Paul,
I 'Googled it'.
I could find no evidence that any human, economist or non-economist, in the history of the recorded world, ever put those two phrases together in a sentence before Mr. Trump:
'Trade wars are good, and easy to win'.
No surprises there but I invite readers to conduct the same search.
5
Trump will cut off his nose and everyone elses' to spite his face...and his hands are too small to cover the mess.
Fact is, until Trump graduates middle school and starts to act like someone that can sit at the adult table, this type of destructive nonsense will continue. Any prediction of outcomes is just random.
8
Eric: He has too much power and is doing great damage to our country. Is there no one to stop him from this?
Morris: No.
3
It's almost inconceivable that anyone can be so ignorant, especially someone who went to such good schools and is "a very smart person."
5
Weeks ago I got out of stocks. Well, not a moment too soon. Just wait - this crew of numb nuts will bring down capitalism.
8
Many want to criticize Paul but over the years his instincts have proven correct
The simplistic range of tarriffs done in such a clumsy way are no match nor answer to the China problem. China can play this silly game by hitting back on agricultural and other areas and do some real harm to the US economy as well.
As Cramer said in response as well, China was so prepared for this they immediately had a list of products to hit back with. This hits Americans in their 401ks and promises lots of damage on both sides. TRADE WARS RARELY WORK, and if anything lead to increased suffering and military conflict,
4
“If you want to pressure China into respecting intellectual property, you need to assemble a coalition of nations hurt by Chinese ripoffs....”
Friends, let me introduce you to the TPP.
11
"There is a cult of ignorance in the United States, and there always has been. The strain of anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that 'my ignorance is just as good as your knowledge.'" - Isaac Asimov
Trump is the high priest of this cult of ignorance. Time and again, in many forms, scientists, law enforcement officials, lawyers, judges, generals, spy chiefs, economists, and many other people who are informed in their area of expertise, have tried to explain to Trump the world is not so simple as he thinks. Every single time, Trump's reaction is to not listen, surround himself with yes-men, and plow on ahead. Trump and his supporters do not even seem to learn from past mistakes. Even after the experience of "nobody knew health care was so complicated," they are still convinced that warnings from experts are simply attempts to trick them.
10
I wonder how Trump has arranged to cash in on insider trading.
5
The Republic is in danger! Where is Paul Revere?
1
Oops. That's what happens when you're still posting columns a day after they're written. Now, a day later and with John Bolton coming onboard, the column should be about "Bumbling Into War".
2
Trump's mind set is not only a bullying one but simple as well. To ask him to consider the broader implications of any policy especially one as complex as trade policy is like asking him to consider something beyond the level of cheating on a golf game. The real tragedy is that he does not know how ignorant he is. To ask a question who does see the true effects of policy to him would devalue his unbounded ego. And beyond this when things go south Trump will always find someone to blame for his own stupidity.
1
So China is willing to send $500 billion worth of goods to the US in exchange for $500 billions worth of US Treasury bills. (Remember they have to import the funny pieces of papers to keep their currency from appreciating too much.)
So the Chinese are helping to finance $500 billion of US federal deficit for domestic expenditures, defense spending, DARPA and the 7th Fleet. Yes, the money is being recycled, thank you.
Would you throw a monkey wrench into this system just when the GOP voted for $1.5 trillion in even more Treasury bills? Who is going to buy those additional funny papers?
You can see that the GOP tax cuts and the Trump trade war are jointly pointing towards higher interest rates and the bombing of the US housing market, not to mention boosting the cost of college tuition and capital expenditures for steel mills. And there will be less farm exports.
That is why the financial markets are tanking around the world. Obama gave Trump a record high on Wall Street; the next recession is Trump's gift to you--not the first time the GOP is passing on a recession.
8
This makes a lot of sense.
But so does the argument that what we've been doing hasn't been working. The WTO hasn't been working. If it was working, how did we get where we are--where we have legitimized Chinese trade manipulation and now are domestically torn when someone tries to do something about it.
Korea and Japan have no interest in pressuring China to improve trade with the US since they have large surpluses with China. The US is in this alone against China as we are the only ones to have opened our markets and economies that broadly to China. If the US succeeds, the EU will benefit but have none of the costs of waging the war, so either way the US is at a disadvantage.
We have a huge export to China: Whenever China exports goods Americans like to buy, the US exports to China pieces of paper saying IOU (a.k.a. Treasury bills).
So China bought $500 billion (or $375 billion) or US Treasuries last year? So whose problem is that? Would you rather be the holder of goods worth something or a holder of IOUs the value of which depreciates in an rising interest rate environment? Trump does not understand who is the winner here. (Does he really want to be holding Chinese national debt?)
Another point: US trade deficit means there are holders of green backs overseas. How is that used? Many third world countries when buying stuff from other third world countries sign contracts in US dollars. (Even the Russians do!) Yes, US trade deficit has been greasing the growth of global trade the past 70 years.
What else? Central banks around the world use the green back as their major reserve currency, even the Russians. Think about the benefits that brings to Americans, but that is another story that Trump will not understand until he breaks the system.
4
Oh Paul, don't go soft on us. The only thing Trump is truly passionate or obsessed about is himself.
7
We have a lot of problems to solve in this world.
We can't solve them as long as narcissistic leaders are allowed to just engage in petty games of ego.
Trump has no clue about what he is doing.
America has embraced "survival of the fittest" as it's official economic policy, and that includes con men as a legitimate profession.
1
You forget, Dr. Krugman, that a "win" for Trump with his base matters more to him at this point than the long term economic health of our nation.
Tariffs play well with Trump's base. And Trump desperately needs the frenzied support of his base to ensure his political survival.
With an energized base voting in GOP primaries, Trump can keep congressional Republicans in line. Trump's base is also his get-out-of-jail card with impeachment as well. Make no mistake. If Trump feels he is about to be ousted, he will have no qualms about calling for a "2nd Amendment" solution from his most ardent followers.
6
“You need to assemble a coalition of nations hurt by Chinese ripoffs”
China has a long history of stealing intellectual property and profiting from it.
As Dr. Krugman points out, the details of the various world trade imbalances are clearly well beyond the skills of everyone in the Trump administration.
Global economics is complicated, but to get a feel for what is important - well, America is doing very well right now in the way of employment and the economy.
I say right now because as the deficits begin to soar as the result of the recent tax abomination law, we will see many critical services slowed or shut down to help pay for privileged country club membership fees.
Tariffs are not the solution in dealing with China, which, appears to be the main target of Trumps-Tariff-Tantrum -
Clearly, enough feedback has hit the White House as seen in the recent Wall Street tumble to clarify this point to the dim witted Oval Office et al.
What may be needed is a powerful arm of the United Nations to act on China's technology thievery.
This "Global Market Justice System" would levy steep fines for such crimes.
These levies would in effect, be comparable to the tariffs - but without any damage to our friends and allies who do play "fair" !
By targeting countries with dubious trade policies directly, the risk of harming our friends is reduced if not eliminated.
3
If Trump can do something to stop the Chinese from ripping off our intellectual property, he’ll be proven right. It’s not just the obvious knock-offs of American products, or even the blatant espionage. It’s as much the official industrial policy that forces US firms who want to operate in Chinese to work trough a joint venture with a Chinese partner. That partner then gets the intellectual property and can use it to make the same stuff for export. It’s outrageous and has been going on for decades.
1
Our federal deficit and debt are exploding under this Republican President and Congress. Trump is triggering a major trade war with China. China can cause a dramatic increase in interest rates for U.S. debt instruments by briefly interrupting their purchase of those instruments, even more by dumping 5% of their holdings onto the international market. This would cause a dramatic escalation in the cost of servicing our exploding debt, thereby triggering a crippling budget crisis.
We would face these crises with a national government led by an incapable president, a Fox News cabinet, and a church mice-led Republican Congress.
We must not allow ourselves to be surprised by what our ignorant, ego-driven president might do. Trump is less predictable than a Roman candle in a dynamite factory. We must anticipate the worst, and plan accordingly. Trump absolutely, positively, must go.
4
Agree. China will win in this because Capt Peter Peachfuzz is helpless.
It seems we only call it a trade war when the president publically announces his tariffs for publicity. If the same proposals are included in the secretly negotiated trade agreements we never hear of them.
1
Can theNYTimes review Mr Krugman's predictions over the last decade and provide a score card of his hits and misses?
2
he was right about the stimulus, which he says should have been larger, and about the premature switch toward austerity. he was right about inflation. he was wrong about trump's immediate effect on the stock market, but there's some recent evidence the jury is still out on that one.
1
To someone who has a hammer, everything looks like a nail. Trump has one tool: a hammer, and he's banging away at everything in sight, regardless of outcome.
We’re not “bumbling in” to a trade war.
This moron got elected and half the political world doesn’t have the guts to say “NO”.
But they did the “dog whistle” thing for decades, so no surprise.
2
Trump doesn't care about trade or trade wars. These are political weapons that he can use to fire up his base and separate himself from the "establishment" in their minds.
Trump is a global billionaire with real estate deals around the world and who outsources his Trump Brand products to other countries, including China.
Treating Trump's trade policy as if it is anything more than red meat for the base helps him create the illusion that he actually means any of it.
Meanwhile his positions change faster than you can criticize them.
Next year, Trump will declare the TPP fixed and sign it.
Trump is using his office to funnel tax payer dollars into his private corporations.
When Democrats help him privatize the nation's infrastructure (because "getting things done" is more important than what you get done) Trump holdings will be big beneficiaries of the program.
Trump's buddy billionaire dumped his steel holdings just before the tariff announcement. Do you think Trump got anything for that?
And if the Mueller investigation comes up with a long list of Trump crimes, do you think Trump will resign quietly, like Nixon?
No, he will start a war, declare martial law, and postpone elections, indefinitely.
Trump is not Reagan, Bushes, Clintons, or Obama. Trump is a whole different kind of animal, one that is familiar to those of us that follow third world politics, as the guy who ripped up the constitution to make himself "president for life," words Trump used last week.
