Trade war
Trade war
NWO media and politicians are constantly trying to deceive you. Their new deception is that trade war is bad. A TRADE WAR that moves TOO FAST is BAD. NWO media and politicians paraphrase and alter the meaning of phrases. Somethings are better done fast while other slowly. A trade war should be avoided but it is something that should be done SLOWLY, if it happens.
A government in a country with trade deficit does not only have the RIGHT but an OBLIGATION to the citizens to bring deficit down. The first step would be to discuss it with the countries it has large deficits. Obviously, these countries do not want to decrease their trade surplus and they will not respond positively initially. So the country with deficit must use protectionist tools, tariffs, subsidies or quotas.
The countries with surpluses should accept that as a justifiable measure to decrease deficit and make trade fair. They should avoid a trade war. Nevertheless, they could retaliate and that is when a trade war may start. Still a trade war may not be that bad, if it moves slow and does not invlolve many countries. We will use USA as an example and three tables in Appendix 22 to explain that.
In Table A, countries that have the highest surpluses with USA are shown. EU and ASEAN are included. EU is not a country but a failed experiment. But tariffs have to be the same in all EU countries. Column 1 shows exports from USA to the country. In Column 2 are the imports. Column 3 has total trade, the sum of imports and exports. Column 4 is USA's deficit, exports minus imports. The numbers are in billions of dollars and the ranking is according to deficit.
In Table B, Column 1 is GDP in nominal values. We must remind that this is affected by price level. Purchasing power parity values are more suitable in most instances but trade is done in nominal values. Column 2 shows what percentage of its GDP a country imports from USA and column 3 the percentage of GDP the country exports to USA. Column 4 shows their surplus with USA as percentage of their GDP.
Column 1 of Table C presents USA's exports to countries as percentage of USA's GDP (30.338 bln). In column 2 are the imports and in column 3 deficit as percentage of USA's GDP. Column 4 shows export/import ratio. Around 1 is fair trade. Below 1, unfairness is towards USA and above 1 towards the other country. The further from 1, the more unfair trade gets. Since all countries shown have surpluses with USA, there are not any exports/imports ratios above 1.
A trade war between USA and China should be avoided by all means. What would happen if Allies started Cold War before World War II had ended? Probably Nazis and Axis would have won the war. We will go to line 2 and examine our favourite war between USA and EU. Actually, the whole world should go to trade war with EU because EU is the enemy of the world like Nazis were. We detest EU greatly because we like Europe very much and EU era is one of Europe's lowest points.
Suppose there is a trade war to the end. This means that retaliation will go on untill trade between USA and EU is wiped out. It sounds horrible but it is not bad at all if it is done SLOWLY. We do not recommend that this should happen. The best would be if trade remains and USA's trade deficit decreases dramatically. But even if there is a trade war to the end, it will be OK if it does not proceed too fast.
If we look in column 2 of Table C, EU companies will lose 2% of USA's GDP in USA's market. For simplicity, to make it easier understood, we will assume that domestic producers will cover that demand. In column 1 we see that USA will not be able to export to EU 1,22% of its GDP. If trade war moves slowly, USA would benefit 0,78% of GDP shown in column 3. If trade war moves too fast, domestic producers in USA will not be able to fill the market shares EU exporters will lose.
The reasons have been explained in a previous article. At a first stage, domestic producers will produce at full capacity to cover the market shares EU companies will lose. Afterwards, new investments will be needed to increase production capacity and that requires time. Also time is needed to shift production factors to new uses, make other products and provide other serices. The products and services USA exports to EU are not the same it imports from EU.
In Table B, we can see what will happen in EU, if the trade war goes all the way, till trade is wiped out. USA's companies will lose 2,18% of GDP which EU producers will take. But EU will not be able to export to USA 3,56% of its GDP. So overall EU will lose 1,39% of GDP. Some of that could be gained in new markets or with correction of their trading deficits with other countries, if trade war moves slowly. So EU's harm could be minimized.
In Column 4 of Table B, we can see which countries would be harmed a lot, if trade war goes all the way, even if it is slow. The ones that will lose the highest percentages of GDP are Vietnam, Ireland, Mexico, Taiwan, Thailand, Malaysia, S. Korea, Switzerland. Their surpluses with USA is are a large percentage of their GDP. It is very hard to gain 24% or 15% of GDP in markets of other countries. Their overall surpluses or deficits, with all countries, should also be examined.
These countries would have also a problem without trade war, if USA's deficit with these is reduced considerably. Countries that have a surplus with USA which is a large percentage of their GDP are in trouble with or without a trade war. The best approach would be to negotiate so that they can get as much time as possible to reduce the surplus from their side, deficit from USA's side.
A NWO-EU fanatic, Spain's prime minister Sanchez went to Vietnam. The two prime ministers stated the importance of free trade and improving trade relations. This is ridiculous! These people are very silly! What can Sanchez do for Vientam? Can Spain import 24% of Vietnam's GDP? Vietnam's prime minister should go to USA ASAP and negotiate a long term surplus reduction plan. Vietnam has been very unfair to USA. Export/import ratio is 0,1 as it can be seen in Column 4 of Table C.