What’s the point of a trade war?

My dad was trained as an economist, and one thing he taught me when I was very young is that tariffs never benefit the country that levies them—or anyone else save perhaps a few people in “protected” industries. Yet Trump promised to engaged in trade wars, and people voted for him. Now they’ll get to see what happens.

Yes, yesterday The Donald just levied tariffs on steel and aluminum imported from three major trading partners: Canada, Mexico, and the European Union. The duties are 10% on imported aluminum and 25% on steel, and took effect at midnight last night. These three areas provide, according to the New York Times, half of the metal imported into the U.S.

Predictably, these countries are threatening to levy, and almost certainly will levy, duties on products imported from America, products like blue jeans, cigarettes, bourbon, and so on. People here will lose their jobs, prices will rise, and everyone loses except—perhaps!—some in the steel and aluminum industries.

After all these years, I still can’t see that what my dad taught me was wrong. The principle of comparative advantage, with each country producing what it produces best and cheapest, and selling those products worldwide without the impediment of duties, seems eminently reasonable from the viewpoint of both economics and employment.

Mexico, the EU, and Canada are fighting back, and rightfully criticizing this stupid move. Why on earth would any American favor it?


  1. Posted June 1, 2018 at 8:42 am | Permalink

    I expect that the point is to point the blame for everyday Americans’ economic woes at other countries, which is likely to be bought by his intended audience. The harmful effects you properly notice will not be felt until long after the November elections.

    • Saul Sorrell-Till
      Posted June 1, 2018 at 9:31 am | Permalink

      That’s precisely why Brexiteers and members of the Trump administration are so comfortable saying and doing all this counterproductive stuff: they know they’ll be long gone by the time the consequences start to bite.

      Up until recently there’s been a tacit understanding among both the right and the left that either side _could_ take advantage of populist vote-winning manoeuvres like this, but that both sides refrain from doing so because the consequences would be so bad for the country as a whole.

      It’s not clever or incisive or politically tough or maverick for Trump to do this kind of stuff: any politician could turn to these tactics. They’re a constant live possibility. But they don’t turn to them because for all the differences between the left and right there is at least some mutual understanding about the things that are not in the long-term interests of the country. Not anymore apparently.

    • Heather Hastie
      Posted June 1, 2018 at 2:53 pm | Permalink

      That’s certainly a big part of the motive imo too, though there are.

      However, I think there could be big enough problems soon enough to effect the November elections. The EU in particular has been very clever about the products they’re putting tariffs on in retaliation. They’re targeting goods made mostly or exclusively in purple and red states. Kentucky Bourbon for example, which singles out Mitch McConnell’s (who’s leaving so new less well known candidate) state and has a strong Dem candidate.

      • Posted June 2, 2018 at 1:15 am | Permalink

        I think you’ve confused your senators (or ours to be more precise). McConnell isn’t leaving and in fact has already stated that he intends to run again in 2020 and keep leading the senate. It’s Corker that is leaving.

    Posted June 1, 2018 at 8:42 am | Permalink

    It’s basically what the idiot in chief promised his base, since “everyone is taking advantage of the US”. Hopefully, the response will be directed to impact Trump’s devoted base. China clearly has this approach planned.

  3. Mark Reaume
    Posted June 1, 2018 at 8:45 am | Permalink

    Here is a list of countermeasures that Canada is imposing on the US:
    https://www.fin.gc.ca/activty/consult/cacsap-cmpcaa-eng.asp (Table 1: 25%, Table 2: 10%)

    The other part that baffles me is that the Trump admins excuse is regarding national security.

    • Mark Reaume
      Posted June 1, 2018 at 8:46 am | Permalink

      Now I have to stock up on Whisky and Yoghourt before July 1.

      • Simon Hayward
        Posted June 1, 2018 at 9:15 am | Permalink

        You can lay in a good stock of whisky and I’ll volunteer to help you drink it well into the future. But you’re on your own with the aged yogurt!

        • Mark Reaume
          Posted June 1, 2018 at 9:22 am | Permalink

          I really didn’t think through the yoghourt thing.

          • Dominic
            Posted June 1, 2018 at 9:25 am | Permalink

            Very droll!

      • XCellKen
        Posted June 1, 2018 at 1:06 pm | Permalink

        I prefer Whiskey over Whisky. Yes, there is a difference !

    • Dominic
      Posted June 1, 2018 at 8:48 am | Permalink

      … to get re-elected co-opt the state to get more wealth for trump & his pals?

    • Posted June 1, 2018 at 8:52 am | Permalink

      Kathleen Wynne did a pretty good job on an NPR (USA) interview this morning, calling out Drumpfenführer’s B.S. this morning; and making fun of the claim of national security.

      Well done Madame Premier!

    • Diana MacPherson
      Posted June 1, 2018 at 5:38 pm | Permalink

      It was the only loop hole in the trade deals. Trudeau announced that it was an insult to Canadians who died along side Americans in wars. However, Trump has no knowledge of history and neither does his base.

  4. Posted June 1, 2018 at 8:45 am | Permalink

    I suspect that the immediate point is to point the blame for everyday Americans’ economic woes at other countries, a view that many Trump supporters are likely to accept. The negative effects that you so properly mentioned will not be felt until long after the November elections. Winning more of those elections is probably the real point of the tariffs.

    • Posted June 1, 2018 at 8:46 am | Permalink

      Apologies for the duplicate … I received a response that my first posting was not accepted.

      • Dominic
        Posted June 1, 2018 at 8:49 am | Permalink

        twice the fun! 😉

  5. Dominic
    Posted June 1, 2018 at 8:47 am | Permalink

    I would get rid of all trade barriers. Mind you, I think the continual push for growth in a world of finite resources but increasing population is nuts.


  6. Randall Schenck
    Posted June 1, 2018 at 8:49 am | Permalink

    All you need to favor this tariff business is to be an idiot. Trump is the perfect candidate for this. His abilities in diplomacy, and politics in general are equally as bad. What his specialty is besides paying off women and looking stupid I cannot imagine.

    The idea that charging additional money (tax) to bring in foreign made commodities will then cause more of that commodity to be generated here is more than ignorant. If this works, why not charge big taxes to import cars from foreign countries. NO. You will sell your cars if they are better than the other guys. If not, then get into another line of business. To hit our two best and closest neighbors with these tariffs is mad.

