• Tag Archives Trump
  • Trump’s Lumber Tariffs Hurt Hurricane Recovery

    As the flood waters from Hurricane Harvey dry up, the residents of affected areas are turning to the task of rebuilding their storm-ravaged communities.

    Early estimates of the damage suggest they have their work cut out for them. The Texas Division of Emergency Management reports that the storm destroyed 9,407 single family homes. Another 44,013 experienced major damage. Moody’s Analytics estimates that the cost of the hurricane will be in the $51–$75 billion range.

    President Donald Trump has pledged $1 million of his own money to Harvey relief efforts, along with a $15 billion aid package for areas affected by the storm. But he’s also pushing protectionist policies that will raise the cost of the basic building materials, making recovery a longer, more difficult, and more expensive process.

    The Price of Protectionism

    In April, the Trump administration imposed countervailing trade duties averaging 20 percent on imported softwood Canadian lumber, a common material in home construction. In June, he hit them again with anti-dumping duties of 6 percent.

    The initial application of these tariffs aggravated consumers of Canadian lumber, says Kevin Mason, managing director of ERA Forest Products Research (a timber market analyst firm), and the damage done by the storm has only made those consumers’ situation worse.

    “Some people who’ve just gone through this devastation—they’ve had their house flooded or it’s been destroyed,” Mason says. “To the degree that they’ve got to go out and get lumber to do some repairs, they’re going to be paying close to record high prices. And part of the reason prices are as high as they are is because of these duties.”

    Tariffs Are Hurting Importers

    The U.S. has imposed tariffs on Canadian lumber imports periodically since the mid-1980s. What makes the latest round of tariffs unusual, Macon says, is the degree to which U.S. consumers have eaten the costs of those trade barriers.

    “Historically the Canadians have had to absorb half if not the bulk of the duties,” says Mason. “This time the U.S. consumer has borne the entire brunt.”

    According to a pricing index put out by the timber market publication Random Lengths, lumber prices hit a peak of $430 per thousand feet of board in April, the month countervailing duties were first imposed. That’s 20 percent over where lumber prices were in January, and nearly 25 percent higher than where prices were in April 2016.

    The increase has not gone unnoticed by builders, including those in areas affected by Hurricane Harvey.

    “A lot of our distributors, and lumber companies that we deal with, were buying a lot of that imported lumber because they got a much better price, and that rolls over into the prices that we pay,” says Patrick Mayhan, vice president of purchasing for the Houston-area company Westin Homes.

    That dependence on cheaper Canadian lumber meant that Mayhan’s company was particularly vulnerable to Trump’s tariffs.

    “It was a significant hike at the time. It was a 20 percent increase,” he tells Reason, adding that “we had no choice but to pass that along to our retail pricing for the home. And that’s a significant amount, because lumber is a big part of the cost of building a home.”

    Adding Insult to Injury

    Increased demand from the storm would push up prices regardless. But thanks to the tariffs, that price increase is starting from an artificially inflated baseline. For some, that could be the difference between a new home and no home at all.

    “Currently for each $1,000 that you tack on to the price of a new home, about 150,000 people nationwide can no longer afford homeownership,” says David Logan, director of tax policy analysis for the National Association of Home Builders (NAHB). Logan says the tariffs have increased the costs of lumber for NAHB members by 15 to 20 percent, increasing the cost of a new home by some $1,700.

    Zoltan van Heyningen, executive director of the pro-tariff U.S. Lumber Coalition, disputes the numbers coming from the NAHB, saying the impact of tariffs on home prices and homeownership has been overhyped.

    “The impact on consumers is negligible to none. The impact on producers is life or death,” he tells Reason.

    But builders like Mayhan are quickly approaching the point where they cannot pass added costs onto the purchasers of homes. Though it’s still too early to tell, the expected price increases coming in the wake of Hurricanes Harvey and Irma might push them past that point.

    For some builders, that pressure to contain retail prices will lead them to compensate for higher lumber prices with lower profit margins. For others, particularly those operating at lower margins, reduced returns might mean forgoing new construction projects.

    That’s particularly true for people planning to rebuild in the aftermath of Harvey and Irma. In addition to near-record-high lumber prices, the costs of other materials—drywall, sheetrock, siding—have gone up as well.

    Trump told reporters recently that the response to the recent storms is “gonna cost a lot of money.” Without his tariffs on imported lumber, the cost could be considerably less.

    Reprinted from Reason

    Christian Britschgi

    Christian Britschgi is a reporter for Arizona Watchdog.

    This article was originally published on FEE.org. Read the original article.

  • Amazon Destroys Jobs? Really?

