Politics

Tubby’s Canteen said:

The one constant good to come out of war post ww2 was the absence of it on North American soil. 9/11 while a great tragedy was a sucker punch of a terror attack and not a military action.

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Tanks said:

I didn't even know Luxemburg had an army let alone a member of NATO. They are landlocked with a slew of countries between them as a buffer from any potential threat from Russia. I guess it might have made sense in the days of USSR. They'd be better off financially if they just leave NATO.

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Opposite Pole said:

I believe everyone should pay their own bills and do what they can to provide security for themselves. Now, regarding the “no one is meeting their agreed obligations” mantra repeated a lot as of late. Below is a graph from NATO’s website showing each of the member states’ spending. According to the official data eight countries are not meeting their agreed spending targets. There are 32 members states.

View attachment 674844

https://www.nato.int/nato_static_fl2014/assets/pdf/2024/6/pdf/240617-def-exp-2024-en.pdf

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Pondoro said:

Europe is now rearming...800 billion euros are on the table.

Sure..we need to do it..Hegseth is to reduce your military spending with 40%...8% pro anno from now..so perhaps you will have to pull out of Europe by necessity..

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mdwest said:

this is true... however it is only recently true.. and only reflects what has been happening for the last 18 months..

in 2018 only 3x NATO members were meeting their 2% obligation (US, UK, Greece)..

in 2020 only 9x NATO members met their commitment..

That number dropped to 7x countries meeting their commitment in 2022..

Only in 2023, after Russia invaded Ukraine the prior February did most (not all) of NATO actually start doing what they have been committed to do for a very long time.. and even with an invasion some of the countries doing the most bitching about the US, still arent meeting their commitment..

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Opposite Pole said:

Kindly explain how VAT tax, a sales tax, applied to most goods on the market, regardless of the place of origin and including local and imported goods at the exact same rate is excluding American, or for that matter any other country’s product?

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Opposite Pole said:

True, however at the 2014 Wales summit, following the soviet invasion of Ukraine, it was agreed that NATO member states were to be spending 2% of GDP on defence by 2024.

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Wheels said:

When NAFTA was established, theoretically there was free trade throughout North America. Most products made in Canada, Mexico and America were made in those respective countries. Over the past 25 years things have changed dramatically. Canada and Mexico decided to stop manufacturing products made entirely in their countries, and start substituting products made in other countries, primarily China and the western Pacific Rim. In many cases now, products are only assembled in Mexico and Canada.

Lets use China as an example. America has not been able to get free trade with China because China sends their manufactured products to Canada and Mexico, assemble it, and get free trade into America through the NAFTA Treaty. China then puts a tariff on American made goods. Over the years this has led to a growing imbalance of trade. In 2017, America imported $507 billion from China and only exported $130 billion to China. This deficit is virtually all due to NAFTA.

Trump has tried to work things out with Canada and Mexico for over a year. Neither Canada or Mexico wanted to make things work. That led to the situation that exists today. The only way Trump can get around the House and the Senate is to declare steel and aluminum as vital to national defense. Trump isn't looking to take advantage of either Canada or Mexico. Just have free trade between each country individually. Canada's problem is that they don't make many products anymore. They buy things from other countries and assemble them, thus Canada is going to have a problem adjusting.

Regarding the EU. @Red Leg covered this pretty well. America allowed Europe and Japan to have an advantageous trade balance after the war to help them rebuild. There is no need now to allow this imbalance to continue. Currently America imports $434 billion from the EU and export $283 billion. This is due to the EU having higher overall tariffs on products coming from America than America has on products coming from the EU. Trump wants free trade. Zero tariffs going each way. There is nothing sinister about this. Trump is not trying to get an advantage. Tusk, Junker and the other bureaucrats in the EU acted like no changes would be accepted, at least until Junker went to Washington this week with a change of heart.

All Trump is doing is keeping America from being taken advantage of. Since WWII by Europe and Japan, or since the mid 90's, by Canada and Mexico, due to NAFTA.

Canada has taken advantage of America since they started using foreign made products to export into America, changing NAFTA from it's original intent. This is all easily understandable with an hour or two of research. It is unfortunate that Freeland and Trudeau are inept. They are just making things much more difficult for the average Canadian. Hopefully Freeland and Trudeau will figure things out before things get to bad for our friends in the great white north.

