Random Friday: Tariffs on Mexico, agriculture prices, Milton Friedman

News Story of the Day: Beginning on June 10, the United States will slap tariffs on Mexico in order to urge the country to stop illegal immigration.

Using the International Emergency Economic Powers Act, President Donald Trump will impose a 10 percent tax “on all goods imported from Mexico.” He claimed that he will only remove the tariffs “if the illegal migration crisis is alleviated through effective actions taken by Mexico.”

He added that if Mexico does not take action, then tariffs will increase to 10 percent by July, 15 percent by August, 20 percent by September, and 25 percent by October.

So, Trump wants to stop illegal immigration by punishing American citizens? Because that’s what happens when you institute tariffs: The country slapping the tariffs huts its own people.

Chart of the Day: The U.S. agriculture sector is trading lower and that will be the trend moving forward, suggests one Investopedia chart.

Illustration of the Day: The Internet, though it can be a cesspool most of the time, is a marketplace of ideas. You can learn anything and converse on any subject with anyone around the world. But don’t take it personally if they disagree with you.

Quote of the Day: Once again, President Trump is tapping into his mercantilism, his protectionism, his Tariff Man sense by imposing tariffs on Mexico. Milton Friedman would like to have a word:

In the international trade area, the language is almost always about how we must export, and what’s really good is an industry that produces exports. And if we buy from abroad and import, that’s bad. But surely that’s upside-down. What we send abroad we can’t eat, we can’t wear, we can’t use for our houses. The goods and services we send abroad, are goods and services not available to us. On the other hand, the goods and services we import, they provide us with TV sets we can watch, automobiles we can drive, with all sorts of nice things for us to use. The gain from foreign trade is what we import. What we export is the cost of getting those imports. And the proper objective for a nation as Adam Smith put it, is to arrange things, so we get as large a volume of imports as possible, for as small a volume of exports as possible.

This carries over to the terminology we use. When people talk about a favorable balance of trade, what is that term taken to mean? It’s taken to mean that we export more than we import. But from the point of view of our well-being, that’s an unfavorable balance. That means we’re sending out more goods and getting fewer in. Each of you in your private household would know better than that. You don’t regard it as a favorable balance when you have to send out more goods to get less coming in. It’s favorable when you can get more by sending out less.

Tweet of the Day: Robert Mueller did a drive-by press conference that put to rest the Russian collusion investigation. At least it should. Here is a good tweet that summed up Thursday’s presser:

Mueller: "I certainly do not question [Barr's] good faith" in the release of the report. He then says he will not be testifying publicly before Congress, and has nothing more to say beyond what's in the report.

Bye-bye, "cover-up" conspiracy theory.

— Aaron Maté (@aaronjmate) May 29, 2019

Video of the Day: Did you hear? The electoral college is comparable to slavery!