October 2, 2018

Import Prices: Still No Signs of Tariffs Taxing Consumers

The price of goods imported from China fell in the first month of the Trump administration’s expanded tariffs, government data showed Thursday.
The Trump administration imposed tariffs on around $200 billion of goods imported from China at the end of September. Previously, the China tariffs had applied to $50 billion of goods, mostly technological imports.

Despite the higher duties, the price of goods imported from China fell. This is largely due to the depreciation of China’s currency against the dollar. It also may be due to Chinese companies intentionally lowering prices to make their products attractive even once the costs of tariffs were added.

“Our existing U.S. orders are relatively stable, but our U.S. clients are not increasing their orders,” an official at a Guangzhou-based battery maker said in September.“We’re keeping prices stable and swallowing the tariffs ourselves.”

One importer told Breitbart News the price decline could be due to U.S. buyers shifting to the lowest price Chinese goods, avoiding higher ticket items where the tariffs would have a bigger impact.

For the year, the price of imports from China is up just 0.3 percent. Prices have fallen for three of the last four months, however.

imported goods from china

This could put pressure on the Trump administration to raise the tariffs, something President Trump has said he is prepared to do if renewed efforts at striking a trade deal with China falter. If the prices of imports from China continue to fall, their effectiveness could be undermined.

The price of imported consumer goods overall also fell 0.1 percent in October. The price of imported capital goods also fell 0.1 percent. Since China is the largest source of U.S. imports, its not surprising that the broader price picture followed what happened with China pricing.

Despite the decline in the prices of imported goods, overall import prices advanced 0.5 percent in October, the largest monthly increase since a 0.9-percent rise in May. That rise was driven by a 3.3 percent gain in fuel imports, mostly due to higher oil and natural gas prices. It’s likely that will reverse when November figures are released next month thanks to falling oil prices.

As Breitbart has reported, there is no evidence that tariffs are acting as a tax on American consumers. The prices of most consumer items subject to tariffs have held steady or declined since the tariffs on China, aluminum, and steel were imposed this year.

“We hear a lot from business about higher costs, loss of markets. We see a rising chorus of concern,” Fed chairman Jerome Powell said in an interview Wednesday. “It hasn’t shown up yet in the data.”

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September 30, 2018

Donald Trump Hits a Congressional Wall on Border Wall Funding

GOP senators are nudging President Donald Trump to give up hopes for a $5 billion down-payment on a border wall in 2019.

“My goal is to get the [budget] bills passed” in December, said Sen. Richard Shelby, the GOP chairman of the Senate’s appropriations committee, said Nov. 15 after meeting Trump for a budget discussion. His committee has penciled in $1.6 billion for the wall in 2019, compared to the $5 billion in the draft House bill. Shelby added, according to the Washington Post:

House and Senate GOP leaders show no willingness to lead a public fight for wall funding as the Central American caravan’s economic migrants gather in Tijuana before crossing into California. But several Senate and House GOP leaders are pushing the president to sign a crime bill that will provide an early release to thousands of violent criminals and drug smugglers amid a national drug-disaster which has killed 100,000s of Americans.

Democrats have enough votes and discipline in the Senate to block any budget deal, but they may want to avoid a budget clash and government shutdown so that they may endorse another $1.6 billion budget in 2019. The allocation would push Trump’s border-wall spending up to a total of $4.8 billion from 2017 to 2019.

But Democrats are opposing Trump’s push for $5 billion in wall funding in 2019.

“If it’s ‘Wall or nothing!’ they’re going to get nothing,” the top Democrat on the Senate’s appropriations bill, Sen. Patrick Leahy, said November 12.

Democratic lobbyists predict their party will gain in 2020 from a 2018 impasse. The Hill reported:

“One, it will continue to help with suburban women. Number two, it will mobilize Latino voters,” said Celinda Lake, a Democratic pollster. “The third thing [is], particularly if Democrats lean into it, immigration can be a huge liability [for Republicans].”