  7. Posted June 1, 2018 at 8:50 am | Permalink

    Doing Putin’s bidding:

    Der Drumpfenführer is doing everything he can to undermine the western alliances.

    What the hell does Putin have on him (that we don’t already know of)?!

    • GBJames
      Posted June 1, 2018 at 8:52 am | Permalink


    • Ken Kukec
      Posted June 1, 2018 at 11:38 am | Permalink

      Few people anywhere are as susceptible to blackmail as Donald Trump. I suspect at least part of it has to do with the yooge piles of filthy lucre Trump’s apparently been laundering for the Kremlin/oligarchs/mafiya (they’re essentially interchangeable) in exchange for the Russians’ having bailed him out after his casino debacle.

      • Posted June 1, 2018 at 11:50 am | Permalink

        Oh yeah: The Russians hold almost all of Drumpf’s paper.

        Which by itself should have disqualified him for POTUS.

        Works great for Putin: You launder our dirty money and we save your sorry cheeto ass. And get lots of juicy intel on you in the process.

        • darrelle
          Posted June 1, 2018 at 1:33 pm | Permalink

          This is the aspect of the Trump phenomenon I find the most fascinating, sometimes infuriating, always epically ironic. The Right Wing I’m familiar with, across at least 3 decades, were I-Kill-Commies-For-My-Mommy-T-Shirt-Wearing patriots on anything that had any connection to the USSR -> Russia. And now Putin is like a bad boy hero for them and evidence that Trump is pretty seriously associated with him is no big deal. The Right Wingers I knew all of my life until now would have despised Trump from the first, slightest whiff of any Russian scent on him.

          It is hard for me not to be openly contemptuous of them.

    • Diana MacPherson
      Posted June 1, 2018 at 5:40 pm | Permalink

      Yes. What leader wants to put all energy into fighting allies?

    • nicky
      Posted June 1, 2018 at 11:55 pm | Permalink

      Yes, you could be right, devide and rule…
      Nothing would devide and weaken the West more than an ‘internal’ trade war. It appears that Mr Putin’s plans using Mr Trump work out nicely.

  8. Posted June 1, 2018 at 8:52 am | Permalink

    Why on earth would any American favor it?

    A very good question. Although I *can* understand the self-preservational instincts of workers in industries affected by cheap products from abroad, those concerns should be addressed in other ways.

    It’s odd to me that the ‘land of the free’ and home of the most right wing, regulation-averse politicos in the free world has spawned these ideas that the free market *cannot* do the job it’s supposed to, so the government must step in. The government must step in over this, but not over the regular gun slaughter of schoolchildren. More pertinently, the government must step in over this, but not over the increasing inequality of wealth in the US and elsewhere that gives rise to calls for protectionism.

    I don’t know exactly why Trump and his cohorts want to impose tariffs, but Eric Schliesser wrote recently:

    …trade barriers facilitate the creation of (what we may call) artificial monopolies, which enrich the well-connected few at the expense of the many. As I already noted before the Presidential election, given that now President Trump (and many of his voters) explicitly embrace a zero-sum world, this is not a bug, but a feature.


    I think he may have a point.

    • Posted June 10, 2018 at 1:43 am | Permalink

      “Although I *can* understand the self-preservational instincts of workers in industries affected by cheap products from abroad, those concerns should be addressed in other ways.”

      I agree. The problem is, nobody proposed such other ways; everybody just told the (former) workers to put up with the destruction of their life and their communities. Some are even happy with this. I have read liberals saying that manufacturing jobs will never return regardless of Trump’s election with unmistakeable glee.

      • Posted June 10, 2018 at 10:12 am | Permalink

        Our “glee” comes from the certainty that Trump’s ideas on the economy get proven wrong and his supporters realize how stupid they were to have voted for him. While we here in the US want our economy to win, we still have to fight against bad ideas. Trump tries to make any disagreement with his opinions as somehow unpatriotic as in “Don’t you want America to win?” Instead, it is much more patriotic to back good ideas and good leaders. That’s true patriotism.

  9. Historian
    Posted June 1, 2018 at 8:57 am | Permalink

    From Trump’s point of view, the intrinsic merits of any particular policy are irrelevant. He only cares whether it will play well with his base. In this case, he thinks promoting economic nationalism is a winner. If the long term effects of his tariff policy hurt his working class supporters, he would probably be able to deflect attention from this result to some other act of madness. As long as the supine Republican Congress bends to his every whim, he will get away doing anything he wants.

  10. Nick
    Posted June 1, 2018 at 8:58 am | Permalink

    And today’s instalment of “if Obama did this, how would the Republicans react?” is….

    • Nick
      Posted June 1, 2018 at 9:00 am | Permalink

      Not that he would have, of course…

      • John Black
        Posted June 1, 2018 at 9:47 am | Permalink

        Obama did try tariffs, incidentally. And it didn’t go well.

        • Diana MacPherson
          Posted June 1, 2018 at 5:42 pm | Permalink

          Yes Obama was actually not the better candidate for Canada even though everyone liked him personally.

  11. Posted June 1, 2018 at 9:02 am | Permalink

    What’s the point in pardoning D’Saoza? What’s the point in pardoning Arpio?
    What’s the point in anything this moron does?

    This jackass has but three goals in his life:
    1) Like the image of Akenaten, he wants to erase the legacy of Obama from the fabric of American history.
    2)He wants to create as much havoc as he can to distract everyone from his disgusting, treacherous crimes.
    3)He wants, above all else, to delay the inevitable – impeachment and a legacy of worse disgrace than Tricky Dickey.

    That’s pretty much the point of any of his idiotic shit.

  12. Neil Wolfe
    Posted June 1, 2018 at 9:05 am | Permalink

    If you erect barriers to trade you can then selectively carve out exemptions…for the right price. In an ideal world this would be used as leverage to make sure the benefits of trade are equally distributed. In the real world it will be used to make sure the powerful become more so.

    • Posted June 1, 2018 at 10:20 am | Permalink

      Oh yes. Black mail. To increase der Drumpfenführer’s personal wealth.

      And to help out his creditors in Russia.

      • nicky
        Posted June 2, 2018 at 12:37 am | Permalink

        I still think it is surreal, a Russian shill as POTUS….

    • Ken Kukec
      Posted June 1, 2018 at 11:51 am | Permalink

      What happened to the GOP that, just a couple short years ago, was bitching that government had no business “picking winners and losers”?

