Matisyahu's Blog

I was watching a few videos tonight regarding the changes in the mandates in the United States regarding pollution regulations and fuel economy standards regarding whether the series of steps to deregulate is setting the car industry up to a change in tariff policy between the United States and China. I say this because at the moment there is quite steep tariffs on Chinese made EVs being imported into the United States and the Trump administration are talking about allowing Kei vehicles into the United States. With those changes taking place are we going to see a change in policy along the lines of “now I’ve taken the shackles off your industry, I’m going to remove the protection for your industry”. It’ll be interesting to see what occurs in the coming year – personally I think the use of tariffs by Trump have more to do with seeing it as a tool to express power through rather than any sort of deep understanding of how tariffs actually work in reality. It would fit into his modus operandi of being attracted to ways of projecting power and he see’s it as a way of doing just that – “do what I say or you won’t get access to the United States”.

That being said, it could be all moot because we may see the Supreme Court say the tariffs he imposed were illegal which would mean that there would be refunds from the tariffs collected which leads me to wonder whether he knows that the tariffs are going to be overturned which is why there has been a flurry of deregulation so when the tariffs do come off as a byproduct of the court making their decision that United States industry is ready for the disappearance of Trump protectionism. That being said, I am assuming that there is some sort of method to madness rather than it simply being the mad king doing mad things because of deep seated issues – the crazy driver and the rest of the world are the unwilling passenger holding onto our dear life in a hope we arrive all in one piece.

Back closer to home there is talk about a free trade agreement with India with unfortunately doesn’t give the New Zealand agricultural sector the sort of access that the current free trade agreement that New Zealand has with China. One of the sticking points has been the part of the free trade agreement regarding being able to work in New Zealand after graduating with the question being whether we’ll have the amount of accommodation required because at the moment. At the moment due to an increase in supply of houses plus outflow of New Zealanders overseas there has been downward pressure on rents for the first time in many years – with more students staying in New Zealander after graduation are we going to see increased demand putting upward pressure on rent? what is the plan in terms of building more housing to ensure that there is some sort of balance between supply and demand for housing?

I can’t help but get the feeling that this free trade agreement is about helping out the landlords once again by boosting demand which in turn will boost house prices so then New Zealanders can feel artificially richer who will then load up on debt and get the economy working. What would be the real solution to our economic woes? promoting investment into businesses turning commodities we export into final goods so then we’re price makers not price takers, investing into infrastructure that improves productivity and competitiveness, encouraging businesses to invest into capital to improve productivity and competitiveness. To do that would require a long term plan – something that New Zealand governments tend to do a pretty lousy job at.