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deewayne2003 said:

You really should THANK Trump! Without him the EU would just have continued to sit on their hands and do nothing, well nothing besides making snarky comments.

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C.W. Richter said:

yeah, but due to Reparation$, we essentially invested shit tons of $$$$$$$$$$$$$$$ in educating Japanese in the USA, helping to re-build their factories, and then allowing them to shift mfg and money over there. The 1% club are NOT your friends. "We use taxpayer money to make us even wealthier." -R. Perot 'Not a big fan of the process. At least they've scheduled war$ in jungle$ and cave$ in my lifetime. How civil! LMAO Like Pearl Harbor, I believe they allowed 9/11 to happen...

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Wheels said:

I have done it before but happy to do it one more time. You live in Poland so lets use America and Poland. (My figures are from a cursory glance at the internet) Lets say America has a $50k car they want to sell in Poland and Poland has a $50k car they want to sell in America. Poland has a 10% tariff on imported cars. America has a 2.5% tariff on imported cars. That makes the American car cost $55k in Poland and the Polish car cost $51,250 in America. Now you add on the 23% VAT that Poland charges and the American car now costs $67,650 in Poland vs the $51,150 the Polish car costs in America. (American States do have a registration tax/tag tax that varies by State that needs offset, but it is low compared to 23% VAT)

It doesn't matter that Poland charges 23% VAT on all imports from all countries or for internally made products.. If Poland wants to do that it is fine. Just don't expect other countries to be okay with it. In this case, America is jacking up the cost of the Polish car 7.5% (10%-2.5%) plus the 23% to get to a fair price of $67,650 which is their right, just as it is Poland's right to have a VAT. This has been going on for decades between America and Europe helping cause a massive trade imbalance favoring European countries. If Poland doesn't like it that is fine. Poland doesn't have to trade with America on equal terms if they don't want to. Just don't expect America to be happy getting the short end of the deal into perpetuity. If however Poland wants to trade with America going forward, expect reciprocity. If Poland wants to sell cars in America without tariffs it is easy. Just build the plants in America and there will be no tariffs!

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Wheels said:

Just build the plants in America and there will be no tariffs!

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RLD said:

What do you call someone who signs a deal and then refuses to stand by it?

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RLD said:

This is actually an interesting issue if you think about it for a couple of minutes. America is the consuming nation where all the money is. It kind of begs the question:

Why don't foreign companies build their plants there in the first place? Why did Honda and Toyota build plants in Ontario and not just over the border in say...Michigan?

Here are some of the reasons.

1) A better educated more productive workforce. One of the reasons the Mercedes-Chrysler merger fell apart was due to the inefficiency of American workers who were unable or unwilling to meet the German standards. For instance, the German Union contracts required their workers to move almost three times as many parts as the Chrysler workers CBA's required them to move. American workers have the potential to be as productive as anyone else but are not.

2) Health care costs. If you are building a big plant in the U.S. and have to buy health care insurance for your many thousands of employees, it can get very expensive. Base health care in Canada is provided by the government and thus not a cost. American health care is very expensive.

3) Cheaper energy costs. Which is the main reason the U.S. can't build aluminum that cheaply. Energy cost is a huge part of aluminum production.

4) Lower corporate taxes.

So how about this for an idea. American governments work to create an environment that makes it attractive and desirable to produce products there. Rather than simply trying to bully people into doing it, make it the best choice.

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Wheels said:

I have done it before but happy to do it one more time. You live in Poland so lets use America and Poland. (My figures are from a cursory glance at the internet) Lets say America has a $50k car they want to sell in Poland and Poland has a $50k car they want to sell in America. Poland has a 10% tariff on imported cars. America has a 2.5% tariff on imported cars. That makes the American car cost $55k in Poland and the Polish car cost $51,250 in America. Now you add on the 23% VAT that Poland charges and the American car now costs $67,650 in Poland vs the $51,150 the Polish car costs in America. (American States do have a registration tax/tag tax that varies by State that needs offset, but it is low compared to 23% VAT)