2
I used to think that U.S. institutions, laws and processes were too big and established to be harmed by Trump. But after the last two weeks, looking at his tariff proposals, alienation of allies, budget brinksmanship and crazy new Cabinet appointees, this ignorant bully and his "team" are undermining everything it's taken the country 242 years to build. Thanks, GOP!
4
The Chinese, for centuries, have learned by copying. Art is taught this way. Young artists copy the art treasures from the past. They see nothing wrong with this.
American companies, salivating at the bit to do trade with China, entered into these arrangements pretty freely, then were aghast when their intellectual property was copied. Furniture manufacturers were more than willing to close furniture plants in the south to send the manufacturing to China. I remember one P&G saleswoman in the mid 1990’s just imaging her sales if she could convince the Chinese to use diapers.
Trump has probably bitten off more than he can chew, not that he’ll ever admit that to his base. They slavishly believe he’s going to give them back their jobs, which won’t happen.
4
Trade wars with China and real wars with who knows who now that never-served Bolton will be whispering in Trumps ear. All that matters, to the US and the world, is that the democrats DO take over congress in the midterms. And they DO impeach trump or at least neuter him. It's about the last chance for the country to save itself from this madness of the thrashing incompetence that abounds in this white house.
7
Surely these moves on trade and appointments to State and Defense, are "treason.."and other high crimes and misdemeanors" Justifying impeachment -- by a committee of the House, with a trial in the Senate (viz the W. J. Clinton impeachment) (which would end in acquittal (because of qualms --even by McConnell -- about installing a President Pence)..
Somebody should be educating h Pence about the peril(s) he wol d face if he became President because Trump were be judged guilty of the Congressional indictment, and therefore Trump would haved to be removed from office. Pence should be convinced to take measures to save his own skin. (P.S. next in line for presidential succession after a Vice President::, Speaker of the House).
If the USA was creating more new taxable wealth in the USA, then the government could confiscate a part of that wealth to pay for all of the wealth consuming government expenses without borrowing money from others via selling freshly printed paper US treasury bonds.
People making things and selling those things to others outside of that family or nation create new wealth in that family or that nation.
1
Professor Krugman keeps hanging his Nobel hat on the U-3 Underemployment figures. Politicians and pundits like to do that when it suits their agendas. More honest folks prefer to consider the U-6 Underemployment figure because U-6 gives a broader indicator of the true picture of the work force in the US. Of course, U-6 isn't a rigorous indicator of structural underemployment, but it certainly is more informative than U-3.
But, U-3 suits Dr. Krugman's NEVER TRUMP agenda, and more specifically, Krugman's refusal, or inability to grasp, to acknowledge that the US has been waging a losing foreign trade war for decades.
It's interesting that Paul's bedrock economic philosophy underwent such a metamorphosis on November 9, 2016. John Maynard and data driven macroeconomics got kicked under the bus like a hot potato.
1
The US is not "losing a foreign trade war."
While trade deficits are bad for the economy — and the US has a trade deficit — the US has for the past few years been increasing its exports while reducing its imports.
So it's more accurate to say that the US is catching up rather than falling behind.
2
Tariffs and a trade war will hurt agricultural exports from the midwest. The president won't listen to or read reports from knowledgeable people. The ag sector will try a new approach. They are buying TV advertising time on the president's favorite FOX shows.
4
"The markets will implode if Trump is elected." Krugman
4
That's Right-wing misinformation via cherry picking.
Three days after writing that, Krugman revised his call, reversing it based on a re-evaluation of the possible effect of the deficit.
"There’s a temptation to predict immediate economic or foreign-policy collapse; I gave in to that temptation Tuesday night, but quickly realized that I was making the same mistake as the opponents of Brexit (which I got right). So I am retracting that call, right now. It’s at least possible that bigger budget deficits will, if anything, strengthen the economy briefly."
A half-truth is the same as a lie, something the Right is experienced at — but not very good at.
Krugman is not afraid to admit his mistakes. Will you admit yours in implying that Krugman did not do so?
1
To those who say that we can't go back to 1950, of course that's true. But to somehow think that globalism without checks is inevitable or good is naive.
In the next 10-20 years, there will be only two leaders of technology globally: China and the US. There is a very real competition, and it's not in anybody's interest to operate in a unipolar world with China as the hub. Consider that China is already a leader in AI research, and it sends thousands of students a year to the US to study engineering. Skills acquired in the US are then exported back to China to suppress free speech at home, brutally stifle dissent, and create a literal police state with almost total surveillance. And all of this is under Emperor Xi, who is undoubtedly the most powerful leader China has ever had and the most powerful leader in the world today.
I agree with Krugman that IP theft and unfettered technology transfer are not in our national interest, and I also agree that tariffs on a bunch of random goods is likely to be ineffective in reining China in. But we do have to do something meaningful besides blindly acquiesce to China's desires and pretend that this is all part of benign globalism.
To those who despise Trump, I agree with your sentiment. But ask yourself how comfortable you think you would feel in a Chinese World Order. Trump is at least trying to do something, which in this case, is certainly better than nothing.
2
The USA has already lost the World Technology Leadership.
The USA must change the emphasis of our education systems back to STEM if the USA wants to ever compete in the world with US technology compared to the superior technology available in mostly Asian foreign nations.
2
Tariffs on Chinese impact will act as a Regressive Tax on American Workers.
This kind of Regressive tax is the ONLY kind the Republicans are interested in.
Translators Note: Regressive means the Poor pay more as a percentage of their income than anyone else. (And the Malefactors of Great wealth are unaffected)
5
Trade with China and US wages (Wonkish)
1. The Iphone section is a repeat of Krugman's 2007 paper "Trade and Wages Reconsidered"
To economists, the question on what fraction of an Iphone made in Zhengzhou reflects trade deficits with China (rather than Japan that makes the display) is known as content distribution
To quote the 2007 paper "But determining the actual impact will require more finely disaggregated factor content data than are currently available."
The paper is available at
https://www.brookings.edu/wp-content/uploads/2008/03/2008a_bpea_krugman.pdf
An analysis of the paper by The Economist can be found at
https://www.economist.com/node/11050137
Krugman's conundrum : The elusive link between trade and wage inequality
“THIS paper is the manifestation of a guilty conscience.” With those words, Paul Krugman began the recent presentation of his new study of trade and wages at the Brookings Institution. Mr Krugman, a leading trade economist (as well as a New York Times columnist), had concluded in a 1995 Brookings paper* that trade with poor countries played only a small role in America's rising wage inequality, explaining perhaps one-tenth of the widening income gap between skilled and unskilled workers during the 1980s. Together with several studies in the mid-1990s that had similar findings, Mr Krugman's paper convinced economists that trade was a bit-part player in causing inequality."
Modern research has shown that Mr. Krugman was wrong
2
Prognostications are never 100% right.
It's okay to be wrong. What's bad is to not change one's mind.
Krugman has.
Trump's actions are going to cause massive unemployment in the U.S. much more so than occurred in 2008. But why should he be concerned? All he wants is to be the big bully who's going to "teach the Chinese a lesson".
Eventually, the unemployment will erupt into massive Great Depression, much worse than 2008 and the 1930s combined.
5
The steel/aluminum tariffs were an attempt to help Saccone win the PA seat. When Lamb beat Saccone, Trump lost interest in pursuing the steel/aluminum tariffs - if he even had any sincere interest in implementing them - since the tariffs were only a vote-getting ploy that failed.
6
If anyone or any company is responsible for the growth of the Chinese economy, It's Wal-Mart. Wal-Mart in an effort to drive out the little guy, forced their vendors to find cheaper and cheaper manufacturers. Their pricing also kept the inflation rate artificially lower. What was the cost? Lower wages for employees and a new economic giant in China.
8
The subtitle to a business article I read years ago read "Are $11 toasters really worth it?"
3
Trump's taiffs are much more complicated than Trump can comprehend. Let's look at the overall economic picture as of today. We have a very large tax cut, (see: more borrowing) tariffs that may raise prices, (see: higher prices), and a large spending bill (see: even more borrowing). These actions WILL increase interest rates, possibly faster than can be anticipated. We'll find out.
2
Amazing comments predicting gloom and doom as most here do with anything Trump.`Professor Krugman predicted economic calamity and a meltdown with the stock market when Trump was elected. I’m still waiting and we are over a year in. Have you ever considered the possibility that perhaps Trump is pursuing this policy for an indirect gain like for example pressing China to take a stronger stance against North Korea?
2
Again, misinformation through half-truths from the Right.
Krugman's dire prediction lasted just three days. Then he published a blog retracting it, after reconsideration of additional factors.
Are you going to admit that you were wrong to pass off that misleading remark as Krugman's final say?
2
New jobs for US workers and mew taxable wealth for the government to confiscate 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.
The USA would also need a technical workforce with the STEM knowledge that will be required to operate, maintain, and repair these robotic manufacturing systems after they are created by the Engineers and Scientists.
3
Great piece that really explains the nuances of trade. Begs this question.
According to the Conference Board average hourly manufacturing wages:
Germany: $28.86
U.S. : $23.04
Japan: $22.01
Germany and Japan. Two advanced countries with manufacturing labor costs in the ballpark with ours to somewhat higher. Those two countries are able to sell enough manufactured goods to China to actually have a trade surplus. But we have a deficit that we always blame on the cheap cost of Chinese labor relative to the U.S.
Why can they do it and we can't?
Maybe a future Krugman column can explain this anomaly.
7
While intellectual property issues can be real problems, it is easy to overstate the seriousness of such claims. In a career working in R&D for a Dow Jones company I can remember less than a handful of cases where the patents or trade secrets had any real value beyond three or four years. The pace of technology progress and ability to work around technologies just makes patents more about making non technical management feel good than any real advantage.
The fact that the tariffs will hurt our allies who provide components to China is an important insight. It would be consistent with the steel and aluminum tariffs which will hit Japan and Korea hard. Maybe Trump has some deep grudge against them. In any case, if I understand the numbers right, exports to the US represents well less than 5% of China’s GDP. our real leverage is much more limited than 20 years ago
And for most US companies the real prize in China is the massive base of Chinese middle class consumers. A signal from the Chinese authorities could poison that base for decades with massive negative impact on our S&P companies. Playing with fire
1
The USA must create more new taxable wealth by re-industrialization in order for the USA to stop borrowing money to pay for our government activities.