    While the country was consumed with the Charlottesville debacle last week, President Trump was busy reigniting his PR campaign against an American retail staple: Amazon.

    In a tweet composed last Wednesday, Trump said:

    “Amazon is doing great damage to tax paying retailers. Towns, cities and states throughout the U.S. are being hurt – many jobs being lost!”

    This anti-Amazon rhetoric is of course, nothing new for the president. During his campaign he made his opinions of the company well known. Going as far as to threaten the company before even being elected to office, the then-presidential candidate said, “believe me, if I become president, oh, do they have problems. They’re going to have such problems.”

    Now, seven months after taking office Trump seems to be living up to his menacing promise. But is there any truth to Trump’s claims that the Amazon is both destroying jobs and “stealing” money from the taxpayer?

    The Ultimate Job Destroyer?

    The American people are not united on much these days, or so it would seem. However, if you wanted to give Americans a reason to unite against their leader, threatening their Amazon Prime accounts would be a surefire way.

    Earlier this year, a report produced by the Consumer Intelligence Research Partners (CIRP) found that over 80 million people in the United States hold Amazon Prime memberships. A number worthy of recognition especially considering that it has doubled in less than two years.

    Amazon has revolutionized the American retail experience. Not only do Prime members get free two-day shipping on essentially any item they wish to purchase from food to electronics, but members also have access to Amazon’s library of streamable films, shows, and music at their fingertips. Need an item in less than two days? No problem! Amazon Now offers delivery services in under an hour for participating products. Even more amazing, Amazon Prime now also dabbles in the restaurant delivery service business competing with the likes of Uber Eats and GrubHub.

    And yet, in spite of all these subcategories, each requiring its own set of employees, Donald Trump has accused Amazon of inhibiting job growth in the United States. As of January of this year, Amazon had 306,800 employees and a promise to hire an additional 100,000 full-time employees by mid-2018.

    On their own these numbers are impressive, but they do not account for the additional employees who will find future part-time employment via Amazon’s participation in the sharing economy.

    Amazon Enters the Sharing Economy

    Receiving an Amazon Prime package as an adult is akin to opening up a Christmas present from Santa Claus as a child. You don’t know how the package arrived, but it doesn’t matter. You asked for it and 48 hours later it appeared on your porch as if by magic. Unfortunately, there is no mythical Amazon being responsible for delivering these packages. There is, however, an army of Amazon delivery personnel who operate on the sharing economy model.

    Like the “Uber of packages,” Amazon couriers work when they want. As with the rest of the sharing economy, this allows millennials interested in side hustles or others looking to get ahead financially the opportunity to work around their own schedules.

    In the few years since the sharing economy has grown in the United States we are already seeing the benefits it brings both in job creation and consumer satisfaction. Amazon’s restaurant delivery service works the same way.

    As Americans are generally discontent to live mediocre lives with mediocre salaries, these side hustles have become essential to living a full and prosperous life. Amazon’s contributions to the sharing economy as well as the overall job creation in the country is something worthy of praise. Yet instead, the company’s reputation is being eviscerated by the President in very public social media posts.

    Why All the Condemnation?

    Trump has made the claim that Amazon hasn’t paid its fair share of taxes and is thus, stealing money from the American people. This is entirely untrue, but what Trump is implying by this comment hits at the core of his real problem with the company: he’s a brick and mortar enthusiast.

    After Trump’s tweet, Politifact dissected the president’s post to decipher which, if any, of his claims were true. According to the site:

    ”While Amazon takes advantage of tax breaks and loopholes, it pays federal corporate tax, and charges sales taxes in 46 U.S. jurisdictions. Last year, Amazon paid $412 million in federal, state, local and foreign taxes.”

    So if it’s not about destroying jobs or stealing tax dollars, what is Trump so mad about?

    Trump is a traditional businessman who made much of his money through the real estate business. By nature, the virtual business realm is almost completely foreign to him. Trump has made his living buying and selling physical space. Subscribers to the belief that Amazon is the boogieman of the brick and mortar world will appreciate this, as they see Amazon and other online retailers as a threat to their existence.

    As Jeffrey Tucker says:

    “It’s not just about ideology; it’s a battle of economic interests. Trump is joining an emerging war between old-style economic institutions, rooted in brick-and-mortar and nation-state loyalism, vs. new-style digital institutions that span the globe and empower producers and consumers directly

    But it is not and never has been the president’s job to decide which companies succeed and which ones fail. That power rests with consumers who utilize the power of their own purses at their own discretion. Unfortunately for Trump and other brick and mortar protectionists, Amazon is constantly proving that consumers prefer to use its retail platform above all other options. For a president to openly condemn a company for outperforming the competition is antithetical to the free market that Trump pretends to support.  

