Dollar Down as US Starts Trade War with its Creditors

[Macrobius]

I was surprised this tariff move didn't get more press (even in the blogosphere). Would we really be so dumb as to start a trade war with China and nuke Iran in the same week? I can't image that -- and that bears on predicting whether we are going to 'do' Iran.

'The initial duties will range from 10.9% to 20.3%, Secretary of Commerce Carlos Gutierrez said at a press conference in Washington on Friday. '

Smoot-Hawley, here we come.



Dollar tumbles as US imposes new tariffs on China imports
Published: Sunday, 1 April, 2007, 08:45 AM Doha Time
New York: The dollar dropped against the euro and the yen this week after the US added tariffs on imports from China, fueling concern the levies will reduce trade flow with the world’s biggest holder of foreign reserves.
The US currency also fell against the yen on speculation mounting tension in the Mideast will lead investors to reduce holdings in riskier assets financed by loans in Japan.
The tariff and Mideast concern yesterday offset US reports showing signs of a stronger economy and accelerating inflation.
“The whiff of protectionism killed off the bullish sentiment on the dollar,” said Shaun Osborne, chief currency strategist in Toronto at TD Securities Inc.
The dollar fell to $1.3356 per euro, down 0.55% from March 23. The US currency touched $1.3401 on the tariff announcement, the lowest level since March 22.
The dollar dropped 0.23% to ¥117.85. For the quarter, the dollar lost 1.19% against the euro and 1.03% versus the yen.
Brazil’s real was the biggest gainer against the dollar among the 16 most active currencies tracked by Bloomberg this quarter, rising 3.72%. The South African rand lost the most, dropping 3.67%.
The initial duties will range from 10.9% to 20.3%, Secretary of Commerce Carlos Gutierrez said at a press conference in Washington on Friday.
The Bush administration faced pressure to expand the tariffs from steel companies, textile producers and other manufacturers and their advocates in Congress, analysts said.
...

[Sertorius]

Macrobius,

I heard on Lou Dobbs that this was only on paper and it was something like 0.008% of the total trade with China.

[Macrobius]

Macrobius,

I heard on Lou Dobbs that this was only on paper and it was something like 0.008% of the total trade with China.

I would be happy to have the proceeds of 0.008% of our trade with China. Tell him to mail a check and I will be sure make the appropriate tariff collection. :)

[Texas Dissident]

Smoot-Hawley, here we come.

It's about time.

http://www.buchanan.org/pa-94-1203.html

The Isolationist Myth
by Patrick J. Buchanan
December 3, 1994

High among the falsehoods is that 'free trade' made America prosperous and protectionism always made her poor...

Poor Smoot and Hawley. They get it every time. During the closing hours of GATT debate, their names were everywhere: Reed Smoot and Willis Hawley, architects of that dreadful, ruinous tariff bill of 1931.

Smoot-Hawley, it was said, deepened -- if it did not cause -- the depression. Smoot-Hawley proved the folly of using tariffs to protect America. Smoot-Hawley made the case, forever, for free trade. GATT opponents were isolationists and protectionists in the Smoot-Hawley tradition. It was their forebears who made the world safe for fascism and laid the groundwork for WWII.

This is part and parcel of The Great Myth of the 20th century: That withdrawal of America's armies from Europe after World War I, our refusal to ratify the Versailles peace treaty and our isolationism and protectionism in the '20s and '30s, made the world safe for fascism, Hitler and World War II. We Americans bear responsibility for those horrors. We are guilty! Therefore, we owe mankind reparations and must never again shirk our duties to the world.

This myth is the greatest of the "Blame America First" slanders. It is endlessly exploited, here and abroad, by men whose dreams have always been to leech out America's reservoirs of blood and treasure for their own global ambitions.

But The Great Myth is a great lie

Fascism and Bolshevism -- Mussolini, Lenin, Stalin, Hitler -- did not result from American isolationism. They were the results of European stupidity and bloody-minded idiot-interventionism. World War I, the monstrous bloodbath which destroyed four empires -- Russian, German, Austrian, and Ottoman -- and brought Lenin to power in 1917, was Europe's doing, not America's.

As for the Versailles treaty, which split a defeated Germany in Two and left millions of German-speaking peoples cut off from their homelands, isolated in France, Italy, Poland, Czechoslovakia, that was the doing of British and French "statesmen." Woodrow Wilson may have gone along, but it was not he who scheduled WWII -- with the vindictive, wicked peace of WWI.

That the U.S. should have joined the League of Nations and used its power to police this squalid treaty is absurd. For Versailles did not rest on Wilson's "Fourteen Points," the principles of peace that had won Berlin's agreement to an armistice.

Versailles trampled all over them. It denied German-speaking peoples all over Europe the right of self-determination they had been promised if Germany and Austria laid down their arms. The only way the Western allies won German acceptance of their dictatorial, Carthaginian peace, was with a British-led Starvation Blockade of 1919, itself a moral atrocity and violation of Wilson's Fourteen Points.

Mussolini, the first of the fascists, came to power in 1922. (Perhaps Il Duce marched on Rome to protest the Fordney-McCumber tariff.) And perhaps Hitler's Munich Beer Hall putsch in 1923, where he tried to seize power in Bavaria, was pulled off in anticipation of Smoot-Hawley?

Dismemberment of Germany at Versailles, the imposition of impossible reparation demands, which post-Kaiser Germany was forced to accept, discredited Weimar democracy and created the misery and thirst for revenge -- not some U.S. tariff.

But didn't Smoot-Hawley cause the Depression? Again, myth. The 1929 collapse on Wall Street triggered the Great Depression. The failure of thousands of banks, wiping out a third of America's savings, caused the Depression to last until WWII, long after the Smoot-Hawley tariffs had been rolled back.

Americans today are being indoctrinated in false history. And high among the falsehoods is that "free trade" with foreign nations made America prosperous, and protectionism always made her poor. This is the catechism of the One Worlders, but it is politically correct history -- not truth.

All four presidents on Mt. Rushmore were protectionists. The greatest era of industrial expansion in America, where our workers saw the greatest rise in their standard of living was from 1860-1914, when America protected her industries and jobs behind a tariff wall. During that half century, U.S. exports rose 700 percent, while imports rose only 500 percent! By 1914, U.S. workers were earning 50 percent more that Brits, and more than twice what Germans and Frenchmen made.

No nation has ever risen to pre-eminence through free trade. Britain before 1848, America and Germany from 1865 to 1914, Japan from 1950 on, all practiced protectionism.

Now, the indices of national decline are all around us: endless huge trade deficits, falling wages, urban and social decay. But that decline will not be reversed until Americans cease to think of themselves as global citizens, with global duties, and start thinking again of their own country.

Smoot and Hawley aren't responsible for America's decline. Rather, it is those who make constant sport of them, and who need to be driven from power, if America is to reclaim the lost dream.