Foreign Trade deficits are important. Nations with Foreign Trade deficits are net taxable wealth consumers and nations with Foreign Trade surpluses are net taxable wealth creators.
The "National Debt" or "Sovereign Debt" will have to be paid by our children and grandchildren, and that is not fair for us to obligate them to pay our debts while we refuse to work and make things to create new taxable wealth, reverse our trade deficit, and also to pay for our government activities.
Foreign Trade deficits are important.
1
The US cannot reindustrialize to compete with cheaper labor abroad.
It needs to promote its service and high-tech sectors and its surplus of raw materials and agricultural products.
1
Perhaps Trump is not bumbling. What if he set up short sales through an offshore bank or tipped off his friend Carl Icahn or one of his Russian oligarch buddies prior to announcing the Chinese tariffs.This action was virtually certain to cause a stock market plunge. So was the appointment of Bolton as security advisor and Trump's threat to veto the spending bill.
25
Actually, Icahn did so before the steel tariffs announcements.
"Icahn sold the stock (Manitowoc is a global manufacturer of cranes and is therefore highly dependent on steel.) for between $32 and $34 a share in February, but the price of a share at market close on Friday was $26.93. He sold off $31.3 million in stocks.' This is per NPR. https://www.npr.org/2018/03/03/590583598/before-trump-announced-tariffs-....
Coincidence? I don't think so.
4
It seems that Trump and company would not understand the answer to a trade problem, should they even listen.
But, has that not been the "winning" strategy of Trump, and many of his GOP allies for a very long time?
"Create issues, using lies if necessary, dumb them down so that they can be "understood" by a host of "not deep thinkers", repeat endlessly, and reap the electoral rewards." Do you really think he will even bother with logical thoughts and analysis, when his "strategy" has worked so well for his narrow purposes?
Moreover; "If anyone “wins,” it will be nations that gain geopolitical influence because America is squandering its own reputation. And that means that to the extent that anyone emerges as a victor from the Trump trade war, it will be … China."
Would he listen to that, comprehending either the argument or the logic?
That the above is an eminently rational projection is, I fear, of absolutely no consequence to him and his.
1
Sadly Professor Krugman your understanding of commerce is only slightly better than your understanding of how to take of dogs(being a lover of cats yourself). China is dependent on commerce with America and is not yet in a position to rape an unwilling America. The problem, as Trump has pointed out, is that American business has been willing to exchange short term gain for long term loss. The underlying corruption of the American political system through unfettered financial contributions has exposed America to Chinese purchase of the American political class. How many $75 contributions does it take to produce a $100 million dollars in unreported contributions? Ask Bernie Sanders, he knows the math, and so does every other politician in the USA.
2
This is rich. All the Trump garbage he sells is made in China including those red MAGA ball caps. So when the prices start skyrocketing on all the cheap goods that American companies outsourced to China to produce for maximum profits, I hope the good people of the Midwest and rust belt states aren't surprised by what they have sown.
6
"Bumbling" is the key word.....for anything and everything this administration does. Or does not do..... But they do offer employment to lots of lawyers.....unfortunately for the taxpayers.
2
Ah... Let me add another winner to the dumb Trump trade wars - Russia.
3
Interesting article. I read the Dedrick link you provided. The argument was made that US has twice the IPOD wages in the high paid engineering/professional fields than non-US companies. The charts showed the wages solely based on the home nationality of the component supplier. I question the validity of this assertion as the mentioned US companies are multinational. This Dedrick data set is not only old (2006) but misleading as there is a considerable amount of US hi-tech job outsourcing by the US multinationals to their foreign subsidiaries (India/China) where engineering labor is much cheaper.
1
This is a great column.
5
You are attributing everything Trump does to personality defects. After labeling him selfish, childish and an egomaniacal. You failed to explain in depth what logical reasons he may have act this way.
An other personal attack. When will you stop?
2
Why don't you explain to us why Trump is "selfish, childish and an egomaniacal"?
Politicians in general, and presidents in particular, are pretty ignorant about economic issues. They rely on their advisers and staff almost 100%. Trumps problem is that he is totally ignorant (about everything!), but doesn't know he is ignorant. And he hates taking advice because, in his total ignorance, he thinks he is a know-it-all. That makes him the worst type politician of all - ignorant (which can be fixed) and stupid (which can't be fixed and so ensures willful ignorance). On top of that he drives away anyone who tries to educate him and so ends up surrounding himself with stupid, sycophantic ignoramuses.
I wonder who Trump will blame for ruining the great US economy he inherited from Obama. There are signs now are that it is starting to totter...all due to Trumps ignorant and stupid "policies."
1
Good column. The Trump style seems to be to announce big tariffs are coming, but then decide later just what products, countries and tariffs will actually be subject to those tariffs, and when and for how long. Oh, and all of that might change soon depending on who is talking and when. So we may or may not be having restrictive steel and aluminum duties, with lots of exemptions or maybe not. BTW, it’s dunb to say the duties will be set at 25%. Rather, as anyone could tell, you set the level of tariffs according to the effect you want to have, remembering that it is US consumers who pay the tariffs or, if the duties are prohibitive, pays in the form of higher US prices.
1
I feel much better about the tariffs now since Krugman is wrong nearly 100 percent of the time.
2
It's foolish in the first place to make such a specious and unverifiable claim about Krugman.
It's even more foolish to believe something simply because you think another person was wrong about it.
Two things:
1-China’s economic plan spans 50 years. This plan is in book form, a required reading to all government employees. Compare that to the US economic plan which spans only 4 years (if ever) and is relegated to powerpoint slides at the most and media buzzwords at the least.
1-China’s economy is a command economy. Ever saw a single Toyota car in China? Exactly. Now think of apple, Unilever, P&G, etc and their worldwide market. One word from China that these products aren’t welcome and these will have a reverse-Venezuelan effect but just as devastating.
Easy to win? Hahaha!
3
One of the things that obviously didn't cross Donald Trump's mind is the fact that China doesn't play around -- and no nation on earth, outside of Russia hits back harder and faster.
To this end, any trade war with China is going to hit them, but it's going kill us, simply because we don't manufacture much of anything anymore, and there's very little that they don't.
So ultimately all this is going to hurt American consumers where they'll feel it most -- in the pocket.
And now with John Bolton on board, any hope of a diplomatic detente is practically null.
This isn't "winning".
6
Wonder how Putin sees Trump's approach to China. Happy that two rivals are in conflict? Another instance of Russia's asset doing their bidding?
1
I suppose it's fine with Krugman, if China continues its practice of taking advantage of the U.S. By:
--subsidizing key Chinese industries
--dumping imports into our market
--manipulating its currency
--stealing our intellectual
--bullying our companies into building plants there--and handing over our technology
Krugman's solution? Advocate doing nothing--while bashing Trump for defending American interests.
3
Those things are problems that Krugman acknowledges.
But that does not mean that what Trump is doing will solve them.
Trump has made clear from the git-go that his personal interests matter to him far more than "American interests."
This a clear-headed, fact-based takedown of this administration's incompetence. Say all you will about collusion, extramarital affairs, bribery, nepotism, racism, cronyism, and corruption, but while all of this is going on, these people simply have no idea what they are doing. It is these very real policy blunders, committed in serial, with no indication that the man in charge even understands that what he has done is bad for the country, that will end up ruining our economy and reputation around the world.
2
"And that means that to the extent that anyone emerges as a victor from the Trump trade war, it will be … China." I'd also argue that Russia will also win as this trade war will further undermine our democratic institutions and alliances.
4
China is doing to the United States what the US did to the United Kingdom at the end of the 19th century. At that time the English complained that the Americans were stealing their intellectual property at the same time that they raised tariffs in both countries to protect certain industries. Did not work then and won't now.
1
Really, this was a Party default, in that the alternatives to this candidate were utterly deficient in either understanding or explaining this to an anxious public. But sure, the ceiling got cracked. Not just the ceiling, but also the floor, the basement and the walls.
1
Remember the good old days not so long ago when the stock market was breaking a new record every day, and the unemployment rate was at NAIRU (non-accelerating inflation rate of unemployment)?
Then we decided to create even more jobs by lowering taxes for the job creators so that because of the trickle-down effect (a.k.a. Kansas effect) they would raise salaries and create more jobs. We disregarded macroeconomics that said that reducing taxes on high-income people does not significantly stimulate the economy because high-income people have a low marginal propensity to consume and a high marginal propensity to import.
We also disregarded macroeconomics when it said that because of the twin deficits, increasing the federal budget deficit would result in higher interest rates, strengthen the dollar, and increase the trade deficit.
Subsequently we decided to start a trade war with China to improve our trade deficit and to penalize them for robbing us of our technology…
2
Pressuring China to respect intellectual property will do nothing for US industrial workers. It will help the various subsidiaries or global corporations, mostly in low tax nations like Ireland, that own and market intellectual property.
How much of the value of the iPhone is intellectual property? How much to artificailly extended patents contribute to global monopoly and inequality?
People who need to understand the complexity of trades are his base but they blindly support him, his poll numbers will go up because they keep on watching Fox News. At this time it does not matter with the appointment of Bolton you can be sure of major conflicts starting and Trump will get a real military parade.
2
Many economists are pilloring Trump for imposing tariffs on imports, especially Chinese imports.
I am not a professional economist, but I know enough of economics to know what is going on.
Over the decades, we have shamelessly exported our manufacturing facilities to China and other countries. Who did it help most and who did it hurt most?
The recipients of the technology clearly were helped - mightily; it helped them create hundreds of millions of new jobs and reduce poverty. Very good.
The American donors of technology also were helped because their profits increased enormously. For example, if you go to department store and look at shirts priced at 30, 60, or 90 dollars; you will find that all of them were stitched abroad. One would have thought, that, because of low wages abroad, these shirts should cost, maybe 10 dollars. Huge profit.
