Tarriffs- Sunday afternoon discussion 2 PM Andrea's house Gate code #6087

This will be a discussion about tariffs - from a historical perspective and also discussing the current tariffs in the US. I will have beverages, pretzels and chips and salsa

Part of the impetus for the discussion is that I was recently fortunate enough to teach an online class as a contractor for a former employer, and my one student was a guy who works for the Export Import Bank of the United States, which is a federal agency whose job it is to help US companies deal financially with the tarriffs imposed on us by other countries into which we are attempting to sell goods. Boeing is the largest customer of the US Import/Export bank.

There is a considerable amount of buzz about tarriffs having an affect on prices here in the US - i.e. the tarriffs that the trump administration is levying on foreign imports which will raise prices for US consumers. However in that discussion we may perhaps lose sight of the fact that tarrifs are part of a trade war, and both sides participate.

from USA Today:

BEIJING/WARSAW/WASHINGTON, April 11 (Reuters) - Beijing on Friday increased its tariffs on U.S. imports to 125%, hitting back against U.S. President Donald Trump's decision to hike duties on Chinese goods to 145% and raising the stakes in a trade war that threatens to up-end global supply chains.

A few months ago I was reading a book about the founding and development of Heinz company (as in Heinz ketchup - 57 flavors. Heinz owns Kraft goods and is itself now owned by Berkshire Hathaway. There was actually a supreme court case in the late 1800's that resulted in the classification by the Supreme Court of tomatoe's as vegetables (rather then fruits) for purposes related to tarriffs.

China just recently ordered Chineses airlines to suspend deliveris of Boeing Jets in retaliation agains the US in the tradewar over tarriffs. Chinese customers represent about 10% of Boeing's commercial plane orders.

Seems like an interesting topic to discuss how tariffs have been used in trade wars over time, with the idea that it isn't just randomly raising tariffs on imported goods, but it is being done in retaliation for China doing the same.

Interestingly enough, I also visited the Mac Truck museum in Allentown, Pa. where I took a tour. You aren't able to visit the actual manufacturing facility which is right next door, but the tour guide (a retired test engineer who tested Mack trucks in wind tunnels that simulated 60 MPH winds) mentioned that Mack plans on opening a manufacturing facility in Mexico in the next year or so, and those goods will undoubtedly be affected by tariffs as well. Not to mention that a part of the reason for the decision to open a facility in Mexico is that most of the workers at the Allentown plant belong to the United Auto Workers Union (UAW), so labor costs are higher at union plants. When I worked for Westinghouse in the beginning of my career, the circuit breaker manufacturing plant that I worked at paid some test positions about 15 dollars an hour. When those positions were moved to Puerto Rico, that hourly rate went down to about 50 cents to 1.00 per hour, not to mention the savings of having a plant located somewhere where year-round heating and cooling are required.

I think I had asked a question about "Why war" at a lunch thing a month or so ago. There are actually different kinds of wars - wars fought with guns and wars fought with policies.

(Another possible future discussion topis might be whether it is a better policy to give weapons to other countries like the US does to Ukraine, or is it better to provide infrastructure like China does with its Belt and Road initiative in several Eastern European countries.