      Oh, yeah, it deliquesced at the first appearance of its populist orange tyrant.

    • Diana MacPherson
      Posted June 1, 2018 at 5:43 pm | Permalink

      Yes this is how Trump wants to get his way with NAFTA.

  13. Randall Schenck
    Posted June 1, 2018 at 9:17 am | Permalink

    In the negotiations with Kim he is going to do the same for N. Korea. Make N. Korea great. Just drop the word again because it does not apply here. He will make sure the export of their greatest industry (dirt) has low tariffs and all they need to do is quit the nuke business. Also throw in a franchise with McDonald’s or Burger King.

    • Ken Kukec
      Posted June 1, 2018 at 12:11 pm | Permalink

      Don’t get me started on the dirty deal whereby Trump lifted sanctions on ZTE (the Chinese electronic company infamous for ripping off American tech), as a personal favor for Xi Jinping, just a couple days after a Chinese state bank agreed to loan half a billion bucks to an Indonesian theme park in which Trump holds a yooge stake (and, coincidentally, within a couple days of China’s approving a bunch of Ivanka’s trademarks).

      Way to drain the swamp, Donald!

  14. Dominic
    Posted June 1, 2018 at 9:27 am | Permalink

    The etymology is interesting – OED onlne says –
    < Italian tariffa ‘arithmetike or casting of accounts’ (Florio), ‘a book of rates for duties’ (Baretti), = Spanish tarifa, Portuguese tarifa, < Arabic taʿrīf notification, explanation, definition, article, < ʿarafa in 1st conj. to notify, make known. So French tarif.
    The word came into general use as a technical term (sense 2), and this character it long retained in English use, being hardly found, except as applied to the Customs ‘tariff’; its more general application (sense 3), found earlier on the Continent and in U.S., has become more common in Great Britain only since c1890.

    • DrBrydon
      Posted June 1, 2018 at 9:32 am | Permalink

      I’ve always liked Mr. Johnson’s definition, given popularly as, “Excise: A hateful tax levied by wretches.”

      • Ken Kukec
        Posted June 1, 2018 at 12:15 pm | Permalink

        That’s Doctor Samuel Johnson to you, buster. 🙂

  15. ThyroidPlanet
    Posted June 1, 2018 at 9:28 am | Permalink

    Then there can be scenarios where the USA has facilities in remote countries. not sure what to make of that.

  16. DrBrydon
    Posted June 1, 2018 at 9:30 am | Permalink

    Although there is an argument for strategic protectionism (it’s important that we maintain a domestic capability for aircraft or ship manufacturing, for example), Trump’s tariffs are the stupid kind that seek only to protect the manufacturer of the goods. Steel tariffs might make domestic steel more competitive locally, but all it does is raise prices on the downstream manufacturer and the consumer. One has only to look at sugar tariffs have done to domestic candy producers (driven them out of business or out of the country) to see that they are short-sighted. Mr. Bigest Tax Break in History just imposed a tax on the American consumer. Sad.

    • Randall Schenck
      Posted June 1, 2018 at 9:39 am | Permalink

      Ship building, now that is good for a laugh. The U.S. has been out of nearly all ship building now for years. Maintaining a couple of places for military contracts is about all we have. The rest of the world past us by long ago. Let’s put a tariff on imported ships and see what happens? We don’t hardly own any more ship lines that transport all the imports and exports to this country. The only reason we have any American Flag ships is, the only requirement is you have to maintain an American crew and we hardly can do that.

    • Ken Kukec
      Posted June 1, 2018 at 12:22 pm | Permalink

      “… look at sugar tariffs …”

      Gotta protect those big-dollar far-rightwing contributors who’re despoiling the Everglades.

    • XCellKen
      Posted June 1, 2018 at 3:31 pm | Permalink

      Haven’t sugar tariffs had the effect of causing most soda manufacturers to switch to corn syrup ???

  17. Craw
    Posted June 1, 2018 at 9:42 am | Permalink

    This is one of the things that most worried me about Trump (I was never worried he would invade Mexico for Lebensraum or set up death camps in Idaho). It’s bad economics and bad foreign relations. This was also the big concern with my right leaning friends who are never Trumpers. The party of Reagan was for free trade. Sad.

    • Posted June 1, 2018 at 10:22 am | Permalink

      And the party of Reagan was concerned about Russian interference in our system/country.

      How the GOP has changed!

      • Craw
        Posted June 1, 2018 at 11:45 am | Permalink

        Fully 20% of the GOP caucus is “retiring” , including Ryan. That’s unheard of. Because they are not happy with the new TrumpGOP. McCain too of course. So the Trump skeptics are mostly gone. He seems to own it now. Sad.

  18. Saul Sorrell-Till
    Posted June 1, 2018 at 9:44 am | Permalink

    Trump’s populist policies seem like a huge, glacially slow playing out of the prisoner’s dilemma, where America is the one ratting on their friend and getting a massively reduced sentence, and the rest of the world represent the deluded naif that gets the life sentence in spite of playing it fair.

    But that only works out for America and Trump if the rest of the world is stupid enough not to retaliate in kind.

    More importantly than that, it only works for the ratting criminal in the prisoner’s dilemma if the deal offered by the jail warden is a one-off. In repeated instances the ratting criminal quickly gets a reputation for screwing over other criminals and is shunned or even punished. Likewise, even if Trump gets a certain, immediate boost from screwing over the rest of the world’s economies, he also tarnishes America’s long-term reputation for honesty and trustworthiness and invites a punitive response from the international community as a whole.

    • Posted June 10, 2018 at 1:37 am | Permalink

      However, I don’t see the rest of the world playing fair. Here in the EU, it is big deal to put on any item the stamp “Made in the EU”.

  19. Posted June 1, 2018 at 9:46 am | Permalink

    Reblogged this on The Logical Place.

  20. Davide Spinello
    Posted June 1, 2018 at 9:58 am | Permalink

    To be fair, the trade relationship Canada-US is quite asymmetrical, as Canada is extremely protectionist both internally and externally.

    Unfortunately this feeds well into the buffoon’s narrative.

    • Jessy Smith
      Posted June 1, 2018 at 11:04 am | Permalink

      That may be true but the linked article is woefully short of evidence. He mostly complains about having to pay taxes and shipping. He also complains Canadian sellers on Amazon don’t carry what he wants, but fails to show how that has anything to do with Canadian import regulations.

      It’s just a guy shaking his fist at clouds.

