The worrisome part of this is that Trump appears to be acting entirely on his own, with no top-level advice, much less pushback, from anyone inside his steadily eroding inner circle. Who’s left?
I suppose he could bring back Bannon. Or put Henry Kissinger on the White House payroll. But, truly, Trump is floating in uncharted waters. He said he would recruit the best of the best to be his White House advisors. Yet with this planned foray into North Korea, he has no advisors. That’s really worrisome!
6
Dear Paul, It must be tough to write an article that tries to dissect what The Donald and his minions have planned for our future in the world, as it applies to world trading of goods and badness, it is not a business he is familiar with. For The Donald, it seems to be, put your last name in caps in gold, walk away, call it good. If it doesn't float, stiff your contractors, declare bankruptcy and move on to the next news cycle. I probable won,t live long enough to see the full ramifications of two or more years of Trumpstupidness. My only hope is that saner minds will prevail. Please be one of those saner minds. Clueless in Oregon. RAW
2
Mr. Trump is taking something that wasn't broken and making sure it is so broken it will take years to fix, all in the name of profits for his special interest supporters. The rest of us poor chumps have no power unless we go to the ballot box in record numbers to make our will known, both in terms of who serves in Congress and how they deal with Mr. Trump.
2
You're leaving out Bernie Sanders in this mix. St. Bernie spewed the same Trumpian rhetoric that TPP and NAFTA were bad and Hillary was a criminal for supporting. St. Bernie was actually way out in front of Trump on this one. Trump was more locked into racist, build the wall dogma, then picked up bashing Hillary with trade after Bernie knocked her around with it.
2
As Prof. Krugman has pointed out, those dollars of the trade imbalance eventually return to the U.S. in the form of investment. And few rely on foreign investment as much as the Trump and Kushner companies - in large measure because US banks won't loan to them.
Here's the thing that puzzles me: how can Trump, who relies so much on foreign investment, not understand that the dollars in those investments ultimately come from the trade imbalance? How can he be that clueless?
Even if President Trump repeals President Clinton’s NAFTA and President Clinton’s PNTR for Communist China, those higher paying and taxable wealth creating assembly line manufacturing jobs are not coming back to the USA because those jobs are now replaced by robots and robotics, and/or the jobs and the manufacturing facilities are permanently relocated to third world nations where people will accept lower pay than US workers demand.
US citizens that knew how to manufacture things are now probably long gone and maybe even dead and buried.
US workers refused to work for the wages and benefits that Third World workers would gladly accept so those manufacturing jobs and those factories are permanently relocated to those third world nations.
New jobs for US workers could be created in the USA to design, manufacture, build, operate, maintain, and repair the future manufacturing robots for worldwide sale. These jobs would/will require STEM educations so that these college graduates will have the critical thinking skills, concentrated focus abilities, and technical knowledge required for US citizens to be employed in the creation of these robots.
Without a Science Technology Engineering and Mathematics (STEM) human database in the USA, the artificial intelligence and hardware for any of the future robotic and automation machines for manufacturing products will NOT be designed, developed, manufactured or built in the USA.
2
Oh, how Trumpy indeed. Reminds me of that old saw, "the operation was a success, but we lost the patient". In Trump's, Mister Winning's, case, we'll have "he won the war, but lost the country". Making America not so great. Thanks Trump, and special kudos to all his Chumps who voted for this dolt.
DD
Manhattan
2
As Shakespeare might say. This trade war is much ado about nothing.
The European Union already has tariffs of 36% on Chinese steel, so it imports steel from Brazil and Russia. China exports quite a bit of steel to Canada.
If the US tariffs go up on Chinese steel, the Chinese steel will just flow through Canada which is not included in the act.
I do not want to join facebook but I do still have a question:
Can the gov be sued in order to make the administration have to prove that this is a national security issue? My understanding (weak I admit) is that the president only has authority on trade if it is a national security issue otherwise it falls to congress. Can corporations (e.g., auto makers) sue the government to make them prove their case? It seems like the only way around this type of ignorance is the courts.
1
Oh, What a Kruggy Tirade War!
3
Far better if the White House would focus on rebuilding worker (Union) power so REAL wages for the bottom 40% of the work force would significantly rise.
Of course, that would mean asking the Republican .01% puppet masters to give up a few crumbs.
Still, that is what would be required to help the Rust Belt and the Red States.
6
I'm for free trade too, but I'm also against unfair trade. If we are, in fact, erecting fewer trade barriers than other countries, then our policies need to be recalibrated. We should press for free trade, but we should keep our trade barriers low only if other countries do the same (subject to some exceptions for poor countries).
Unfortunately, the public trade debate so far has been mostly free of specific facts regarding our actual trade policies and practices. Is Trump correct in his claims that U.S. trade barriers are far lower than those of other countries? What about with the E.U., Japan, and South Korea? Is there an authoritative comparative analysis of U.S. trade barriers and those of other countries and blocs?
I would like to have an informed opinion about U.S. trade policy, but right now I just don't have enough information.
1
Mr Hardin- The WTO Secretariat publishes joint reports with the OECD on trade measures imposed by the the G20 countries, going back to the Great Recession. There are links at https://www.wto.org/english/tratop_e/tpr_e/trade_monitoring_e.htm A 2017 109-pp report is at https://www.wto.org/english/news_e/news17_e/g20_wto_report_june17_e.pdf Look, for example, at the section on Trade Remedies to see tables on anti-dumping and anti-subsidy ("countervailing") measures by G20 countries. The US used to be far the #1 user of these measures until India caught up and passed us on antidumping measures some years ago.
Manchurian Candidate strikes again.
2
Facts have been replaced by dire threats of a trade war, major loss of jobs due to severe (but unwarranted) retaliation by the countries affected, and a notable increase in inflation. No country would allow the decimation of so many industries that has occurred in the last 50 – 60 years. There has been an immense loss of jobs to imports and intellectual property violation. The number of jobs that have been created thanks to greater exports pales in comparison. Some believe that cheap imports offset lower or lost wages and keep the lid on inflation and the cost of living. In fact, some are concerned that inflation is too low and we need to raise wages, which will favor imports and stifle exports even more. Were the dollar not a reserve currency the dollar’s value would have dropped precipitously thanks to our decades of balance of payments and trade deficits. Normally countries with chronically large surpluses see the value of their currencies rise. That has not happened because they buy massive amounts of dollars to keep the value of their currencies down to protect their industries. Dry up the trade deficit you dry up the financing for our profligate spending. Any semblance of fiscal discipline is gone. If we stop increasing the debt limit and borrow no longer there will be and no more low interest rates. Watch the dollar skyrocket and the stock market crash. If Trump's plan is not liked what is the alternative? If none, China will swallow us well before the century is out.
2
Trump and his loyal supporters are firm believers in the fiction that the key to "Making America Great Again" is for America to go it alone. From alienating allies, to confrontational attitudes on trade, to ethnic nationalism, there this idea that "the strongest are strongest alone." But the US never succeeded as an isolationist country. It went from an agrarian backwater to an economic power thanks to international trade. It became a global political power through alliances. The US didn't win World War II - its greatest military test - alone. It won as part of an international community, defeating countries that were enamored by precisely this "strongest are strongest alone" ultra-nationalism.
The US has about a quarter of the population of China and India, and about 60% the population of the EU. Go-it-alone hostility is not going to be the way forward. It will lead to isolation and, eventually, irrelevance. It will turn us into Putin's Russia, a poor Potemkin Village pretending to have influence by bullying neighbors with decaying military power.
3
The president’s companies made a lot of money with sleazy dealings and lax regulations, so why wouldn’t he want that to continue?
2
"Trade wars are good and easy to win" should read "wars are good …"
There is no example in history when countries entered trade wars didn't end up in real wars. None.
2
"Trumpocrats, however, don’t see corruption and rule by special interests as problems."
All politics involve some quid pro quo, but Trump takes it several steps further. He seems to see his office largely as a means by which he could buy and sell favors. Steel and aluminum tariffs is, in effect, a subsidy for those industries that come at the expense of other industries - auto, construction, aerospace, etc. The fact this move comes just ahead of special election in a state where steel is a big employer highlights the cynicism.
Ask not what your country can do for you...at least not until you first ask what you can do for Trump.
It seems that the self-serving special interests have been part of trade agreements as well. Trade has not been totally "free."I am thinking of the Investor-State Dispute Settlement provision that is part of NAFTA and was also part of TPP when the U.S. was involved. That provision gives greedy businesses preference over governments and their people. According to what I have heard, 85% of US TPP negotiators were businesses, many of whom hoped to benefit at the public's expense. In an effort to criticize Donald Trump, we shouldn't look back through rose-colored glasses.
1
All economic policy even one that makes most people better off and the country and world as a whole better off will have losers. Republicans don't care and Democrats seems to be frightened to discuss this. There needs to be a discussion about policies to help the losers of economic policies that are generally good.
2
Good point, Dan. Orthodox economic theories - and the policies they justify, all ignore the "average" fallacy, the belief that if the average result of a policy is positive, or at least non-negative, it's acceptable. The fact that the average may be the sum of many small numbers plus a few very big ones doesn't matter. As long as it's > or = 0. Even when those little numbers are the near starvation incomes of the great majority of a people, and the few big numbers are the obscene wealth of the few, it's still an average, and it's still, from the point of view of many, though not all, economists acceptable.
In other words, any economic policy produces winners and losers but it matters very much how many of each it produces.
"Trumpism is all about belligerent ignorance, across the board." Dr. Krugman certainly hit the nail on the head with that comment. Too bad the big Ag states were fooled by the carnival barker and hopefully we won't have trade wars so they have no markets for their products.
3
"Belligerent ignorance": even better (or worse) than invincible ignorance.
If FREE TRADE AGREEMENTS and H.1.b. VISA INCREASES were known to destroy US industry, US manufacturing jobs, reduce wages, and create mass unemployment, why did our elected Mainstream Democrat and Republican congressmen, congresswomen, senators, presidents create all of this legislation?
Our elected and appointed officials of both political parties SELL THEIR VOTES to create H.1.b. VISA INCREASES; tax loopholes; bankruptcy laws; offshore tax havens; Free Trade Agreements; MFN trade statuses; PNTR trade statuses; Alaskan drilling permits; no-bid PAY TO PLAY government contracts funded from the public treasuries such as the CGI Federal no-bid contract; US government loan guarantees such as the Solyndra political deal; MILITARY SECRET weapon system software transferred to Communist China (Hughes Aircraft company Rocket Guidance Software - Google up “Chinagate”); granting license for the sale of Uranium One shares of USA's of a uranium production mine company to Russian citizens, more U.S. taxpayer foreign aid to finance the building of more Nuclear Bombs for/in Israel; presidential pardons for convicted felons; new F-15 aircraft export license sale to Saudi Arabia; and other new laws to benefit their campaign contributor's business, US citizens, foreign governments, and/or to anybody else offering money, AT VERY REASONABLE PRICES.
2
"Tariff policy will once again be driven by influence-peddling and bribery, never mind the national interest." The Trump Klan has always been involved in bribery of government officials, effectively undermining our democratic system for which he has zero respect. Belligerent ignorance from an old bully so repulsive his only option to cheat on his third wife are prostitutes. I doubt he has a college degree.
1
Trump isn't the problem. He is a symptom of the problem. The problem is that slightly less than half the voters in this country are preternaturally stupid. Trump is a pathological liar and a conman. He has never hidden who or what he is. We have decades of seeing Trump display his belligerent ignorance. During the campaign he told us in his own words he was a serial sexual predator and voyeur of naked teenage girls. He espoused economic, domestic and military policies that were equal parts ignorant, unintelligible and contradictory. Yet, 63 million Americans voted to make him President.
In the immortal words of Pogo, "We have met the enemy and he is us."
3
Diversion. Successful.
Would you have us assume that trade agreements were written by the angels?
"After all, we now basically have an Environmental Protection Agency run on behalf of polluters, an Interior Department run by people who want to loot federal land, an Education Department run by the for-profit schools industry, and so on. "
This is so obvious to everybody so why can't somebody, ie the courts or 1 or 2 congressmen who aren't on the dole, fix this?
2
There is another parallel between Trump and Putin.
Putin has the support of many Russians who think Putin is showing the world the Russia is tough.
It doesn't matter if the Russian economy and the Russian standard of living is terrible, their support is tribal.
And Trump has the same tribal support as the Republicans wreck our economy and standard of living for average Americans with 35 years of trickle-down Reaganomics.
MASA - Make America Smart Again.
2
It seems clear to me that the real goal of the tariffs is to consolidate even more power into the Executive Branch. As pointed by many, the tariffs themselves are relatively small economically, and even if they are targeted at specific countries, the tariffs are likely to do little to rebalance any imbalances (real or perceived). So why do it? Because Trump believes no one can or will stop him, and Trump recognizes that a certain portion of our country would prefer a dictatorship to a democracy.
Free trade increases overall economic activity and at a macro-level grows the economies of all involved. However free trade can also cause disruptions in labor markets and regional economies.
The problem we face in the USA is that we allow all of the benefits of free trade to be captured by those who control capital while expecting all the damage caused by free trade to be fully absorbed by workers and regions that have been dislocated.
This is unfair and is a recipe for both populist movements and destructive policies.
Paul says: “You could say that the world trading system is, in large part, specifically designed to prevent people like Trump from having too much influence. Of course he wants to wreck it.”
There we have it. The only surprise is that the GOP Congress has raised objections. That won’t last: Ryan’s conception of “targeted tariffs” is wording for tariffs for the favored few if they provide the dough.
Paul sees corruption lurking. It’ll be seen to be fact as soon as reporters dig them up.
1
There is a massive segment of the US population who should have a better economic situation than they do, namely all the people for whom the jobs have just "gone away". If their lot can be improved, many problems in America will be mitigated or disappear – unfair distribution of incomes, dying communities, under-employed workers, inadequate wages, unaffordable healthcare, deficits. Improved prosperity is an objective worth fighting for, worth ruffling feathers over, worth taking some risks to achieve, worth trying an unconventional approach. This is why Trump was elected. This is what Hillary would never have done. This is not PK's style, but then on the other hand PK has no solutions, PK is a liberal proposing liberal solutions with little chance of acceptance without a sea change in American political attitudes. Trump takes the conservative approach, pragmatic, the business-like. PK projects the worst that could happen if Trump’s strategy backfires. But there will be no trade war, Trump will pull back if necessary to avoid that. There may be some rocky moments, there may be some retaliatory action, but it will be minor. This will end in a win for America. I often wonder, what would PK prefer, to see Trump fail to reduce his chance of re-election, or to see improvements in the problems in the US.
1
Yeah. Right. Because Trump paid his tax due, didn't stiff contractors, workers, didn't buy steel from China, and has always worked for the little guy. LOL. Is weed legal in Canada? Because you'd have to be really, seriously, on a nuclear bender high to believe that Trump gave a rat's patootee about anyone but Trump. HRC, on the other hand, had a plan and had worked for decades to get training, new technologies, higher wages, health care, etc for every single person in the USA.
2
merde
1
"And here’s the thing: The small groups that benefit from protectionism often have more political influence than the much larger groups that are hurt."
So is this an example you are often talking about, Big Pharma has various protections against imported drugs, which keeps the prices high for Big Pharma's drugs? Otherwise versions of the same drugs from Canada and India would enter the market and drop the prices on these drugs.
Plus Big Pharma has a lot of political influence?
1
It's a Grumpy, Lumpy, and sure to be Bumpy "Trumpy Trade War!" Names will fly on and off the tariff list as fast as the Grumpus' mood shifts and faster than White House personnel come and go. It will by Lumpy with also sorts or dubious deals offered to get a pardon. And, of course, if it's Trumpy, it will have to Bumpy with threats hurled left and right at whatever country won't give Jared a loan (Yes you, Qatar) or a Trumpy Tower (C'mon, Vlad) and new items added for special cases of Trumpian ire.
1
Mark Shields opined that the steel tariff was simply Trump's way of pandering to steel workers in a blue collar district in Pennsylvania which supported Trump over Clinton by 20 points. For the first time in a long time the Democrats have a strong candidate for the House seat from that district and Republicans would be humiliated by a defeat.
No one thinks that provocative action will lead to either a trade or shooting war--although Trump seemed unconcerned by the prospect. No one really knows what the outcome of these tariffs will be but it will not be good.
ok, so the President - any President, but in the current case, Trump - can invoke national security to slap on tariffs. is there no oversight on this? could a successor, or even the same President,one day decide the tariffs are no longer a matter of natioal security and eliminate them? that's a lot of power unregulated by checks and balances. sounds downright unAmerican.
can we sue?
This is one of Prof. Krugman's best columns. "Protection" is really about discrimination, which quickly becomes (if it doesn't start as) corruption.
The international angle is not essential: its prominence is mainly due to the usefulness of being able to take advantage of the spirit of ethnic rivalry.
Needless to say, however, there's inside-the-borders discrimination too. One of the reasons the U.S. abandoned the federation model and created a national government was to take away from the states the power to wage trade wars against one another, which they were drifting into.
I look forward to a similar column about international currency integration sometime in the future. One understands that patience will be required: it took the U.S. generations after its commercial union to even imperfectly integrate its payment institutions.
The Commerce Dept's report recommending additional tariffs on imports of steel says that the goal of the tariffs is to increase capacity utilization in the US steel industry. However, per the Commerce report, the capacity utilization rates in the steel industries of our trading partners generally is at the same level as in the US or even lower. This is beggar-thy-neighbor trade policy, just as with the Smoot-Hawley tariffs in the 1930s. It was a disaster then, and it won't end well now, either.
2
"Belligerent ignorance." I'm going to be using that term...
1
I liked your summary history in this column. It was one of your best. It is the foundation of the thinking required to formulate a policy response if any, to improve the performance of the U.S. economy. I think your invitation to your readers is a new departure to understand what could be done to improve the well being of all Americans.
My feelings are the progress being made thus far is not being shared with all incomes. In short, wage stagnation seems to be a source of many social problems as reflected in the distribution of healthcare. It was disturbing to read the study done by Angus Deaton and Ann Case. Their findings should be given a higher policy priority.
I want to scream that we are unnecessarily experiencing too many deaths and costly injuries on our highways.
Improvements can be made in our current system that can benefit the economy's energy efficiency and the environment, create jobs, increase wages, and save consumers time and money in faster travel, and lower costs of delivered goods. These improvements are not being made by the so-called free market and fair and open competition. The role of regulatory and standard setting agencies has been diminished so there is no place for ideas to be tested and proposals submitted.
We have incredibly poor performance in the electric power generation and distribution. Eventually, we must abandon fossil fuels or see our standard of living diminish. Global warming is real and we are not ready.
4
Trump's new tariff policy is designed to harm our economy so as to please the Russians for helping in the Presidential election and an installment payment on their blackmail. Investigate Mueller!
3
Never try to stop Trump from doing something stupid.
That will only guarantee that he will do it.
It’s all about the bully’s ego, not what is the best thing for the country.
2
What are the so-called "unfair trade practices" that Paul Navarro says justify the imposition of the Trump tariffs?
Larry Stern
[email protected]
Do the republicans in congress; many of whom understand these trade concepts very well, do anything any more? They seem too cowardly or stubbornly unwilling to challenge this ignorant, arrogant man, who let us remember filed for bankruptcy I believe it was six times. Instead of checks and balances, we have a total amateur running amok whist running the country and the economy into the ground.