Who were hurt? The American workers. Millions of jobs were lost and thousands of factories were shuttered.
The elites were prognosticating that if China became more prosperous, it would become more democratic and give up communism. That did not happen and may never happen, or may happen several more decades from now. Instead, Xi JinPing has become the Chinese head of state for life - dctator for life. A remarkable failure of the elitist thinking.
In the meantime, we have accumulated trillions of dollars in negative trade imbalance and a huge loss of jobs. And the economists are telling us: don't worry. Shame on them.
Clearly, you are not a professional economist and just as clearly you don't know what is going on. Opinion based on economic ignorance is worthless.
2
ALM:
China is "communist" in name only. Its economy is state capitalist, in which the ruling bureaucracy has the power and wealth of a ruling class.
The same people who predicted that China would become more democratic are those who predicted that Russia would become more democratic. In both cases, those predictions emanated most strongly from the rabidly anti-communist Right.
The US trade deficit in 2017 was $560 billion, not "trillions of dollars."
No economist is saying "Don't worry." Krugman is saying that Trump's tariffs will not help, and may make things worse.
Excellent! ALM! Excellent! The idea that only an economist can understand the reality of an economic policy or principle is simply an idiotic notion.
What the elites can't seem to grasp is that the regular people who've born the brunt of their failed theories are now saying - very loud and clear - "Umm... your ideas didn't work." Then these same regular people have gone down to the ballot box and voted for some other ideas - and the elites simply can't grasp or cope with the rejection they've received.
Maybe the elites are simply not as smart as the regular people they try so hard to diminish on a daily basis. Is Paul Krugman a genius? Given the fact that his ideas regarding free trade didn't seem to work for this country - as he told us they would - then maybe he's not the genius he and his followers would like to think he is.
What does Donald Trump know about trade policy? of military capacity? or anything?
It's time we revisited the prospect of limited executive authority bounded by a vigorous, assertive congress. At the moment, we have neither, and it's terrifying.
9
Professor: I agree with you about the need to foster a united front with our allies and trading partners to confront Chinese irregularities on trade. I think that you agree that China has not been an honest trading partner with us. What I do not understand is why the United States tolerates a Chines tariff on our exports as well as other impediments to the sale of American products in China, while imposing no tariffs or other impediments to the import of Chines goods in America. Maybe we have not leveraged our great economic power to negotiate more favorable trade agreements. If not, maybe we should start doing so, regardless of who happens to occupy the presidency.
1
"Bumbling into a trade war," amongst other possible wars Trump trumps up. John Bolton's appointment as head of the National Security Agency, whose first choice is to create enemies and go to war(s), is surely not going to make anyone feel more secure.
The question is: Why is Trump doing all these really stupid, uninformed, damaging and dangerous things? And the simple answer is: Because he can, and because the GOP lets him.
At every choice point Trump makes the wrong choice. And as we can see with the parade of Trump handlers marching or being booted out the White House door, no one can instill any reason or sense of decency and responsibility in this man, who asks no questions, tells mostly lies, and refuses to anticipate or accept the consequences of his crazed, impetuous, vanity-driven decisions and behavior.
Trump doesn't solve problems; he creates them. Like any country, we have economic, social, and political problems. But, unlike most countries, our biggest problem these days is psychological--our deranged, maniacal president; his incompetent, nefarious, destructive cabinet and advisors; the extremist, reality-denying, cold-hearted, do-nothing GOP; the greedy money- over-people-our-children-and-the planet special interests and big campaign donors; the authoritarian right-wing propaganda media machines grinding out disinformation and lies; and the willfully ignorant, angry whites supporting Trump, no matter how much damage he is doing.
How do we fix that?
2
If Trump had considered it more he would have called for sanctions on China instead of tariffs because of their abuse of human rights and territorial aggression. Perhaps the more obvious sign he didn't think this through is the threat posed to Ivanka's several trademarks in China.
I wonder why he didn't mention money laundering or voter suppression and election fraud.
2
Beyond the depressing fact that this is just how a lot of wars start, what concerns me is that as with everything else, Trump's economic moves look at lot more like distractions, angry flailings, and political spasms than anything else.
It's not just the far-right wackoism that concerns me, though that's quite bad enough. It's that Trump isn't just (as Krugman notes) completely unreliable as a partner of any kind, and not just overseas.
Remember the constant bragging about the DJIA? Where'd that go, after the markets dropped around 3000 points in specific response to not only Trump's dippy actions, but growing instability?
And those pork, sorghum, soybean farmers in Iowa: they voted for Trump, and he's absolutely sticking it to them. They might as well be tusted Cabinet members with solid support.
It's at home, as well as overseas, that Trump cannot be trusted.
2
US businesses must take advantage of President Clinton's NAFTA for Mexico, his PNTR for Communist China, and the other additional more recent Free Trade Agreements and then relocate their US jobs to foreign nations with lower paid laborers and other cost disadvantage because US consumers will not pay anything extra for US made products.
All of the good paying jobs have been relocated to third world nations in accordance with the economic requirements created by President Clinton’s NAFTA for Mexico, and his PNTR for Communist China, plus all of the Free Trade Agreements with third world nations created since then when US workers refuse to work for the lower compensation that uneducated citizens are happy to work for.
Without President Clinton signing those trade agreements into Law, those jobs would (might) still be in the USA.
How much PAY TO PLAY money did foreign manufacturers pay our elected politicians to create all of that FREE TRADE legislation that caused our manufacturing jobs to relocate???
1
No one can save this man from himself.
He's flailing and doesn't even know it. He's drowning and doesn't even know it.
How do we as a nation awaken and realize this man could - with no compunction - take us down with him?
How do we save ourselves? How do we right the ship?
1
Bottom Line:
- China thinks and acts strategically in terms of decades and centuries.
- Global corporations think and act in terms of next quarter / next year.
- Politicians think and act in terms of next election cycle.
- POTUS tweets in terms of next day news cycles.
Ask yourself which one would you bet your future on?
2
No kidding, Professor Krugman. I was trained in Economics at Columbia. We learned that tariffs never do what they are expected to do. Instead they just raise retail prices and lower the taxing nation's standard of living. Why upend 70 years of American trade policy on a whim?
1
I have a trade deficit with Costco, it is way too expensive for me to grow my own pistachio nuts. We are nation of capitol and consumption, we trade our capitol for products made elsewhere. If you want to end the trade deficit than we must become a nation that produces products from raw materials that are competitive with those produced by other nations. Social transformation is the only way to end our trade deficit.
3
I agree, but we cannot put the cat back into the bag.
Most all of the wealth creating STEM factories have already left the USA with their STEM jobs and are now gone forever.
Do you think that President Clinton granting "Permanent Normal Trade Relation" trade status to Communist China and his signing NAFTA into law had anything to do with US jobs relocating to Communist China and Mexico?
1
It doesn’t matter if something looks like a win on Fox News. The bluster, tough talk and name recognition mean nothing to China. China is focused and they see the US in a weakened position right now. During the USA’s downtime China will most likely step up its efforts already underway to create real wins. This means real loses for the USA. Unfortunately the USA wont know this until it is too late.
As usual politicians will have others to blame the loses on and if voters don’t start choosing the right people USA will continue to lose. Everyone will be fine and it is not like we are going to turn into the poorest nation o n earth but there will be more income disparity and we will continue to struggle with job creation. It will be a long slow decline. Kind of like England and France. They aren’t doing badly but they are not the leaders of the world either.
2
Mr Krugman states: "Let’s be clear: When it comes to the global economic order, China is in fact a bad citizen. In particular, it plays fast and loose on intellectual property, in effect ripping off technologies and ideas developed elsewhere. It also subsidizes some industries, including steel, contributing to world excess capacity."
What does Mr. Krugman propose doing to address these issues?
"If anyone “wins,” it will be nations that gain geopolitical influence because America is squandering its own reputation. And that means that to the extent that anyone emerges as a victor from the Trump trade war, it will be … China."
China or Russia? Or to put another way, is this another example of Trump doing what Putin wants? I mean no one has accused Putin of not doing his homework.
1
I am not worried about a trade war but a hot one. Trump's appointment of the neocon Jon Bolton endangers peace in the far east and the middle east. He and Dick Chaney were most responsible for the mistakes in Iraq and Afghanistan. The chicken hawks have come home to this Republican administration. Be fearful;!
6
If the US really wants to reduce the deficit, then the US must decrease the value of the dollar. This can be done, but needs to remake Bretton Woods. That can be done, but needs the EU, China and Japan to cooperate. Why not bring up this fact?
1
You might as well try explaining this to a 9 year old after interrupting him on his Play Station.
2
"Under any circumstances, putting an irresponsible, ignorant man who takes his advice from all the wrong people in charge of the nation with the world's most important economy would be very bad news..."
"Now comes the mother of all adverse effects — and what it brings with it is a regime that will be ignorant of economic policy and hostile to any effort to make it work. So we are very probably looking at a global recession, with no end in sight. I suppose we could get lucky somehow. But on economics, as on everything else, a terrible thing has just happened."
Written on November 9th, 2016 by a someone who foresaw the trade war mess Trump is now precipitating. The author of those words was castigated by many, including Trump, for his predictions when the stock market initially soared...but as he subsequently replied...Trump's term ain't over yet. Yeah...Paul is the author of the quotes above.
If Trump doesn't cause a global recession, it won't be because of his knowledge as he has none. If Trump doesn't cause a global recession, it won't be because of his ability to reason as he has none. If Trump doesn't cause a global recession it will be simple dumb luck. Better cross all of your fingers and toes.
3
You cannot expect critical complex thinking from a one dimensional thinker like trump. His team of economic advisors like most of the trump team are not the best and brightest so not much help there. The trade war like most things trump may be very short lived and who knows maybe it will bring China to the table to discuss intellectual property. My fear is that team trump won't have a clue how to handle it.
2
He's not bumbling, he is raging - as in bull.
He's nuts and this is what crazy people do when they are allowed to do it.
So how much longer is the psychotic in the White House going to be allowed to get away with his poisoning our nation with his rage?