      The USA has been protectionist for a very, very long time. From laws that require government contracts use American companies and goods to payments to foreign countries rather than reduce tariffs on foreign cotton.

      • Davide Spinello
        Posted June 1, 2018 at 1:05 pm | Permalink

        The point is the asymmetry. If you buy from the US you can import up to $400 (I think) without paying taxes at the border; if you buy from Canada you start paying above $20 value.

    • infiniteimprobabilit
      Posted June 1, 2018 at 8:54 pm | Permalink

      The guy seems to think that the reluctance of US sellers to ship to Canada is somehow specific to Canada.

      In my experience (looking for particular out-of-print books, car parts or tools that may not be available in NZ at a reasonable price because we’re a small country with no bulk distributors) – many US Ebay sellers won’t ship ‘overseas’ or, if they do, they charge a very high and apparently arbitrary cost for shipping. (A few charge a reasonable cost, so it can be done). Which I find quite annoying but I can’t fault the sellers if they don’t want to be bothered with a tiny overseas market.


    • Gareth
      Posted June 2, 2018 at 4:39 pm | Permalink

      Heh, that does seem weird. I can order stuff from Amazon Germany and get it delivered to the Netherlands for free (if its above 29 euros), and if its not on Amazon.de I can try Amazon.fr or .it.
      Oddly sometimes stuff is cheaper on Amazon France/Italy than in Germany, and the marginal extra cost of delivery still makes it worthwhile.
      Meanwhile Amazon.nl only sells books, go figure.

      Granted the EU is considerably different than NAFTA, but still. If I had to drive to a warehouse just over the border in Germany to pick up something I ordered, I wouldn’t bother ordering, and the border is a 1 1/4 drive from me.

      On the plus side, Netherlands is so small, next day delivery is free 🙂

  21. docbill1351
    Posted June 1, 2018 at 10:06 am | Permalink

    First, I think we can all agree that Trump knows absolutely nothing about absolutely anything. His cognitive capability is diminishing. All you have to do is watch videos of Trump from 10-15 years ago to recognize that his mental ability, his command of language and his thought process has diminished significantly.

    Second, Trump surrounds himself by flatterers, fellow con artists and people who entertain fringe ideas (for whatever reason). His “economic” advisors sound completely idiotic. All they said was “national security” over and over with no substance or justification.

    Thank you, Congress, for being complicit in the destruction of our institutions and economy. But, on the bright side … her emails!

    • Posted June 1, 2018 at 10:39 am | Permalink

      They say national security with good reasons. Under international agreements currently in effect, its one of the few justifications for imposing tariffs.

  22. Posted June 1, 2018 at 10:26 am | Permalink

    I’m just asking everyone’s opinion. I wonder if these tariffs will cause more US companies to locate production facilities to other overseas locations to they can keep doing business in other parts of the world. Thoughts?

    • Posted June 1, 2018 at 10:44 am | Permalink


      I know Brexit is causing many US companies to rethink their footprint in the UK.

      Brexit will almost certainly cause my company to turn to a Notified Body in a EU country following Brexit, rather than stick with BSI. (This is just my guess. I know nothing official.)

  23. Posted June 1, 2018 at 10:32 am | Permalink

    the next post answers your question: “why would we do this?” Answer: “because Americans don’t think.”

    After several decades of tearing down critical education, most Americans (or at least a very large plurality) don’t know how to assess data and arguments any more. Worse, they (we) don’t see the need to do so. So long as we get what we want (Supreme Court Judges that say what we want, tax breaks, nastiness against ‘those people’), we don’t care about actual policy, let alone arguments for or against it.

    For most Americans, it doesn’t matter why any policy decision is made. What matters is that it makes us feel tough, and that it confirms that we are victimized, which is what we feel, despite evidence. Remember, Americans voted for Bush twice, and Trump once.

  24. Posted June 1, 2018 at 10:32 am | Permalink

    the next post answers your question: “why would we do this?” Answer: “because Americans don’t think.”

    After several decades of tearing down critical education, most Americans (or at least a very large plurality) don’t know how to assess data and arguments any more. Worse, they (we) don’t see the need to do so. So long as we get what we want (Supreme Court Judges that say what we want, tax breaks, nastiness against ‘those people’), we don’t care about actual policy, let alone arguments for or against it.

    For most Americans, it doesn’t matter why any policy decision is made. What matters is that it makes us feel tough, and that it confirms that we are victimized, which is what we feel, despite evidence. Remember, Americans voted for Bush twice, and Trump once.

  25. Ken Kukec
    Posted June 1, 2018 at 10:51 am | Permalink

    Time was, free trade was was a bedrock principle of American conservatism, along with balanced budgets, small government, and a due regard for traditions, institutions, moral virtue, and personal rectitude. That conservatism, the American conservatism of my youth — the conservatism that came to the fore in the 1950s with William F. Buckley, Jr., and Russell Kirk; the conservatism that traces its roots intellectually to Edmund Burke and Classical Liberalism, and, economically, to the Austrian school of Hayek and von Mises — is moribund.

    Sure, there are still keepers of the flame, but they’re all never-Trumpers, who’ve been banished, most of them, to punditry or think-tank sinecures. They’re MIA from government, from the federal administrative state, from the Republican Party establishment, and from any other seats of power. There is no place for them in The World of Donald Trump.

    • Randall Schenck
      Posted June 1, 2018 at 11:42 am | Permalink

      All of the economist and reporters are going nuts today on this tariff news. Canada and Mexico have already begun retaliating and Europe too. The word on what happened with the NAPTA or whatever it was is that Trump asked for one more thing. He wanted it to expire in 5 years. Just nonsense in a trade agreement so Mexico and Canada said no. The stupidity of this guy is way beyond understanding.

    • Craw
      Posted June 1, 2018 at 11:48 am | Permalink

      Indeed. Reagan would not be very welcome in today’s GOP.

      • Ken Kukec
        Posted June 1, 2018 at 12:29 pm | Permalink

        He’d be chased outta the party as a RINO. Hell, so would “Mr. Conservative” himself, Barry Goldwater.

      • Ken Kukec
        Posted June 1, 2018 at 1:59 pm | Permalink

        I know I badmouth the rightwing around here, a lot. But I had a lot of respect for this original group of conservatives — and, though I disagreed with them on pretty much everything, even a grudging fondness for some.

        This ain’t your daddy’s Movement Conservatism anymore.