3
"The informed people have gotten their way for too long. Now we're gonna do things my way."
- Donald Trump
2
Those same "informed" people who caused a stagnating economy with ever lesser labor participating rates. We needed to purge those "informed" people.
>But the steel and aluminum tariffs, justified with an obviously bogus appeal to national security, clearly don’t pass the test.
***But what about the argument that if the steel and aluminum industries are gutted, we would have a problem using our industrial might, as we did in WWII, to sustain the arms, ships, vehicles and other equipment needed by our military? If we relied on imports, we might be caught short if shipping routes are disrupted because of war.
2
Trump declared a steel and aluminum trade tariff war on China that targets and threatens Canada, Mexico, Brazil, South Korea and Europe. Trump is the dumbest American President on trade ever. Inheriting family real estate and playing a businessman on TV did not give Mr. Trump any insight into international commerce or economics.
3
Corruption, bribery, bankruptcies, lies, pornography, bad trade deals, nuclear war. Did I leave anything about this so called president out?
He ran to become dictator why should any of this surprise us?
1
Please respond to the conservative opinion of Daniel McCarthy in his editorial in the NYTimes today ... “Trump’s Tariffs and Making America Great Again”, in which he defends the proposed tariffs and economic nationalism as means of strengthening our economy.
GL
From the opinion page of the NY Times today: http://nyti.ms/2txrUeQ
And, you claim Trump "violating the law" by enacting the Tariffs. Prove it.
1
If the times ever gets into the fake news business, just go all in and make it so Obama is still President. We're leading the way on TPP. "Stormy Daniels" is just a new mixed drink or the name of someones boat presumably. Just have fun with it, you really can't over do it. I would almost invite the delusion at this point.
1. Impeach! 2. Convict! 3. Imprison! Repeat steps one through three.
2
What kind of trade agreement was it that allowed American companies to manufacture their products with Asia's cheap labor while it destroyed entire industries and put people out of work in this country? Seems to me that trade agreements between equally mature economies are equitable and worth pursuing, but the disparity between developing countries and the US is bound to benefit one side more than the other. In the case of the current free trade boom, the middle class here is the biggest loser.
I just spent time on the NYT archives, looking through Professor Krugman's Trump-related prognostications, and must ask if he ever gets tired of being wrong.
Within 10 hours, North Korea begs to negotiate, and the economy adds 313K jobs.
As an investment strategy, one just needs to see what Krugman writes- and bet against it.
Biden 2020.
Everyone is now discussing tariffs and the meeting with North Korea instead of Mueller and Stormy Daniels. Trump likes ratings. He is a TV man.There is no right or wrong.
Trump & Cronies are only concerned with whatever biases they learned 50 years ago. They know nothing about world trade (Least of all Commerce Sec. Wilbur Ross, now proven via his own words to be unbelievably ignorant of the real world). They are simply intent on implementing all the nonsense they "learned" 50 years ago and have been stewing about ever since. You can compare Trumps blathering 30 years ago to any speech made today and there is no difference.
Trump and Cronies know nothing, and care nothing about anything except having this one chance to do all the things they have dreamed about for years. We are the ones to be harmed, and ironically, his supporters will be harmed most of all. So much for caring about the deplorables.
1
Belligerent ignorance guided by the one organizing tRumpism principle, cruelty.
Although i do agree that we have to have some protectionism (there is no reason our military should be using Chinese-made electronics), this is something that needs to be done with a scalpel, not a chainsaw.
1
Maybe you should tour Allegheny Technologies new 3-4 B$$ mill in Brackenridge, PA near Pittsburgh. It rivals or surpasses the Japanese mills you referenced.
He does stand for free tirade, so there's that.
The Donald plays in a zero sum World. You either win or your are a LOSER. He has no ability or understanding of mutual good or compromise.
Unintended consequences are the recurring theme of everything that The Donald touches and despoils.
The next POTUS is going to have some very heavy lifting to do after this rule of ignorance is finally over.
1
For an example of how this new kind of corruption can work, President who for sake of argument we will call Mr. Orange, calls one of his cronies, Mr. I, who for the sake of this argument we call Mr. Green. Mr. Orange tells Mr. Green that he thinking imposing a tariff on steel in next couple of weeks. Mr. Green, who owns stock in a company that consumes steel, sells that stock for $30 million dollars when the price is near a peak of $43 dollars per share. Then the announcement comes out and the price falls to $27 dollars per share. Mr. Greed can then buy back his shares at the cheaper price and pocket $10 million in cash. https://www.google.com/search?q=Manitowoc+stock+price&ie=utf-8&o...
https://www.snopes.com/fact-check/carl-icahn-stock-steel-tariffs/
Mr. Green then makes a campaign contribution and/or charitable donations to Mr. Orange's foundation worth $1 million dollars. Brilliant, if you are the one running the grift.
1
Atlas shrugged
The majority of American consumers will be pocket picked by this Trump trade policy A penny here, a dollar there will disappear from their pockets as millions of products' prices are raised to pay for the tariff increases. Millions of jobs, manufacturing and agriculture jobs, will disappear as foreign markets respond to Trump's tariffs. Our relationships with valued allies are being stretched thin. This is just plain stupid.
Trumpocrats ? How about Trumpublicans ?
Almost as if orchestrated by an oligarch in the Kremlin.
1
"After all, trade (like racism) is an issue on which Trump has been utterly consistent over the years."
Yes, it's true. But also, it's gratuitous and childish. It will completely devalue the rest of the article in the eyes of those who most need to read it.
The NYT really needs editors.
1
I thought Conservatives we're the kings/queens of "Free Market" ideology?
Trump is officially that annoying party guest you reallllly didn't want to invite, but he's arrived now, and everyone's doing their best to tolerate him.
You know, that guest who destroys/wrecks/or breaks everything he touches in your house?
Healthcare, the middle class safety net, immigration, trade, not abusing the office for personal gain, facts, truth, the border, the EPA, education, climate change, normal human behavior.
56
Excellent point !
"belligerent ignorance"
Perfect!
THE unRAVEliNg
Once upon a midterm dreary, while he pondered, twitter weary,
Over many a quaint and curious volume of Fox spun lore—
While he nodded, nearly napping, suddenly there came a tapping,
As of someone not so gently rapping, rapping at the White House door.
“’Tis Hicks or Nunberg or Sessions,” he muttered, “tapping at the White House door –
Only this and nothing more.”
….
Back into his bedroom turning, all his rage within him burning,
Soon again he heard a tapping somewhat louder than before.
“Surely,” said he, “surely that is something menacing my Presidency;
Let me see, he said, what thereat is, and this threat to me and those I helped bore —
Let my heart be still a moment - as his anger did soar;—
’Tis time for tariffs and to push Cohn from my core!”
2
Trump knows nothing about nothing.
duh
2
This isn't even a trade war against one country. This is Trade World War I. This clueless arrogant man is trashing his country and the world at large doing Putin's job for him.
Trump continues to further define the offensiveness of the adjective or expletive that "trump" will mean to future generations. Being compared to a "trump" will sure be offensive much as it is being compared to the H man of a century ago!
It's not foreign countries that are taking advantage of our open markets. It is the 1%ers and corporate suites in our own country that have exploited our open market to outsource to other countries trump claims are cheating and hurting us. The idea that smaller, poorer countries with corrupt leaders are going to take advantage of the biggest economic bully on the planet is preposterous without the instigators with the money - the 1%ers and corporate leaders in our country.
Then came trump. Trump was all talk about starting a trade war, until a porn star proved to be the catalyst that made him act. Imagine that!
A second porn star calling trump out for sexual misconduct! How trumpian. The Smut-Trump Tariff Act. Guess who benefits from influence-peddling and bribery? Trump and his concigliere.
2
Its not about what is good for the country but what DT perceives is good for his reelection chances. The steel workers in PA and OH, critical electoral states, is what motivates DT, not the welfare of the country. There are no limits to what he would do to enhance himself while he throws the country under the bus: suck up to Putin, succumb to blackmail to cover up his sordid sexual exploits, play both sides of the gun debate, support a child molester for the Senate. I wouldn't be surprised if and when he negotiates with North Korea that he will be more concerned with appearances to make him look "presidential" than entering into an agreement that enhances our security and that of our allies.
Trump's ideas always go back to some poorly understood concept of a romanticized past. He would probably be thrilled at Industrial Age massive factories with smoke rising while inside children and exploited workers toil long hours seven days a week. He likes the idea of mobsters and casinos with scantily clad women and fortunes to be made. He wants the thrill of killing endangered species and bringing back bloody trophies. All of this is a world of tycoons about to sail on the Titanic with wars coming.
His dictator personality, bullying, threats, and mistreatment of others think he can force people to bow to him. Republicans have. Betraying the country with Russia, creating trade wars with allies, and ignoring the future will end badly.
Worst president ever. Stupidest, most ignorant and craziest.
2
There are three major factors in the hollowing out of America's manufacturing infrastructure that are absent from this and other discussions: the lack of enforcement of anti-trust laws against Walmart, the complexity of the tax code (which allows the private equity players the chance to profitable engineer the cost of capital in combining and closing various small companies,) and the capture of investment and venture capital by software, and to a lesser extent, medical industries.
Walmart sucks the profitability from most of American manufacturing in the '80's and '90's. The private equity players collapsed and closed the shells because they were given special tax deals. The ease of entry into software and structural and legal protection afforded the medical industry are difficult for manufacturing to compete with for new capital.
Until these three are addressed (if they can be), things like open trade and tariffs are dabbling at the margins.
For every steel and aluminum job saved, 50 lost in other industries that use the metals. Looks like the Art of the Dunce.
1
Only when people are hurt will Trumps folly be understood. He does set out to do what he said which for most Americans is bad. Seems he will do anything to please his base. Hopefully Trump and his party will pay the price for his stupid decisions come November. He is not a forward thinker and has no understanding of history. He is a true narcissist looking at the world as he sees it now. Trump does not consider consequences, as he is uncaring and not especially bright.
40
There he goes again, that Professor Krugman, talking seriously about the history of tariffs, patiently explaining it. The chances that Trump supporters will even try to understand what he's saying?
3
Trump is obsessed with dominating others. He has to always feel like he is the winner - so he always needs to have someone who he can call a loser.
What this says about his self confidence and self image should be obvious to all.
3
Krugman is clueless as usual. Trump agin has brilliantly forged a policy that will break down tariffs in other countries and stop unfair trade practices by others who subsidize exports or who tariff US products. Trump is exactly right and Krugman is just being foolish.
3
Satire agin...?
1
I'm assuming you too have a PhD in economics - years of education, training and experience behind you - as you assert Krugman's cluelessness? Why should I trust your insight on this?
2
So nice to hear from someone who knows the facts. Knows what tariffs the EU imposes on our cars. Knows how large a surplus Canada runs with us. Oh yeah, I imagine James is just waiting for the phone call from Oslo.
1
"Belligerent Ignorance". I believe Mr. Krugman has identified what Donald Trump practices to a tee. Spot on!
3
Here's the thing about ANY trader deal: it cannot gain every field of one country.
A deal involves give and take. The corruption starts at: which fields are you willing to let down...?
1
I can see Putin's Cheshire Cat grin from my house! And it's getting bigger every day.
3
Though i am glad you are teaching at CUNY now, I wish, Professor Krugman, you would be a traveling teacher in the poorer regions of this country. The people there can benefit much from your clear thinking.
4
President Tweet-In-Mouth reminded me of the Austin Powers segment where Dr. Evil threatens to blow up the U.S. unless he was paid "one million dollars". His family sarcastically reminded him of inflation and Evil raised it to "$ 100 billion":
https://www.youtube.com/watch?v=jTmXHvGZiSY
Yesterday the Chump tweeted China should reduce its trade deficit within a year by (wait for it....) one BILLION dollars! Today he corrected his spasm and tweeted "one hundred billion":
https://www.cnbc.com/2018/03/08/trump-tweet-understates-deficit-reductio...
The White House has become a parody of a parody of a parody. It has become the joke that never stops giving.
7
It's gonna be yuge. Best trade war ever. You're gonna love this trade war.
4
What, if any, financial gain will inure to Wilbur Ross by virtue of these tariffs??
3
This is the result of a disinterested electorate choosing a neophyte, ignorant and intellectually stunted man-child to run the world's largest economy. As we have seen for the past 16 months, this president has shown a total disinterest in being schooled by others who have spent the whole of their professional and/or educational lives understanding the nuances and macro economic relationships of trade agreements. To expect anything remotely close to a well thought out policy on anything from this man(?) is to discount the validity of Darwinism.
8
Tariffs are just another example of Trump's blissfully ignorant incompetence. As Dr. Krug points out, they primarily protect special interests and invite retaliation. In this case, their economic benefit is a big negative.
1
I like your description of Trumpism as "belligerent ignorance." Please keep repeating it.
6
The blue collar workers who will personally see the damage from these tariffs in the form of lost jobs and wages, have no one but themselves to blame. They chose to vote for a xenophobic, misogynistic racist. Unfortunately, many others will also suffer as a result of the most unqualified, and unstable President in the history of our country being voted into office with your support.
You reap what you sow.
9
mr. trump seems to dislike europe and european products. o.k. i can understand that - he is a product of europe as well...but come on - NOT EVERYTHING FROM EUROPE IS BAD !!!
1
A prolonged trade war on a large scale would be a bad thing. An adjustment in trade terms may be a good thing, however. So the question is, how to bring about the adjustment? Trade negotiations take forever. Trump's approach will produce results more quickly. it will lead to wherever its going to lead in a matter of months, not years. And if it doesn't lead anywhere good Trump will back off. Trump is ruffling feathers, he is not genteel, it is why he was elected.
The legality of Trump's actions under US law is an interesting question. Arguably it is in US national security interests to have greater domestic aluminum and steel production. That is a political question, not one to be answered by the courts. On the other hand if Trump's expressed national security concerns are found to be bogus, that is an abuse of presidential powers, If the result of Trump's moves is to exempt Canada and Mexico from the tariff, pick up a few gains in NAFTA, continue the tariff against other countries and increase domestic production of these commodities, will the exercise of these powers be bogus, will that be an abuse ? Not so sure that it will. No doubt his actions will be challenged in the courts, so we will see.
In the course of my kids' lifetime (they were born after 1990), from apparel made by OshKosh B'gosh and Levis, and playthings made by Gymboree, everything they now own is Made in China. How did that happen? Every product we buy in the department store has some Chinese invisible hand, either the product itself or the packaging or the parts....even their iPhones and Macbooks....? You watched it happen right before your eyes.
3
Your president is a troublemaker. He shows a childish form of behaviour. Being the leader of the most powerful nation in the world, Mr. Trump wants to terrorise his friends and foes alike, for the pleasure to see their pain and shock. Leaders as Xi and Putin are at least stable characters, and although they are despots, stability is an important factor in world politics, so in one way or another we, Europeans, could seek a new form of alliance with Russia and China.
2
"Make America Great Again" was an outright lie that almost half of U.S. voters fell for. I wonder if they even realize it . . .
2
“South Korea is the third-largest exporter of steel to the United States,” UhOh! So now Trump will go to North Korea and talk peace while he taxes South Korea? What could be stupider? Sex with a porn star? Witness tampering in Mueller investigation? Pay off of porn star? Starting a trade war? Cutting taxes on the wealthiest Americans by borrowing $1.2 Trillion from the treasury? Lying to the public at meetings with Congressional leaders regarding ACA, Tax cuts, and gun control?
History will be very harsh in it’s judgment of Trump and the GOP, unless the Evangelists are right and the “Second Coming” will end history.
4
You once again present a series of important facts; their implications and consequences to be considered.Understood. As best as we can. During a divisive dialogueless-era of constraining either/or, and binary-banality, comprehensions.Paralyzing complacency easily transmuted into potent, epidemic-size, willful blindness about what exists. Which needn't be. Shouldn't exist.Willful deafness to the painful, voiced, as well as muted, outcomes of institutionalized, anchored, inequalities.Exercised willful ignorance about so much, and so many.As toxic-"truthiness"-Stephen Colbert's creation of preferring concepts or facts one wishes to be true, rather than concepts or facts known to be true;" Charles Seif's proofiness: “the art of using bogus mathematical arguments to prove something that you know in your heart is true — even when it’s not; ”infopinions, personal truths, factoids and zombie ideas, infest and infect.As facts, fictions and fantasies are mixed up, down and sideways.My questions: What are "facts" when sightlessness sears evidence? When deafness denies needed dialogues as opportunities to overcome, and bridge, stakeholder-created WE-THEM, daily, violating barriers? When ignorance informs all-too-many voiced insensitive words and implemented harmful deeds? THE Facts do not seem to be enought to begin to make the needed changes, and to sustain them, for menschlich daily living infused, and supported, by mutual respect.Trust.Caring.Willful, mutual help when needed.
1
Trump loves corruption, especially when he is profiting from it!
1
Which US political party despises jobs in the USA for the Working Class people?
NAFTA, PNTR for Communist China were unilaterally signed into law by President Clinton.
President George W. Bush unilaterally created fourteen additional Free Trade Agreements with Jordan, Morocco, and other young democracies of Central America.
President Obama unilaterally created Free Trade agreements for South Korea, Vietnam, Brunei, Singapore, Malaysia, New Zealand, Australia, Chile, Peru, and Several other Asian and South American nations.
These Free Trade Agreements destroyed US jobs and the way of life for US workers in the industrialized states between the US coasts and economically caused our manufacturing jobs to relocate to these third world nations because US workers would not agree to work for the same wages that citizens in these third world nations would work for.
These manufacturing jobs are now gone forever unless the USA starts a new trade war that the USA cannot win!
1
How do you compete against a country that has industry run by the government? How do you compete against a country that pays $5 a day, when you pay $130 a day? How? Not well is the answer. Therein lies the rub.
Trump is President because the 'elite' don't really care about the rest. They got their man to cut their taxes: done. They got their man to fool the common workers into voting against their own interests: done. America as a democracy and place of humanity: long gone.
This, of course, is just another fool's errand to keep heat off his treasonous actions and moneylaundering. The fool us US.
But, we reap what we sew: where is the middle class? Is it growing or declining? Everyone knows the answer, yet nothing is done. Actually, our actions make the situation worse. So, of course this is what we deserve.
When the rich people, including the readers of the Times, see equality as necessary for community, democracy and humanity, we'll be okay. We'll move away from rewarding greed and avarice and fake patriots and evangelicals. Until then we'll continue down the spiral towards plutocracy and possibly fascism. America the beautiful? Nah, America the corrupt and dumb. As the liar-in-chief might say, 'Sad!'
2
If "nearly all experts" agree that it's a bad idea... it must be good for USA.
In the same March 8th issue of the NYT, appeared an article by Daniel McCarthy entitled "The Case for Trump's Tariff and 'America First' Economics". Just wondering how Paul would address the last sentence of that article which reads: "But they are a first attempt at finding an alternative to a free-trade system that has built up the People's Republic of China while hollowing out the factory towns that once made America great." Vito Sciscioli
Thank you, Paul. You've said what needs to be said. Will this cause a market correction? Will the outcome be like the outcome for President Hoover's tariff's?
"... his views are based on zero understanding of the issues or even of basic facts ..."