8
Well put to highlight how irrelevant the trade deficit number is to begin with. China currently adds the least amount of value to a product (final assembly) and sees the most amount of value when final assembled goods are exported at full retail price (not the production cost, e.g., and iPhone comes in from China valued at $1100 not the ~$200 it cost to build it or $0.80 in labor that China put into it).
We must also look at what jobs are being done in China, why they don’t buy as many goods from the US, and what that means for both economies. China mostly performs tedious final assembly of electronics - do Americans want these jobs? Probably not since we rely on (sometimes illegal) immigrants to do trade and food service jobs that have more prestige, higher pay, but are dangerous or dirty.
Why doesn’t China buy more US goods? Partially because China is much poorer on a per capita basis giving them less purchasing power and partially because the US builds more expensive goods that require skill to produce (e.g., airplanes and jets).
The trade arrangement seems to benefit US workers and businesses who essentially get to benefit from space labor at the expensive of a scary looking trade deficit number.
2
Mr Krugman gives lip service to the trade problems with the Chinese but his argument largely skirts the strategic issues
I suppose The NY Times is not a proper forum for that discussion and as an economist, he is focused....on that.
We gave the Chinese our technology and our market 40 years ago. We have to stop. The US needs a manufacturing base as part of a diversified, competitive economy.
What’s the endgame?
The Chinese are uniquely positioned to take over world economy. Why? Because there has never been a racially homogeneous 1.4 billion population govt directed economy in human history.
So whats the endgame?
If we are unwilling to force a fundamental change in our economic relations with China this will eventually be settled by war. Not a trade war!
In the meantime, the US faces an overall trajectory of further economic and social decline. Look around you.
Tariffs are the first step in our renegotiation and if it forces a crisis, it was inevitable anyway.
China has no allies and ours, especially W Europe won’t lead but they will follow. Alone or together we can do this
3
This is an excellent illustration of Krugman's essential point: that out of a remarkable combo of stupidity, ignorance, arrogance, showboating, and far-right wackoism, Donald Trump is belting the patient with a hammer because he has no idea that the problem is caused by mitral insufficiency but promsed that he'd do something.
Honestly, it's like watching a gaggle of varied monkeys try to fix a quantum computer with bananas.
2
Tiger Shark writes, "If we are unwilling to force a fundamental change in our economic relations with China this will eventually be settled by war. Not a trade war!"
And what, exactly, are the fundamental changes you would advocate? If you can't provide that list, how can anyone determine how Trump's tariff's will achieve valuable changes? Paul mentions the issue with intellectual property theft by China...and mentions a realistic plan for dealing with them. What is needed is organized resistance to China from their other trading partners...something Obama was attempting with TPP. Who killed TPP? Trump.
Trump will precipitate a trade war that will hurt everyone and solve nothing. What it will do is take the focus off of Trump other issues such as collusion with Russia and obstruction of justice. That's the real point of the tariffs. That's the real point of shutting down government by vetoing the current budget bill.
2
The numbers are just Trumpflation.
That said; The republican party surely has the people and knowledge necessary to get to the president with the information Mr Krugman is explaining here. I think if you look at this as part of the pattern of El Trumpo's entire presidency ( only 14 months!) you will see that it is intentional.
What El Trumpo and his GOP majority are doing to the United States standing among nations is meant to lower our standing so that they can passive aggressively pull out of the US obligations they do not want to have to uphold. It is the same sort of passive aggressive method by which they destroyed much of our government in the reagan administration. In the reagan admin they simply refused to fund the programs or policies they did not want to exist and by that destroyed them without ever mentioning they were against the thing they had just done away with.
El Trumpo & Congress are doing the same thing with/to the US reputation hoping to end its obligations among the nations of the world by pretending to be unable to control or influence the president. We all know all they have to do to get his approval is hold another press conference and hand out a bunch of compliments with superfluous adjectives preceding them to make the compliment seem "bigger".
This is the national version of the myopic Michigan republican apparatchik saving $500K and causing the Flint Mi. water crisis which they still refuse to unambiguously fix properly. $300B & counting
2
This may actually prove to be a good thing because it will hurt the $ Republican’s monied interests and donors where it really hurts them—in their pocketbooks and $ bottom lines.
It may awaken the agricultural producers and exporters—who overwhelmingly supported the Trumpster—to finally see that the thing they love about Trump-“He’s gonna shake things up in Washington!”—is a double edged sword that can bankrupt them.
Whether the economic nationalism born of Trump’s ignorance and stuborness will wake up his $ supporters remains to be seen.
Unfortunately, any moderating advisors once in the administration have already thrown in the towel, and abandoned the White House “ship of state” captained by a political Captain Queeg.
1
Mr. Krugman. Thank you for explaining the true meaning of our China trade deficits. Will you please get hired by Fox News as their economic guru. Since Trump is a tv baby and of late is doing his government hiring based on Fox News face time, this is the best we can do to avoid more economic punishment (trade wars) from Trump.
The other winner will be Trump, politically. He doesn't know and doesn't care what the effects of his trade policies will actually be for the economy or our relations with allies. But he does know his base laps this stuff up like a thirsty dog. It gets him glowing coverage on Fox News and cheering fans in red baseball caps at his public appearances. It's guaranteed to get lots of likes for his next Tweet about how he's Making America Great Again!!! The man's currency is unthinking adulation. If he wrecks the solar power industry or alienates South Korea while getting it, he couldn't care less.
1
... and the problem isn't China, it's Nike, Apple, et. al. closing American factories and sending the jobs there. Tariffs won't solve the problem of corporate greed...
2
Trump's myopic and trumped up world vision has gotten us into this economic mess, but as of today, I'm more worried about our existence with Pompeo and Bolton.
2
There is very little thinking and more impulsive
policy making in this administration. Nostalgia of
recreating 1950s and 1960s is not going to work.
world was different when America called the shots
for two decades after WW2. In 1980 it was Japan
we were railing against, blaming them for stealing our
intellectual property and using unfair trade practices
to exploit America. Now China has replaced Japan
as the target. Instead of competing on cost and quality
we are using trade wars as a way of inflicting damage
on China. It is Tonya Harding approach, you can't beat
Nancy kerrigan in figure skating then hire someone to
break her knees. China is now funding aggressively the
research in future technologies- AI, Quantum computing,
5G network,etc. At initial stages of development countries
borrow technology because they don't have money and
the talent for research. As they develop, the resources
become available for research. USA did the same, it
borrowed from England at the initial stages of
industrialization. History is not our passion and
we thrive on amnesia.
r
1
Chronically True to the "President's" consistent Form, He does Not know enough to Care...or care enough to Know.
3
And what starts as a trade war could escalate into a real war. Although the example may seem far fetched to some, the Treaty of Versailles, which was the end to the war to end all wars, WWI, was a continuation of WWI and led directly to WWII. Other nations were so angry at Germany for WWI that they didn't stop to think that exacting such high reparations could lead to another war on an even greater scale than the previous one.
We don't need another world war. We need leaders who are capable of working with each other. Trump is not capable of working with anyone. But we saw that when he was campaigning. New Yorkers have seen it for decades with his self important pronouncements on how to run things, who to execute, how to prosecute, etc. Trump is a person who knows almost nothing of how to run a successful business. He was born on third base and still can't make it to home plate. This trade war is no different. China will continue its game but we will have lost face with the rest of the global community because Trump doesn't want to cooperate with anyone at all.
10
This is all about the "rural middle class whites are suffering" narrative, not reality. The narrative goes: "Non-whites are hurting the God-fearing middle class whites, who need protectionism to level the playing field." Of course it's actually white executives are hurting them, mainly by automating their jobs.
In the real world, real median household income hit record levels in 2016, a great measure of middle-class success. We are close to full employment. Corporate profits and the stock market have been hitting records for several years.
The right strategy is to redistribute the income, not cut that income by trade wars. Per CBO, the Affordable Care Act taxed the top 1% mainly to pay about $600 in benefits on average to the bottom 40% of families. That's the type of policy we need for education as well.
5
Saying Trump and his team "don't know what they're doing" is the wrong approach. They know exactly what they're doing. Trump has run this play many times before and he always manages to get paid first. Tariffs against China give his club members, industry titans all, a quick revenue boost as they adjust their prices up to just below the tariff. That these tariffs cause a trade war or cost wages and/or jobs is a future problem for someone else
The same holds true for foreign policy. Bush was able to ride 9-11 and the invasion of Iraq into office by claiming an attack on him was an attack on the troops. Obama got bin Ladin and ridiculed Trump in public not lot long after. Trump is smart enough to put these facts together. A war with North Korea would be a quick win, he believes, would allow him to eclipse Obama (or at least one-up him), and would make it possible to run in '20 as a war-time president. That it would cost thousands of American and millions of Korean lives would never be his problem.
We're past being shocked by the hypocrisy or appalled by the stupidity. That only makes it easier for Trump and his team to do what they want to do. Trump is working to benefit a small group, and not the group he claims, at the expense and possibly the lives of the rest of Americans. We can only stop him by shining a light on his true intentions, not by pretending he's just a circus clown.
3
No one ever mentions the Trump products that are, for the most part, amde in and imported from China -such a hypocrite. See Jimmy Kimmel's shopping spree on the Trump Store website recently. Amazing, but not shocking.
2
A trade war will hurt. The real war he is aiming for will kill millions.
5
"The Art of the Deal." What a cruel joke. More like three-card m.onte
5
With bringing on John Bolton as National Security Adviser, we all should be praying that Trump will not be bumbling into something more than a trade war.Of course, I am sure Trump could bumble into a military conflict without Bolton, but now he will have an enabler like he has never had before.
7
Spot on analysis. Trump is Making China Great Again.
2
Bravo Trump - I have worked 30 years in this field, opening up markets in Asia for Western products... lived and worked in China, Japan, Korea, Indonesia, Thailand and Vietnam... all I can save is about time.
Today, the plethora of stand-up comics are boring and sound like the monologues from a psychiatrist’s couch (while he dozes). They seem to think that profanity and perversion are actually funny.
A serious Trump has given comedians a banquet of material that only the late-night host have found and are dinning heartily.