        • Posted June 1, 2018 at 2:05 pm | Permalink

          Yeah. They were not, generally speaking, any worse human beings than leftwingers. We just disagreed (in significant ways on important things). But this new lot…..

  26. Randall Schenck
    Posted June 1, 2018 at 10:53 am | Permalink

    Let’s just see how the big tax cut plan helped America workers and meaningful jobs. The largest manufacturer of big motorcycles, Harley-Davidson is shutting down the plant in Kansas City and continuing to build the plant in Thailand. Nearly 800 workers will or already have lost their jobs in KC. So what did Harley-Davidson do with their big tax break? They also have a plant in India. So how does this go – make Thailand and India great again…

  27. Posted June 1, 2018 at 11:01 am | Permalink

    Trade wars are games of chicken, a sport Trump thinks he is a master at.

    • Ken Kukec
      Posted June 1, 2018 at 12:36 pm | Permalink

      He’s paid a scant price for his bluster and bullshit his whole life. His Day of Reckoning a-coming.

      • Adam M.
        Posted June 1, 2018 at 1:40 pm | Permalink

        Somehow I think we’re gonna end up paying for it…

        • Posted June 1, 2018 at 1:51 pm | Permalink

          Yes, our Days of Reckoning started January 20, 2017. May they end soon.

    • Posted June 2, 2018 at 7:47 am | Permalink

      This. But that should remind us that trade aggression can be perfectly rational. (I say aggression, not war, because a protracted war means you lose. ) That’s how you get a better deal. “Free trade” has become a mantra in the mainstream press that blocks all further thought.

  28. Jessy Smith
    Posted June 1, 2018 at 11:08 am | Permalink

    Pete Coors of Coors brewery voted for Trump but now complains of the aluminum tariff. I guess Pete Coors didn’t actually bother to listen to what Trump was saying before the election. Trump made it quite clear he was going to enact protectionist tariffs.

    • Posted June 1, 2018 at 11:55 am | Permalink

      Well, most Drumpf supporters claim to have taken him “seriously but not literally.”

      (Whereas the opponents or Drumpf are said to have taken him “literally but not seriously”, which has some truth in it.)

  29. Mehul Shah
    Posted June 1, 2018 at 11:26 am | Permalink

    I’m reminded of a book I read long time ago, Economics in One Lesson. Chapter 11 deals with this issue of tariffs,

    It was a great intro for a layperson like me.

    • Mehul Shah
      Posted June 1, 2018 at 11:30 am | Permalink

      Sorry, I didn’t mean to add a large obnoxious image of it. Just a link.

    • Posted June 10, 2018 at 1:31 am | Permalink

      I found this book excellent, and even translated it.

  30. Posted June 1, 2018 at 11:29 am | Permalink

    There are two possible reasons why the Trump administration use “national security” as the excuse for the tariffs:

    1. Global trade deals that the tariffs would otherwise violate have exemptions for tariffs imposed for national security reasons.

    2. Trump really thinks the country needs to be able to operate properly when the rest of the world hates the US. In other words, the extreme version of the US going it alone.

    Of course these are just excuses. The real reason for the tariffs is that Trump’s knowledge of economics is that of a 12-year-old, and a rather dull-witted one at that. He thinks pretty much everything is a zero-sum game.

    My fear is that he will lie about the economic results due to these tariffs and that too many of the American people will be fooled.

  31. Posted June 1, 2018 at 11:40 am | Permalink

    Personally I’ve never been convinced by the usual economic reasons to avoid tariffs categorically.

    That said, they *can* certainly hurt domestic economic matters, and certainly by unilaterally changing the “country’s mind” on a whim doesn’t endear oneself to partners and allies, which I thing is the greatest problem with the proposals.

    Also, Trump’s base is going to love it when the price of beer increases because American beer companies have trouble sourcing aluminum. 😉

    • XCellKen
      Posted June 1, 2018 at 6:00 pm | Permalink

      I thought that the vast majority of aluminum cans are recycled ???

      • Posted June 1, 2018 at 6:07 pm | Permalink

        I read just the other day that 80% of the aluminum that has been mined since the 19th century is still in the cycle.

      • Posted June 4, 2018 at 11:34 am | Permalink

        I don’t know the numbers, but there are more people, and I think proportions of beer drinkers are relatively constant, so …

        (The remark *was* a bit silly.)

    • XCellKen
      Posted June 1, 2018 at 6:00 pm | Permalink

      We can always go back to steel beer cans. Plenty of iron ore in Minnesota and Wisconsin

  32. Ed Collins
    Posted June 1, 2018 at 11:46 am | Permalink

    Good article at CBC about how the tariffs will help the Canadian aluminium industry.

  33. Frank Bath
    Posted June 1, 2018 at 11:49 am | Permalink

    If American cars are made with home made dearer steel it will make them less competitive with imported cars made with cheaper steel. So it goes.

  34. Randall Schenck
    Posted June 1, 2018 at 11:53 am | Permalink

    Besides all the fun and games with trade and tariffs today, Trump decided to do some insider trading today as well. He used his normal communication – twitter, to tell all an hour before release, what the jobs and employment for the month was going to be. Who gets to pardon this moron?

    • Posted June 1, 2018 at 11:59 am | Permalink

      Well, technically he really didn’t. He said:

      “Looking forward to seeing the employment numbers at 8:30 this morning.”

      Still not legal though as we know Trump wouldn’t tweet this if the numbers were bad.

      I hate that our Presidents are above the law in that they see the unemployment numbers before everyone else, they can pardon convicted criminals, etc. Trump is going to exploit every one he finds out about.

      • Randall Schenck
        Posted June 1, 2018 at 12:34 pm | Permalink

        And maybe speculate on how many he told this news since he got it the day before.

        • Posted June 1, 2018 at 12:44 pm | Permalink

          Agree but we know Trump has millions of ways to make money from his presidency. It will be horrifying to see the tally when it’s all over, and you know we will.

      • Posted June 4, 2018 at 11:33 am | Permalink

        I work in the business – and “looking forward” might be interpreted to mean that he knows they are “positive”. But that’s vague.

        However, what is more important (slightly) is that he should never know. I would be in violation of the law if I told (say) PM Trudeau such things.

    • Ken Kukec
      Posted June 1, 2018 at 12:51 pm | Permalink

      Trump, ignorant of the ways of government, came to office expecting to wield power unilaterally. That’s why, when he gets frustrated and ornery, he loves him some pardon power and signing executive orders.

