I see that Trump is going to impose a 20% tax on Mexican imports to pay for the wall he plans to build along the Mexican border. White House Press Secretary Sean Spicer announced that it was part of a comprehensive tax reform package.
Firstly, they don’t understand what comprehensive means. A quick Google search for the definition yields: “Complete; including all or nearly all elements or aspects of something”.
I understand comprehensive because I championed a comprehensive plan in my administration. It is not arbitrary and takes a lot of time and people to get it right. Trump has been in office for six days and he claims to have a comprehensive tax plan? Uh, right. NOT! It is impossible. What he has done is to implement a knee-jerk tightening of a choker chain around the neck of a country that has been our ally for years. Why? Because their president refused to be submissive to Trump. Plain and simple. Do you remember one of my articles telling you that Trump is vindictive? This is only the beginning of seeing his sickness grow.
So what will happen because of this targeted incomprehensive tax? While I hold no magical crystal ball, things could go in many directions.
We will begin with China’s reaction. They quickly mobilized to grab control of global market trade. Trump has pulled our lead away and they took up the slack. China is now sending out slews of PR people to promote their country as being the new leader of global trade. Even their president mobilized quickly. Will it work? Damned right it will. They are the world’s low-cost producer. Period. Why do you think everything we buy says “Made in China”? Every country buys things as cheaply as they can.
Now for Mexico. This involves China as well. China has been expanding into Mexico as a strategy to gain influence in the Americas. Yes, that is correct. China is now over the border looking at us... on our continent. The relationship between China and Mexico will only become stronger now. Parts that flowed to the USA will now flow to China’s manufacturing plants they are building in Mexico. Furthermore, the goods being taxed that will flow into the USA will cost US manufacturers more money. A 20% increase in a product is significantly larger than a 1 to 2 % margin of profit. The Mexicans will not sell at a loss, therefore, those parts are going to cost (drum roll here) 20% more for the United States. That increase in cost goes into our automobiles. And guess what? The price of the automobile goes up. So who ends up paying for the 20% increase? YOU DO! Therefore, you still end up paying for that damned wall.
There is more to the equation as well. Trump ordered a hiring freeze across all departments in the federal government, but then issued a request for 5,000 more border patrol employees. That was only a “start” of the hiring needed to tend to the wall. You see, people have known how to scale over walls since the caveman. Only physical human beings can stop other human beings from scaling a wall. Therefore, they will need thousands more to man “towers” along the wall. Think of how prisons are designed to get an idea. Looking at the initial 5,000 employees, that is approximately $300,000,000,00 per year just in wages. That does not include benefits. If you add additional employees for after the wall is built, that could easily hit a billion dollars a year.
And that is why this tax is not comprehensive, because the flow of cost was never considered. That tax is a knee-jerk punishment. Plain and simple.
Eventually manufactures will begin to make those parts in the United States because of the higher cost to import them. However, you can’t just open up a plant tomorrow. It will take time. Furthermore, those parts will cost more to manufacture in the USA than they do in Mexico. Therefore, there will be no reduction in the cost of the automobile. That leads us to more problems.
More American will not be able to afford the automobiles. They will keep used cars and need parts to fix them… that are made in China or Mexico. And then there is the problem with getting laborers. We already have a shortage. Those white voters in the rust belt that voted for Trump are jobless because… they don’t want to move to where the jobs are. When a company looks to build a plant, they look first at location, location, and then location. That is why they are in Mexico to begin with. And don’t look to hire Mexicans legally to fill those spots because Trump wants to tax the money they send home to Mexico to support their families there. They simply will not have any incentive to fill open jobs. Therefore… those jobs will require higher salaries… which means… higher cost automobiles. Higher cost automobiles mean… less sales. Less sales mean… plants closing or laying off workers.
So now you will have more expensive automobiles from the USA, and China will see an opportunity to make the automobiles themselves… for considerably less cost. We, as Americans, always want to pay less and will eventually buy Chinese cars. Look; we already buy huge quantities of Korean cars. Who would have thought that could happen 50 years ago?
Russia is laughing its ass off and China is forging ahead. Russia set us up to defeat ourselves.
Look, reevaluating imports and exports and making adjustments is a good thing. We may have been behind on the curve in that respect. But it needs to be methodical and in some form of a comprehensive strategic plan. Knee-jerk radical decisions have a major impact and generally always cause some form of retaliation when they hurt. Trump reacts quickly and without thought. That is DANGEROUS for a president folks! We can’t have that without severe repercussions across the globe. I would suggest that he calm down, but that is not going to happen. This guy is a true psychopath. You can’t fix that in a day and sometimes, not in a lifetime.
Some manufacturers, and maybe even some workers, may be happy with some of the things Trump is doing, at least in the short term. Regardless, his way of governing cannot endure long-term. It is very detrimental. A leader must be calculating, strategic, and thorough. Trump is anything BUT that. Every decision made by our president will send a ripple throughout the entire world. And it is that ripple effect that must be carefully predicted and analyzed before making such a decision.
There is a high and calamitous price to pay for being selfish and self-centered. We will all bear that price, not just Trump.
On another note, regarding ethics and conflicts of interest, Trump’s Mar-A-Lago resort in Florida doubled its price for members. Those memberships are not available to the public and now go for $200,000 per year. It is being touted as Trump’s Winter White House. That is cheap, however, to the $500,000 one-night stay at his new hotel in Washington so the people paying for it could wake up and look out the window when Trump walked up Pennsylvania Avenue during the inauguration.
Folks, we are better than this. Our forefathers made it clear that our country would not fall down to this disgusting level like many of the other countries had. It is sickening to read about what this guy is doing every day to destroy our country. Our integrity should never be for sale.
Remember something that is very important. Trump thinks he is the absolute best and smartest person on the planet. He is very rich, but he owes a LOT of money. He wants the USA to be the absolute best and will tell you every day that he is making it that way. Only… he is NOT the best person and he is not the smartest person. Therefore, what he does to the USA will only be smoke and mirrors with nothing of substance. Eventually his knee jerk decisions will come crashing down on us because of the tremendous weight of hate, debt, and disrespect he is building.
Man, I sure hope we can survive the next four years. My guess, though, is that something big will happen before then. It could come in any form. Something is going to snap. It could even be that he is removed from office. But for now, the Republican legislature is having fun watching him and taking advantage of being on his side. That won’t last forever. Change is coming, to be sure. As they say, “Be careful of what you ask for”.
… oh… what is that I hear? It’s a lovely flute playing charming music! And look at all of those rats happily gathering around the yellow-haired flute player.