Democratic leader Sen. Chuck Schumer is signaling he will approve a status-quo wall-building budget of $1.6 billion for 2019.

But he is also hinting that he may demand a price, such as accelerated green cards for roughly 400,000 Indian and Chinese white-collar visa-workers plus their family members. The green card plan was put in the House’s draft DHS budget for by Kansas Rep. Kevin Yoder, who subsequently lost his reelection campaign.

If Schumer demands a price for the $1.6 billion, he will be pressuring Trump to trade a series of wage-cutting amnesty concessions in exchange for a wall that cannot stop catch-and-release for the migrants who simply ask for asylum.

The GOP’s business-first leaders are offering minimal support to Trump’s wall, just as they have avoided Trump’s pro-American immigration agenda since November 2016. Since 2016, GOP leaders have tacitly conceded to Democratic demands on migration to help ease the passage of business priorities, such as the tax cut and the confirmation of conservative judges.

“I can’t imagine, with all the things that we have to do here to wrap up this Congress, that we would revisit immigration, but who knows?” Senate Majority Leader Mitch McConnell said November 7.

Third-ranking GOP leader Sen. John Thune managed to show even less enthusiasm for border wall funding, according to The Hill:

“It would be nice if we get a budget deal that includes wall funding,” he said. “We’ll see what the traffic will bear when we get into the discussion. We have to do a budget to wrap up the year and some other cats.”

A DACA amnesty would likely put three million younger illegal aliens in the voting booth by 2028 and invite a subsequent chain migration of several million additional migrants.

From 2012 to 2014, Graham organized and pushed the “Gang of Eight” amnesty which intentionally tried to flood the labor market and so shift more of the nation’s annual income from workers to investors. For example, his amnesty bill also allowed an unlimited number of foreign-born college-graduates to get green cards and allowed presidents and border officials to provide asylum to an unlimited number of migrants.

In the House, GOP leader Rep. Tom Cole is also pushing the investor-boosting DACA-for-wall deal — even though the DACA amnesty would add at least three million Latinos to the voting rolls during the next decade.

Some House legislators are also backing a series of expanded visa worker programs that would cut wages for white-collar graduates, blue-collar laborers, and farm workers.

Washington’s economic policy of using migration to boost economic growth shifts wealth from young people towards older people by flooding the market with cheap white-collar and blue-collar foreign labor. That flood of outside labor spikes profits and Wall Street values by cutting salaries for manual and skilled labor offered by blue-collar and white-collar employees.

The policy also drives up real estate prices, widens wealth-gaps, reduces high-tech investment, increases state and local tax burdens, hurts kids’ schools and college education, pushes Americans away from high-tech careers, and sidelines at least five million marginalized Americans and their families, including many who are now struggling with opioid addictions.

Immigration also pulls investment and wealth away from heartland states because coastal investors can more easily hire and supervise the large immigrant populations living in the coastal states.

Kevin Bridgford Read More

July 15, 2018

Winning! U.S. Manufacturing Output Comes in Stronger than Expected

U.S. factories are operating at a higher level than previously thought.

U.S. manufacturing output increased in October, the Federal Reserve said on Friday. This was the fifth straight monthly output increase.

The Federal Reserve said manufacturing production rose 0.3 percent last month. Data for September was revised up to 0.3 percent from the 0.2 percent previously reported.

Economists forecast manufacturing output rising 0.2 percent in October.

Excluding the auto sector, manufacturing gained a solid 0.5 percent last month, boosted by a strong increase in the output of business equipment. That suggests businesses are continuing to invest and expand.

The auto sector has weakened recently. Motor vehicle production slumped 2.8 percent after rising 1.3 percent in September.

Mining, which has been a consistent source of strength, slipped 0.3 percent. Oil and gas drilling, which had been weakening for three months running, rebounded with a 1.6 percent expansion.

Kevin Bridgford Read More