      I were an engaged guy working in the West Wing, I’d be nervous about him exercising the droit du seigneur. 🙂

      • Posted June 1, 2018 at 6:02 pm | Permalink

        He seems to have exercised droit du seigneur
        throughout much of his life all over the world.

  35. CJColucci
    Posted June 1, 2018 at 11:58 am | Permalink

    The pain caused by tariffs is diffuse and general, for the most part. The benefits of tariffs are concentrated and specific. Most of us will pay a little more for a lot of stuff — I’m glad I bought our new washer and dryer months ago — while some identifiable group of workers in the protected industries keep their jobs.

    • Posted June 1, 2018 at 12:01 pm | Permalink

      Right. Most of the poor fools that voted for Trump will be hurting but they won’t know why.

      • Neil Wolfe
        Posted June 1, 2018 at 12:32 pm | Permalink

        Thanks Obama!

  36. Posted June 1, 2018 at 12:48 pm | Permalink

    If the Narcissist-in-Chief actually took an economics course at Penn (where he was a “very nice student”), he apparently didn’t pay any attention.

  37. JonLynnHarvey
    Posted June 1, 2018 at 1:04 pm | Permalink

    The purpose of a trade war is to aggrandize Trump’s ego, and to create an illusion of American strength to people with the mentality of a bully.

  38. Jamie
    Posted June 1, 2018 at 1:18 pm | Permalink

    I noticed only two comments that even question at all the neoliberal declaration that tariffs are unequivocally and universally bad or stupid. But not all who question the boundless goodness of “free trade” are idiots following the siren call of “populism”.

    David Ricardo’s fanciful idealization of “trade” between England and Portugal, which came to be called “comparative advantage”, was an extreme oversimplification that made many questionable assumptions. Two of them specifically (that neither capital nor labor crosses borders), obviously do not hold in today’s world.

    There are respected economists (Herman Daly, is one I know of, but he is not alone), who think comparative advantage, as many people understand it, is a fiction. And while early 20th century protectionism did lead to trade wars, it is also the regime under which the US became an economic powerhouse.

    So called “developing” nations without the ability to protect their native industries cannot “develop” internal markets and domestic production. Some people might think that’s fine, but one can legitimately question whether is in a nation’s best interest to be nothing but a source of raw materials for the already developed world. Not every nation has a developed woolen or wine industry from which to extract their comparative advantage. We, the “developed world”, impose “free” trade on the undeveloped world, and call it good.

    The same argument that is made here against tariffs in principle, (i.e., that it benefits a few) applies to so called “free” trade. “Free” trade only “benefits everyone” with the ideological blinders of “trickle down” firmly in place. Granted, tariffs can be insanely off the mark. There is nothing good about tariffs, per se. But there is also nothing wrong with the idea of protecting domestic industry. There is, or ought to be, sufficient competition within a nations borders to insure market efficiency.

    I apologize for the length of this comment, but given it’s ‘against the stream” tenor, I hope you will excuse it.

    • Posted June 1, 2018 at 1:41 pm | Permalink

      I can see the attraction of “protecting domestic industry” as it is baked right into the phrase. However, it is exactly this that misleads. While I want to avoid any absolutes like “tariffs are always bad” but, it seems to me, that this is pretty much the case.

      Another thing that keeps “tariffs can sometimes be good” alive is that they can help out a specific industry and its workers and investors. As other commenters have pointed out, the cost of such tariffs is spread thinly over everyone else.

      Another fallacy is the connection between free trade and globalization with problems like income inequality and other abuses. While it is true that eliminating trade (free or otherwise) might reduce these abuses, it would only do so by eliminating the playing field. No one can be injured on field if we don’t play the game. The problems are real but other solutions need to be found.

      • Jamie
        Posted June 1, 2018 at 3:37 pm | Permalink

        “While it is true that eliminating trade (free or otherwise) might reduce these abuses…”

        Just to be clear, I favor trade. I think trade is a good thing generally. What is good about it is primarily that it distributes goods and ideas far and wide. There is,in my mind, no issue of whether or not to trade. The only issues are the prices and quality of traded goods.

        So, for those who believe that markets either are or ought to be “free”, a global free market is clearly a desiderata. But for those of us who think that no market is ever “free”, nor should be, the impulse to create a global “free” market is misdirected.

        That doesn’t mean we think there should be no trade. Trade is generally good, but markets must be regulated, including the international market, which states can only regulate at their borders.

        If we lived in a world with a coherent global government, global trade could be regulated at a higher level. But we don’t live in such a world.

        If you want to get away from the phrase ‘protect domestic industry’ we can do without it. The broader issue is, do we regulate markets or not? If we recognize the necessity of regulating markets, why should the global market be exempt?

        Of course, the regulatory process then comes into question. Who decides what, and for what reasons, regulations are imposed? Cui bono? There are no easy answers to this problem. Cui bono? Expect corruption.

        • Posted June 1, 2018 at 4:26 pm | Permalink

          Usually when we say “free market”, we do allow for some regulation. I’m not even sure what a 100% free market would look like. No one is talking about allowing trafficking in slaves or children for example. As you acknowledge, much depends on what exactly is being regulated and how. I am not in favor of regulations for the purpose of “protecting domestic industry”.

    • Posted June 4, 2018 at 11:36 am | Permalink

      I guess I’m one of the one’s that’s skeptical too – that’s why I said that even that aside one should not just unilaterally change agreements. That’s *not* “the art of the deal”, that’s ticking off your partners so they are less likely to want to work with you on things.

  39. Posted June 1, 2018 at 1:18 pm | Permalink

    The “law” of comparative advantage is not only not reasonable, it is, in fact, an offensive weapon in the economic arsenal. It’s basic message is “do not compete with us,” which is as anti-compettiive as such things come. If you look at any of the modern economies that are doing well: Korea, Japan (sort of), China, etc. they got where they are the old fashioned way: they protected fledgling industries until they could compete globally. Think back on Korea’s car industry or Japan’s. After WW2 they had almost nothing left of their industrial bases. The law of comparative advantage indicated that they should not try to make their own cars as the US and Europe could make them far more economically than they could, but forge ahead they did. They protected their new industries with tariffs on imported goods and voila, they now make world-class cars.