It doesn't matter that Poland charges 23% VAT on all imports from all countries or for internally made products.. If Poland wants to do that it is fine. Just don't expect other countries to be okay with it. In this case, America is jacking up the cost of the Polish car 7.5% (10%-2.5%) plus the 23% to get to a fair price of $67,650 which is their right, just as it is Poland's right to have a VAT. This has been going on for decades between America and Europe helping cause a massive trade imbalance favoring European countries. If Poland doesn't like it that is fine. Poland doesn't have to trade with America on equal terms if they don't want to. Just don't expect America to be happy getting the short end of the deal into perpetuity. If however Poland wants to trade with America going forward, expect reciprocity. If Poland wants to sell cars in America without tariffs it is easy. Just build the plants in America and there will be no tariffs!

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Alistair said:

That's clearly wrong.

In your example, the 7.5% delta is valid, but vat clearly and evidently has no impact.

The US company isn't paying vat, the Polish consumer is. They have to do so no matter if they buy an American car, or a Polish car, or a German car, so it's not barrier to US trade as it does not represent a competitive disadvantage to the US supplier over the Polish one. It simply means that Polish consumers pay more for ANY car.

Any more than a 5% us sales tax is somehow driving US consumers into an American car over a Polish one. That's clearly not going to be the case.

I'd also note that if your argument is that vat nominally results in a skewed balance of trade because the US car nominally becomes a more expensive export vs the Polish import coming into the US, then you should be aware that vat is not accounted for in trade deficit as it is charged at the point of sale, not at the point of disembarkation, so again, your argument is flawed.

Tariffs and duties on imports you have an argument. Sales taxes, be they vat or us sales tax, you do not.

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• Shipping and insurance: $20.
• Import duty (say 3%): $3 on the $100 value.
• Total taxable value: $123.
• VAT at 20% (e.g., UK rate): $24.60.
• Final cost to the European buyer: $147.60.

• In Europe, with 20% VAT, it would cost $120 domestically.
• Shipping and insurance $20
• When exported to the US, VAT is removed, so the base price to the US buyer is $120.
• Import duty in the US (say 2% on the $100 value): $2.
• Cost before sales tax: $122.
• US state sales tax at 8% (e.g., a typical rate in states like California): $9.76
• Final cost to the US buyer: $131.76.

RLD said:

It is so weird that Trump has been trying to work this out with Canada and Mexico for over a year, since he only has been in office since January.

Please help me understand just who he was communicating with in the Canadian government to work this out with?

It's also so weird that steel and aluminum are the targets of the larger tariffs, require no assembly at all and really are made in Canada. You are right Canada is not a manufacturing center, we tend to export natural resources, which require no assembly at all. If you take energy exports (oil and electricity) out the U.S. runs a trade surplus with Canada. And just to be clear, the oil and electricity are not imported from China and assembled in Canada.

And let us not forget, the current trade deal in place between the three North American countries was negotiated and put in place by Trump in his first term when he called it "the best trade deal ever."

What do you call someone who signs a deal and then refuses to stand by it?

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RLD said:

This is actually an interesting issue if you think about it for a couple of minutes. America is the consuming nation where all the money is. It kind of begs the question:

Why don't foreign companies build their plants there in the first place? Why did Honda and Toyota build plants in Ontario and not just over the border in say...Michigan?

Here are some of the reasons.

1) A better educated more productive workforce. One of the reasons the Mercedes-Chrysler merger fell apart was due to the inefficiency of American workers who were unable or unwilling to meet the German standards. For instance, the German Union contracts required their workers to move almost three times as many parts as the Chrysler workers CBA's required them to move. American workers have the potential to be as productive as anyone else but are not.

2) Health care costs. If you are building a big plant in the U.S. and have to buy health care insurance for your many thousands of employees, it can get very expensive. Base health care in Canada is provided by the government and thus not a cost. American health care is very expensive.

3) Cheaper energy costs. Which is the main reason the U.S. can't build aluminum that cheaply. Energy cost is a huge part of aluminum production.

4) Lower corporate taxes.

So how about this for an idea. American governments work to create an environment that makes it attractive and desirable to produce products there. Rather than simply trying to bully people into doing it, make it the best choice.

Click to expand...