concoction to try to get away from being guilty of RTDS? Pathetic.

            Hey, I could add some irrelevant weird and insulting word with its letter in front of the D, and this could go on, but, sorry, I am not going to play. And it is your RTDS gang that is involved in discrimination far more than those you are criticizing. Sorry, but deal with it.

  12. pgl

    “Bruce Hall
    May 20, 2019 at 7:06 pm
    pgl, the Chinese are making investments everywhere and very smart about them. China buys into a lot of strategic plays around the world and are quite adept at leveraging them. However, the actual innovation in this case and most others was not done by your sponsors, the Chinese government.”

    Your usual lame whining ala Bruce Hall. #1 – I do no work for the Chinese government. #2 – funding is vital to biopharma research. If Bruce Hall does not get this – he is even more clueless than I give him credit for.

  13. baffling

    from the ft today:
    “A tenth of US farm operators have received more than half the money from a federal bailout designed to offset the costs of the Trump administration’s trade battles, data show.

    Some use legal loopholes to collect multiples of a $125,000 cap on payments. 

    The government had doled out $8.5bn ahead of last Friday’s application deadline for farmers, the US department of agriculture said. The White House launched the Market Facilitation Program in September after China, Mexico and other countries fought back against US tariffs by raising duties on American farm goods, depressing their price. 

    The payments reflect the farm sector’s political clout in Washington. No other US industry has received direct payments to relieve losses caused by tariffs. ”

    who thinks those trump voting farmers are even aware of this crony socialism?

  14. CoRev

    For heavens sake baffled, please remember recent history and some of your own predilections. The Ethanol, SOLAR and WIND industries are largely supported by Government subsidies. This article lists anther set of industries/companies received or recently received them: https://www.mic.com/articles/85101/10-corporations-receiving-massive-public-subsidies-from-taxpayers

    Subsidies are given to entities and products the Government want to promote or the level the economic playing field(s). They are not just for farmers, even though Farmers are one of the groups needing them the longest, and not just for tariffs but other foreign governments’ support of their own.

      1. CoRev

        Menzie, please do not ever have had a Government Grant, taught a student with a a student loan, or taught a vet. If so thee is also you. (In all its senses.) 😉

    1. baffling

      solar and wind are competing without much subsidies these days. coal, and especially oil, receive far greater subsidy support through military and environmental waivers than either wind or solar. which is why we are accelerating in our transition to renewables. that just burns the bejesus out of you, doesn’t it corev. coal and oil are actually disappearing in favor of green renewables, and it is occurring due to economics!

      but apparently it is bad to subsidize renewables so that we can avoid trillion dollar wars and unreliable oil sources in enemy territory? really corev, do you even read the garbage you write or is it simply random flow of words? but in corev’s warped mind, socializing farms is acceptable as long as it generates more trump voters. we call that buying the vote. however, my greater interest in the article is not necessarily that trump wants to socialize farming and buy the vote. my interest is that apparently most of that “subsidy” is going to a handful of large corporate farms. those trump farmers are still waiting for their handout, and will continue to wait for a handout that trump does not intend to deliver, but they seem to still be voting for team trump. that is the really fascinating thing in this human drama. as trump continues to stab them in the back, they double down on him even more! and corev’s propaganda on the subject will simply encourage more of them to fall into bankruptcy. nice.

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