    This is the way all major economies created themselves … every damned one (note: no emphasis on free markets were included, either). So do not say tariffs are self-defeating as they are only when they are being used incorrectly, which I think we can count on our current POTUS to do as nothing he does seems to be done at all correctly.

    • Posted June 1, 2018 at 1:30 pm | Permalink

      You make a good point. Of course, using tariffs to protect fledgling industries is something that the US should NOT do. If any country should be a proponent of free trade, it’s the US.

    • Randall Schenck
      Posted June 1, 2018 at 1:53 pm | Permalink

      Japan always protected their industry because govt. and business have always been one in Japan. They also used many other methods to protect themselves from import. They made importation so complex and filled with rules and process to send most people screaming into the night. Regarding agriculture they have always protected their farmer and therefore, endured extremely high prices for their food. To create their own manufacturing power they first copied like crazy. The final product took some time to add quality but then they killed us with their cars, took over the electronic manufacturing of every thing and we mostly just sat by and watched it happen. All of these things have moved on to other countries now, from Korea to China, you name it. But it is toast in America. Our manufacturing simply left and will never return.

      • Posted June 1, 2018 at 2:01 pm | Permalink

        Though Japan’s economy has been stagnant for decades. Connection?

        • Randall Schenck
          Posted June 1, 2018 at 6:27 pm | Permalink

          I thought I was responding to some of Steve Ruis comments. Do not understand the comment.

        • Posted June 2, 2018 at 1:23 am | Permalink

          I doubt it very much. Japan’s economy has been stagnant primarily because they are old. They are the oldest population in the world I believe, they allow no immigration to speak of so they don’t get any older, and I’ve read reports that the men and women in Japan have actually grown disinterested in sex so they aren’t producing any young. https://tinyurl.com/zps34ch

          • Posted June 10, 2018 at 1:29 am | Permalink

            According to Wikipedia, current total fertility rate of Japan is 1.41, not very different from that of Western countries. It is the lack of immigration that makes the population old.

      • Posted June 10, 2018 at 1:25 am | Permalink

        Why do you – and many others – think that it will never return?

        • Posted June 10, 2018 at 10:07 am | Permalink

          Will manufacturing jobs return to the US? This is the wrong question, IMHO. The US and world economies are dynamic, involving many parts. The pace of change has been increasing and will likely continue to increase. All countries, workers, industries, individual companies should strive to do the best they can in the circumstances in which they find themselves. This is the essence and power of capitalism. This involves looking forward, not back.

          • Posted June 10, 2018 at 11:30 am | Permalink

            Well, let me reframe my question: Why do you think that no new manufacturing jobs will ever appear in the USA?

            • Posted June 10, 2018 at 11:59 am | Permalink

              As I said, it is the wrong question, reframed or otherwise. Let me reframe my response by looking at just one industry.

              Many years ago the US led the world in making TV sets. We all know what happened to that. Those manufacturing jobs got shipped to Japan and later to Korea, China, and wherever else. If we look solely at manufacturing jobs lost in the US due to this shift, it is clearly a huge loss. However, look at the price of TV sets these days. All of us in the US and around the world gain from it. This gain is harder to measure perhaps but very real. How much would we be paying for an American-made TV set these days? My guess is that many couldn’t afford them and they’d be lousy anyway.

              So is this kind of trade-off worth it? I think it is. There are way more winners than losers. It is not even close to a zero-sum game. To look at manufacturing jobs lost is looking at only one part of the overall change.

  40. Adam M.
    Posted June 1, 2018 at 2:13 pm | Permalink

    10% on aluminum and 25% on steel, eh. Those numbers sound very precise – surely the result of detailed modeling and simulation and not just something Trump pulled out of his… wherever.

    And why those two products? It seems to me that we should do the opposite. We should encourage other countries to send us all the natural resources we could want, while we turn them into far more valuable finished products. Then if they ever start to run out of resources, we’ll still have ours.

    But I (in my ignorance) don’t see why protectionism is so bad. Why not say that if an American company sells products to Americans, that those products must be made by Americans (including legal residents)? No more outsourcing. To deal with foreign products made with cheap/slave labor, we could mark them up by the labor cost differential. Then we needn’t compete with China in a race to the bottom on working conditions. Companies with good working conditions would be relatively unaffected. (Hell, we could even give them a discount on other import duties if they have superior working conditions and labor costs.) To deal with products subsidized by foreign governments, we’d have the option of marking them up by an amount equal to the subsidy, if the subsidy was hurting us.

    These seem fair. Fair to workers by penalizing companies with poor working conditions. Fair to companies in that it cancels out subsidies so they can compete on their merits. And not punitive or arbitrary…

    • Posted June 1, 2018 at 2:45 pm | Permalink

      I’ve seen many articles that claim that people in low-wage countries prefer those jobs to none at all. I am sure there are abusive working conditions in some of them, perhaps even most of them, but starvation can be pretty abusive too. The best way to fight against these abuses are to expose them. Embarrass them in the eyes of their government, their people, and the rest of the world. Companies that import their products from such suppliers should choose those ones that abuse their workers the least. Obviously there must be limits to the amount of abuse but it doesn’t make sense to measure them against US working conditions or wages.

      It may seem distasteful to support such abusers but, in the long run, it will pull such countries out of poverty and their wages will be raised. The richer the country, the more they care about worker abuse. Simply cutting them out of the global economy will not work as well. The exact opposite, in fact.

      • Adam M.
        Posted June 1, 2018 at 6:41 pm | Permalink

        Sure, I agree with that. It helps poor Chinese to give them our manufacturing jobs. But protectionism is for people who care more about their own country than others. 😛

        • Posted June 2, 2018 at 10:44 am | Permalink

          And global trade is for people who don’t like poverty. 😉

          But seriously, does anyone really believe that we can back off from a global economy and it not be an economic disaster?

          The US leads the world in so many ways: entertainment, computers, biotech, clean energy, universities, etc. The rest of the world likes our stuff! Shouldn’t we be taking advantage of this? Protectionism is for losers. Our best and most forward-looking industries do not need protection. If we apply tariffs, we invite retaliation and our best businesses lose their advantage and consumers will pay higher prices for many things.

      • Posted June 10, 2018 at 1:23 am | Permalink

        “The richer the country, the more they care about worker abuse.”

        True… until the moment when the corporations decide to outsource the manufacturing, and this is the end of workers. I agree with those who say that it has been wrong to outsource so many jobs. But I don’t know what should have been done instead, and what should be done now. Anyway, I am against tariffs and other trade barriers, as well as barriers to capital flow.

