We’re Devolving. And The Cobblers Are Restless.
We're devolving, apparently. On Monday afternoon, the Financial Times reported that Huawei is going to try and launch its own mobile phone operating system. This is necessary because thanks to Donald Trump, Google is curtailing the company's access to Android software. Tim Watkins, Huawei's VP for Western Europe, swears the new system "can kick in very quickly". Huawei's OS, Watkins says, was already in testing in some areas of China. Tim's spin efforts aside, this is a forced devolution away from specialization, a foundational economic principle that ceases to apply when access to outside markets is constrained. Rather than promoting technological advancement and economic development, the US is now actively working to turn back the clock on civilization. America's is now a retrograde policy. The results will be predictable: Higher prices and lower quality. Amid the selloff in semis, we gently suggested the Trump administration needed to take immediate action to ameliorate the situation. Frayed nerves need calming, lest the semi swoon should be seen for what it is: A reflection of the White House's increasingly archaic conception of global trade and commerce. The selloff in chip stocks is the market vomiting on the triumph of Trump's idiocracy. Perhaps realizing that things were spiraling quickly out of control, the US on Monday authorized a temporary general license which green lights some transactions with Huawei and its 68 non-US affiliates. Huawei will generously be permitted to buy American goods necessary to ensure existing networks remain operational and to update software on existing Huawei devices. However, Huawei is still restricted from purchasing American-made parts to make new products (unless licenses are approved, which they won't be). The effective date of the new authorization is from today, through August 19. “It appears the intention is to limit unintended impacts on third parties who use Huawei equipment or systems", former Commerce official Kevin Wolf told Reuters. "It seems they’re trying to prevent network blackouts." Yes, it does "seem" that way. And that speaks to how out of control this really is. Trump's trade war is now on the verge of causing network blackouts. Meanwhile, Nike, Adidas and 171 other shoe companies signed an open letter to Trump, Steve Mnuchin, Wilbur Ross and, for sh*ts and giggles I guess, Larry Kudlow. The letter calls Trump's shoe tariffs "catastrophic for our consumers, our companies and the American economy as a whole." Bullboxer Shoes, Converse, Crocs, Fila (which still exists, apparently), Keds, Skechers and dozens of others did not mince words. In fact, the companies literally demand the White House "immediately" cease and desist from being categorically insane. To wit:
On behalf of our hundreds of millions of footwear consumers and hundreds of thousands of employees, we ask that you immediately stop this action to increase their tax burden. Your proposal to add tariffs on all imports from China is asking the American consumer to foot the bill."It is time to bring this trade war to an end", the letter adds. The cobblers are restless. Now, one imagines, Trump will go to war with shoes. Because what did shoes ever do for America, anyway? [pdf-embedder url="https://heisenbergreport.com/wp-content/uploads/2019/05/2019-Footwear-Tariff-Letter-1.pdf"]