David Brooks, Thomas Friedman, Paul Krugman and the rest of the opinion writers are thinkers with whom we may not always agree but cannot avoid thinking seriously about what they write. But they are funnier than the stand-ups just by commenting on the news.
At times, I had wished that journalist would have taken Trump more seriously, but after a year, I conclude that they have. It’s just that a serious Trump is funny as hell.
Describing how Trump as “bumbling” into a trade-war is hilarious, dangerous; but hilarious. I suspect that I may be suffering from “gallows humor;” but laughter is all I have left.
Can we have President David Dennison back, PLEASE? If he is going to screw things up, I would prefer to have him busy cavorting with porn stars instead of meddling with international trade.
2
This so-called "trade war" with China has nothing to do with trade. What's actually going on? The United States is worried that the Chinese are trying to "take over" the world order, which the US has run since WWII. These tariffs are a crude and probably ineffective way of stopping China's rise. What's more, these tariffs will probably hurt the average American more than the average Chinese person, especially if China retaliates by shunning American firms and steers its imports to the Europeans and other Asians. It will be interesting to see how the European and Asian stock markets fare in the future as a result of these tariffs.
China has been a socioeconomic political educational diplomatic military technological scientific superpower for most of the past 2200 years by not 'bumbling into a trade war' and losing.
Nearly 20% of the human race is ethnic Han Chinese. There are more Han living outside of China than there are Americans. China absorbed and survived the Mongols, the Manchus, the British and the Japanese 'trade war' efforts.
America's exit from the Trans-Pacific Partnership along with the Paris Climate Accords and these American anti-China tariffs opens the door to the powerful international trade influence of China's Infrastructure Bank and 'One Belt, One Road' initiative.
8
No, you’re right, we should definitely let china continue hollowing out what is left of our domestic production and then buy up all of our remaining strategic technology companies. That sort of “strategic patience” is the genius that has guided us.
2
So Krugman suggests Trump should “assemble a coalition of nations hurt by Chinese ripoffs — that is, other advanced countries, like Japan, South Korea and European nations.” Very funny, Krugman seems to know less about the trade ethos of our allies - they he does about the actual practice of international trade. They have all bought into the phoney free trade story and love photo ops for signing “free trade agreements”, because it’s the conventional wisdom, meanwhile the jobs flow one way, and exports back in reverse. NAFTA and China Asia like are just wage standard busting initiatives to drive down costs.... simple.
3
I see that Krugman is pushing the delusion that unemployment is low in the USA.
The official reporting methods have huge problems, like not reporting on those not seeking work and thereby not interacting with the unemployment "insurance" system.
Then more importantly: Jobs that do exist, largely don't pay anything like a living wage. Walmart and Amazon warehouses simply don't pay what the Maytag factory in Newton Iowa used to pay.
In short, not for the first time, Krugman be completely blind to the underlying reason for Trump's win in Nov. 2016.
4
Don Quixote fights windmills that he imagines are giants.
Paul, you must be slipping. You accused your fellow socialist, Barack Obama, of being clueless in regard to trade with China. I am definitely saving this article for future reference.
Be careful Paul, NYT may have to take you to a woodshed for a re-education camp.
2
I wonder what would happen if China agreed with Trump's issue with Chinese imports, and refused to export certain simple but key products. Hardware (construction, not computer) comes to mind. Do we still make screws and nuts in this country? Could we still build American houses without Chinese parts?
For the narcisstic trump haters.
Trump is a known buffoon.
Xi is a known communist dictator for life who crushes all opposition including from his elite fellow commies.
Will you narcissists ever stop talking about yourself at the expense of the facts?
Nope.
Wow! I never thought I'd ever hear the phrase "trade war" used to describe U.S. trade policy in my lifetime. It's like some horrible but ultimately risible dream sequence from a B movie.
Anyway, the main reason I'm posting is to ask a question I'm sure the idiot Trump and the idiots who advice have not considered. Who the heck is going to buy all the debt the U.S. is planning to issue in connection with the $1,500,000,000,000 rich man's tax cut and the $1,300,000,000,000 dollar budget proposed for fiscal year 2019? After all, if we cheese off China, Japan, and the E.U. with crazy half-behind tariffs, can't they all retaliate by refusing to buy U.S. debt? That sure is what I'd do. And that means that interest rates - all interest rates - will have to go up, up, up so that we can cover the costs of the great big party our government's throwing for the Koch brothers, Lockheed, and anyone else who already has tons and tons of money...like, um, our president. I'm being kind of flip in tone with this post, basically to keep from screaming my lungs out into the nearest pillow. But I am interested in your take on this Dr. Krugman.
5
It took W 7 years to trigger a recession after inheriting a strong economy from Clinton.
It looks like Trump is way ahead of him.
The Obama bull market was the longest ever. It looks like this will be the first down month for the market in 8 years.
6
Trump is dangerous because he's stupid, clueless and mean. Substance be damned, everything connected to him is based on appearance and perception. The criteria for success is based on "looks and acts like..." . This is definitely a "by accident" type of governing. That was fine when he was on his own, but now, it involves me and that's not fine. VOTE!
8
An incredibly stupid president that we elected by not voting and we shall suffer
8
China's likely retaliatory response is likely to hurt Trump's political base as it will be concentrated on soybeans and intermediate manufactured goods. Red state Indiana, for example, is likely to suffer a great deal.
Ironic, no?
8
Trump has always bumbled into everything he's done. His entire career. Even his father thought so. He'd probably have been best deployed at his grandfather's brothel. But now we're all faced with the prospects of crashing markets and perhaps a quick entry into war with North Korea. This is insanity.
5
Trump is a certifiable psychotic. A trade war will be the least of our horrors before this nightmare is over.
5
The whole scenario has a “Guns of August” aspect with cock sure leaders who just happen to be very wrong running around telling us they can ‘win’. Except that, as they say, the first time it’s tragedy, the second time, farce.
4
The only way to get rid of the TWIT's "Moe, Larry and Curly Clown Show" is to vote them out...ignoring the Russkies and FAKEBOOK all the way to the polls...
Oh, and let's vote on low-tech paper ballots so that any election-stealing is done the old fashion way, by throwing the machines into the Chicago River, losing ballots or just plain old miscounting!
3
Fascinating how a man so ignorant of world affairs blusters his way relying upon Fox NES fo his advisers
3
Trump is a traitor and is too stupid to realize it. That's why when he "won" the election he didn't recuse himself. He doesn't have the sense to realize he would be so bad at being president he would flush everything the U.S. has of real value, it's people, it's peoples health, talents and education down the toilet of treasonous greed.
3
It seems after wasting minutes my post disappeared...
to recap, while the "red wash" through China of import components originating in Japan and other places but finally assembled in China does not change the sum product of $$$ leaving the US, but does allow a surreptitious hit on out dear allies for their sneaky advantages, all while just whacking Bad China.
However it is the potential pin to an exuberance bubble on Wall St we should worry, severally but also each (think TSP, IRA portfolios), over. The happyhappy machine churning out perpetual higher valuation can be thrown into reverse by a few big players (sell high buy low, invent the down draft). When GDP is up 20% in 8 years but stocks up 100% almost too great a temptation to poke the bubble. Of course foreigners, facing a ledger trade hit and losses in the Casino may be the first theater goers to yell "fire"...
2
Imagine just for a moment, if you will, that we had elected Trump in 2008, just as the melt down/recession occurred? A full fledged world-wide depression, permanent loss of key industries like the auto industry, tax cuts on steroids, war, autocracy. Rome burning, while he plays golf in Florida, or is consumed with the antics of a porn actress. Talk about opportunity costs. Wow.
1
Any American should be loathe to accuse China or any other country of intellectual piracy when the US is the only country in the world that does not recognize biopiracy as a crime. It never ratified the 1993 UN Convention on Biological Diversity and rips off foreign genetic resources with impunity.
If intellectual piracy is the "just cause" for this ill advised trade war, G-d help us.
2
Can you imagine a Trump adviser trying to make this argument to the "great leader"? The man is completely incapable of understanding anything more complex than 2 + 2 = 4 and I'm sure he would call that fake news if it would make him a buck or get him a vote.
4
Trump knows what he knows and doesn’t comprehend that it might be advisable to learn something else. He has no conception of how deep the well of his ignorance is.
“Buy low, sell high—and if that doesn’t work, default and declare bankruptcy “.
2
Where are the checks and balances to deal with the whims of this appalling ignoramus? Trump is surrounding himself with pathetic stooges like Mike Pence so don't look for any relief there.
America has installed an extremely bad Dear Leader and must find a way to dislodge this bolus.
4
When China retailiats there will be nothing to sell
at Wal Mart, Christmas Shops and Target
put that Smoot in your Hawley
5
Trump is a known buffoon.
Emperor Xi has effectively declared war on the US and the West after declaring himself emperor for life.
It is disheartening when buffoon Trump stumbles into a fool position that is still closer to the mark than Krugman’s. Xi declared war over oast grievances and the Han right to imperial rule as embodied in himself in his speech to his fellow commies. This is his inalienable Han right no matter what technocrats say and the watered technocrats Xi has utter contempt for had a better start listening.
2
If you are also wrong about this aspect of the Trump presidency, will you write a mea culpa? That you seemingly joke that the China trade deficit is $375 billion, as if that is not nearly as bad as what Trump says ($500B) says everything about your bias. You also mention theft of intellectual property almost as if it’s shoplifting, when it is the most expensive and threatening of any foreign appropriation. And that entire fake Apple stores, identically built Ford F-150 trucks (with fake Chinese badge) etc. litter the Chinese landscape ought to make even Krugman cringe. But like all NYT editorial writers, the only thing cringeworthy to him is having to watch Trump’s policies succeed in turning around decades of weakness and capitulation to countries like China. MAGA
The country is run by Fox News. Get with the program. Generational damage...if we even survive.
5
Arent Trump's ties made in China?
5
The reason China has a trade surplus is because American Citizens do not want to pay American wages. Take a look in the mirror.
8
Are we tired of "winning" yet? I sure am.
Did anyone know that Trump's definition of "winning" is chaos?