"... the steel and aluminum tariffs, justified with an obviously bogus appeal to national security ..."
"... Trump is in effect both violating U.S. law and throwing the world trading system under the bus ..."
2
"But what did they expect? There was never any good reason to think that trade policy was safe from Trump’s depredations."
True...and little else that we value as Americans is safer, either.
1
Thank you Paul Krugman! I did not know most of what you explained in this editorial. The only problem is now I have a real clue as to why we should all be horrified by these steel and aluminium tariffs.
1
This seems to imply that world trade agreements are the best thing since sliced bread.
Not true. First of all, why are they often so secret? Very secret meetings.
“Trade agreements continue to override climate change. A habit of willfully erasing the climate crisis from trade agreements continues to this day. In 2014, American negotiators removed climate change protections from the Trans Pacific Partnership which is a very, very secret deal and had to be exposed through Wikileaks. The current elitist model of globalization through trade agreements has put us in climate crisis. It has led to the climate nightmare of low wages correlated with high emissions of carbon dioxide and is the cost of deregulated, global capitalism and the related world trade agreements. The victims are numerous: lost jobs, degraded jobs, lax safety codes, hundreds killed, toddlers with lead toys, Walmart employee problems, the deindustrialization of U.S. and coal plant pollution in china and a 30 year trend of growing corporate power. To allow arcane trade law, negotiated with scant public scrutiny, to have this kind of power over an issue so critical to humanity’s future is a special kind of madness.” from Naomi Klein in her book, “This Changes Everything.”
2
Krugman writes off the economic prosperity of the industrial heartland in exchange for cheaper consumer goods. If liberals continue to do likewise get ready for a second Trump administration
1
Up to now, the GOP figured they had the goose who laid the golden eggs. They are just beginning to understand that what they really have is the guy who is trying to hide golden showers tape. Something a whole lot of us figured out a long time ago.
2
The paradox is that the Trump base will be hurt the most. They were and still are an uninformed an uneducated group. As a result, DJT might get away with this in a political sense. Our economy and our democracy are hanging in the balance. The Dems should on the front lines of our internal battle making their case to everyone. If that doesn't succeed, at least they tried which is a step in the right directioin. Just imagine what the GOP would be doing if the situation was reversed.
1
It is my opinion that the USA wlll not be in a better place after the Trump presidency, whenever that might be, than it was before.
Trump seems to be achieving everything you would expect him to seek to achieve as Putin’s proxy candidate. He has released termites into every institution he possibly could, and the damage they inflict will long outlast him.
Sad.
3
Trump has already moved on. The job now passes to his sons and the Kushners to extort exemptions in return for investment in their struggling businesses.
With all due respect to Prof Krugman, Trump and his clan have not given any thought to the economic , national security and geopolitical consequences of the tariffs. And why should they? Ryan and McConnell gave them the green light. It's all good.
2
It's not surprising that President Trump's imposition of tariffs on steel and aluminum sent Paul Krugman into a tizzy. The professor is one of the staunchest advocates of free trade in this country, so it's undoubtedly hard for him to write in a calm, thoughtful manner after the president commits what Dr. Krugman views as a cardinal sin.
I think his offer to answer questions about trade is thoughtful. However, from my perspective, I wouldn't really want to ask him my questions. His tone in this column is strident and his language is pejorative. What kind of answer would I get? Not one I could have confidence in, at least until he breathes deeply and counts to ten!
I have to accuse him of committing the very sin he often rails about: not admitting errors or even learning from them. Sorry to say, but the award-winning academic comes off as a petulant and narrow-minded anti-tariff bigot in this piece.
Trump is often in error, never in doubt.
4
Who knew that foreign trade was so complicated?
1
My understanding is that for at least three decades foreigners have been sending us hundreds of billions of dollars of goods and we have been giving them pieces of paper. Sounds like a pretty good deal for us. Is there any reason to believe that this is an unstable relationship?
1
If you don't give Trump credit for thinking or planning and give him credit for shooting from the hip we can assume that any so called "idea" must belong to someone else. In most cases, such ideas belong to the cast at Fox News. So tariffs were chosen probably by Fox as the next wild card for Trump consumption. Even if such ideas were in Trump's rhetoric early on, he is most likely reflecting someone else's thinking. So if disaster hits as a result of these Tariffs, Trump only deserves credit for completing the tasks. He has no personal idea what might happen----but trade wars sound good to him, so let's have them. Bring trade wars on and he will show us their value.
Trump, long an importer of cheap foreign steel to construct his buildings, and cheap foreign labor used staff his resorts, raises hypocrisy to an entirely new level. The claim that he has consistently railed in favor of tariffs and restrictions on foreign imports may be true, apparently, but only in the sense that they don't apply to him.
1
Why doesn’t Trump use the WTO to sue countries that dump cheap steel and alluminum? The process is slowed by memeber countires failure to support the dispute mechanism - so ante up everyone, starting with the U.S.
Also, it’s time to renogiate labor standards in Trade agreements. I advocate bringing the world to improve a floor of minimum wage, a week of labor, paid sick leave, parental leave -let’s get labor to the negotiating table!
In his ignorance of and limited capacity to control multilateral agreements, what I think President Trump likes about this approach to tariffs is the ability to reduce the issue to a series of bilateral "deals" in which he believes he will have the most powerful position. Perhaps real estate works that way, but I think he and we are about to be disappointed.
"Globalization" continues to get the blame but it is not that simple. We need to look inward. The American consumer demands low prices. Indeed, the American consuming piublic has been led to expect the lowest prices. Importing goods from countries that have low manufacturing costs is the best way to keep consumer product prices low. This consumer demand has prompted U.S. manufacturers to move production to low cost countries and then bring the products back to the United States. We should not blame others who are responding to meet those demands more effectively and efficiently than we are able. BLOTUS decries globalization but he and his family have exploited (and continue to exploit today). When BLOTUS lends his name to a line of fashions, where is that clothing manufactured? Likewise, where are the fashion items sold under the name of the crown princess manufactured? As long as wages remain stagnant and economic inequality in this country continues to grow (and it will most certainly grow under BLOTUS), the consuming public will be forced to look for the lowest possible prices and producers will have to look for the lowest cost manufacturers. The problem requires a comprehensive and well-coordinated and executed plan with strong government and private sector involvement. BLOTUS and the republicans have demonstrated that they are incapable of effecting even the smallest initiative. The easiest thing to do is blame everyone else.
Bottom line is the president has way to much power. No individual should be allowed to make these decisions alone. We have a very broken system of government.
I would hazard a guess that Mr. Trump will also be meeting with Duterte, Erdogan, al-Assad and President-for-Life Jinping and other assorted dictators when he meets with Kim. Oh, the tangled web we weave Mr. Trump. Please vote in November 2018 as if your life and those of your children and grandchildren depended on it because it does.
Can't this be taken to court? The president has made the assertion that this is in the interest of national security, that the US needs to prioritize the manufacture of it's own steel and aluminum. But, then this is violated by making exemptions for other countries. Who would have standing to bring this to court? Would auto manufacturers, who would be hurt by this, have standing?
Also, why won't Congress over-ride this? They surely have the votes, at least from their public stance?
When I took an undergrad course at Harvard in International economics, we were taught about comparative advantage. I asked the professor what happens when CA mandates moving auto production to China thus leaving auto workers in the US unemployed and destitute. He smugly answered: that's a political problem not an economic problem! I didn't accept that then and don't accept it now.
The fact is that foreign countries, especially in the Third World, have economic advantages over the US, such as low wages, no pollution regulations, no labor unions, child labor, etc etc.
One could argue that their "comparative advantage" is artificial and unfair to impose on US producers.
How would you respond to this claim?
Trump so far has proved all the arm chair speculators, theorists and Nobel laureate for economics dead wrong on the economy and jobs. All the presidents before Trump had created an unfairly hostile environment for American businesses big and small. Trump is doing everything possible to make America a better place for doing business in America again, by creating attractive conditions to do business in the USA. Lowering the burden of government bureaucracy that accompany draconian rules and regulations which pile on massive legal costs will certainly foster business and it shows in the lowest unemployment numbers and better than expected job numbers. As a small businessman my legal costs on patents and trademark and future FDA regulations take up most of my operational costs pushing my product development costs to a tiny fraction of my legal costs. Imagine now what happens if the government cannot protect the intellectual property and allows people from outside the country to unload their cheap products based on my innovation. I think Trump is on the right track with regard to the tariffs. It levels the playing field and if it turns out to be a Trumpy Trade war so be it. Trump will call their bluff and not buckle under. Time is ripe to put America and its business first, in every way possible.
1
Well I for one alway compliment folks on their Smoot-Hawley excellence. I also let people know when they are Trump wine quality or Trump tie caliber. I was just saying to a fellow investor on how the Trump Taj -esque suitor for their child was made for TV. If it is lost on some, no Smoot or Trump grade of excellence has organically entered the lexicon. It is no different than 'you are so reality TV' or 'wow you cover that patch on your head like a pro' or why are each of your wives so not Michelle? There are so many ways that dt cannot be a quality indicator. After this is over, the amendment to cancel his show will be a ratings favorite.
Congratulations on an article so concisely written, even a president can understand; perhaps we can petition Fox and Friends to read this aloud on their next show and (possibly) prevent America from being voted off the global trade island.
I have a simple question Mr. Krugman
Do you still believe that Mr. Sanders was over the edge, whose position on the TTP was
"SENATOR BERNIE SANDERS: THE TRANS PACIFIC TRADE (TPP)
AGREEMENT
MUST BE DEFEATED
The Trans Pacific Partnership is a disastrous trade agreement designed to protect the interests of the largest multi - national corporations at the expense of workers, consumers, the environment and the foundations of
American democracy. It will also negatively impact some of the poorest people in the world. The TPP is a treaty that has been written behind closed doors by the corporate world. Incredibly, while Wall Street, the pharmaceutical industry and major media companies have full knowledge as to what is in this treaty, the American people and members of Congress do not. They have been locked out of the process"
As you stated in the NY Times:
https://www.nytimes.com/2016/04/08/opinion/sanders-over-the-edge.html
And do you still believe that
TRUMP IS RIGHT ON ECONOMICS
as you wrote in this very same column in the NY Times
https://www.nytimes.com/2015/09/07/opinion/paul-krugman-trump-is-right-o...
and thus contributed to his victory . You ought to know that the endorsement of economic policy be a Nobel Memoriam Prize Winne does matter
I am looking forward to your answer
Thank you
A Benrie Bro (To use your language)
Is Trump's real goal to influence the Pennsylvania election, a district that is overwhelmingly white and coal country? After the election, will he change course?
Informative and mostly convincing. But, modern trade agreements allow corporations to sue to overturn (in a court composed of corporate reps.) democratically enacted labor and environmental laws. So the special interests within a country don't even have to bother with Congress. If trade agreements were originally intended to limit the power of special interests, they don't accomplish that anymore. Quite the opposite. Get rid of those enforcement provisions, and I'll be more interested in free trade.
1
Two items make our country struggle on the world stage, and the list does not include coal mining and steel production.
1) Our for profit monetized so-called health care system. If we the people had half of that money in our pockets, we would be able to spend and save-- both good for the macro economy. Instead we worry about our potential health issues, cut pills in half, skip lab work and maintenance health care. Our poor national health outcomes from birth on proves my point.
2) Overly expensive college education. No loans should be used for ANY for-profit colleges, none. Every for-profit college needs to be studied and eventually exposed as the shams & scams they are. Any college loan should be capped at an interest rate equal to what we can earn on our savings and CDs. Beneficially zero. Government funding of colleges needs to be restored to pre-Reagan era rates.
2
"There’s near-universal consensus ..."
The beginning of Krugman's opening line speaks volumes on its own. Just like climate change, on the matter of trade and tariffs, there is no where near "universal consensus" when it come to those other than economist and business leaders - that is the American workers and the American people.
Sure, economist and business leaders are for "free" trade because it means lower cost of inputs or finished goods. That then results in higher profits that go to 1% elite as stockholders and their toadies in our centers of powers - like economist with endowed chairs at an Ivy League university.
What most Americans recognize is that China, the biggest beneficiary of "free" trade, and many other developing nations, are exploiting their workers, their environment and their legal/regulatory system all to tilt trade in favor of exporting massive amounts of cheap raw materials and goods to a wide open American market. And, yes, the vast majority of Americans benefit from the everyday low price of these exports result in at Walmart and other points of purchase. Yet, the cost to the American economy and society has been devastating over the past thirty years.
These tariffs and trade disputes are not just about the economy. They are about how we as a nation are going to finally start putting America and the interest of the American people first.
2
Nonsense.
1. We have record real per capita GDP, record real per capita disposable income, record real wealth per capita, and low unemployment.
2. The problems you cited are mostly the result of inequality, which, in turn, is a result of workers having very little bargaining power.
2
Your comments ring very true. Until my late 20s
(in the 1970s) the United States had what is called a “regulated capitalism“. This resulted in a more or less balanced arrangement of economic outcomes for the majority of people. All quintiles rose when the GDP rose. They were two sides of the same coin: when the economy prospered, the American people prospered. This is no longer true. And it’s not a force of nature that made this so.
I’m glad you put “free” in quotation marks. Because our government has consistently subsidized technology companies, energy companies, and agriculture.
I’m surprised Paul comes across so heavy-handedly in this article. If remember correctly, he was against the Transpacific Partnership- “mildly”, but still against it!
I have watched for the past quarter century as elite leadership has put the “economic” above
“community”, above the traditional “politicus”
(“of, for, or relating to citizens”).
“Economics” is in the driver seat- above the needs of the public. It wasn’t always so. I guess you can blame “the people“ for letting this happen, but elite institutions and their self-serving mouthpieces have to bear a large measure of responsibility here. This is how the Democratic Party lost their base. And people like Bill Clinton and Barack Obama(a community organizer to boot!) have to take a large measure of the blame here. Trump has only exploited a huge chasm.
I believe our only hope is resistance- like that shown by the West Virginia teachers.
18
How does starting a trade war that will negatively impact many other industries accomplish being for "the interest of the American people."
And sorry, you invoke climate change, but just because the average American is an idiot doesn't mean there's not a universal consensus about it. Just that the consensus doesn't take the uneducated opinion of a willfully ignorant person into account.
2
Trump just started his reelection process. This is a claim he can make that he accomplished his long term goal of trade tariffs. It has nothing to do with being good for American or American consumers.
2
Why isn't there more discussion of the intended impact of steel tariffs on the PA special election?
From 538: "President Trump carried the 18th District, which includes some Pittsburgh suburbs but also smaller towns bordering West Virginia, by almost 20 percentage points. So even a narrow loss by Lamb would reinforce the broader narrative of special elections since Trump’s inauguration — namely that Democrats are outperforming Republicans in races across the country and have a strong chance of winning the House in November."
Trump and the Republicans don't want to lose that seat and are willing to appease steel country to help secure a victory. He made a similar play before the Ala. Senate seat, and lost.
10
Guns are made with steel. If they're willing to jack up the price of guns everywhere to safeguard a lousy seat, that's a measure of desperation, yes?
As with the tariff on solar panels (which cannot by any stretch of the imagination be justified by "national security,") this tariff will destroy more stateside jobs than it creates...and that is just in industries using steel and aluminum as a raw material.
There is no predicting what the effect of counter-measures on the part of our allies and adversaries will be.
10
It always amazes me how the simple arithmetic of some economic policies eludes the experts (see also, Navarro, Peter) in favor of complex explanations that are basically intended to bolster their claim of expertise.
Policies like tax cuts (reducing revenue) that equal increases in revenue, because 4 - 2 can equal 6 if you just look at it the right way.
And then there's tariffs on steel. In this example, adding 25% to the cost of imported steel somehow makes American steel cheaper. So, this is kind of the reverse, where 4 + 2 equals 3.
Okay, I'll concede that with the tariff American steel will be cheaper RELATIVE to the cost of foreign steel. But that won't make it cheaper in absolute dollars; all it will do is force buyers who wouldn't buy it before, because it was too expensive, to buy it now because it's cheaper than the artificially jacked up imported stuff.
Of course, this leads to more interesting arithmetic, as in once American steel is cheaper relative to foreign steel, American steel factories will re-open by the hundreds, hiring new workers by thousands, because all the steel users in the country will be beating a path to the door of the newly cheaper American steel factories. I think this one looks like this: 4 + 2 = 3 + 5 = 100.
No wonder Donald Trump buys into this... the arithmetic probably makes perfect sense to him.
7
Gee, Prof., in Econ. 101 one learns that GDP is among other things dependent on net exports. If net exports is negative, doesn't that reduce GDP? In other words, isn't the US trade deficit accounting for a 0.5% annual reduction in GDP?
Alexander Hamilton and Friedrich list knew aht they were about as they had a dynamic view of economic growth and development. David Ricardo and the free trade advocates had a static view based on current comparative advantage. Did tariffs hurt the US or Germany in the 19th century when these countries experienced rapid growth based on industrialization, a process that would have been inhibited by Great Britain's short-term comparative advantage?
Will selective tariffs harm the US today? Look at what has happened to US manufacturing. Be an economist and not a political writer.
1
The US and Germany in the 19th century benefitted greatly from Britain's unilateral free trade giving them access to British markets while they restricted British access to theirs, as well as by ballooning domestic populations increasing the size of domestic markets. Neither seem very relevant today. The US should insist on reciprocal access to markets, but no one else is going to give the US access without reciprocity. And there is no American west to be filled with farmers equipped by US manufacturers, all assisted by massive immigration.
1
Yes, and the lesson is ... look what happened to Britain. Perhaps the wide open spaces were filled by immigrants from overseas, but it was the railroads that enabled farming and ranching to become marketable and profitable. Moreover, the rails and rolling stock were US made capital goods, not imports from GB. Germany, of course, did not have empty spaces to attract immigrants, but relied on food imports from Ukraine that were paid for by exports of manufactures that would not have been produced without tariff protection.
Japan, China and South Korea used the Hamilton-List approach to industrialization, much to their benefit. As well, they were able to manipulate exchange rates to enable chronic surpluses to be earned on current account. Normally, their currencies would have appreciated to eliminate their trade surpluses. Germany benefits from the Euro, which operates like the Gold Standard and enables its trade surplus to be maintained as there is no currency appreciation. Exchange rate manipulation has kept the US currency overvalued relative to its chronic trade deficit as trade surplus countries but US capital account exports, e.g., US government bonds. Sad and bad.
What are the few things one would choose to do differently in order to create a Globalization tide with less collateral damage. As David Brooks points out, there will most likely not be " a snap back to the democracy we knew before". This is not minor as damage goes.
Not that one could control much, but for the sake of our own understanding (education), what could have been set up different in the policies that iteratively took us to this state of inequality, anger, populist backlash, fracture of the west?
For example, many would say the deregulation of the Clinton years could have been crafted with more checks and balances; the EURO could have been thought much better; etc.
Since this is about Trade, what do NTT and NEG and Globalization Discontent teach us, tentatively at least?
Again, the motivation is only educational. It is always relatively easier to understand what happened and why in hindsight; we can not change the past, but we can educate ourselves and do things better in the future, and there are plenty of enlightened policies crafted after WWII, or during the Renaisace, so on, with past experience and history in mind.
1
You want a policy that would reduce the collateral damage due to globalization ?
