Tariffs On Washing Machines Coming Up; Mish Rages "Let's Tax The Sun And The Rain Too"

Authored by Mike Shedlock via MishTalk.com,

Whirpool bitched to the Trump administration and the International Trade Commission about unfair pricing on Samsung and LG-brand washing machines.

The ITC panel ruled U.S. washing machine makers hurt by South Korean imports, so your price is guaranteed to go up.

The U.S. International Trade Commission on Thursday found that imports of large residential washing machines were harming domestic producers, in a major step the imposition of duties or quotas on foreign-made Samsung- and LG-brand washers.

The case, brought by U.S. appliance giant Whirlpool Corp, asked the ITC to recommend to President Donald Trump “global safeguard” restrictions on imported washing machines to stop South Korean rivals Samsung Electronics Co Ltd and LG Electronics Inc from flooding the U.S. market with cheap washers.

The commission, which voted 4-0 in finding that large residential washers were being imported in such quantities to create injury to domestic producers, will recommend remedies by Dec. 4 to Trump, who is expected to make a final decision by early next year.

Crony Capitalism

The ITC ruling will not save a single US job. But it will drive up costs on US consumers.

When corporations cannot compete, they bitch. They also pad the pockets of politicians so the politicians see things their way.

French economist Frédéric Bastiat wrote about this in 1845. I encourage everyone to read Bastiat’s famous Candlestick makers’ Petition.

The petition was a sarcastic proposal on behalf of candle makers and similar occupations to tax the sun for the unfair practice of providing free light.

Were it not for the sun, there would be more jobs for the manufacturers of Candles, Tapers, Lanterns, sticks, Street Lamps, Snuffers, and Extinguishers, and from Producers of Tallow, Oil, Resin, Alcohol, and Generally of Everything Connected with Lighting says Bastiat in his petition.

Let’s Tax the Sun and the Rain

Bastiat’s petition explains the folly of tariffs. Samsung is no more stealing jobs than is the sun.

Speaking of which, the US has massive sugar tariffs to protect the sugar lobby from “unfair competition” from countries that happen to have better-growing conditions for sugar cane because they get more sunlight and water.

Hmm. It seems we need to tax water for falling into Lake Superior and Lake Michigan instead of the desert where’s it’s badly needed.

Why should Illinois farmers get more rain than Arizona farmers? By tariff logic, we need to level out the playing field so that all corn farmers in Arizona and Greenland are not disadvantaged compared to Illinois.

Related Articles

1. Reflections and Reader Comments on Free Trade: “China Doesn’t Play Fair!”


2. Disputing Trump’s NAFTA “Catastrophe” with Pictures: What’s the True Source of Trade Imbalances?


3. Trump Accuses Germany of “Currency Exploitation”: Merkel vs. Trump, Is Either Side Telling the Truth?


4. Navarro Nonsense and the Folly of Trump’s Proposed Tariffs

All this talk of “fair trade” is complete nonsense. The only “fair trade” is free trade.

Those who wish to understand the true source of escalating trade imbalances need look no further than Hugo Salinas Price and Michael Pettis on the Trade Imbalance Dilemma; Gold’s Honest Discipline Revisited.

AAPL Stock Slips After Reports Of New iPhone "Plagued By Production Glitches"

AAPL stock is sliding this afternoon as The Wall Street Journal reports the new iPhone is said to have seen "production glitches."

Apple Inc.’s new iPhone, which is expected to be unveiled Tuesday, was plagued by production glitches early in the manufacturing process this summer, according to people familiar with the situation, which could result in extended supply shortfalls and shipping delays when customers start ordering the device later this month. New iPhones are typically in short supply when first released. But if shortfalls of the new phone extend beyond the initial sales period, which is expected to begin September 22, they could weaken analysts’ and investors’ projections for sales in the crucial holiday period.
... 

The production glitches led to a setback of about a month in the manufacturing timetable. Foxconn Technology Group, the Apple contractor that assembles iPhones, has been ramping up production at its manufacturing complex in Zhengzhou, China. The company is paying bonuses to employees who can help bring new hires on board at its Zhengzhou plant, which Foxconn said in June employs about 250,000 people.

Ironically, this was predicted three months ago by Citi analyst Jim Suva who warned that "based on industry-wide checks, we believe the significant enhancements to the iPhone 8 OLED could experience delays as it ramps to high volume production in order to meet strong demand" and as a result slashed his September iPhone delivery estimate from 47 million to 40 million.

Of course, having ignored the news in June, the stock is acting quite surprised now that the exact same story is back in the headlines. 

On the other hand, who knows: this could all be just another clever AAPL PR move to create scarcity and buzz ahead of the looming launch.