Trump actually enjoys chaos. But, really what he enjoys most is getting a reaction out of people. He enjoys watching people react to his causing them harm. He enjoys tormenting people to see how they react. He is like a sick child teasing and abusing a puppies. Pick one up by its tail? Let me see what he does? He yelps! He, he, he...Bop one on the head? Look he squeals and runs away! Ha, ha, ha...
So Trump announces tariffs not to remedy unfair trade practices, but to get our allies and our business leaders ticked off, yelping and protesting. Then he gets bored, backs away and chooses another issue to turn into chaos and people to torment.
The fact that Trump is an emotionally ill man-child is not news. The fact that Republicans defend and aid him is shocking. I never accepted their trickle-down economic scam to enrich the rich, I never accepted their disregard for the less fortunate, I never accepted their proclivity to start wars. But I never believed before 2017 that they were traitors to America; now they follow their dear leader and spit on their allegiance to America almost daily.
8
Always fighting the “last war”. That’s Donny. And too many in the GOP. Just looking to make splashy headlines. Who cares about the actual details? And note that the great deal maker almost always quietly backs down later on. Breathtaking stupidity abounds today.
5
"...America is squandering its own reputation."
A little late for that.
Today America is viewed as a bad joke.
Led by a bad joker.
8
The Liberal narrative is just a much of a whitewash, a load of garbage as the traditional Republican narrative on trade. Krugman is one of the worst economists on trade that we have. He got his Nobel because he did research that was totally Europe-friendly, and where does the Nobel committee reside?
Clearly Trump is talking to US companies to determine what tariffs to impose. I see no major problem with this.
In response to Trump's $60 billion in tariffs, China has come up with a paltry $3 billion in retaliation. You call that a war? What a joke!
Honestly I don't know what is wrong with you economists. You're kookie. You live in an alternate universe. The tariffs will hurt almost everyone? Not so.
You really haven't a leg to stand on. It's too bad Biden is on your side on trade and he's got close relatives that manage hedge funds and he's been on the side of bankers.
It looks like we'll have a Trump reelection in 2020.
I find Krugman to be off the wall, almost crazy at this point. Crazy with anger. He's not quite as crazy as Hillary, but it's a close call.
Thank God we didn't elect Hillary! She hates an awful lot of Americans. She would have been the worst president of all time.
2
Here's an instructive irony to contemplate: This morning's (3/23) Wall Street Journal ran an editorial on the China tariffs using precisely the same arguments (and eerily similar phrasing) as your OP-Ed piece. Both of you reach the same conclusion, i.e., that Trump has no coherent trade policy and, by obvious extension, has no idea what he's doing. The WSJ will continue to back Trump no matter what, but their editorial makes it clear that they aren't fooled by him one iota. They know he's nothing more than a useful idiot.
6
It feels as if we are blundering towards major conflicts... even war. “Trumprirade II” and the appointment of John Bolton as NSA are two examples that should be of great concern to any sentient persons.
Our American style democracy is cracking under the pressure of ignorant born fears that are promulgated by a propagandist media and social media landscape.
What are we adults bequeathing to our children and grand children!!!!??
2
The West in general, and America in particular, learnt no lesson from the debacle of Islam and its 1300 years of Kaliphate.
While Socrates failed against his Demos in the trading centre of Athens, a thousand years later Mohammed, in another trading centre of Mecca won against his Demos, big business Umayyads, Banker banu Abbas, and trade monopolist Tribe of Judah. Then he founded the secular "Socratic" Republic of Medina with rights for all, and in particular Free Trade.
But immediately after his death the Demos struck back with the Kaliphate in 632 AD, and promptly imposed Tariffs (Arabic word of Kaliphate origin) that killed the Silk Road, impoverishing Asia and Europe. Crusades to free trade failed, and Europe had 100 famines in 100 years straddling year 1300, reducing its population by half.
In 1453 Ottomans grabbed Constantinople, and Kaliphate blocked trade altogether. Finally, Christians were able to expel Muslims and Jews from Spain, then were free to find new trade routes (and new lands too), giving Kaliphate the middle finger. The rest is history.
Tariffs weakened Middle Eastern industry. Islam lost on technological revolution.
Now that China and Asia base their future on education and industry and free trade, do Americans want to end up like Tariff Kaliphate Lovers - ignorant, poor, violent?
1
Trump's wrongheadedness is so complete one has to wonder whether or not it's intentional. The man never wanted to or thought he'd be elected president – he just wanted to enhance his foul brand through the campaign. I'm beginning to think his astoundingly poor decisions and foolish actions are deliberate efforts to get himself fired. I realize that possibility presumes forethought and a crafted plan which seem beyond his capabilities, but otherwise how could anybody be such a total fool?
5
The Trump administration is counting on China to continue buying US government bonds to fund the $1T deficit. Good luck!
3
As much as I, and probably you, have attempted to avoid letting Slimy and his ilk become normalized, I feel, personally, that he/they have. V O T E
3
A trade war would only make sense if our government deliberately designed our economy so that a trade war wouldn't hurt us. Not only has our government not done so, it never could do so, because to even try would go against the "free market" mantra that is always being spouted by the Republicans.
Following the actions of the Trump administration is like watching a movie about a rich kid whose parents are away, who gets drunk, and then decides to drive the family's various expensive cars, one at a time.
The last Republican president we had wrecked our economy, and it had to be put together again by a Democrat. That was only ten years ago, but here we are again, with another Republican president.
Are we a stupid country, or what?
6
Tariffs are taxes by another name. Trump, the 'tax cutter' will collect taxiffs on foreign goods you buy. Where is Grover Norquist when we need him? This may help moderate the deficit devastation of his get-richer-quick tax bill, but it will hurt America even before China & Friends retaliate with their own taxiffs.
Putin must be so proud of his protege.
2
Trump is truly a loser since he has no expertise about world trade and a simplistic and ignorant obsession with deficits. He is unthoughtful and incapable of reading and learning about complex subjects like the manufacturing processes of today and thus is not qualified to analyze and make decisions in the best interest of the American
people. I hope that he will be forced out of office soon
since I feel that a world wide catastrophe economically
and militarily is likely under his awkward and inept and malevolent rule.
He is truly Putin's gift to weaken America and our allies.
Thanks Paul for being so astute!
3
all Trump's nutty actions, looney positions, and dangerous appointments - even the chaos he engineers every waking moment - play well to his equally ignorantand dispirited base.
2
"He tried to kill Obamacare, but to all appearances his main concern was tarnishing his predecessor’s legacy."
Bingo. I never quite understood how brainless was much of the animosity toward Obama until after Trump was elected. Then people felt free to expose themselves as being utterly craven fools.
8
"Only the best...", and now we have Bolton. Trump needs war to bolster his sense of impotence, so trade war it is. Isolate America as in "MAGA", lose your friends and bolster your enemies. He is truly mad.
Once you lose your reputation, what do you trade on in the future? Who will trust us?
And, why doesn't Obama sue Fox News? They have slandered him in a big way with the 'false flag' nonsense.
2
Did Trump ever complete that briefing on the constitution? 23 amendments to go!
2
Thank you Paul - for your blindered, rose-colored vision of US-China relations.
China, more than Russia and North Korea, is a real and existential threat to not only the US but to the entirety of Western, aka liberal, concepts of democracy, freedom and human rights.
Liberal democracies (that's as a philosophy, not a political leaning) abetted or turned a blind eye to the rise of Hitler and Fascism leading up to WW II. We are in the same situation now with the rise of the Middle Kingdom and their nefarious machinations for economic and then political domination, first in East Asia, then Africa and then to turn the developed world in to a lap-dog doing their bidding. Exhibit one and two - Apple and Facebook with their caving to China.
Trump, while a damaged vessel (a very damaged vessel), is doing more than Obama and the rest of the appeasing Democrats to carry the water needed to douse China's burning desire for world hegemony. And that includes Krugman with these "scholarly" analyses that are akin to providing aid and comfort to the enemy. For shame!
2
I can't believe Paul Krugman is still writing anywhere. He is wrong 100% of the time. Not just a few times, but everytime he writes about something. I've been waiting to see what he has to say about the current White House economic policies, so I know what ever he is against will work.
Robert
1
Will Russia also b a winner?
1
Do you think that The Donald knows who Herbert Hoover was?
3
"It is all part of my brilliant master plan," said the President. "When I am finished, the USA will be a 3rd world country, my cronies and I will be even filthier rich than we are now, and my buddy Putin will get the respect he deserves. Hey, put that microphone away! Get him! That was off the record!"
2
In this as in so many other things, Trump is obsessed with looking like a winner. All he knows about his trade deficit number is that it looks like a losing score. That’s all he ‘understands ‘.
There’s a easy fix though. Just get somebody on FOX & Friends to say the trade deficit is a really smart deal because they need us more than we need them and Obama just didn’t get it.
Yeah, it makes no sense, but remember who we’re dealing with here.
1
There is a simple solution to get over depression over Donald Trump's antics: imagine you are Xi Jinpin's best pal. Cheer every time Xi scratches the US-China lottery ticket and win a prize. Share the joy.
2
Looks like most journalists didn't bother to read The Art of the Deal. This tracks as a typical negotiation and one that is set-up for win-win. Let Trump be Trump. He earned it and deserves the chance to have his picks confirmed. Reps did not agree with many of Obama's appts, but put them through because he deserved the right to govern. Face it, the main stream media is an arm of the Democratic Party.
There is universal agreement about Trump’s actions and threats. Trade war? No this is not the issue. The issue is Donald Trump is under the gun: Stormy Daniels interview Sunday, emoulument subpoena, Summer Zervos suit proceeds, and the Mueller Tsunami are gathering and he will do anything to distract us from them. Anyone who doubts Trump’s willingness to burn down the world rather than face justice needs only to consider his choice of John Bolton as his new National Security adviser.
Would Donald Trump start a nuclear war to prevent his removal from office? That is the most important question. He has already answered the question: would Trump destroy the world economy, world trade to distract us from his crimes.