How about this: before a company can shut down any plant, it be required to give the employees of the plant the right of first refusal to buy the plant and keep it running.
Here the employees would form a group to evaluate the feasibility of keeping the plant operating and continuing to supply jobs. A government guaranteed loan would fund the employee buyout. Employee ownership and control would directly empower local communities to have a say in their economic destiny.
This is not socialism, but grass roots capitalism; this would lead to a real ‘ownership society’.
What could be done about the change in job types - ie, loss of low-skill manufacturing and the rise of a service economy? The answer is funding of jobless benefits for those put out of work, funding for primary, secondary and college education, funding of job real job retraining, funding of universal medical care so people feel free to change jobs and move to other places, wage increases commensurate with productivity increases (has not kept up for 30 years) that gives workers a part of the wealth created (instead of funneling to executive stock options and stock buybacks), not destroying unions that fight for workers rights and pay., etc. In other words, actions that help normal people instead of the 1%.
The Repubs have fought against all of this for 40 years. Repubs are to blame for the hollowing out of the middle class no one else. NEVER vote for are repub if you want to live in a civilized world.
Large and corrupt tariffs are destructive of prosperity at home and world trade more generally, a world trade that profits the US in many ways because our economy is so very big and octopus-like.
However, more modest tariffs can be a useful form of regulation of the market. They CAN make sense, even if they so very often do not.
They can limit dumping..
They can equalize national "disadvantage," like safer labor conditions and pollution rules. We don't have to kill our workers or live in a sewer of waste, just because some of our competitors are willing to do so.
They can serve national security, by ensuring a certain minimum of capacity for defense needs.
Again, they can go far past that, and be very destructive.
We are presently at the end of a long path of eliminating all tariffs, the good, the bad, and the uncertain ones.
We do need a discussion of reasonable tariffs to serve reasonable needs. Absolute "free trade" is like an unregulated market, too much of a good thing. See the 2008 banking disaster for where that leads us.
It is just irresponsible to insist all tariffs are bad, just as it is irresponsible to do them willy-nilly pandering to special interests.
It is not likely that Trump is doing them well. He is at best shooting from the hip, and may be pandering more corruptly. However, we also went too far eliminating tariffs.
Moderation in all things. It is old wisdom, over the ancient portal of the Oracle of Delphi.
5
"There’s near-universal consensus among both economists and business leaders that Donald Trump’s tariffs on steel and aluminum are a bad idea.."
Unanimity tells me they are all wrong.
3
Dear Mr. Krugman,
Your work in exposing trump and his malevolent policies is admirable. But without emphasizing a positive agenda in things that effect the millions in the country that, misguided, voting for him: a $15 minimum wage, free college tuition in state colleges, control of banks that brought about the last recession, and government sponsored health care, he and his gang will win the next elections. By devoting a whole column to his evil ways without mentioning how we can improve living conditions in this country in simple terms will end up being self-defeating.
4
so a 255 tariff on steel - isn't that imposed by the government? isn't a tariff another name for a tax? Where is Grover Norquist ?
Tariffs / taxes on steel will be paid by people who buy cars, guns, fridges etc. made of steel.
When you put a 25% tariff on steel - it raises floor on the price of steel to the lowest cost import plus 25% . Are US producers at least 25% more expensive than imports?
If imported steel costs 100 - it will now cost 125. If domestic steel costs 115, domestic manufacturers can now increase their prices from 115 to 125 - so you have a 9% increase in the cost of all steel.
Domestic produced cars, guns rebar, fridges will all increase dramatically in price. Imports of cars, rebar, fridges etc will be cheap. But I guess the american people will still buy american guns at any price.
4
Tough to sell the tariffs on aluminum an steel as a national security issue when Trump is exempting Canada and Mexico if they toe the line on Nafta re-negotiations. Are they instead being used to punish those who Trump sees as trading unfairly with the U.S.?
1
The irony of the new tariffs is that the US economy has been lifted so high in the last year or so because Europe's and the rest of our world trade partners economies have improved and continue to grow. What has Trump learned from that - nothing.
3
A variation on the old lay away plan, pay until we're layed away.
This is a good basic primer and I love the term "belligerent ignorance." It is the perfect description of the Republican orthodoxy.
Krugman doesn't take his assessment to the next step, though. What happens next? The justification will be shot down after an extended set of Court cases. If Trump continues to add to steel & aluminum (and the previous ones on consumer electronics) we are likely to have a significant shift in the world order relative to trade. However, in what scenario do we come out the winner?
The TPP looks like a club that will expand, but we took ourselves out of it, so our interests were not protected in the final document. Europe is doing the same thing with Asia. We are putting ourselves in exactly the box economists worried about 40 years ago when they anticipated the development of a European bloc, Asian bloc and Americas bloc for trade. Except we are even pushing away our Americas neighbors. When the music stops, we will have no seat. Future Administrations will have to pay a steep price to buy into the game and we will have no influence on the conditions. This is a prescription for disaster.
1
How much of the US steel and aluminum industries' inability to compete in the global market place is due to technological advances implemented by other countries vs the cost of labor, adhering to environmental regulations, etc?
Nice try, but US steel and aluminum can't compete because the corporations that own them chose not to invest in new technology. When the steel mill I worked at as a student was dismantled a few years ago, some of the equipment was vintage WWII.
With trump, the safest place to start is with corruption. He has already said that he will personally decide which nations to target with tariffs and how large or small those tariffs will be. Moreover, these tariffs, as trump envisions them, will be subject to frequent arbitrary change according to his personal whims.
I am wrong to conclude that what is about unfold is the biggest pay-to-play shake-down in human history?
5
International trade and the policies that support it are quite complex. These are not trivial matters and require research and legal expertise to put it together and then enforcement mechanisms to insure that all parties play by the rules. The process creates relationships and can generate goodwill between nations.
Trump does not like rules, rules are for the low-energy types. Trump likes to talk or tweet. Trump likes action (any kind of action). And Trump likes to see himself on TV, all day, every day. So what if the tariff wreaks havoc and creates a mess, as the ruler, he can stop it. As long as Trump is in office he will operate on the assumption that he is the ruler not the president.
I would expect to see more of this in the coming days especially closer to the elections. These proclamations will be used as proof that much was accomplished. Trump is hallowing out democracy, the rule of law and ethical behavior. What rushes in to fill the vacuum he is creating is still up for grabs.
3
Could there be another reason that Trump is starting this Trade War? Will the Russian economy stand to benefit from Trumps actions? Any other economies, like Saudi Arabia? Other economies where Trump is trying to build or develop
additional business for the Trump organization.
This would be worth exploring.
After all, Trump has no intention of doing anything that would benefit all of the citizens of the United States. Only what will benefit him and his cronies.
3
Paul Krugman - Can you please explain what happened when George W Bush levied a tariff on steel, and how these tariffs are the same or different?
Do the Trump tariffs violate WTO or other trade treaties?
1
Concise and well done overview/history of international trade, Dr. Krugman. Dr. Samuelson could have used this as an introduction on international trade in his college economics text book
1
International trade was one of my areas in grad school, but I have never before read such a clear and insightful statement on the political economy of foreign trade policy. Protect us from ourselves indeed!
1
I remember a car ad that featured a car plant where the car that came out and the parts that went in shared one characteristic (Untouched by human hands).
We in Canada are on the losing side of Nafta and despite the expiry of the last softwood tariff I suspect Koch Industries which owns Georgia Pacific America's largest softwood lumber producer will make sure they are the biggest winner if the USA is to sign a new Nafta.
The USA hasn't been a nation of laws since Republican lawyer Antonin Scalia was hired by the Republicans to represent them on the Supreme Court of Injustice. The USA flouts international court decisions even as it Republican Supreme Court lawyers pervert and obfuscate the US constitution.
It was in 1773 that the merchants of Boston boarded the East India Company ships flying the East India Company flag and dumped the East India Company untaxed tea into Boston harbour.
The East India Company was an international company that owned and operated over half the world and it was they that had their competitor's tea taxed.
Tariffs are a consumption tax on every American
Koch Industries is holding up Nafta so Canada will pay a large ransom to stay in the USA economy. Tariffs is all about wealth and power and will do nothing to alleviate the expansion wealth inequality.
There are two words that really need mentioning "Bretton Woods".
Until America again embraces an agreement akin to Bretton Woods I will advocate the highest possible tariff walls around the USA.
3
Once upon a time Business friendly Republicans believed in free trade and progressive union Democrats supported more protectionist policies. Now that Trump is pushing protectionism and tariffs it puts Democrats in a tough spot. Either 1: Agree with establishment Republican, 2: Agree with Trump (ugh), 3: Explain to workers why protective tariffs are bad for them. None of which is very easy or palatable . Triangulation at its best.
1
Neoliberalism, it's a thing? Bill Clinton signed Nafta and made China a permanent WTO member. George Meany's Democratic Party has been gone for decades.
Indeed, the Dems failed mightily when they neglected to point out how the GOP controlled Congress has, for the last 8 - 9 years, refused to pass any legislation that would have supported jobs training for displaced workers. They had time to attempt to repeal ACA multiple times, investigate Benghazi for years, and of course steal a seat on the Supremem Court -- but legislation to help Americans? Not so much.
2
@ SDH
Typical "progressive" economic idea - retrain workers for imaginary jobs, while destroying industries and killing jobs. Trump, and a republican majority is the best thing that could have happened to US workers.
When all countries get to produce, some industries lay off American workers. A few of them get educated into other jobs; the rest become industrial waste. Automation, such as in the coal production industry, creates even more of that industrial waste. What is desirable and politically possible for discarded laborers?
4
We keep chasing a glorious past that , in reality, mostly benefitted white men. I constantly here people reminence about the good ole days when America made things and had a strong industrial base in what is now called the rust belt. Trump and his ilk don't want to acknowledge is the incredibly large government investment in roads and other infrastructure that made our manufacturing prowess possible. The very government that they rail against is the only entity that can make such growth possible. You must have someone working for the common good. The profit incentive is not sufficient to make America better.
4
Trump has no appreciation or understanding between simple and complex problems. For Trump, all problems are simple--there is an identifiable cause and effect---so, address the cause and you will achieve a desired effect. Maybe in the real estate business such simple relationships exist---you can't sell your house at your asking price..so lower the price of the house. But in the presidency all problems are complex, with countless identifiable and unidentifiable causes and countless identifiable and unidentifiable consequences. Layer on top of these countless uncertain causes and effects, is how these causes and effects interact with each other. In recent history we had a President who, like Trump, treated all problems as simple cause and effect relationships--we all know now that eliminating Saddam Hussein and defeating the Taliban in Afghanistan has left our country deeply mired in the complexities of middle eastern culture and religion --- for which, we have yet to find an exit strategy. This is not to say that we should not attempt to resolve complex problems ---climate change for example---but, it is dangerous to treat all problems as simply a matter identifying one cause and fixing that cause.
2
As is often the case with Mr. Trump, a law suit could stop these tariffs, since, as Dr. Krugman observes, this is a violation of U.S. trade law. The framers of the Constitution did have the wisdom to create three branches of government. Good thing. We've been relying on the judiciary to save ourselves from Mr. Trump's reckless ways.
94
Perhaps Congress needs to more carefully define when "national security" is a valid basis for unilateral presidential action on tariffs. As with Russian sanctions, they need to force the president to get prior congressional approval for any changes to tariffs.
2
Except that the zombie brain eating republicans have been stacking the courts with right-wing and religious nut jobs.
1
The judiciary? If Trump can cobble up a tax break for the wealthy (himself not withstanding) the rest of the free world views as criminal self service how, pray tell, will any or all three branches offer anything but compliance?
You mention the Smoot-Hawley Tariff Act of 1930. It would be even more powerful if, when you mention that tariff act, you you add that many economist credit the Smoot-Hawley Tariff Act of 1930 as a key trigger to the depression of the 1930's. That way your readers would better appreciate the down side of a unilateral, one sided, tariff act.
6
Like all of Trump's decisions, this has nothing to do with policy.
There is no policy in the White House except the policy he has always had: lining the pockets of the Trump family, and--for Trump himself, adulation, which used to be something he paid for, from sex workers, and now he punting for the country.
This particular peccadillo, which will unleash rage, is simply about appealing to his base, who see this and think they will be protected, in the same way they thought he would look out for them in other ways. This won't happen.
Trump would have difficult reading and understanding this article on his own, much less agreeing or disagreeing with it.
3
I wonder what it will take before the Republicans realize that Trump is a luxury they cannot afford.
With these tariffs, he’s steering the U.S. economy straight for the rocks; is this enough of a wake-up call for the rest of the Republicans, do you think, or are they just going to stare in fascinated horror while their own political futures sink without a trace—along with a large part of the rest of the country?
I suppose time will tell; but—warning to all Republicans—you’d better act NOW. There may not be much time to avert a trade war, in this case; or any number of other catastrophes that will take generations to fix.
1
You correctly state : "With these tariffs, he’s steering the U.S. economy straight for the rocks; is this enough of a wake-up call for the rest of the Republicans, do you think, or are they just going to stare in fascinated horror while their own political futures sink without a trace—along with a large part of the rest of the country?" This has been the MO of the GOP since Trump was elected. They are just as much to blame, for their complacency, as he is and so far I see no end in sight.
I suppose time will tell; but—warning to all Republicans—you’d better act NOW
1
Trump's war on coal.
Trump's steel tariff aimed at China (who export little steel to the USA) actually hits Brazil who are a major IMPORTER of US COAL. So not only does President Tiny Hands threaten the livelihoods of US manufacturing workers, and destabilize Brazil, he directly threatens the very coal mining jobs he bust the EPA to 'protect'.
Truly we are being governed by a man who you would move away from if you heard him ranting on the subway.
7
If it's new, "belligerent ignorance" is a major contribution to the lexicon. It explains most everything that's ever made this country "great," in the sense that the red hats define it. Thank you.
84
"Ignorant and proud of it " is another version of the same.
3
Isn't that what the rest of the world means when they say "Americans" or was that lost in translation?
2
I've been using a term similar to "belligerent ignorance" even before Trump became a politician: "Ignorant and proud of it."
1
I’m trying to understand Trump’s moves from Putin’s point of view. How does Russia benefit? It appears that China is stepping into the vacuum created by a vacating USA. What’s in it for Putin and his gang?
2
A man who chooses to outsource labor and buy his raw materials from overseas is not leading us into a trade war? For those who defend his past transgressions, he always had the option to increase the price of his products, including his buildings to include the "made in America" label but always choose to ignore it.
Trade wars can lead to real wars, and often have in the past, but if you lead like an uneducated dolt you might never know until it is too late. The only silver lining is that there are term limits, his time will eventually end, and then we'll begin the clean-up of yet another Republican economic disaster.
2
You're right that the parameters we use to police trade are created "to protect us from ourselves: to limit the special interests . . .and outright corruption...."
But open borders are a choice, too, and that choice also creates (a few) winners and (a whole lot of) losers.
The winners: corporations that can move their production to low cost countries and retail empires that can take higher mark-ups on cheaply produced goods.
The losers: the 80% of Americans whose incomes have stagnated since 1980.
Whose side are you on, anyway?
1
Folks,
Follow the money. Who benefits from the tariffs? Whose pockets are lined with anti-environmental presidential acts? Who is enriched by selling more guns to arm teachers?
Trump has never made a secret of his desire to funnel funds into his own coffers at the expense of his workers...and now, We, the People. Repeated bankruptcies, defaults on payments to contractors, allowing his children to trade on his presidency...these are all massive billboards about how his raison d'être is himself.
We, the People, elected him and subsequently his cabal, to run this country, this Constitution, into the ground. We are certainly reaping what we have sown.
In the end, following the money will be the undoing of this administration. It will be equally important to see where the money does _not_ go. That is moving dangerously close to torches-and-pitchforks time.
https://wifelyperson.blogspot.com/
5
Our Congressional Leadership doesn't even have hindsight let alone the foresight to forestall this Fool's Errand. American voters, we put these people in office. Until and unless we get these people out of office nothing will change.
4
“Influence-peddling and bribery”: sounds like Trump’s version of what the business world is all about. It’s no wonder he sees tariffs as simply business-as-usual.
2
Some have argued that the relaxation of U.S. tariffs after WWII constituted a form of foreign aid with which other countries could ward off communism; that this method was used because Congress refused to provide meaningful foreign aid. Other have said that the impact of free trade on manufacturing labor, and displacement of U.S. manufacturing to foreign shores is the result of the U.S. failure to adopt an industrial policy prevent such results: policies such as those in Germany. Over the 70 years of free trade development in the U.S., it also has been argued that trade deficits result from the U.S. failure to achieve reciprocity with its trading partners. Others say U.S. trade deficits with China have provided the capital China needed for its modern industrialization? What are your views regarding these issues? Best, Ed Spievack
Since globalization began US GDP growth has not accelerated and productivity growth has declined. Economists would not be talking about "secular stagnation" if globalization had resulted in the promised benefits. Obviously American workers are not benefiting since wages have remained stagnant - recent increases are nothing like what should be expected from the unemployment level and stage of recovery.
Trump is not likely to improve this situation but who is? What constructive policy suggestions do Democrats and "liberal" economists have to reduce the trade deficit? Trump may go away - probably for reasons not related to international trade - but the problem will remain, perhaps for the next and more competent demagogue to exploit. Who knows, advocating a rational trade policy which is not designed for the benefit of corporate profits might win some votes for Democrats in the next election.
7
I think the 'liberal' recognition is certainly not to gut social services programs at such a time. It nonetheless appears reasonably clear, based on input from multiple economists, that these tariffs will neither address core structural problems for working class, or the greater economy as a whole
4
Having asked the question of how family of four with house, 2 children, a car, and a dog would be affected by the tariffs, realized why any answe that could not account for their access to health care and organic food would make such a response very much ball park.
As corporations (Monsanto, Koch Industries., etc.) and the industry-promoting, regulation-shredding cabinet continues to help poison what makes life possible (air, water, soils), more and more expenditure is necessary for survival.
5
Do the numbers really capture what it means to the USA when a factory closes in a small city? The family conflict, increased alcohol and drug abuse,
that always happens in a few families all of a sudden afflicts many and the quality of life in entire communities slides downhill.
In the former Soviet Union the closing of all the uneconomic factories lead to a decrease in male life expectancy because of increased substance abuse and accidents (read suicides). The same is now happening here (read the NYT article on Madison, Ill).
When economists perform calculations with their numbers they seem to forget that these numbers are an imperfect reflection of reality.
I understand that the world doesn't stand still and that Trump's idolization of life in the 50s is not a good going-forward path. But still, we just can't sit around and do nothing when economic purposelessness disables so many grown people.
Children should not see their parents flattened by economic hard times. That leaves scars on both parents and children that many never escape.
12
I agree with you that free trade has caused family turmoil. The issue is not free trade...change is inevitable. The problem is that we, as a society, did not support the people negatively impacted by trade. We could have mandated income support, good re-training programs, & life coaching for these folks. Instead our politicians ‘promise’ to get these jobs back instead of helping these folks move forward.
30
See some of the comments related to the essay from the guy who supports Trump's policies. Their point is, if these industries are "protected," what is the likelihood that they will, infact, continue the level of employment these bergs have known? They won't. Tech will still replace jobs and the capitalists will still be driving towards maximizing profits.
2
First of all, there are no numbers or calculations in Krugman's essay.
