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Monday, June 03, 2019

Small business is cool with tariffs


The news media's attack on President Donald John Trump's tariffs center on how it will hurt high-tech companies, soybean farmers, and the price of avocado toast. The media carries water for Wall Street.

But on the Main Street side of the economy, no one is panicking.

Gene Marks is the founder of the Marks Group, a small-business consulting firm. He wrote a column for The Hill.

In it, he wrote, "The reality is that most small businesses in this country simply aren’t affected by the China tariffs. Don't believe me? Then look at this survey conducted by Bank of America this past month of more than 1,500 small-business owners.

"Fifty-nine percent of those respondents said they 'don’t see any impact.' That data was backed up by the recent polling of 1,700 small-business owners from brokerage site BizBuySell. In that study, 57 percent of small-business owners said they weren’t affected by the China tariffs."

But more than 40% will be affected. They will have to adjust, finding new suppliers and new customers.

Unlike the media, Marks is not looking at businessmen as innocent bystanders.

He wrote, "farmers expected China to keep buying from them even though Donald Trump has been warning for years what he'll do if and when he becomes president.

"I feel bad for these guys because, through their own miscalculations, they are indeed suffering. Ultimately, business Darwinism will prevail. The dopiest ones will disappear and go back to their corporate jobs.The smart ones will survive, learn and grow. And they'll ultimately benefit from this experience. Why?

"Because if President Trump gets his way, I can stop hearing what I've been hearing from most of my small and medium-sized clients for the past three decades: that doing business with China has been patently unfair."

***

We have been in a trade war with Red China for nearly 30 years. To date, the big winners were Red China and American farmers.

The big losers were factory workers and the American military. The former lost their jobs. The latter lost a technological advantage that spares American lives in battle.

Josh Kraushaar of the National Journal pointed out that Republican senators worry that farmers will turn on them.

He wrote, "Farmers have had over a year to see what the president’s next move is, and they’re growing antsy. Many were willing to accept tariffs as a bargaining tool, but they expected results to come from the leverage. Even if a small number of that loyal GOP constituency defects from Trump, it will cause problems for Republicans. Combine that disillusionment with the growing anger from the reliably Republican business community, and Senate Majority Leader Mitch McConnell has a looming crisis on his hands."

Farmers get relief if tariffs hurt them. And the business community is split between the Chamber of Commerce, which likes Red China, and small businesses that in general don't.

Marks in The Hill outlined what President Trump hopes to achieve with Red China:

  • a more-level playing field;
  • greater opportunities for small manufacturers to make stuff for the American market;
  • more access to China’s numerous consumers;
  • less illegal dumping of Chinese products that kill American suppliers;
  • a crackdown on the bribes, graft and corruption that has always plagued U.S. business dealings with China; 
  • a reduction of cyber-espionage that steals our data and intellectual property; and
  • no more joint venture "partners" that are required when one wants to do business in or with China.

That makes the sacrifice worth it.

13 comments:

  1. To hear the media tell it, all the farmers affected by the tariffs are small family farms of 160 acres. No mention of corporate agribusinesses that dominate modern farming.

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  2. We have been sold out as a nation. This is not new and has been happening since the 1950s. However, it became a big thing with HW Bush and a really big thing with Clinton and NAFTA.

    The result is a hollowing out of America to the point that a friggin' $1000 new phone mortgaged on a multiyear phone plan might be a few hundred dollars more expensive made here and that is just a wild guess because the parts alone are pennies in comparison.

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  3. Current tariffs have not caused a spike in inflation. We adjust. Media and experts are wrong again.

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  4. Have NEVER heard anyone say during this temporary trade spat that..Farmers will plant different crops next year.... Wheat, corn, etc. whatever has a good market, esp given a bunch of the Midwest is under 20' of floodwater. Grow something else, pocket some tariff $ till you figure it out next year...

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  5. The grain markets are coming up. China is less of a factor than you are led to believe. We had a huge crop last year. Planting is delayed and prices are coming up nicely. I think we will see $5 corn on the CBOT. Some farmers paid FAR too much for land and I don't feel sorry for them if they are pinched a little. $8 corn could not continue and any one that thought it would is a fool if they based buying land on thinking it would continue.

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  6. Does the queen know Melania doesn't get paid by the hour? Do the people of Great Britain recognize her with her clothes on?

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  7. So China is buying soybeans from someone else? That means that whoever was buying soybeans from China's new source will need soybeans. Find them and make a deal. And as others point out, due to Midwest flooding, the price of many crops and meats will be going up.

    China has a billion plus mouths to feed so their maneuvering room here is limited. And I don't think the current generation of Chinese is just going to lay down and starve by the millions so their leaders can play games and save face.

    Cromert

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  8. Thus far Trump's tariffs have been too low. They need to be higher before American manufacturing can replace Chinese imports. Tariffs that are too low to bring back our jobs are simply a tax on consumption, not an effective means to bring back American jobs.
    The annual $500 Billion trade deficit with China has not only caused the outsourcing of American jobs, but has also greatly enriched and empowered China-- at America's expense. And China knows this full well. Anyone who thinks massive trade deficits are not a problem should ask China about it. China would laugh at the idea of a trade deal involving them having to suffer an annual $500 Billion trade deficit with the U.S.
    Trump must keep increasing tariffs until the trade deficit is erased.

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  9. "That makes the sacrifice worth it."
    Oh so NOW its a sacrifice! And I thought it was all voluntary according to the Trump worshiper.

    Soy boy shows his true colors: he loves an imperial president raising taxes he'll justify it by any means necessary.

    So get ready for sacrifice Americans! You deserve it.

    ReplyDelete
    Replies
    1. Yeah, Trump is sooo imperial he has gotten rid of regulations that would have made a small pond on your property subject to federal regs.

      Yep, he is sooo imperial that he jettisoned the Iranian deal and got us out of Chinese sneak around in the Asian trade deal.

      It would be nice if you and the other bots were actually factual or had a smidgen of truth.

      Delete
    2. Another thing, if the wicked witch had gotten elected I bet gas would be quite a bit over $3. $2.59 here and I look for another drop pretty soon.

      Delete
    3. Were you unaware that "sacrifice" can be voluntary too? At one time they taught that as part of civics.

      Delete