“Trade War: The Sky Is Falling Down, Again” By Musafir


The sky is falling down again and Chicken Little is running for cover. This time it is the Trade War. The American industry will be destroyed and the Americans will suffocate under the burden of indirect taxes because the Chinese and the European gods are furious and breathing fire on us wanting to retaliate and impute us. Oh Boy! Didn’t I hear this before?

On Thursday, March 1, 2018, President Trump announced tariffs of 25% on steel and 10% on aluminum, promising that they would protect U.S. producers “for a long time.” The media pundits have been busy predicting grave economic consequences for the US economy as a result of Mr. Trump’s announcement. The news channels can’t get over their indefatigable coverage of retaliation from China and Eurozone. The economists are insatiably predicting apocalypse now (as usual). The Wall Street indices plunged by 1,100 points in days following the above announcement.

Relax! Don’t panic yet. Think for yourself; do some research. I did. What happened when Mr. Trump slapped hefty tariffs on imports of solar panels and washing machines from China on January 24, 2018? Despite the doomsday predictions by the media and economists alike, China lowered the price of washing machines to compete in the U.S. market and decided to build the solar panels here on the U.S soil. How soon do we forget!

First of all, China and Eurozone are no Mother Teresa. They have been taking advantage of the USA’s generosity for years without reciprocating despite America’s cry in wilderness and now they are crying foul again. Let’s examine the facts:

USA normally sets import duties between 5 to 12% which includes imports from China. In contrast China levies 13% tariff on food and 18 to 30% on industrial goods and electronics imported from the U.S. Eurozone places 6.4% tariff on industrial and 16.1% on food items coming from the U.S. India has put 100% duty on Harley Davidson exported from Wisconsin and charges 60% duty on auto parts. USA charges 0% on motorbike imports from India. The maximum import fee charged on all Indian goods doesn’t exceed 6%. Brazil and Japan have similar stories. That’s a topic for another day. (Sources: Chinaimportal.comExport.GovChina-briefing.comcommers.gov)

Fear mongers have been spreading the rumor that import duties proposed by Mr. Trump will add indirect tax to the U.S. consumers. Yes, to some extent! Soda and beer cans will cost one cent more and automobile will cost on average $45 to $145 more depending on the model. That’s peanuts compared to how many steel and aluminum industry jobs it will save. Nothing is totally free in this world.

If China and the Eurozone decide to go on trade war with the USA, they can’t win. The U.S. economy remains the largest in the world in terms of GDP. The $19.42 trillion U.S. economy is 25% of the gross world product. USA is the greatest spender in the world outpacing the rest by a wide margin. USA’s GDP per capita is $57,638 compared to Eurozone’s per capita of $39,100 and China’s $6,333. Who’d the world like to do business with without affecting their own economy? Go figure!

The Eurozone unemployment rate is 9.4% while the USA is inching towards full employment. China being a communist country, their figures are always dubious. Additionally, China is losing its competitive advantage quite fast. Chinese labor is getting more expensive. Consulting firm Oxford Economics estimated recently that China’s unit labor costs were just 4% lower than those in the U.S. It’s now cheaper to pay factory workers in Japan than in China, per unit of output (Source: www.bloomberg.com). In case you have not been paying attention, Mr. Xi Jinping just became a lifelong dictator of the Chinese people so that he can avoid the wrath of his countrymen in coming days. Just the other day, the Europeans were going gaga on the prospects of China replacing the USA as the new moral leader of the world. “Lord, what fools these mortals be.” (Shakespeare: A Midsummer Night’s Dream).

The US Commerce Secretary, Mr. Wilbur Ross summed it up succinctly, “American employees have borne the brunt of all the imported steel and aluminum that’s been coming in. Corporate America might complain, but the president is taking up the banner of Mr. and Mrs. America.”

(The writer is not an economist. If you want to contradict, correct and/or educate him, you are very welcome to do so.)