Second, Krugman is indeed concerned about family conflict, drug and alcohol abuse, etc. And his point is that such conflict and abuse will INCREASE if a trade war breaks out.
The only reasonable conclusion is that Anne didn't even bother to read the essay that she's commenting on.
When Trump tries a new and different approach to address issues facing the country, which, for example, Obama would never have implemented, I try and keep an open mind. If Trump's tariffs were successful in benefiting the steel and aluminum industries, bring back well-paying jobs, Krugman would be the last person to give him any credit, just as he gives the president no credit for the tremendous stock market gains for the past 14 months.
2
There are several times as many jobs in industries that use steel and aluminum as there are for the direct producers. If steel and aluminum prices go up because of protectionist tariffs, there is a substantial multiplier effect. However since our largest source of imported steel (Canada) is exempted, that negative effect may be somewhat mitigated ... except for the potential trade war with the EU, etc.
6
"When Trump tries a new and different approach to address issues facing the country, which, for example, Obama would never have implemented, I try and keep an open mind."
If you had bothered to read the editorial, you would know that there is nothing whatever "new and different" about Trump's clumsy imposition of tariffs. It has all been tried before, with disastrous results, including being one of the causes of the Great Depression.
5
ATF, Your statement re: the stock market in 2017 leads to 4 questions:
What effect can a president have on the stock market?
What specific actions taken by Trump do you believe caused what you believe are "tremendous" gains?
If the stock market does better than it did in 2017 does that mean the sitting president had better policies?
Will you trumpet the policies of the sitting president in years in which the stock market did better than it did in Trump's first year?
I only ask because the S&P was up 21.83% in 2017. In Obama's first year it was up 26.46%. As of two days ago the S&P was down for 2018.
I have an Obama bumper sticker if you want it.
8
Wouldn't we have been in a stronger position to thwart China's unfair trade practices had we taken a leadership role in the TPP?
28
The whole TPP issue is generally way above the average person's mental process. The same issue affects NAFTA. In any direction that a new policy, law, or trade agreement takes creates 'winners and losers' in jobs, the status of the economic performances involved, and how the personal futures carry on. The same will and is occurring as of the first second of trump's withdrawal from the TPP. We as a nation will have no say in that trade partnership.
1
As usual with Trump an elephant gave birth to a mouse.
32
Picking winners now seems to be the essence of Republican's view of the role of government in economics. Coal vs. renewables, steel, and a tax cut bill loaded with dozens of gimmicky give-aways that are only starting to surface. Couple this with their new found appetite for deficits and it's clear that when it comes to coherent ideologies there is no there, there anymore.
46
I think that what they are doing is trying to pick political winners. The industries selected are chosen solely for their promise in delivering blocks of votes in essential states. The process is as corrupt as it could possibly be.
4
To win an election in PA Trump risks an outright trade war. Foolish in the extreme but not surprising. He has no sense of history and no one on his staff that can help.
Shoring up the prospects of a few thousand steel workers, or coal miners, to sacrifice the millions of workers in downstream industries that depend on imported steel, is criminal negligence. If the GOP ends up supporting this action the covers are off.
To borrow a Ryan slogan "a better way" is already in place. Retrain the coal miners and steel workers to switch to alternative power generation and service. A vote by coal miners recently declined to accept any retraining of this sort because Trump had promised a revival of their industry.
This act, and others e.g. cancelling the US participation in the TPP, will end up duplicating the effects of the Smoot-Hawley tariffs in 1930. History will not be kind.
43
i agree with you...retrain and utilize their skills/talents
Is there no legal recourse to Trump's executive order regarding tariffs?
15
The legislature could stop it if they wanted too.
1
"Is there no legal recourse to Trump's executive order regarding tariffs?"
Yes. But who is going to take him to court?
Why do you think American workers in affected industries like coal and steel and aluminum ignore job losses due to technology and blame all their woes on regulations and unfair trade? If a lot of their jobs don't rematerialize, who will guys like Trump blame then? Do you see Republicans passing laws that limit the amount of job costing technology that can be used to try and "save American jobs"? And if there are not reasonable increases in the steel and aluminum work force, what do you think the Democrats should offer to these folks that would make them feel someone is listening and willing to help?
8
Agree with you, Dr. Krugman. But this has nothing to do with trade. To Trump, this has to do with his view of negotiating.
Look at his business career. His negotiating style is to create leverage by creating crises and then using them to get the best deal.
For example, his loan defaults and bankruptcies are well chronicled. During the campaign, he even made a reckless comment about defaulting on U.S. debt to improve interest rates in negotiation. He thinks that when the other side is facing a potentially devastating result (like losing the entire value of their loan), they will be more amenable to negotiating a deal he likes better. Look at a few examples during the 15 months of his presidency:
--Threatening to "blow up" NAFTA
--Withdrawing from the TPP, to gain leverage to negotiate bilateral trade deals
--Threatening to bomb North Korea
--Imposing duties on various products
--Threatening to pull out of NATO
It is the "Armageddon" approach to negotiating. The problem is that eventually his credibility is shot and the other parties move ahead without him. In Trump's personal case, U.S. banks stopped lending to him, which is why many of his more recent "deals" are with Russian oligarchs and Arab oil money. Likewise, countries are also moving ahead without us--the TPP, signed March 8 by 11 countries, is an example.
Our allies are not banks stuck with Trump's bad loans, and U.S. international relations should not be like just another bankrupt Trump casino negotiation.
74
The tariff policy is being promoted by the administration using the political tactic of fear-mongering a “shooting” war, making the isolationist/nationalist tariffs a solution to a war that might come. The benefits to workers will be temporary if a war comes or not.
Federal funds for military contracts will eventually run out if war never comes. If war does happen, the first targets by enemy ICBMs will be manufacturing hubs.
None of this is necessary, in my view, and represents an administration using potentially harmful and high cost policies to increase a still dissatisfied voting base.
The implementation of policies that have failed historically is more harmful to the country and national security due to their high risk components. I suggest Trump supporters read some history books.
I feel for the workers in manufacturing and material producing industries. It is understandable they have narrow and self-interested goals. To put their faith in a high risk conman demonstrates workers’ desperation. It will be the workers who will pay for the administration’s selfish interests, and then the nation. I am not a visionary; I am witnessing history rhyming. This time, however, our country is not standing on higher moral ground. The administration is recklessly daring destruction.
4
Question: Why can't we create a trade policy that lets us take advantage of a supplier's willingness to deliver product at a depressed cost? If there is a "sale" on a product why not take advantage of it. I acknowledge the scenario where we eventually get sucker punched if we allow our onshore suppliers to wither on the vine and then at an inopportune time the offshore, previously low price, supplier decides to tighten the screws and pressure us into some poor choice. Ok, Acknowledge that while developing a policy that protects us against that turn of sentiment ( ie grabbing a fistful of short hair through our own exports to the supplier or the financial/legal system for example). Maybe we have an on-shore program to develop and refine the very upper, high margin end of the boutique market for the product in order to retain our expertise while advancing our know how to sell to others at a later time. Can't we pursue the high margin end of the market while letting others supply the bulk commodities?
2
Obviously you missed the Walmart and main street effect. You need to get out more.
The Koch Bros. don't like the Trump tariff plan. The longstanding & concerted effort to export American resources & energy to foreign manufacturers & consumers is running full speed ahead.
A planned LNG pipeline from Canada to a coastal Oregon port is gaining steam. Nobody seems to consider the impact on Americans concerned with affordable winter heating in future as the exports proceed. The cost of conversion from gasoline to LNG powered vehicles will skyrocket as domestic pricing elevates. Frackers delight in rising gasoline prices. The average American driving to work...not so much.
The same hand wringers worried about Chinese military expansionism within their geographical sphere of influence haven't the slightest concern over our absolute reliance on their export market.
Maybe we need to establish American manufacturing & production sites along the lines of recreated early American workplaces like colonial Williamsburg & Dearborn.
Tourists could watch Americans making steel just like they watch cheese being made in Tillamook County Oregon, through big plate glass viewing rooms. Why is that cheese so good? Because it's produced with the finest ingredients under absolutely pristine conditions.
Now let's transfer some of that concern to our brethren in countries supplying our remaining needs. Can we rely on the WTO? I don't think so.
3
Steel and aluminum imports amount to about 1/500th of the US economy, so the tariffs amount to about 1/2000th -- much less than that if the main exporters are exempt.
This is going to be a very small war.
2
I still remember Krugman's prediction on the stock market crash when Trump got elected. If Krugman is against it I am for it.
3
Just wait. A repub is president, there will be a crash, and it will affect middle class more than the rich. It's coming.
3
Prof. Krugman has been been right so much more often than not over the years I have followed his column and has been the first to admit being wrong when it happens. Yet Trump is wrong almost constantly, lies constantly, cheats on his wives, is a misogynist, cheats in business, doesn't pay his bills, won't let us see his taxes, does nothing about Russian interference in out elections, and so much more, yet that's OK, because he supports the idea of, "it's their fault", and promotes lack of or avoidance of personal responsibility which his followers feel. No consequences for bad personal behavior.
"I still remember Krugman's prediction on the stock market crash when Trump got elected. If Krugman is against it I am for it."
You do? You must have read it in Breitbart or TownHall. In the NYT, Dr. Krugman's been clear: "the stock market is not the economy."
A question for Paul Krugman:
Why precisely do most economists agree that tarifs are bad for most of us? Are there exceptions? Could this be one, as Trump insists?
1
Mr Krugman, I admire your honesty and clarity in your analysis. I'm interested in whether if you think the fall of communism and the failure of the Soviet experiment had lit the fuse and in some ways led to the current chaos?
As in the complete collapse of the Soviet Union and total discrediting of the communism ideals led to a new found enthusiasm for laissez faire capitalism, led by the USA, which in turn created an environment for the likes of Trump to practice their demagoguery and thrive in the midst of such chaos?
7
I don't get it. Quite a few Republicans as well as Democrats in Congress are against this entry into trade wars, commenting (as does Krugman) that it is not in America's interest. Why is it that Trump can proceed, apparently unhampered, as full-blown dictator? What happened to the democracy? Is the division of powers into three (executive, legislative, judicial) a mere relic of the past, with no will to stop this dictator while there is still an America a hint of the greatness we once knew? Is it REALLY too late, or could Congress wake up and act responsibly?
16
Let's level the playing field first, and allow our hollowed out steel towns to rejoin the middle class. Why should China's middle class be larger than ours? President Trump is turning into a promise keeping President, who does what he says, and could be a great President remembered for centuries to come.
2
Great article! Question: What's the relationship between so-called free trade agreements and the ever-increasing power of trans-national corporations? Ever since reading Korten's "When Codporations Rule the World" in the 90's I've been wary of the destructive infinite greed of these powerful concentrations of economic corporate power, especially after Citizens United. These corporations buy politicians everywhere to protect themselves.
11
Could Trump be crazy like a fox? Instead of assuming if Europe retaliates, he then retaliates, let's assume Europe does and he doesn't. Is there much down stream cost if Canadian and Mexican steel and aluminum are still imported? Marginal I'd say. If Europe targets as indicated peanuts and cranberries, bad for GA and WI but is that truly a big price? The payoff: DJT looks tough, proves calls of tradeageddon were 'fake news', plays to base. Of course, all that assumes that the likes of Navarro and Ross are reigned in.
Perhaps a further step in protectionism might be that only American owned hotels, golf courses and condominium complexes are allowed in the USA. The disadvantaged foreign investors then could have their own countries place tariffs on Trump properties abroad. That would certainly bring a bit more class to the world. Oh wait a minute, that wouldn't hurt Trump anyway as he doesn't own most of the Trump properties insofar as they are owned by the Russians and Chinese who funded them.
8
Question for Professor Krugman:
What do you think of the arguments of Trump administration officials that the impact on any American consumer is minucule, calculated to be less than a penny.
3
Conservative darling (and NYT Op Ed writer) Henry Hazlitt explained in "Economics in One Lesson" why tariffs can help people in the protected industry, but hurt everyone else. You can find his wonderful explanation online. He used sweaters, but let's use cars:
1. Tariff is imposed on steel, an input to cars.
2. Car companies switch from lower-cost foreign steel to higher cost U.S. steel. Presumably, the foreign steel was cheaper or they would have been buying U.S. steel all-along.
3. U.S. steel producing companies get more revenue and profit as demand for U.S. steel goes up; workers and owners share the benefits (the split for the Trump tax cuts was 15% for workers, but I digress).
4. Consumers buying the more expensive cars have less to spend on other things.
5. Workers in other industries get hurt, as money that used to flow into their industries is now going to car companies and those workers.
6. Other countries retaliate in other industries, hurting our export industries and those workers.
7. The tariffs mean we have more workers in less productive industries (i.e., steel workers not cost competitive with foreign countries) while foreign countries have to find other jobs for their steel workers (who were more efficient) making the entire system less productive, reducing overall wealth.
The best solution to globalization is to help those left behind (education, healthcare) by raising taxes on the rich who benefit.
8
Three more years of Trump (at least). And a GOP Congress that has been obstructing for 25 years, with an interest in looting rather than governing. There are endless way, such as trade wars, for them to do tremendous damage.
5
When inequality of wealth, income, property and power are so immense, the common people will revolt. They don't know what to do, but they'll do something.
This madman, narcissist of a bully President talks tough about the 'other'. That may be other countries, immigrants, minorities, etc., but he sees a lost and hopeful people that need something to hold on to: even if they are lies.
The trade war is another wild ride for US, to keep us off balance and dancing to Trump's music. We're so dumb to follow; continually. He's not that good, it's really that we're that desperate.
He's a traitor that does all he can to make as much money as he can. That may, in fact, be the American dream: to be rich. That is certainly his dream. And, the fever of greed being what it is, these guys are never satisfied.
And so, we lead the industrialized world in citizens in poverty. Our middle class falls. We create billionaires and those in desperation.
Trade war? No, war against humanity.
13
The purpose of a good government is to limit the tendency toward excessive greed, a common human trait. Our government has failed in this task for the last 40 years. The current president is the pinnacle of this bad governing. I think most of us have learned a good lesson and change is on the way.
2
Trade wars are destructive but so are some trade treaties...NAFTA being a good example. When the treaty was passed politicians promised the moon & the sky...what happened? Well first, it led to the loss of 750,000 U.S. jobs. Most were in the manufacturing industries in California, New York, Michigan, & Texas. Many manufacturing companies moved to Mexico because labor was cheap. Second, job migration suppressed wages. Companies threatened to move to Mexico to keep workers from joining unions. Without the unions, workers could not bargain for better wages. This strategy was so successful that it became standard operating procedure.
Third, NAFTA bankrupted 1.3 million Mexican farmers. It allowed U.S. government-subsidized farm products into Mexico. Local farmers could not compete with the subsidized prices. It forced unemployed farmers to cross the border illegally to find work. In 1995, there were 2.9 million Mexicans living in the United States illegally. It increased to 6.9 million in 2007.Fourth, unemployed Mexican farmers went to work in substandard conditions. US owned companies employ Mexican workers near the border to cheaply assemble products for export back to the US, The program grew to employ 30 percent of Mexico's labor force. Fifth, US companies degraded the Mexican environment to keep costs low. Agribusiness in Mexico uses more dangerous fertilizers & chemicals. Krugman is only giving one side of the story. NAFTA is an unfair treaty. It needs to be renegotiated.
4
This may seem like a simple thing but America demands to bid on Canadian government projects and the much smaller sign making companies can't compete with large American companies and so even Canadian road signs saying Welcome to Canada are made in the states.
T
Right now Trump is determined to destroy Canada's remaining dairy industry because American farmers overproduce to the point they pour milk into ditches to keep prices up just as was depicted in The Grapes of Wrath.
My question is why do Americans think they are the only ones entitled to manufacturing and good jobs?
1
We need to go back to the drawing board. There's no point in having a trade treaty unless it's fair....all parties on both sides need to be protected. Provisions could be put in to protect both sides....unfortunately they never are.
Isn't a discussion of the benefits and drawbacks of free trade simply begging the question? Isn't the genuine angst felt by many Americans regarding free trade centered not on the theory but rather on how the wealth created by free trade has been allowed to be captured by the wealthy and large corporations, leaving laid off workers and hollowed out manufacturing communities to fend for themselves?
13
Corruption is a problem. Rule by wealthy donors is a problem. But I fail to see how US trade policy directly addresses either corruption or rule by wealthy donors.
US trade policy encourages offshore production and labor arbitrage. That, together with tax policies that encourage offshore production, a labor policy that discourages unionization and an anti-trust policy that encourage mergers and acquisitions but discourages competition, have created a class of wealthy donors that have corrupted government and threaten to replace democracy with a corrupt oligarchy.
10
Mr. Krugman : Thank you for sharing your valued knowledge on world trade when
about to enter a war for dominance by USA against the world expecting same results as
at the end of WW II. When we all us know industrial countries of the time where totally
Destroy hence zero competition,them all where able to compete again via new Designs Price ,High Quality values and success that prevails till Now, Mr.Trump, seems to Ignore
that Isolation is for a fact for USA extremely Out of Bounds since first swing at it.
Isolation as the main factor of Not acknowledging that steel industry is relatively Gone
high tech, Green Power on on on, however According Infrastructure both vía investment
And Mainly , Human Resources , Committed & Well paid in USA case,Qualified to shift
From oven furnaces to ,Zero tolerance-clean working places environment,to produce High Tech,soft and hardware seems non real
A fair view from over seas, far away for achieving world domination via Bullying even in the
Not so remote case of a Nuclear encounter if we us all do Not bend to mr.Trump Wishes
I do believe he will follow thought , with his so far Fifty years of Perverse acts and over 70 years old...Will change his way of acting,and expecting something different is Unreal .
1
OK, I see from your op-ed that tariffs are often a way to benefit one part of our own economy over another, and can lead to shady deals by lobbyists and crooks. And of course tariffs can be used as a political tool to benefit one nation over another, besides being used to try to benefit us versus them. And of course there are different short-term and long-term costs and benefits. And one last bit for this preamble: international trade has not been fair in the past. A few simple examples are our government’s helping our oil industry in its early days in grabbing oil fields around the world, the British stealing the Chinese intellectual property – tea, others stealing their silk-making techniques. And of course the whole slave trade and imperialist exploitation (British destroying Indian cotton industry). And there are plenty more recent examples.
My question is: what would be a good trade policy and how do we properly set such a functional and fair trade policy? Should it be absolute free trade (minus trade in heroin and other banned or clearly dangerous substances – do weapons fit here)? Who would be on a committee that would determine this – would it be politically determined by elections, would it be comprised of only economists, would goals be to make trade “fair” or to help reduce inequality in the US or to help fledgling industry or to help beneficial (sustainable) industry over toxic ones?
5
Dear Mr Krugman,
If President Trump is in effect violating law by enacting these trade tariffs, nullifying environmental regulations and putting up protected public lands for drilling, doesn't the Congress and/ or the USSC have the capacity and an obligation to intervene and stop him from harming the country by his actions ? I thought that the system of check and balance was exactly about that.
Unfortunately , our Republican controlled Congress and USSC won't act on behalf of the country. Aren't they all doing us wrong and throwing the whole country under the bus ? What else can be done besides going to the polls in 2018 and 2020 ? By then it might be too late.
