China issues anti-dumping ruling on European pork, charges deposits

The trade wars are heating up! Progress on global free trade, pursued since 1945, is suffering another setback!

Well, the Communist Party of China has practiced mercantilism for several decades without much resistance from the West.

"China has made a preliminary determination that Europe is dumping pork and pork by-products into its market, causing “material injury” to the domestic industry, Beijing’s Ministry of Commerce said on Friday. ..."

China issues anti-dumping ruling on European pork, charges deposits | South China Morning Post "Ministry of Commerce says importers covered by preliminary judgment must provide cash deposits with shipments"

'Only going to get worse': China’s export orders plunge amid trade war with Peter Schweizer

Recommendable!

The new TEPA agreement between the EFTA and India breaks with traditional trade agreements to accommodate Indian mercantilism

Good news! India, a rising superpower!

"... With this in mind, the interest of the EFTA states (Switzerland, Norway, Iceland and Liechtenstein) in a trade agreement with India is understandable. After 16 years and 21 rounds of negotiations, India and the EFTA signed a Trade and Economic Partnership Agreement (Tepa) in March led by Switzerland. ...

These industrial policy ambitions [Make in India] also explain why the Indian government declared the investment promotion chapter to be a “sine qua non” in the negotiations. In it, the EFTA states commit to investing 100 billion US dollars and creating one million jobs by 2040. ...

Since the turn of the millennium, the EFTA states have invested almost 11 billion US dollars in India. More than half of this amount has been invested in the last five years. ...

In terms of realpolitik, however, this appears to be a pragmatic bet. Concluding the Tepa before India reaches an agreement with the UK or the EU could give India a competitive advantage. Moreover, the additional expansion of the Swiss free trade network – with Ecuador (2020), Indonesia (2021) and the UK (2021) – promises to make Switzerland more resilient in difficult geopolitical times. Switzerland’s free trade agreements now cover 77 countries and around 55 percent of the global market. ..."

Switzerland Bets on India - Avenir Suisse

The Infant Formula Crisis was caused primarily by severe Government Intervention in production and foreign trade

Very recommendable! Sums it up quite well.

E.g. imports of baby formula are only less than 1.5% of domestic supply thanks to government trade barriers. Government programs created basically an exclusive domestic oligopoly of producers of baby formula.

Pure insanity! Government programs require that almost half of all baby formula sales can only be purchased from certain brands and only at approved stores.

Why can baby formula not imported from e.g. Canada or Europe? Because the U.S. government essentially declared those products unsafe!

Stringent government regulations also effectively prevent more domestic competition in the market of baby formula!

"Everyone at the hearing agreed that shortages in the United States have been caused in no small part by the current concentration of U.S. infant formula production among Abbott and three other companies: when Abbott initiated a voluntary recall and shut down that Michigan factory, there were no easy or immediate replacements to fill a gaping hole in the U.S. market. ...

In particular, several U.S. policies have worked to all‐​but‐​ensure that the infant formula market here is stagnant, dominated by a few large, domestic corporations, and highly vulnerable to an economic shock. These policies include:

Trade barriers. U.S. tariffs, trade agreements, and FDA rules effectively block almost all foreign‐​made infant formula from the U.S. market—contributing to market concentration. ... shipments from Europe have been routinely seized and destroyed by U.S. Customs and Border Patrol because they did not comply with FDA labeling and other rules — even in the middle of the current crisis. 

Government contracts. The expansion and design of the Special Supplemental Nutrition Program for Women, Infants and Children (“WIC”) effectively ensures that the U.S. market remains concentrated. WIC provides vouchers for low‐​income Americans to buy pre‐​determined brands of formula at approved retailers. Since the program’s inception in 1974, WIC participation has grown dramatically: today the program accounts for more than half of all domestic formula sales. This buying power allows the government to demand that producers offer steep discounts; and in exchange, state WIC agencies offer big, sole‐​source contracts to winning bidders. ...

Regulation. Finally, stringent FDA regulations specific to infant formula are also likely amplifying domestic market concentration. Since 1980, the United States has regulated formula more strictly than other foods here and more strictly than formula in most other countries. ... Until a few weeks ago, there hadn’t been a new formula manufacturer in the United States since 2007, and it took the new player, ByHeart, more than $190 million and five years to start production. ..."

The Infant Formula Crisis Argues for Less Government Intervention, Not More | Cato at Liberty Blog

Colbertisme Is Still Alive In France!

When A U.S. Company Wants To Acquire A French Company

The CEOs of both companies (General Electric & Alstom) have to first consult with the French government.

The French government prefers a European solution with e.g. German Siemens.

Mercantilism Has Never Died

Those who attack “Laissez faire, laissez passer” or the “invisible hand” etc. are often extremely ignorant or they are worshipers of a government run economy.

Currency Manipulator China - An Irrational Obsession Of Mitt Romney

Candidate With Business Acumen, But A Poor Economist

No doubt, Mitt Romney is an accomplished business man, someone the USA urgently needs to end four years of agonizing und unnecessary Great Recession. However, his understanding of economics seems to be poor as can be shown by his insistence of China being a currency manipulator.

I do not understand which voters Mitt Romney is trying to win with this campaign motto, but if he is smart he would drop it instantly. How much is to be gained with such a slogan versus how much is destroyed by it?

Romney’s Trade Campaign Platform On China

Under “Trade Issues” we read “Confronting China. China presents a broad set of problems that cry out urgently for solutions. …
•Designate China a currency manipulator and impose countervailing duties …” (Emphasis added).

This is certainly overly aggressive language, more suited perhaps for the national defense issue page.

Currency Manipulation & Countervailing Duties

Both terms are taken from the tool box of a mercantilist or protectionist. Both have been tried in the past with considerable negative consequences.

The US thanks to its Smoot-Hawley Tariff Act of 1930, preceded by the similar Fordney-McCumber Tariff Act of 1922, has greatly contributed to the severity of the Great Depression.

Currency manipulation is in the eye of the beholder. Is it currency manipulation that the US keeps short term interest rates for years at artificially and recklessly low rates?

A currency is a two edged sword. It is a measure of value of money of one country versus the value of money in other countries. If one country decides to control the value of its currency to be cheap versus the rest of the world so be it. As most relationships in economics it has benefits, but also disadvantages. A devalued currency promotes exports, but it makes imports more expensive and so on. Thus, China, which is highly dependent on imports of resources and technology, pays a price for devaluing its currency.

The US Needs A Strong Economic Recovery Above Anything Else

The World, including China, is waiting for that to happen!

People, who sit in a glass house should not be throwing stones. That is counterproductive. Meaning, China has acquired a trillion and more dollars in US government bonds, thus helping the federal government to finance its extraordinary debt binge of the past decade. At present, a highly indebted country with a weak economy like the US ought to be careful what it wishes for.