        • Posted June 10, 2018 at 9:58 am | Permalink

          As cold as it sounds, I think the decision to outsource production, assuming it is made for economic reasons, is one that has to be made. Of course, it isn’t a good day for those that lose their jobs but these things happen all the time.

          Say there are two companies making competing widgets but one of them makes much prettier widgets than the other. This eventually causes the ugly widget company to go out of business and puts their workers out on the street. Somehow we don’t feel so bad about those put out of work this way.

          Is the lesson to be learned by a widget company that it is better to simply go out of business than to outsource production to stay afloat? That doesn’t seem right. Better for who exactly?

          The answer is that people shouldn’t count on having the same job for their entire lives. They should plan for a life of periodic renewal via retraining, education, switching jobs. Would that really be so bad?

          • GBJames
            Posted June 10, 2018 at 10:07 am | Permalink

            The real issues have to do with public policies. When closures/outsourcing is the result of policy changes designed to encourage outsourcing, we’ve got a problem.

            • Posted June 10, 2018 at 10:40 am | Permalink

              What policy changes are you referring to? I can’t think of any offhand that have increasing outsourcing as a goal. A side-effect perhaps.

              • GBJames
                Posted June 10, 2018 at 10:49 am | Permalink

                Well, NAFTA, for example. (Note: I’m not advocating support for tRump’s attempt to destroy it).

                NAFTA was a policy change with profound consequences for the economies of all three countries involved. Among them was the undermining of Mexico’s domestic agricultural system resulting in countless campesinos having their lives undermined. Many more people suddenly found themselves needing to find work in the north.

                Economic policy decisions matter to the lives of working people.

              • Posted June 10, 2018 at 11:43 am | Permalink

                While NAFTA had some losers, it seems like an overall win though I am not qualified to do a detailed assessment. I believe that most economists consider it a success though parties that perceive they were hurt by it have louder voices.

                It seems like the assessment of trade deals is analogous to the evening news in its constant focus on the inevitable losers without looking at wins. Every change has winners and losers. The only fair way to assess a trade deal is to look at the whole thing.

              • GBJames
                Posted June 10, 2018 at 11:47 am | Permalink

                The guaranteed “winners” are those at the top of the heap. Economic policy decisions are almost always designed for their benefit. Those in power nearly always operate in their own interests.

              • Posted June 10, 2018 at 12:06 pm | Permalink

                But employees do win when their companies win, right? Income inequality is real and needs to be solved but companies not making money is clearly not going to help anyone. We are going to have to solve income inequality some other way

                While I am in favor of raising the minimum wage, that clearly is not going to make much of a dent in income inequality. Some have toyed with the idea of laws which enforce a maximum ratio between highest and lowest paid workers. I doubt that is going to work either. It is a tough problem but we need to think harder about it and try some things.

              • GBJames
                Posted June 10, 2018 at 3:39 pm | Permalink

                Some win. And a great many lose. The point is that employees are expendable in this process. Hell, they aren’t even called “employees” much of the time. We call them “resources”. And like other resources, the primary emphasis is on keeping the cost of resources as low as possible.

                The shit will really hit the fan in ten or twenty years when automation will have eliminated most of the need for employees at all. Self driving trucks are just around the corner. Even the best intentioned public policy makers aren’t going to be train all of the excess “resource” we’ll be dealing with.

              • Posted June 10, 2018 at 4:30 pm | Permalink

                Ok. So what’s your solution?

              • GBJames
                Posted June 10, 2018 at 4:56 pm | Permalink

                What solutions might be found, IMO, will require some sort of socialism. But I’m not so much in the solutions business as I am in the try-to-be-clearheaded business and I don’t pretend to own any magic wands.

                I just know that the direction we’re headed, with a tiny group of well-heeled owners-of-companies and a gigantic mass of people who have next to nothing isn’t going to work very well. We’re going to need one hell of a bigger “safety net” than anyone’s got right now.

              • Posted June 10, 2018 at 6:12 pm | Permalink

                I don’t have solutions either but I do think they are possible and that we should all seek them, or at least point out bad solutions. I find that too many of my compatriots on the left want to throw the baby out with the bathwater by declaring that corporations and/or their CEOs are corrupt money grubbers and that we should nuke the whole thing.

                I have nothing against socialism per se but I doubt that some kind of direct redistribution of wealth will work. My preferred source for a solution is what might be called economic engineering. I believe that the global economy is a non-zero-sum game and that governments set the rules and enforce them. Governments can wield such power in detrimental ways, such as by picking winners and losers among industries, as Trump is doing now by promoting coal over green energy. There are also good ways for government to help: funding basic research, funding and promoting of standards and information sharing, fine tuning intellectual property mechanisms such as patents and copyrights, preventing monopolies, are just a few examples. Unfortunately, this is not how people look at things in this political climate.

          • Posted June 10, 2018 at 11:29 am | Permalink

            It wouldn’t be bad. The problem is that in whole large regions of the country no alternative jobs appeared. When economy is truly deregulated, jobs usually apeear once wages lag behind enough (unless there is another factor, such as war or lack of roads). I suspect that, while there were no regulations to prevent outsourcing (and this is not wrong per se), there are some regulations that make local manufacturing non-competitive. But I am not an economist and know little about the USA, so I can only guess.

            • Posted June 10, 2018 at 11:50 am | Permalink

              I don’t believe that the US government has done enough to relieve the growing pains that come with globalization. While it is clear that some people will lose their jobs, they don’t provide any funding for retraining and education in general. They leave it to companies to do training but this doesn’t make sense when people switch jobs often and margins are so small (efficiency!) in many industries. Income inequality is a huge problem but government has done nothing to solve it. When people complain about the pain that comes with globalization, they shouldn’t call for less global trade but require their governments to address these problems.

  41. peepuk
    Posted June 3, 2018 at 12:19 pm | Permalink

    People often forget that the point of the EU is protectionism.

    The EU tariffs on steel-products for China are between 48.3% and 71,9%; depends on product type.

    • Posted June 4, 2018 at 11:48 am | Permalink

      That seems a bit too strong. That’s not the only thing the EU does and virtually every country in the world manages their trade and sets tariffs. It is the case, however, that everyone talks about free trade but it is far from free due to lots of tariffs. Free trade is a bit like nuclear disarmament. It is a statement of intended direction, not actual result.

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