3
OK. This isn't actually legal is it. There is no compelling case that steel and aluminum imports are a national security issue. Trump simply cannot be allowed to disrupt the global economy, with untold and possibly dreadful consequences, on a whim.
So where are the other two branches of government?
Purely apart from the merits of the argument, the central fact remains that this was a unilateral move by a would-be tyrant.
7
We're in a Humpty Dumpty very Trumpy perilous position. And, of course, with "all the king's men" a still complacent although this time complaining Republican-controlled Congress, we can't expect a "check" on the bogus "national security" claim and for it to "balance" this latest example of executive overreach. And what exactly will the "bad old days" be like? Smoot-Hawley, of course, was a major contributor to The Great Depression. It seems that with massive tax cuts, a rollback in the Dodd-Frank bank regulations, and now a looming trade war that Donald Trump is setting the stage for another of his infamous bankruptcies. In this case, it's a major recession and we're the chumps (aka the lenders aka the taxpayers) holding the empty bag.
2
I say Trump's decision is in large part due to his ego and excessive self-confidence regarding his abilities. Most people will eventually realize that this decision on tariffs was a bad one, but by then real damage will be evident.
2
In my 40 years at what is now Customs and Border Protection I had a great perch to witness the intense trade-related pressures Imposed by the Congress. Requests to create new ports of entry, to increase or decrease the time and attention given to processing cargo—it was a constant battle between the interests of importers versus domestic industry, and a daily choice between stricter law enforcement versus facilitation. The steel caucus was perhaps the biggest of all on the Hill. In the end, commercial and political power was ultimately influential in swinging these pendulums. It was not decided on presidential whim. But an America that is used to a marketplace of goods produced abroad—probably more than half—has little reason to support protectionism. If we did, who would go to Costco? Ask the steelworkers where they shop.
4
Not mentioned here is the belief among many economists, even Nobel prize winners, that trade deficits don't matter. In line with my economics professor who said to us, 35 years ago, "Why is still having your money in your pocket (your country) better than having a car or tractor or flashlight, while giving the other guy (another country) your money. You can use the car, bulldozer, and flashlight to be productive, unlike the money in your pocket.
1
I think it's safe to say, Mr. Krugman's knowledge of trade policy probably matches his knowledge of the stock market. For the record: we're still awaiting the collapse he predicted after Trump won.
Imagine that you're playing a game of high stakes poker. You're holding a winning hand, and keeping your cards close to your vest. Your fellow players are on their heels, getting ready to fold--but then other people begin to fill the room. They stand right behind you, peering into your hand--and not only start to second guess what you're holding--but begin to telegraph your cards to others around the table. They appear to be actively rooting against you.
This is the position Trump is facing: he's attempting to correct unfair trade deals others have agreed to. In many cases, foreign countries put tariffs on our goods--but we allow them to send goods to our country for free. Countries also manipulate their currencies--and subsidize certain key industries. This is not fair trade--and Trump is finally calling out some of these inequities. He is trying to make a fair deal for American workers and manufacturers.
But here come guys like Krugman--who have no idea whatsoever about trade--pretending to be experts--accomplishing no more than mindless criticism. They second guess Trump's plan and intentions--making wild and dire predictions--without understanding his strategy or motives.
The truth is, our trade policies are finally getting some balance. It's long overdue.
1
If it is all a ploy to renegotiate NAFTA with Canada and Mexico, it is unclear to me how the US will gain anything. I don't see why US Companies that basically moved to Mexico will return to the US to build cars, for example, with higher priced labor. The tariff would just be tolerated, instead of the tremendous costs of recreating industrial plants in the US, or assembly plants employing migrants would be built at the border. The repercussions of NAFTA, positive and negative, worked themselves out over time, but it was the US companies that exploited the situation to their own advantage, as much as they could. It is hard to see Trump's efforts here gaining anything for the consumer or the worker, since nothing positive could happen immediately, but a bunch of negatives, in terms of higher prices would take place in an instant.
What I really see happening here is that Trump is using the size of the American market to threaten competing countries to make concessions that are highly unlikely to benefit US workers or consumers in any real way. It is conjecture, but it would seem that variety would no longer be the spice of life, and the quality of everyone's life around the globe would suffer. Why would you tamper with mother nature, unless you thought you could make a buck, and it has yet to emerge, but almost assuredly it will, how Trump stands to make personal gain on this.
5
One more reason for Trump to initiate steel and aluminum tariffs despite lessons from history and opinions of members of is own party. Distraction. Trump feels the hot breath of Mr. Mueller and increasingly convincing charges of colluding with the Russian government in the 2016 election and obstruction of justice to derail that investigation. His character, unethical finances, and past sexual behaviors have sullied the office of President. He has much to hide, and distraction is his only defense.
2
The funny thing about the Trump Trade War is that its advance billing, build-up, sold it as a "WAR;" but, as actually released, it is a name-calling, face-slapping, hair-pulling sandlot squabble in which America talks big and waves a small stick.
What is "trade" if not a contract between two people/countries to obtain a product/service in exchange for some other product/service (or money).
What is Trump's history when it comes to trade? Contract for services then stiff the contractors. Sell shares in an investment enterprise then funnel resources into his pockets, declare bankruptcy and walk away.
So what is Trump doing by declaring a trade war? He is conning his base base, who think he is delivering on their interests while he is actually hurting them by increasing the costs of imports and driving up their costs of living.
Apparently his "war" is like jello. It wobbles back and forth and doesn't jell unless chilled. Trump can exempt Canada, Mexico, or any country HE chooses; and he can keep his "war" for however long (or short) HE chooses. And the American people won't benefit because they are left out in the cold while Trump plays with his jello.
6
"So Trump is in effect both violating U.S. law and throwing the world trading system under the bus."
Standard Trump business tactics.
It's why Trump relies on bullying, threats, non-disclosures, bankruptcy and lawsuits.
It's also why Mueller has prosecutors experienced in organized crime and racketeering.
1
Right. Trump being Trump. But only because Ryan and McConnell allow it. And now it is even clearer that their "free-market" principles are devoid of any moral, ethical, or humanistic principles. The honchos of the GOP have accepted every foul and foolish Trump deed--until now. And what stirs them now? School-boy notions of free-trade! Considering lavish state hand-outs to foreign auto manufacturers all across Dixie, and Scott Walker's hand-out to FoxConn, who can actually decode "free-trade" as conceived by those cramped minds?
4
Questions for Professor Krugman:
What are the arguments for trade wars being good? Are trade wars easy to win?
1
I don't do fuzzy math, therefore, I'm not an economist, moreover, as a pessimist I know better than to even care, but as an objective observer: correct me if I'm wrong:
Tariffs already exist throughout the world of "free trade"? As the NYTs stated yesterday: Europe places a 10% tariff on American cars and we impose a 2.5% tariff on their cars.
So tariffs are already part of the game.
That said, now that DJT has entered the game, I'm sure disaster follows.
“At the present time, the system of protection is conservative, whereas the system of free trade is destructive: it dissolves old nationalities and pushes extreme antagonism between bourgeoisie and proletariat. In a word, the system of commercial freedom hastens the social revolution.” ....
"We are for Free Trade, because by Free Trade all economical laws, with their most astounding contradictions, will act upon a larger scale, upon the territory of the whole earth; and because from the uniting of all these contradictions in a single group, where they will stand face to face, will result the struggle which will itself eventuate in the emancipation of the proletariat."
Marx
Marx smartly left out the time frame.
4
"Either you are closing your eyes to a situation you do not wish to acknowledge or you are not aware of the caliber of disaster indicated by a pool table in your community." At least Harold Hill had some redeeming qualities- but this master of manipulation creates crises to destroy things carefully created by others as punishment for not being his donor/supporter/admirer. I think there's a word for it in DSM 3-5 . Thanks to Dr. Krugman for suffering this fool every week and reviewing Economics for those that were out of class with bone spurs. DT has now pulled an Orwell coining a pejorative version of the term "globalist"- I'm sure the boys at fox are all over this as the catch phrase that will sell the nation on this as a move for self reliance as the poor get poorer. When did we get this complex about sharing, and why does it appeal to so many here in River City?
3
To me, the real problem is the majority in Congress. They don't act and they don't fulfill their constitutional responsibilities (The Constitution give the power to set tariffs to the House). I guess, for all the bluster about their role, the majority in Congress really wants one-man-rule.
Of course, Trump believes in one-man-rule as long as that one-man is Donald J. Trump.
The next time I hear one of our Republican elected officials talking about "originalism" or "strict constructionism" I'm going to laugh in their faces. They only care about power and their agenda, even if it means scrapping The Constitution and Laws for a Trumpian Dictatorship.
1
"[W]e now basically have an Environmental Protection Agency run on behalf of polluters, an Interior Department run by people who want to loot federal land, an Education Department run by the for-profit schools industry, and so on. Why should trade policy be different?"
Why stop there? We have a government run by a political party trying to dismantle government, and a presidency occupied by the least presidential person we could have conjured. And both see a finite globe capable of sustaining infinite abuse, with casual contemplation of nuclear wars.
Only a visit from the future by the starship Enterprise and Captain Kirk can fix this.
4
While your fact-based analysis is surely correct, we should also always evaluate Trump’s acts by asking, What would Putin want, and what is Trump doing or threatening to do?
1
Simply question. How much of this can be undone or mitigated by Congress? Is the only “legal” reversal to the tariffs, a new leader of the executive branch?
1
The 400 pound elephant in the room is the persistent huge trade deficits run by the US, a fact you consistently fail to deal with. The post-war system never comprehended such an outcome, so you ignore it, thereby betraying the same attitude towards the facts that you accuse the Republicans of. You talk about winners and losers. It’s not machine workers vs farmers. The winners are the Chinese middle class and the top 1% while the losers are the American working class.
Oh Paul, when will you shed the hoary Ricardian shackles and wake up to the market distortions caused by massive dollar reserves and the formation of a currency zone in Europe that serves to support the German industrial regime? The rise of American nationalism is in no small measure due to the realization of the public that the system as practiced had betrayed them. They’ve woken up to this reality while liberal economists have clung to their failed frameworks.
Yes, the Trump tariffs are a disaster, but it is not enough, not anywhere close enough, to just shout this out. Until liberals admit that their models are utterly mistaken representations of trade as it is actually practiced, and come up with a wholesale shift in design that addresses the just concerns of most Americans, expect to continue to see the kind of regime we have now, one that your failed ideas very much helped to put in office.
1
Please explain why our domestic steel production has declined. How much of the decline can be attributed to unfair Chinese subsidies to their steel industry? If it is true (as I have heard from leaders of U.S. steelworkers) that U.S. steel producers are the most efficient and cleanest producers in the world, why can we not compete with Canadian producers? Does Canada also unfairly subsidize its steel industry?
3
Individuals who are in favor of protectionism need only look back to the US auto industry in the 80’s. Today we have a vibrant and competitive domestic auto industry because it was forced to compete in a global environment and America is the better for it ( not to mention the thousands of American workers employed by foreign automakers and suppliers).
24
I found Mr. Krugman's explanations of economics and the history of tariffs super help and easy to understand. Granted, I haven't followed this stuff in years, but this is the best explanation I've read of the interplay between politics and economics – for example, the idea that free trade is not a win-win for everyone but "[t]he small groups that benefit from protectionism often have more political influence than the much larger groups that are hurt.” My favorite line from the piece: "the tariffs are arguably the Trumpiest thing Trump has done so far." Trump has (1) zero understanding of the issues, (2) thinks he knows more than the experts, and (3) is trying to undo a global trade system that was working. Until now, I didn’t know a president has so much unchecked power over trade. Trump shows us the holes in the system.
34
Question: If the point of trade is not just jobs but profits, why don't trade agreements address how profits generated by trade are to be taxed? I would feel better about buying a car in the US manufactured by a foreign based corporation if that corporation was paying their fair share of corporate income taxes to Uncle Sam and my state. I would also feel better if I knew that Apple Computer was paying their fair share of state & federal income taxes instead of shifting profits to foreign tax havens like Ireland and now the Channel Islands under the control of Queen Elizabeth.
Professor Krugman, have you ever watched the BBC documentary "The Town that Took on the Taxman" or "Taxodus" a Dutch documentary - both available on YouTube? These documentaries show how multinational corporations are able to avoid corporate income taxes around the world under the territorial taxation system which the 2017 GOP tax bill just adopted. International trade agreements focuses on the front end, on gross sales. What about the back end, on the net profits and how those profits are divided between the trading countries??
40
Question: How (much) has free trade over the past 30 years influenced the total income of the middle and the lower income groups? In the US and/or the EU.
14
Question: why is such an advanced economy as the U.S. a perennial importer of capital? Isn't the marginal productivity of capital higher in the developing world?
6
I agree with a lot of what Krugman writes here, except … except the picture he paints of real-existing "free" trade is rather too rosy isn't it. recent trade agreements that the US is party to have, in fact, been driven by paddlers of influence and special industrial interests - for example, software, pharmaceutical, and media industries that have achieved longer and stronger copyright and patent protections for their products, protections that amount to tariffs many orders of magnitude higher than those trump is proposing on steel and aluminium.
17
Do you prefer the current system, where the Chinese can buy a single copy of a new movie, record album, or software, and illegally duplicate it instead of paying for what they have taken?
We need stronger copyright and other intellectual property protections in the world, to continue incentives to create these new work. I think the ideal copyright system would be somewhere between the forever protection that Disney bribed Congress to deliver, and none at all.
1
I worked in the steel industry in the mid 70s, we could already see it was losing to Japan at the time. Management was stuck in the 1800s. The furnaces were from the 1930s, the iron had to be poured into molds, stripped from the molds, then heated again for uniformity, then sent to the slabbing mill and cut to length to put in the reheat furnaces for the enrolling mills.
The mills were pretty modern and had computers for quality control, but one mill had a Control Data system that took almost five years to get the programming right. The coke ovens were in an area that already had some of the worst smog in the state,
The Japanese built continuous casting mills. The iron came directly out of the furnaces to the slabbing mill saving many man hours of production, eliminating the need for an in plant railroad to move the molds to another area, and the soaking pits where the billets were reheated before slabbing.
Those mills are gone, they will not be rebuilt. The rolling mills are still there, they get the slabs from Brazil. Even then the Germans had the reputation for the highest quality steel. the ore mines are gone, the coal mines worked out, other countries can make steel cheaper and faster, the U.S. will not win this fight.
264
Actually, the US (partly) did win this fight, with the introduction of mini-mills and electric arc furnaces, later even with continuous casting.
It was only the large integrated mills that lost out, with late adoption of basic oxygen and continuous casting. But that is not surprising considering their large existing open hearth sunk costs.
20
As with many other bad policies Trump is fixated on (like building a wall to stop crime and drugs), bringing back the steel industry is an idea that could've applied and done something to help in the 1980's. Now it's 38 years too late. He's locking the barn door after the horse escaped, ran away, and died of old age. A lot of tRump's "ideas" are solutions to 1980's problems that were popular in the New York press at that time. I think he's stuck in the last era he had hair and was happy.
2
Fascinating information.
If Trump wants to make America great again he's got some very strange ideas of what makes a country great. It's not enough that he's frightening off potential immigrants, some of whom might help us along the way but he's wreaking havoc with the global economy as well. He can't be trusted with anything. Nor can the GOP and its minions. What has been going on since Trump took office is the unraveling of too many beneficial social compacts. The only things we can depend upon with Trump and the Greatly Obnoxious Pretenders are lies, fantastic tales, and outright fantasies in place of cooperation, hard work on behalf of all Americans, and adult behavior.
We can't hope to win every war, trade or otherwise. Every deal we make will have problems. But this president and this congress seem to be completely incapable of acting on behalf of anyone but the economic 1%. In fact they don't seem terribly concerned with what is occurring just outside the beltway in DC.
We care about jobs that pay decent wages. We care about being able to get medical care when and where we need it. We care about our families. We care about being able to support ourselves and our families. But this president is completely disconnected from our reality and the GOP is MIA, as usual. We will pay the price for the hubris of the 1%. We are the ones who do the grunt work. We deserve better than being lied to and about on important issues. We deserve a government that works for us.
185
"We deserve a government that works for us."
No. We deserve the candidates we vote for all throughout the electoral cycle, apparently.
35
Rima,
I see a lot of people using your phrase, "We deserve the candidates..." or similar accusations. More than half the voters, myself included, did not vote for Donald J Chaos & Co. You are only making us all wrong for the disaster that is the Trump administration. We do not need to make even those voters who did vote for him wrong. Many of those voters were looking for change for themselves and their families. We need to offer a higher purpose message that everyone can get behind. An American message, like that delivered by Joe Kennedy III.
2
What???
Surely the United States of America DOES NOT deserve Trump as president and the Republican Party in control of Congress.
The Republican Party in Congress is defrauding the average US taxpayer of the current and future generations with a debt they are unable to pay.
1
So, Trump's trade policies are all about advancing special interests (including, prominently, his own financial interests). That is what his all other policies are about. Why should trade be any different?
34
Can't congress simply revoke the president's authority to set tariffs? One might think, given concerns expressed by the Republican congressional leadership, and I presume the inevitability of substantial Democratic support, that this would be politically feasible.
37
They'll need a two thirds vote from both the house and the senate to revoke the President's trade authority, which is virtually impossible. Republicans in particular are unwilling to cross the President, and for the most part, Democrats are enjoying the fight.
1
The Republican Party in control of Congress is defrauding the average American citizen to the benefit of its contributors under the autocratic Mitch McConnell and Paul Ryan two leaders of the organized crime.
1
Wish it were so; apparently not.
The likely result of steel/aluminum tariffs on US manufacturers who use same is to drive the manufacturers cost up and thus make imported manufatured goods more expensive. If NAFTA countries are exempt, more manufacturing will move to Canada an d Mexico. Sounds as if this drives the push to tighten NAFTA country of origin limits that US negotiators seem to want. Is this the likely ploy, or am I thinking too strategically about an adminstration without a strategy?
4
P.S. I really meant that the imported manufactured goods would be relatively LESS expensive and thus more attractive.
"In effect, the U.S. remade world trade policy in its own image. And it worked: The global deals that evolved from the reciprocal tariff approach greatly reduced tariff rates around the world, while setting up rules that constrain countries from backtracking on their commitments."
Thanks Dr. K.--Now I understand more fully how international trade deals evolved following WWII, and why.
And why Trump's insistence on protecting a small segment of manufacturers and their workers is so counterproductive, as well as based on corruption and narrow interests.
In other words, the very definition of Trumpism is to throw away the baby with the bathwater, so to speak: protect the few and screw the many, while taking credit for helping everyone.
Yes, so very Trumpian--meaning, backward, poorly formed, and tilted towards the law of unintended consequences.
216
So, Trump gives a pass to Canada, Mexico, and announces Australia need only apply for relief.
Meanwhile Europe gets a punch in the eye.
So, who benefits from a wedge being driven between the US an Europe?
Russia!
Collusion!
583
@Turgid
Canada and Mexico are not being "given a pass" on this mess. The Great Deal Maker is suddenly and cynically confounding the tortuous ongoing NAFTA negotiations with the clearly stated threat of these tariffs on steel and aluminum. Canada is the US's biggest trading partner, with an interdependent economy - a friendly neighbor and strategic ally. The tactics of a cheesy real estate developer.
