Subject: o/t, The Uncertainty Recession, Mauldin
" The White House seems fixed on eliminating trade deficits. Worse, they want to eliminate not just the total trade deficit, but to have zero trade deficits with every country on the planet. That is the kind of economic quackery only Peter Navarro can imagine.

Here’s Peter Boockvar on that point.

“As a CIO, portfolio manager, analyst, economist, etc…. I continue to go over every single possible scenario in my head that can come of the tariffs and the intended use of them. I got some more help in figuring this out from Peter Navarro yesterday who revealed in a CNBC interview exactly what he wants from all of this. He said, ‘We want the tires made in Akron, we want the transmissions made in Indianapolis, we want the engines made in Flint and Saginaw, and we want the cars manufactured here.’ He does not want US car makers to just be assemblers of parts made elsewhere into a finished product here. This is his real intention from all of this.

“That sounds all well and good, but the big problem is the US will no longer be cost competitive with its exports. High-cost production in the US will price us out of the global marketplace. Domestic production here will just be for domestic consumption as we are also basically incentivizing US manufacturers to produce overseas to feed their overseas customers because it will be much cheaper to do so than produce here and ship it internationally.

“I'll add again what I said yesterday, lowering the cost of doing business in the US is the path to more manufacturing jobs and presence as what we make here we can ship to the about 75% of global GDP that takes place elsewhere and to the 96% of the world's population that doesn't live here. Wanting to make every single piece that goes into every finished product in the US will cost us billions of dollars of lost export opportunities at the same time US consumers pay through the nose for domestically made goods.”

The “logic” behind Navarro’s vision is that the mere existence of a trade deficit is somehow unfair to the United States. It is (in his view) clear evidence of an unfair situation that must be ended immediately."

https://www.mauldineconomics.c...