    At the end of the day, Trump is worried about his own interests, not the interests of consumers.

    Hitting the nail on the head perfectly, Tucker explains the situation:

    Consider that Trump is the consummate physical-world capitalist. He builds towers, casinos, hotels, country clubs, all rooted in real estate, and all with a gawdy 1980s-style aesthetic. With that comes “the art of the deal.” The deals are done on golf courses, in “old boys” clubs, through personal networks. It’s about meeting in board rooms with mayors and city planners and trading favors. He hires contractors to dig and build and rent. He puts his name on large structures and they reach to the skies to proclaim his personal glories.”

    But there is another layer to Trump’s disdain for Amazon. And like many of Trump’s stances, this one is also rooted in personal drama.

    Facts have never meant much to our president, but any criticism cast in his direction has quickly garnered his attention. Jeff Bezos, the CEO of Amazon, recently purchased the Washington Post, a publication that hasn’t shied away from attacking Donald Trump.

    Addressing this issue head on, Trump has even made statements questioning Bezos’ motives:

    “I have respect for Jeff Bezos, but he bought The Washington Post to have political influence, and I gotta tell you, we have a different country than we used to have.”

    He later continues this line of thinking saying:

    “He owns Amazon. He wants political influence so that Amazon will benefit from it. That’s not right.”

    Unfortunately for Trump, he has chosen to attack a mighty monument of consumerism. Amazon’s services are just too good and too plentiful to fall victim to Trump’s attacks. In fact, Amazon Prime’s 80 million subscribers outnumber the 57.6 million people who voted in the 2016 election. Sorry President Trump, consumers have already voted with their dollars and they choose Amazon.

    Brittany Hunter

    Brittany Hunter is an associate editor at FEE. Brittany studied political science at Utah Valley University with a minor in Constitutional studies.

    This article was originally published on FEE.org. Read the original article.

  • The Amazing Arrogance of the Paris Climate Agreement

    The Amazing Arrogance of the Paris Climate Agreement

    It was December 12, 2015, when headlines in the world’s leading newspapers, in implausibly bold type, celebrated the “historic” agreement in Paris between all nations of the world to curb carbon emissions and thereby stop climate change: or so they said, as if elites get to say what is and is not historic.

    The spin, like the agreement itself, was crammed down our throats.

    I read the stories that day, and the next and the next, and the continuing coverage for weeks that nearly every reader – apart from a few dedicated activists and permanent regime bureaucrats – ignored. The stories appeared on the international pages and didn’t touch the business pages. Energy stocks weren’t affected in the slightest.

    The stories had all the signs of dutiful public service announcements – “fake news,” as they say today – and they contained not a single quote from a single dissenting voice, because, of course, no respectable news outlet would give voice to “climate deniers.”


    Let me pause to protest this “denial” language. It attempts to appropriate the widely shared disgust toward “Holocaust denial,” a bizarre and bedraggled movement that belittles or even dismisses the actual history of one of the 20th century’s most egregious mass crimes against human rights and dignity. Using that language to silence questions about an attempt to centrally plan the energy sector is a moral low that debases the language of denial.

    This rhetorical trick reveals all you need to know about the desperate manipulation the climate planners are willing to engage in to realize their plot regardless of popular and justified skepticism concerning their regulatory and redistributionist policies.

    And what are the specifics of that agenda? The Paris Agreement is a “voluntary” agreement because its architects knew it would never pass the US Senate as a treaty. Why? Because the idea of the agreement is that the US government’s regulatory agencies would impose extreme mandates on its energy sector: how it should work, what kinds of emissions it should produce, the best ways to power our lives (read: not fossil fuels), and hand over to developing world regimes billions and even trillions of dollars in aid, a direct and ongoing forcible transfer of wealth from American taxpayers to regimes all over the world, at the expense of American freedom and prosperity.

    And you wonder why many people have doubts about it.

    The Trumpist Reaction

    Consider what else was going on December 12, 2015. Donald Trump was in the midst of a big battle for the Republican nomination. He started with 16 challengers to beat. He was widely considered to be a clownish candidate, a guy in it just to get press attention to build his business brand. Surely the American system of electoral politics, largely but imperfectly managed by responsible elites, would resist such demagogues. Besides, the media that trumpeted the Paris Agreement would be on hand to shame anyone who supported him. He couldn’t win.

    The press mostly pretended that he wasn’t happening. The Huffington Post put coverage of his campaign in the humor section.

    And so President Obama came home from the Paris meetings to the acclaim of all the right people. He alone had made the responsible choice on behalf of the entire country: every business, every worker, every consumer, every single person living within these borders who uses some measure of this thing we call energy. He would be our master and commander, ruling on our behalf, fresh off cocktail parties in Paris where the best and brightest – armed with briefcases full of government-funded science – decided to give the Industrial Revolution its final comeuppance.