Is it Putin to Doocy to a camera to TV to Trump and back to camera? Is the recipe that simple? Is Vlad bored? Is Xi all, 'let the fast food president dine on russian dressing all i need to do is invest the $ of the US debt before my billions colonize all the social and political strata'? Yep.
Well the Mayans told us 2012 would bring the end, and Donald answered the challenge. Fitting that Mexico would be supreme.
Well, gonna go eat my Szechuan tacos before I get a good night's sleep with my Obama era millions.
Or he his using this as an opening gambit to renegotiate the hideous NAFTA. The EU is an ally and trading partner. They are also our major economic competitor.
Trump Delusional Syndrome!
This is from Michelle Goldberg's NYT op-ed (Jan-4-2018): "According to Wolff, Treasury Secretary Steven Mnuchin and Reince Priebus, the former chief of staff, called Trump an “idiot.” (So did the media mogul Rupert Murdoch, owner of Fox News, though he used an obscenity first.) Trump’s chief economic adviser, Gary Cohn, compares his boss’s intelligence to excrement. The national security adviser, H. R. McMaster, thinks he’s a “dope.” It has already been reported that Secretary of State Rex Tillerson called Trump a “moron,” which he has pointedly refused to deny."
So my question to Professor Krugman is: why do you bother to take questions on Trump?
The source of the tariff idiocy can be back to Peter Navarro, and to a lesser role, Wilbur Ross. Ask them.
87
Trade is like racism, especially if the other countries being targeted for tariffs are not European but Asian. It is all about those people, the other, us versus them. The simplest explanation for most of the policy goals of Trump and the GOP is racism.
24
Some of Trump's motivation is to keep a base US capacity to produce and process strategic metals,especially military.
Previous administrations have allowed electronic component manufactures to close their doors due to cheap foreign competition. Now US users of these parts must import them (at a price higher than ever), mostly lower quality along with potential security implacations.
shame on commentators here...racism indeed.
1
in its public statements, the Department of Defense has made clear that it has no difficulty obtaining all the supplies of Steel and aluminum that it needs from present domestic manufacturing. There is no national security issue at all.
1
Except that isn't so. The US is still quite capable in the realm of advanced metallurgy. We produced 10 million tons of steel a year for 100 years. There are 10 billion tons of steel lying around. No need to smelt another pound, except for a very small volume of special types.
1
Please explain, then, why those currently in the Trump Administration who are concerned with our national security have unanimously argued that these tariffs would DAMAGE our national security. Where's the evidence we can't produce the steel and aluminum our military needs?
The various factions that used the 2016 election to attack the very structure of the federal government, are starting from harms they believe that government is doing to them. They don't yet see what good it was doing, and what harms it was protecting them from. They believe tariffs, like debt and climate change, will only hurt other people. Dr. Krugman thinks they're wrong about this, and I agree completely. Will they wake up in time? This year's elections will tell us.
19
Please comment on Daniel McCarthy’s article of the same date
Regards
Patrick Harford
2
A link?
What’s Trump’s end game, maybe he wants a global depression....it worked for Hitler. He’ll blame the depression on all on the previous Presidents and promote the only solution, the end of democracy. Only a strong leader unencumbered by politics can lead us back to greatness. And don’t you know at least 40% of the population will believe him. How many people know anything about macroeconomics? Scary thought, I hope it’s wrong.
67
Great insight. Because many of us can see where he is heading. And GOP will follow, regardless of tariffs. (And if no depression, he'll find another way to justify an ultimate power grab.)
6
I'm not convinced by Krugman's arguments. What are the costs of lost manufacturing jobs and production caused by trade agreements? If our market represents 25 percent of all sales, would not foreign producers still desire market share there? China requires that foreign producers pay for research and development within China in order to gain entrance into the China market, which is large and becoming larger. Is this not a competitive trade tactic? I think the macroeconomic models are flawed. Incomplete. In my opinion our government should not only protect manufacturing jobs but should subsidize them, just like our competitors.
2
If you need the government to do all these things you would need a government of the European sort, deciding winners and losers, setting long term priorities for the economy, etc. In short very intrusive and redistributing government, the kind Germany has.
I remember a time when republicans disliked Russia and loved free trade. That was so last election cycle. Now it is the opposite. What changed?
519
Sigh. I'm old enough too remember those days from the distant past. Actually, it was a year and a half ago.
As to what changed: Three things. First, the notion took hold that nominating a sane, sober candidate like Romney or McCain was not working, so why not do the opposite?
Second. Anything hard to understand about Republican actions can easily be explained by simply following the money. The GOP is the party of the rich. They never cared about the Russians more than they care about money. As long as Trump is protecting their wealth (and Trump's appointment of billionaires to his administration is a good sign) he a can do whatever crazy thing he wants.
4
Putin gave the NRA $25,000,000 and started supporting Republicans on the Internet.
They support free markets, especially for politicians.
1
Monism, ask David Brooks.
Remember when Trump approved the Keystone pipeline? He claimed it would be built with US made steel! That wasn't going to happen since Trump wasn't actually involved in building the pipeline.
So the root of this fiasco is probably Stormy Daniels. Not that I blame Daniels. She figured out how to manipulate the media from Trump for fun and profit and she's doing a great job of it too! I hope she continues to make a fool of him as long as it doesn't end up in causing an actual war...
And speaking of a war I just learned that Kim and Trump may meet. This means a battle of the hairdos! I wonder which one will win? I'm betting on Kim's since it looks to be his own hair and not some comb-over phony wig.
That Stormy. She landed a bottom feeder rich in oil and fat. A whopper in every sense of the word. Bony spurs throughout the skull! It's the last one to know... I hope she keeps milking that turkey for everything she can get. As long as Trump is restrained from shooting somebody on 5th ave or any other street, path, dirt track, or desert caravan.
Trump gets hoist on his own petard. Guess he should have seen that coming, no?
33
What did you do in the war, Daddy?
Donald Trump finally goes to war, 50 years too late. And he will be as AWOL from responsibility during this one as he was for that one.
27
Next Trump will bestow a Medal Of Honour upon himself for his fearless conduct in his Own Private Vietnam
2
So was I. Where were you. Some dream in your daddy's eye (you know, the one eyed monster.) Let's if the NYT let's this thorough, Forgot the question mark, but I hope you can supply it\them
No, fFinbar, not a dream in my father's eye. I was 23, and 48 years ago I was 15 km from Cambodia, standing in blood, brain matter and stuffing intestines back into bellies with my bare hands.
What did you do in the war, my friend.
1
Will Mr. Krugman respond to Charles Koch’s op ed today in W. Post? The Koch Bros are the richest megadonors to the right wing. Says “Corporate leaders must reject Trump’s tariffs, Free exchange enables growth and innovations that uplift everyone, not just a privileged few.”
Says... “Tariffs increase prices...they fail to increase the number of jobs overall.....trade barriers devastated Detroit….Countries with the freest trade tend to be the most tolerant. Restrictions on trade hurt the economy and pit people against each other.”
"Bush’s 30% tariffs increased consumer costs and higher unemployment…..Obama’s tariffs on Chinese tires burdened consumers with $1.1 billion in higher prices. The cost per job saved was nearly $1 million, not considering all the lost jobs that went unmeasured.”
Koch dislikes 'cronyism'? He says “ our entire economy is rife with cronyism, ….regulations are destroying competition, opportunity and innovation…..free trade has been essential to our society's prosperity and to people improving their lives.
Tariffs may preserve some jobs, they reduce many other higher productivity jobs. Net effect---lower productivity, less choice, competition, innovation and opportunity.
VS
Lori Wallach of Global Trade Watch on Democracy Now--- Yes, Trump is despicable but his tariffs would lead to rehiring of a lot of shifts that have been stopped in aluminum and in steel. Research shows after Bush’s 30% tariffs, prices did not jump.
Comment, Mr. Krugman?
4
I would not be looking to the Koch brothers for a straight argument on anything. "The cost per job saved was nearly $1 million, not considering all the lost jobs that went unmeasured.” Here is a good example. Koch offers only part of the picture. cost per job saved, "$1 million," how did he arrive at that number? And then, throw in all the "lost jobs that went unmeasured." I can't calculate something that is not measured, can you? The Koch brothers care about one thing and one thing alone, their bank accounts. The rest of the country be damned.
You, sir, are too generous. The interests that brought this administration to power views corruption as opportunity.
30
trump is in the game for trump and trump only.
24
Kneel and kiss Trumps ring and you will get a dispensation/or a trade deal. No problem.
Paul should spend some time trying to import cars into Japan/ Korea and Germany ... after that he should go to China and tag some steel and follow it as it goes into Mexico and magically becomes "Mexican" ...to be l shipped into the USA under NAFTA.
NPR did a segment today about specialized steel not produced in the USA ... completely different animal.
We don't have = trade with our so called trade partners .. we have political trade set up for geopolitical reasons... Korea is a global economic power because we gave them the US market w/o any barriers ... they don't practice free trade.
3
Trump's chaos at work.
8
It's so refreshing to learn these relevant facts, rather than be poisoned by further "alternate reality" from the White House.
14
Thirty-five percent of this country takes delight every time trump does something monumentally ignorant. They relish seeing those hated 'liberals' upset. And yet they fail to understand his actions undermine their own welfare at the same time. Sometimes there is no fix for stupid.
547
Well, there is one. it is called 'war'. When will an 'enemy' appear to solidify us all in patriotic war. we still find a way to send the stupid first. they pay with their lives. If they happen to patriotic and smart (Pat Tillman) they will die a hero's death as soon as can be arranged.
I wish the Times had allowed comments on that opinion piece about supposed "smug liberals" and "conservative trolls." While berating the left for lecturing the voters of the right about voting against their own best interests, it failed to point out that they do, in fact, vote for things that harm them. And harm the rest of us, too, of course.
Pieces like that do not do any good.
1
The fix for “stupid” is to have a majority of Fox shareholders take control of Fox and replace the garbage that their viewers trust with fact-based, scientific-based reporting that their viewers must trust if they are going to make the best decisions for their own lives and their children. A person can’t make good decisions based on bad information.
As a Canadian I'm encouraging our national government to take a hard-line with the Trumpers if they persist with blackmail. I realize there are risks and believe the risks are tolerable in the long run. Look at what the USA has inflicted on Canada already (softwood lumber, newsprint, Bombardier, steel, aluminum - frozen electricity; hello Hydro Quebec!. The USA has a goods and services surplus with Canada which makes trumps behaviour all the more outrageous. Is there any reason to believe that it will stop here if we politely acquiesce. Question- Is Kentucky using coal-fired electric power to reclaim their title as leading supplier of "military-grade aluminum"?
The US media does a very poor job of covering these dynamics; infuriating in itself. A lot of Canadians are ready to give the USA the middle finger regardless of consequences.
48
Well said-Canadians are tired of the bully tactics from US over the last decades with trade. Because Canada and Mexico will not agree to the new NAFTA deal we can expect tariffs. OH, and by the way the Trump proposal to exclude Canada and Mexico was just extortion on an international level. He knows perfectly well that Canada cannot sign the NAFTA as currently configured.
Canada may go ahead and support other nations who are affected by the tariffs because they will come to Canada sooner, rather then later. If all affected nations hang together with reciprocal tariffs against US goods, the siege will end sooner.
3
I thought the reason for open trade was "comparative advantage" and to increase market choice while lowering prices. Now it's to combat internal corruption? Can't keep up to the sign post moving. Open trade is clean is laughable.
What Paul Krugman was referring to, I believe, are the historical facts about how the system worked when tariffs were used as a political football, kicked up and down the field by big money and special interests. He was suggesting that the power to impose tariffs is so great that it could take us back to an era of intense, across the board corruption.
18
I have a small goal that I hope will be accomplished by the time Trump exits the political stage - I assume that will be when he dies - he'll never go willingly. I want the word "trump" to have an entirely negative connotation. Mr. Krugman has captured the spirit of this new definition in his column.
"Trumpy trade war", "Trumpiest thing", "Trumpism", all capture the meaning this word should have in the future.
I don't know what Bridge players will do though...
15
Look up definition of the word “Trumpery”- it’s already a perfect fit for everything Mr T does and is. Snopes makes the case that the two words are not related, but I do like the idea of Drumfs forebears being so clueless as to not know the French words’ meaning.
Trump is too stupid to realize that he is hurting many of his own supporters (or is he?).
His supporters are no better; as soon as their pink slips arrive, they’ll be rushing off to the voting booth to pull the lever for him again.
You simply cannot make this stuff up.
28
He doesn't care. As he has pointed out often, his supporters are too stupid to recognize the harm he does them, so long as he appears to be dissing the intelligent portion of our population.
Look for tariff policies favorable to nations and industries that can find a way to enrich Trump family enterprises.
50
So, once again, FDR had it right.
How can it be that the GOP, the “party of business,” can’t seem to get it right? I’m no economist but aren’t expanded markets a source of increased jobs and wages and profits? So, by telling our trading partners to buzz off, we’re saying “we don’t want your business?” What am I missing?
18
Dear Dr. Krugman. The critique of the TPP from Trump is that it was "too easy" on our trading partners. You address this in your most recent piece by acknowledging that China does, indeed, support too much steel production (and I believe you have said elsewhere that China has "dumped" steel onto the US market in the past), but that this is not a big issue now. What of the critique of global trade deals from the left? Do trade deals lead to a race to the bottom on worker protections, collective bargaining, environmental rules? Might Trump's misguided and dangerous efforts today permit a more enlightened future US leadership to be 'tougher' on trade in a more productive way?
4
I listened to an interview on NPR this afternoon. The interviewee was a union local officer, working at a steel plant in PA, who attended the Trump signing. He recounted how his father and his birth family had been adversely affected "by unfair trade practices of foreign companies." He was happy about the tariffs. They will be good for iron and steel workers, he said.
Not once did he even give a nod to American blue-collar fabricators of products made with steel...steel in quantities and of quality that he and his plant cannot supply. Despite the fact that he and his 150,000 fellows represent a tiny fraction of the 17 million people employed in industries that directly fabricate with foreign and domestic steel, it was clear those others didn't register for a moment on his radar.
I found that illuminating.
264
Coal workers are the same way. Survival will make people do the darnest things...
1
I think a major underlying motivation for this sensational tariff drama and upheaval is to distract from the looming Russian investigation. The special counsel is boring in, and is relentlessly uncovering dirt. Trump is paranoid about appearing a dupe, and appearing to have won the presidency illegitimately, whether or not the second is true, and is scrabbling for an alternative narrative.
He's also hypersensitive to exposure of his basic presidential incompetence - he's constantly and erratically play-acting his presidency in a desperate kabuki theater to appear knowledgeable and in charge. And we want this disastrous persona interacting with North Korea?! Or anyone else for that matter...
20
Well, big businesses and free market ideologues DID think they would on trade and other issues push Trump so far into a corner that he would squeak (apologies to Von Papen). They were wrong..
2
If Trump is violating US law by imposing these tariffs, can't a lawsuit stop him? Who, other than the congress or the justice department (fat chance) would have standing to file such a lawsuit? What might be the outcome and any penalties?
5
Next, I suppose the president and his brain-trust will figure out that all imports are bad for the U.S. After all, think of all the jobs that we are missing by not becoming totally self-sufficient. Choices will, of course, have to be made since businesses can either offer to pay Americans what foreigners get (the first choice of business) or charge $25 for a tee shirt. But as Trump states, it will be jobs, jobs, jobs.
4
Paul, If the president as you state only can impose tariffs under certain narrowly defined conditions under which his proposed steel and aluminium tariffs do NOT fall, why are you so worried? His orders will be voided almost before they are announced. This should happen any day now.
If the President says the tariffs are necessary for "national security," the courts won't contradict him, even if they know it's nonsense.
1
This takeover of the nation's unfettered free market agreements is par for the US being bullied and run by greedy gangsters. The top family boss is of course trump. He is just a gangster in a business suit. This isn't what a president for all the people would do.
12
Hopefully the tariffs will be limited through exemptions to steel and aluminum imported in circumvention of prior antidumping and antisubsidy trade measures to an economically beneficial level.
Not that there is much hope brutus ignoramus Trump will listen to you, but what would you recommend to him about undoing the ongoing tariff blunders he so irresponsibly tries to impose?
trump is so twentieth century. he crosses his arms which means he is defensive and resistant. like many old white men the future is scary for them. new ideas are uncomfortable. coal is comfortable while many countries and even states of the US have moved onto solar and wind and water. by all means, lets us take giant steps backward into a comfort zone so the old men can make money. and when the earth changes more dramatically they can eat their money. and when they die, well, they're dead. old scrooge.
7
2018 is shaping up to be a great year. Ford's Edsel is going to be named Car of the Year, and Clean Coal is going to completely replace firewood as our primary energy source. Old White Guys Rule!
5
Even more immediately than with his "greatest tax reform bill in history" we now have a tangible, completely Trumpian action by which to judge the success or failure of this, His Radiant Omnipotence's signature issue. As Paul Ryan (among so, so many others) has pretty well indicated and will attest, you alone own this one, Donnie boy. Four!!!
5
For what it is worth, the Granite City Steel Company ( in Granite City, Illinois ) yesterday recalled 500 laid-off workers. They had been idled since December 2015 due to pressure from foreign steel imports.
1
Which is fine and dandy. Let's make sure the 5,000,000 US employees who will soon be losing their jobs because of these tariffs get equal time on Fox 'News'.
18
Well, as Elon Musk pointed out recently, China has a 25% tariff on cars imported there from the US, and coming the other direction, it's a tenth of that.
Mr. Musk sees that as unfair to US car makers.
To the extent US car makers have made their own problems through low quality, poor engineering, the sometimes unproductive effects of the UAW, etc, I have no sympathy for them.
But would reasonable, symmetrical, trade rules being the norm be bad?
In fact, why shouldn't this be the norm?
Obviously, industries will want their particular products favored, but that leads to the same sorts of problems our crazily arbitrary and overly complex tax system does, or government by the most "generous" lobbyist does.
...
I'm not for the WAY Mr. Trump is going about this. That doesn't mean, however, that the system shouldn't be fixed.
I think you are correct in that you can find many products sold both here and in other countries are more expensive outside the US. How can that be if there is free trade?
Other countries have VAT, or "luxury" taxes on non-essential items.
1
It would be most interesting, and a sharp rebuke to Trump, if Canada and Mexico take the initiative and together withdraw from N.A.F.T.A., turning away from the U.S. as an unfair and coercive partner, while significantly expanding their trade under the revised T.P.P., with the European Union, and pursuant to other multinational agreements. In a global, integrated world, what's "good for the goose, is good for the gander". The impetuous and ill prepared Trump may, to America's great harm, have recklessly overplayed his hand in a highly complicated arena he knows little, if anything, about.
1
Trump for his whole sordid career has sought to under mine government regulations and laws in his favor. The idea that he is out to help anyone but himself, is bogus. A gangster or a con man thrives in chaos and uncertainty and this is exactly what this guy is trying to create with his every action. Meanwhile he does not release his taxes and makes a killing through his family's nepotism. The fog of corruption that Trump spreads is so opaque that it is really hard to pin it all down and that is Trump to a T.
10
In my opinion, erecting tariffs is foolish, bordering on criminal.