A nation cannot claim to be advanced without providing mass transportation to its people

mass transit

My friend Joe decided to cut back to one car in retirement because the cost of operating an extra vehicle was very expensive. One day Joe went across the border to buy his medicine since that was 65% cheaper in Canada. While returning home, Joe met with an accident that kept him stranded in Detroit. Joe’s wife could not pick him up since they did not have an extra vehicle. Joe and his wife bought a second car as a backup for unexpected events. They pay close to $10,000 a year on car loan, insurance and registration which takes a toll on their retirement income.

Our cleaning lady, Brenda lost her income for four months this year because her car became inoperable and she could not afford another vehicle. Recently Brenda bought a used car after receiving her tax return from the IRS which she used towards down payment for the vehicle. Though Brenda is back to work now, her automobile payments (including insurance, gas and repairs) don’t leave her much to live on. She has moved with her daughter to afford a living.

On a brutally cold winter evening, I found Duane walking on I-75 in the middle of nowhere almost frozen to death. He had gone to Flint from Pontiac for a job interview borrowing his aunt’s car. The car broke down and no one would give him a ride back. He had already walked ten miles and had another twenty to go. I dropped him to his place and saved his life.

Americans in metro areas are dependent on automobiles due to the absence of mass transportation. This situation necessitates them to have automobiles for every member of their family. In addition, automobiles contribute more than half of the carbon monoxide and nitrogen oxides, and almost a quarter of the hydrocarbons emitted into our air causing global warming.

Some folks argue that mass transit is not practical because of the suburban sprawl which is designed to provide personal space to all individuals. I agree, but there are many folks like Joe, Brenda and Duane who would like to curb car use for economic and environmental reasons. I personally prefer to use mass transit for going to the airport, medical appointments or downtown events. Others could use that for commuting to work and going to schools. The fact remains, “if you build them, they will come.”

As of today, transit in major American cities does not exist with the exception of New York, Boston, Washington DC and San Francisco. America’s dependence on its automobiles is reinforced by a shortage of alternative forms of transport. The Congress and the President are not doing anything about this either. The government is paralyzed due to partisanship. Unfortunately, the American public seems to care more about same-sex marriage, abortion rights, and transgender bathrooms than mass transit and infrastructure. This may be due to years of social engineering by Hollywood and media. Whatever be the truth, it’s time for us and our leaders to address real issues in the upcoming election instead of dwelling on futile pursuits. If not, we’ll be stuck in the same rut.


First blog post

Friday Fun: If you have time, don’t waste others’ – Unknown

Hey! It’s Friday and may of you may be attending parties for a good time.Beware when someone approaches you with questions like, “What is the meaning of life?” That is a red flag right there. He or she is just trying to show intellectual prowess by poking holes in yours. If confronted, simply suggest that person to do a Google search and leave you alone.

Another absurd question those lunatics often ask is,” Do you know why were you sent to this earth?” Recognize the warning sign right there! People ask this question when they feel inadequate and worthless about themselves. Let’s try to get those people back on track by giving a tit for tat answer: “I was sent here randomly and accidently. That’s why! Did your parents design you genetically by choosing a particular sperm and egg so that you could become a menace to the society and nuisance to others?”

Recently a flaky confronted me with “How do you want to be remembered after you die?”

“First of all this untimely and uncalled for question does not establish you as an intellectual or an intelligent person. Secondly, I don’t care about being remembered after I am gone So, may I enjoy my life without you?” I was at my wit’s end.

Once a dippy asked me, “If you could offer a newborn child only one piece of advice, what would it be?” That’s it! That was the last straw that broke the camel’s back. “First of all, only a screwball will give any advice to a newly born. I may give advice to the newborn’s parents instead to keep their child away from eccentrics like you,” I replied.

So, keep away from them. Please call me if someone asks you, “Who am I?” “What is the nature of reality?” “How far east can I go before heading west?” I will come to the rescue and give such a person a free ride to the loony bin. They need to be isolated al pronto.