Courtesy of Mish.
Trump and his team, led by trade czar Peter Navarro, are itching for trade wars with Mexico, China, and Germany, if not the whole world.
It’s all part of Trump’s “America First” proposal. But how will “America First” play out in practice?
Let’s investigate one way China might strike back.
Leeham News author Scott Hamilton writes Pontifications: Boeing’s risk if Trump goes wild.
Trump threatens a 45% tariff on Chinese imports and a 25% tariff on Mexican imports.
Why do Boeing officials probably have upset stomachs and flaming heartburn?
Because Boeing has more than 1,200 orders from countries that are in Trump’s crosshairs. Nearly 770 of them are 737s. More than 300 are 777s. Nearly 170 of them are 787s. And these are just the identified customers. There’s no telling how many of the 1,101 737s, 16 777s and 76 787s (at Dec. 31) were ordered by Trump’s target and potential target countries.
Iran, Iraq and more
LNC detailed the exposure Boeing has to Trump’s immigration “no-fly” list in our Jan. 30 post to Iran and Iraq.
Trump spokesman Sean Spicer said the immigration ban could be extended to other countries with terrorist activity. I put together the list of Boeing customers in these countries. It’s not small.
There are 1,242 orders that are on the identified customer list. This is twenty-one percent of Boeing’s backlog. The Middle East alone accounts for 560 orders from all the countries.
China
I’ve identified 250 known orders placed by customers from China on Boeing’s website. Boeing also reports that customers in China ordered 280 aircraft, so there are at least 30 Unidentified customer orders. There is a general belief the number is considerably higher.
“China Inc.” is Boeing’s largest single customer; no aircraft orders are placed in China without government approval.
Trump’s threatening China with tariffs is playing with fire. Boeing stands a very good chance of becoming collateral damage.
Trade Wars Unwinnable
Team Trump believes it can “win” trade wars. The fact remains, nobody wins trade wars.
Talk of “fair trade” is total nonsense. Free trade is Fair trade.
Team Trump, academia, and “fair trade” advocates are all wet. Saving a handful of jobs as prices skyrocket is a horrific deal for all but the handful of people whose job is saved.
Imagine a 45% tax on imports from China. Everyone shopping at Walmart, Target, etc, pay more for almost everything. Those people have less money to spend on everything else (dining out, movies, travel, etc.) How many jobs are created or saved in the process? Any?