However, the trade agreements are policy, agreed to by our government, which favor certain domestic groups over others as the Professor points out. The groups that have repeatedly lost in these domestic tradeoffs realized that neither party was going to even try to make them whole, and those groups recently turned to a demagogue who had promised to clear the swamp and tilt the policy back to more favor those groups. The recent tariffs seem to be a promise kept, though in the long run I suspect we shall see a different outcome.
Opposing the president is a necessary and a laudable thing. That opposition is not sufficient to convince those who have been on the short side of all the treaties that the president is wrong, certainly not in the short term. The party that claims to oppose the president needs to adopt some of the remedies that worked in the early 20th century and consider the best practices that do not only favor the 0.1%ers and the corporations. The good news about the GOP, at least you know where it stands. That other party, not so much.
Perhaps these tariffs are simply a distraction from some other maneuver being undertaken by our leaders.
Why would any right-minded nation enter into a deal with the USA when it has become abundantly clear our word is meaningless?
10
When one looks at some of the arguments against negotiating better trade deals, such as an increase of 1.5 cents on a six pack of beer, it would be absurd to conjecture that we might eventually discuss more serious issues such as our unsustainable trade and budget deficits or, the total debt load both public and private this nation is laboring under. Politicians don't care and consumers don't care hence, Theater of the Absurd.
Is this just another stunt to deflect attention from the investigation and the 'stormy in a teacup'?
He's already backtracking, exempting our major suppliers, already eying the exits for a quick escape when it all collapses.
It will be unfortunate for us if other nations retaliate, but it seems to me they don't really believe him either.
Is he really capable of taking a firm position on anything?
7
Belligerent ignorance is a perfect description of Trump. His base will love the trade tariffs. Trump doesn't care if he starts a trade war. His actions are about satisfying his base who be believes will, when the time comes, save him from being impeached.
Bottom line: Trump doesn't act in the best interests of America, and Americans, because he is incapable of seeing past his own bloated self-interest and he isn't going to change.
12
“If you put tariffs against your allies,” Mr. Draghi said, “one wonders who the enemies are.”
The fact may be that Mr Trump has no allies and, perhaps, doesn't even want any.
16
With Trump as President, the US now has an absolute and comparative advantage in economic lunacy.
7
The Trump Prime Directive : In any situation or for any problem, Trump will choose the most stupid solution possible. Anytime, every time.
PERIOD.
9
Our allies must be infuriated with us:
A gargantuan economy with low unemployment, more resources than we know what to do with, GDP through the roof, and the most globally successful corporations in the world.
And yet we complain of trade hurting American workers when we just passed a 1.5 trillion dollar tax cut that benefits corporations, their wealthy investors, and outrageously overcompensated executives, while simultaneously cutting benefits and education for those same workers.
Disgusting.
644
You don't think anyone actually believes that we honestly think trade is hurting Americans? All it is hurting is the kleptocrats' desire for more and more wealth. I think our allies are smart enough to see through this disingenuous assertion.
5
Perhaps Professor Krugman could comment on what appears to really be the case, both nationally and internationally:
Whatever wealth and value in whatever country is so disproportionately distributed that it is the world's oligarchs that benefit. Whether in Mother Russia, the Good 'Ole USA or the poorest nations on earth, whatever true wealth there is is in the hands and bank accounts of the ultra wealthy...they are the "not so secret" rulers of the universe.
4
Your comment should be typed in HUGE letters and displayed over our cities and towns and highways, to be read by all. It explains clearly and in a few words, the horror of the law just passed (tax cuts) and the horror of the law about to be passed. When are people going to wake up to this administration ?
2
Trump has announced that there is the possibility of exemptions. How much more blatant can he be that he is amenable to influence-peddling and bribery? For a slight discount off the tariff rate, the offending country just needs to book a major party at the Trump International Hotel in DC. For a greater discount, the offending country must allow Trump to brand a major hotel in that country. To completely lose the tariff, the offending country must wipe out Trump's Russia debt and/or promise to fix the 2020 election.
17
Nailed it, Trump has found his lever to enrich himself and friends in the back room exceptions area.
the republicans wanted access to unlimited money to fund their political campaigns. this is the result.
7
Rest of the free market world, don't wait for us. Go forth and prosper. We'll only slow you down. Before too long we'll have a bilateral trade deal with Russia where they ship us vodka and we ship them bourbon.
6
It's worse than it looks, Mr. Krugman, and worse than you correctly analyze in this article. Trump is imposing these tariffs on false pretexts of national security to keep them as long as he chooses. He is doing so with the greatest discretion to provide arbitrary exemptions based only on whether or not the White House considers a country a "friend." This opaque approach lets him, his family, and his cronies strike deals. It lets him blackmail Canada and Mexico on NAFTA. Most of all, it is probably no accident that the countries most harmed by the tariffs are traditional U.S. allies: only Russia can benefit from further weakening of the Western alliance. Brazil, Japan, and the EU are hardly a threat to U.S. national security. Trump seems driven to serve Putin's interests, not America's - which shouldn't come as a surprise. And of course, imposing these tariffs dilutes the media coverage of Trump's affair with Stormy Daniels, his lawyer's payment of hush money before the election, and Jared Kushner's pursuit of personal business and financial interests in the guise of foreign policy.
12
When I am Asia, I hear media analysts speak about the approach of the president as what they take to be a typical real estate "guy" approach. Always play the tough guy and beat down any opposition. Possibly that explains this tariff approach by the president, however self-defeating I find the approach to be.
2
Its is not obvious to me that having modest tariff is not a bad thing (say 10-15%) in that it is essentially a form of sales tax on items imported into the country. Of course it ends up being a sales tax on things exported as well as other countries will raise their import duties. But people in other countries don't pay sales tax to the US. The US needs to collect more in taxes to get closer to balancing the budget as the tax. An across the board, small tariff is not what Trump is talking about of course (and maybe we already have small tariffs on most things?).
1
The Smoot-Hawley Tariff Act of 1930 caused enormous damage to the American economy.
Concern over the impending tariff has been linked to the October 1929 crash and the June 1930 crash.
The Dow Jones Average fell 23% in the first two weeks of June 1930 leading up to President Herbert Hoover’s signing the tariffs into law.
On June 16 1930, Herbert Hoover claimed, “I shall approve the tariff bill,” and stocks lost $1 billion in value that day—a huge sum at the time.
The tariff dramatically lowered U.S. exports, from $7 billion in 1929 to $2.4 billion in 1932.
Many individual states suffered severe drops in farm incomes due to collapsing export markets arising from foreign retaliation, and rural farm banks in the Midwest and southern states failed by the thousands.
US iron and steel exports decreased 85% by 1932 due to retaliation by Canada.
The cumulative decrease in those exports below their pre-tariff levels totaled $369 million.
European retaliation raised tariffs so high that US exports declined from $541 million per year to $97 million by 1933, an 82% drop.
There was a huge cumulative export decline of $1.57 billion from the pre-tariff volume to 1933.
https://fee.org/articles/the-smoot-hawley-tariff-and-the-great-depression/
Of course, Donald Trump has no knowledge of history outside of his 1950's White Wonder Bread childhood.
But he's got white spite, and that's good enough for him and his deplorable voter base to govern us into the next Depression.
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Righto, Socrates!
What's more, between the Tax Scam bill and the impending rollback of Dodd-Frank, we already had the perfect storm for a Great Recession redux and neither the people who were most affected by the recession, their children who are now in the gig economy, nor the Fed will be in the same position as they were in 2009.
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One result of the facts which you listed was the emergence of rampart nationalism. Hitler got power because Germany had many unhappy people. They thought a populist leader was the answer. But despite early success, Germany was doomed to fail. The country was partitioned for 50 years with a death toll in the ten of millions. Trump is historically challenged, but we should beware a populist leader who likes to bait races.
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Thanks for the history lesson .. so wants your theory on the 50's and 60's.
SM did not cause the depression ..and 25% on steel will not either
The professor neglects to mention that whereas some industries may become more profitable as a consequence of tariffs and others become less so, in the end all of our citizens are consumers, and the imposition of tariffs ends up imposing a financial burden every time we hit the marketplace. Those who insist on buying American are, of course, always free to do so. On the other hand, the rest of us may end up stuck between a rock and a hard place, deciding whether to spend our money on foreign goods that are exposed to tariffs or American goods whose manufacturers will feel free to raise their prices once their foreign competition begins to languish on the shelves.
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Innovation that enhances productivity is not a win for everyone either: buggy whip makers, to cite the cliche, were hurt by the advent of the automobile. But we were, as a whole, made better off (or at least we thought we were--we hadn't anticipated global warming, pollution, and interpersonal separation).
It makes sense to trade, but it makes no sense to trade with countries that have lax labor, product safety, corruption and environmental standards--they will only drag us down to their levels. While our trade deals have not been perfect, at their best they are efforts to make such standards universal and by doing so level the playing field.
Trade is going to occur whether we have agreements or not. Without agreements, it's likely to be a free-for-all. With agreements we at least have some chance of preserving our standards.
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The problem in discussing trade here is just how strongly nationalist we can be, so that only trade that we win can seem acceptable to many people. Getting over this hurdle can be difficult.
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At the same time Trump is taking us down the path of isolationism with trade, immigration and disrespecting our NATO allies, the rest of the world is moving on without us. Our refusal to sign onto the TPP, something both Trump and Clinton swore to kibosh, has not stopped the other 14 countries from moving forward with TPP, and who knows, they may even invite China to take our place. So, this is where we are, isolating ourselves while the rest of the world is growing closer. Our go it alone will end up leaving us all alone. Obama was right to push for us to be in the TPP, because the alternative is isolationism. TPP was not a perfect trade treaty, but it was infinitely better than not being in the agreement at all. And now even Angela Merkel of Germany has told her EU peers that it is time for the EU to move on without the U.S. Remember, when the Republicans blamed Obama for leading from behind. Is Trump’s leadership what they call leading from in front? Isolationism is leading from in front? Is that what Republicans call leadership?
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The TPP bothered me because it was totally secret: We could not find out what was in the agreement. What kind of a deal is that? Trust me, you'll be glad you did? Would I lie to you?
Trump really believes that unbalanced trade is like having a hole in the dam protecting the city. He is uninterested in discovering the complexities of global trade, its history, its dynamics, its problems, etc. He goes by gut instinct: If it feels good, do it and rave on about it. You'll get supporters when they see your intensity. That's just how he rolls.
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Nothing is simple--everything is inter-related. Not having government financed health insurance means manufacturers have to cover those costs. More than 15% of the cost of building a car in the U.S. covers health care. Detroit either has to charge more per car, or it has to cut corners and make an inferior product. Bingo--trade imbalance.
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Trump is trying to isolate the US for the same reason wife beaters isolate their wife: more control...
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“[W]e now basically have an Environmental Protection Agency run on behalf of polluters, an Interior Department run by people who want to loot federal land, an Education Department run by the for-profit schools industry, and so on. Why should trade policy be different?”
While I am no fan of Trump or his policies the “free trade” agreements were written by the corporations and for the benefit of corporations. Workers have been on the losing end. The agreements have been about weakening health standards, food safety, labor, environmental and financial regulations, and outsourcing jobs. And about setting up foreign tribunals to give multinational corporations the right to sue a government if domestic laws reduce their 'future' profits.
To my larger point, why are we having policy debates with extreme right-wing Republicans who hold large majorities at the state and national level when we have a vulnerable vote-counting process where a handful of secretive, partisan companies count our ballots on "proprietary software”? The financial services industry would never allow a vendor to be non-transparent (see below), so why are we not demanding that our vote-counting process be transparent and verifiable? We must return to counting ballots by hand on election night with observers present. It’s the international gold standard.
Uncounted - Computer Security Expert Bruce O'Dell https://m.youtube.com/watch?v=ai_971yvwBY
(cont’d below)
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(2 of 2)
Bruce O’Dell: “I see the same patterns that I'm trained to detect and prevent in the financial services industry running rampant in the election services industry. Essentially there's no independent audit and control for the election tallying systems. If a vendor walked into a bank and said you cant look at our code, we won't allow you to look at an audit trail and independently test our systems they would either be laughed out of the room or, alternatively, we would call the FBI figuring that it is such a breach of fiduciary trust that no one could possibly think it was acceptable behavior in [finance]. And the fact that it is not only tolerated but rampant in the procurement process for election systems is unconscionable.
“If you accept the fact there is the possibility that there is a group with the porwer to covertly shift votes on a massive scale, and to do so largely undetected, then how do you investigate that? Well, you look to see if there is a group with motive, means, and opportunity to actually do that [O'Dell makes the case that there is]. If you have means, motive, and opportunity and there isn't systematic vote manipulation going on it's only because the insiders at those three companies are too timid or too stupid to do it. And I don't think that they're stupid and I doubt that they’re timid.”
"Uncounted: The New Math of American Elections" (full length)
https://m.youtube.com/watch?v=pisBdNLmo-A
#DemocracyDemansTransparentVoteCounting
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I DEMAND a “special counsel” to investigate liberal cahooting with everyone in the world OTHER than Russians (for now) to weaken this administration’s efforts to craft bilateral trade agreements with our trading partners that actually BENEFIT American workers, for a change. I nominate Stephen Colbert. HE’LL getcha.
Trump’s intent clearly is to set the world at the very brink, as is his wont since he’s quite comfortable there, to force bilateral agreements that cease this incessant placing of geopolitical policy aims ahead of our workers’ interests, regardless of how those tradeoffs have hollowed-out our middle class for decades. Watch everyone around that dickering table cave, so long as their required concessions aren’t TOO destructive of their OWN interests. This would leave us, eventually, with a raft of excessive tariffs on all manner of goods and perhaps services, yet with everyone who is willing to dicker “exempted” or with dramatically reduced tariffs. That could be a lot of far better-balanced trade agreements.
If this happens, ALL those who have cahooted with negotiating adversaries will have an entire DAIRY FARM of eggs on their faces, and Trump will be merciless in his contempt of them come November of this year and November of 2020. Could be the LAST egg required to reduce Democrats to the status of the Green Party in America.
But wait, there’s more.
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Specific action on steel and aluminum has long been desperately needed. There’s a large global overcapacity of these commodities, ramped-up years ago largely to serve OUR needs, as we’re their largest importer. But then came the Great Recession, and our internal production needs flagged as a consequence. That has led to selective and wholesale dumping by foreign interests to keep their manufacturing capacities operating at profitable levels; and it has eviscerated our own core metals industries.
In a perfect world, where nobody was trying to destroy anyone else, that wouldn’t matter so much, as lost jobs in steel have SOME relationship to added jobs in automobile and plane and widget manufacture generally, driven by cheaper raw materials; and an integrated, global supply-chain that ignored independent capacity to drive our own production would be more realistic.
But, lest it’s escaped the cahooters, we DON’T live in such an ideal world, and there are powers that wish to enslave us once we’ve destroyed our domestic extractive and refining capacities. Thus, Trump’s rationale supported by “national security”.
Yet, Paul’s Chicken-Little reaction will wind up as excessive: there won’t be a trade war. In efforts to avoid it, partners will adjust bilateral trade agreements to be more supportive of GENERAL U.S. interests – even though these efforts must ALSO fix the dumping problems.
The only remaining question is whether or not the U.S. government can AFFORD Stephen Colbert.
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Wow, Richard! This comment reads like something was slipped into your aperitif!
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Rima:
At present, I'm alone, and I rarely drink alone, much less "aperitifs" -- if you're going to drink, be serious about it and stick to scotch or bourbon, AFTER a meal.
My comment was an adequate expression of entertainment at Paul's predictable zero-sum, linear and ideologically intransigent position.
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Even if Trump only had workers' best interests at heart, this, quite clearly, isn't the way to go about protecting jobs. More jobs will be lost and the price of many a necessity will rise.
If this stunt is some scheme to dangle a carrot under Mexican and Canadian noses, under the guise of ensuring "NAFTA talks progress," then it is just as hamfisted as Jared Kushner meeting with the Mexican delegation without our ambassador.
But make no mistake, free trade has been negotiated by politicians whose lobbyists briefed them on behalf of their corporate masters. Free trade has benefitted the rich. K Street lobbyists weave in and out of Congress in the great revolving door that is the lifeblood in the veins of triangulation.
Trump lied when he said he was going to "grab, grab, grab," for America. This administration is triangulation on steroids.
---
https://www.rimaregas.com/2017/09/04/triangulation-when-neoliberalism-is...
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The other big issue going on right now is splitting Democrats. Dodd-Frank is about to be rolled all the way back, with Blue Dog Senators like Patti Murray, Claire McCaskill, Jon Tester, and others aiming to vote with Republicans.
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@Rima: Sorry, I'm a mite confused. I would have expected that you and other progressives who've complained about the effects of globalization would have supported The Donald on this abomination (mostly for the reasons you cited in your third paragraph). On the other hand, you're registering your opposition to Trump's tariff policy on the same grounds that would seem applicable to all such policies. What would YOU have him do to reign in the excesses of free trade?
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Stu,
Unilateral economic actions are most unwise. This one is downright stupid. The trade agreements we are bound to, going back several administrations, have completely changed the nature of our economy. One imposition of tariffs on two items aren't going to fix things.
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"...global trade agreements are a striking and encouraging example of effective international cooperation. In that sense they make a real if hard to measure contribution to democratic governance and world peace." This is hugely important, but often overlooked. Another issue, which everyone is afraid to mention, is that open fair trade provides opportunities for developing nations to better their economies and prosper, which in turn makes for a safer, more stable, and more just international community. There's no better way to reduce illegal immigration than to help make other nations safe and prosperous enough that it's citizens are happy to remain there.
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You just repudiated NAFTA, which was enacted in 1994. It appears that it wasn't successful in making Mexico "safe and prosperous enough that it's citizen's are happy to remain there."
And CAFTA, in 2005, which wasn't successful in making El Salvador or Guatemala "safe and prosperous enough that it's citizen's are happy to remain there."
In fact, you basically repudiated every trade agreement that's ever been signed. Which I think you might have "overlooked".
And you got, at this moment, 35 "Recommends" for doing it.
It's surreal.
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NAFTA and other trade agreements were blindsided by China. Now that China is more prosperous, they will work better.
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And tell me how NAFTA helps small farmers in Mexico, who cannot grow maize on their plots that will compete with the cheap U.S. maize? It drives them off their land and encourages them to head north. Mexican wages will barely keep them fed.
It will be fun to watch what the so called "free market" Republicans think of all this and how they will react. They have hardly been profiles in courage on other issues.
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Most Republicans will sit on their hands. Under the current status quo, the money's just too good.
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They can not keep up because the rebound is always slower than the shot, but go ahead give him a fresh ball. girl. loan. franchise. wife. cabinet. burger.
It's hard to believe we find ourselves at a juncture where the U.S. is going to proceed with a trade policy which the entire spectrum of U.S. experts - from Dr. K. to Koch Bros. Inc. (!!):
https://www.washingtonpost.com/opinions/corporate-leaders-must-reject-tr...
finds errant.
It helps if we realize that His Unhinged Unraveling Unfitness is following through on a campaign promise to 'Reagan Democrats' just before he makes his March 10 President Show episode appearance in Pa. steel country - 3 days ahead of a House special election - to understand the rush of the 'Tariff Proclamation'.
This, and remember that Putin's main objective is taking apart everything which glues together The Western Alliance.
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We have no idea what trump has promised Putin but birds of a feather flock together.
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