    The exuberant spokespeople talked about how “the United States” had “agreed” to “curb its emissions” and “fund” the building of fossil-free sectors all over the world. It was strange because the “United States” had not in fact agreed to anything: not a single voter, worker, owner, or citizen. Not even the House or Senate were involved. This was entirely an elite undertaking to manage property they did not own and lives that were not theirs to control.

    The Backlash

    And then Trump spoke. He said that this Paris bit was a bad deal for Americans. We are already in a slow-growth economy. Now these global elites, without a vote from Congress, are presuming to mandate massive controls over the economy, hampering its productive sector which benefits everyone and transferring countless billions of dollars out of the country, with the acquiescence of the party in power.

    He spoke about this in a way that bested all his opponents. The entire scenario fed his America First worldview, that the global elites were operating as parasites on American prosperity and sovereignty. His answer was to put up the wall: to immigrants, to trade, to global managerial elites, and reclaim American sovereignty from people who were selling it out. It was another flavor of statism (globalism and nativism are two sides of the same coin), but it tapped into that populist vein of the voting public that looks for a patriotic strongman to save them from a distant ruling class.

    Everything about the Paris Agreement seemed structured to play into Trump’s narrative of how the world had gone mad. And then he won the nomination. Then he won the presidency. None of this was supposed to happen. It wasn’t part of the plan. History took a different course from what the power elite demanded and expected to happen. Not for the first time.

    How Dare Anyone Dispute Our Plans?

    But the “globalists” of the type that tried to make Paris work have a stunning lack of self-awareness. They pretend to be oblivious to the populist resentment they breed. They act as if there is not a single legitimate doubt about the problem, their analysis of cause and effect, the discernment of their selected experts, or their proposed coercive solution. And there certainly isn’t a doubt that their mighty combination of power, resources, and intelligence can cause all the forces in the universe to adapt to their will, including even the climate that King Canute himself said could not be controlled by kings and princes.

    As with countless other statist plans over the last hundred years, they figured that it was enough to gather all the right people in one room, agree to a wish list, sign a few documents, and then watch the course of history conform to their wishes.

    The Paris Agreement is no different in its epistemological conceit than Obamacare, the war on drugs, nation-building, universal schooling, or socialism itself. They are all attempts to subvert the capacity of society to manage itself on behalf of the deluded dreams of a few people with power and their lust for controlling social and economic outcomes.

    Rejecting Elite Politics

    How far are the Democrats from recognizing what they have done? Very, very far. John C. Williams, writing in the New York Times, has decried the “The Dumb Politics of Elite Condescension”:

    “As a progressive, I am committed to social equality – not just for some groups, but for all groups… Everyone should have access to good housing and good jobs. That’s the point… Too often in otherwise polite society, elites (progressives emphatically included) unselfconsciously belittle working-class whites. Democrats should stop insulting people.”

    That would be a good start. But it is not only about rhetoric. Policy preferences have to change. A global agreement that somehow binds entire countries to centrally plan and regulate the whole of a crucial sector of economic life that supports all economic advances of our time – at the very time when the energy sector is innovating its own solutions to carbon emissions in the cheapest possible way –  is certainly going to breed resentment, and for good reason. It is a bad and unworkable idea.

    Continued reliance on undemocratic, uneconomic, imposed strategies such as the Paris Agreement will only further feed the populist revolt that could end in the worst possible policy combinations of strong-man nationalism, nativism, protectionism, closed borders, and backwards thinking in general. No good can come from this. The backlash against globalism can be as dangerous as globalism itself.

    You might think that the election of Trump would offer some lessons. But that is not the way the arrogant minds behind the climate agreement work. They respond by merely doubling down on disdain, intensifying their commitments to each other, heaping more loathing on the workers and peasants who have their doubts about these deals.

    Trump and his ilk abroad, backed by voting masses with pitchforks and torches – and not a managed transition from fossil fuels to clean energy – are their creation.

    Jeffrey A. Tucker

    Jeffrey Tucker is Director of Content for the Foundation for Economic Education. He is also Chief Liberty Officer and founder of Liberty.me, Distinguished Honorary Member of Mises Brazil, research fellow at the Acton Institute, policy adviser of the Heartland Institute, founder of the CryptoCurrency Conference, member of the editorial board of the Molinari Review, an advisor to the blockchain application builder Factom, and author of five books. He has written 150 introductions to books and many thousands of articles appearing in the scholarly and popular press.

    This article was originally published on FEE.org. Read the original article.