This morning he has threatened to veto the Omnibus Spending Bill and shutdown the Government. Some people will freak out over this. It’s just a distraction in Trump’s world.
111
Stormy Daniels? Summer Zervos? Remember Paula Jones, Juanita Broderick, Kathleen Wiley, Jenn Flowers and all the others?
Muellar’s Tsunami? What has he come up with after a years worth of hard or investigating? A couple of novice underlings, zero of Trump.
I keep praying that the GOP can stand up to this man. They've let him de-value objective analysis, truth, the CBO, economists, even math! Without challenging him or changing his course of misdirection.
He has to be reigned in before he destroys the world economy or he and Bolton just destroy the world.
2
I wonder if “everyone losing economically” includes Trump and his corrupt cronies. It would seem to me that the economic and political turmoil created by this regime provides an excellent smokescreen for powerful individuals without scruples to concentrate wealth.
3
This country by a by a large degree made China inc. the behemoth that it is. We wanted to sell more goods to China and they wanted more technological expertise. No it is not a level playing field but it is a playing field. We blame China for stealing our secrets but so has most other nations including our own allies. Corporate heads salivate over the China market. What about the debt that China buys from our treasury? Any words about that? Trump and his partners at Murdoch inc think they are the great wheeler dealers. Let’s see how badly these amateurs can negotiate terms from those who have been playing the long game for thirty years now. We just bounce from red to blue to red to blue preoccupied with internal squabbling over patriotism.
44
On the topic of theft. For historical reference, Geo Washington's first job was as a surveyor in the Ohio Valley. Before he came, Native Americans had lived there for a very long time. Theft. The Trail of Tears refers to the forced genocidal march of Cherokees from North Carolina to their new "home" in Oklahoma. The state of HI, sitting way out in the Pacific was purloined from the native Polynesian population. The unprovoked American invasion of Mexico, just before the US Civil War, saw the USA gain lands in the South West and in CA. And on and on. Different times and different things but the same old theft. What goes around, comes around. Karma.
Krugman's op-ed is very educational and I have learned a lot from his arguments. No one is going to win in a trade war but Trump thinks otherwise. After 2020 he will go back to Trump Tower enjoy his city views again. We all going to celebrate.
1
President Trump had hoped to partner with China to pressure North Korea to limit their nuclear weapon development. Perhaps he has now forgotten about North Korea. I am assuming that President Trump well never end up meeting with Kim Jung-un.
I have a feeling that what President Trump really wants, is to be in the news, regardless of it's effect on the world. When will Congress decide to reign this chaos in?
5
Mr. Krugman, RE: John Bolton. Please consider. If we want to insert our voices more forcefully perhaps an organized boycott of Fox News is in order. The bubble that feeds these critical foreign & domestic policy decisions should be isolated and squeezed by rational Americans. It's clear the president is being inspired and encouraged by right wing media. It is time we get to the source of these radical developments.
5
I don't understand the idea of property theft. Why is it theft when the companies in America and elsewhere sell the Chinese a product which includes technology and technical software, etc., and happily take the profit. That is not theft to me, and yes I am going to read a lot about this subject in the coming weeks.
Where does Trump's hubris about war, international policy, trade, and the environment come from? He's a real estate marketing guy, he knows nothing about trade - trade involves making or inventing stuff and then selling or licensing it, he has never done anything productive or creative! This is all so bizarrely surrealistic, like a very bad dream. But it's a dream that might very well end in wars and economic mayhem.
4
As with anything Trump, this is another action with little thought or analysis other than what people are whispering in his ear.
Just more shiny trinkets to be thrown, like the paper towels, at his supporters so they will adore him.
3
Trade War Rambo, Trump is like the Rambo character played by Sylvester Stallone. He's a bit edgy and mentally scrambled. He has no trusted relationships. Destruction will occur when dealing with friends or adversaries. It's in our Rambo president's DNA to do it alone. This morning, like the past 500 mornings, I'm wishing Trump was fiction.
2
A tariff on steel and aluminum translates into a tariff on Boeing planes made in America that the company offiicials would like to sell to airlines within China and airlines in other non-US countries. Daaaaa! This was hopelessly predictable. A freshman Economics major can see the explosion of stock prices for Airbus stakeholders.
1
The Trump mantra,
"Billy, look, you just tell them and they believe it. They just do."
Look at your 401K this morning, I'm sure it has taken a bit of hit over the last while and this is just the beginning. The booming economy that Trump inherited will crash soon enough. A DOW fall by over 700 points in a day will have economic impacts. Trade wars will have economic impacts. None of your allies trusting you and moving to trade with others will have economic impacts. This lying baffoon will be your ruin.
3
McMaster deserved to be fired for playing an enabler role to the president to calm the country at the moment of his appointment. He knew well it would not last.
The country deserves trump, bolton pompeo and Putin. With all the messes and the markets stumbling today, the only question left what will be left of the country after?
1
"Bumbling" and "alienating", are two very good adjectives to describe our "so-called" president. I don't understand much about economics, but even I understand how our bumbling president could ruin our growing economy by setting off trade wars and alienating our allies. Since, as Mr. Krugman mentions, he has nothing but contempt for international law and treaties, he will continue to bumble us out of economic security and into chaos, unless the Republican majority in Congress do something to stop the madness. So far he has done much to make Russia great again, and turned our government into a cess pool, with his continual lying and deconstructing of every department and regulation that would keep America's greatness protected from the robber barons of this century, those Russian and Trumpian oligarchs, who are bent on stealing from whoever and whatever and wherever they can. Please good Congress folk, do what you vowed to do in protecting our country and upholding our laws, even if it be against the chief executive, who doesn't give a whit about America or Americans but has some strange devotion to Putin, which is quite alarming. The day of reckoning is coming and justice will be served. Even Trump will be held accountable and have to do some 'splaining" for the choices he has made.
4
Trump is firing everyone because of leaks. He insanely thinks he can control the new appointees. I would bet the ranch that discussions with the new guys center around loyalty. When he dumps his chief of staff, whom he feels is leaking, he thinks he'll have control of things like he does over his company. I've said all along that he'll use a war, or two, to cover his insane behavior. He thinks that America will rise to support more bloodshed. I think the majority of
America is similar to him when he was young and dodging the draft. We don't want war.
1
Trump is a bumbler to be sure, but previous administrations have done little to combat our worst problem with China, and that is the theft of intellectual property. They have stolen our technology on everything from pharmaceuticals to jet planes to solar cells to golf clubs. But, the theft does not end with China as many countries including India do the same. If we could stop the IP theft we would have much fairer trade and solve most of the trade problem. Unfortunately, we turned our noses up at that agreement - it was called the TPP, something Obama completely understood, but failed to impress Trump, Sanders or Clinton. The TPP was flawed, but it gave us so much leverage in protecting our intellectual property. Not signing the TPP will turn out to be devastating as IP theft will continue unabated.
3
If the guy is not up to job, discussing and analyzing is an absolutely futile effort!
Our Guy is not up to any kind of job.
3
It is incredibly ironic that the places most hurt by Trump’s tariffs will be the places that voted for him over HC. Sometimes people are simply Darwinian.
3
When talking about trade deficits, Trump often talks about “losing money” to one country or another. That may just be his cockeyed “winner’ mentality, but it may also reflect other beliefs. For example, Trump believes that each person has a fixed amount of energy, so he doesn’t exercise for fear of using his up prematurely. Maybe he thinks that’s how the global economy works, too.
Either way we elected a guy with very limited mental capacity and even less imagination (hence his need to get ideas from TV.) It’s moved from sad to terrifying.
2
Having spent my entire career in high-tech industry and then government research, I have many first-hand examples of China stealing American intellectual property. Too many people think it's mainly baubles like cheap plastic bits to hang your headphones on under your computer desk (yes, that's one real-world example) or ubiquitous cell-phones/components (after all, if Apple loses a few $M in the process they deserve it for flouting international tax laws, right?). No. It's way more serious and pervasive, and includes some of the US' most valuable and closely-held technological secrets, including a lot that has military applications as well as commercial.
Coming up with a value for all the stolen IP is difficult, but this part is easy: It's WAY less expensive than having to educate your populace and develop the same technologies yourself. Why buy it or develop it when you can just steal it? And you don't even have to leave your computer desk.
My point is, the Trump administration, dysfunctional as it is, is distracting us with steel and aluminum tariffs first, and now more tariffs aimed specifically at China, when what we really need to be doing is securing computer systems and protecting our IP--along with electrical grid (think Russian hacking) and other critical infrastructure. What a royal waste of time, energy, and money--which is precisely what Trump has always excelled at for his entire "business" career.
Make America Lose Again!
135
Apple does not “flout” tax law. Like any responsible corporation it obeys laws. It is the responsibility of legislators to write laws that actually work.
3
How do you know we are not securing computer systems and protecting our IP, electrical grid, etc? Do you have security clearance at the WH?
I think you missed the point. While high tech IP is important, knowing how to make plastic, steel, and chemicals are also critical knowledge. And, he who makes it becomes the expert. Pittsburgh learned this the hard way: they thought to teach steel manufacturing --- they did and became obsolete.
The tragedy that is American manufacturing is that companies were allowed to take technology earned by the American middle class move it to a modern factory and then say it was too expensive to make in America. American capitalism did that.
Soon, the capitalist will run out of cheap labor and be broke. You can't make a living as a country of consumers.
What do we do if the coalition will not assemble? Paul?
2
Those who have Trump's ear believe the world is a flat, static system. It is like an unconditional belief in America or God.
Put theses believers into this administration and the result is economists who don't study trends or war mongers who don't understand diplomacy.
As Krugman implied China was many things years ago, but it economy is evolving. Labor costs, cost of living, middle class growth, demand for Western goods are all going up. The country needs and wants to import more goods and services. It can look to the US or it can look elsewhere.
Make America Great was always based on demand for its goods, services, culture and ideals. Once Trump has trashed all the advantages the US has had, perhaps we will all think any uptick is greatness again.
41
It is important to keep in mind that corporate America for the most part was all in on manufacturing in China. Most management teams knew the deal was for short term benefit and current management would profit most from the deal. Most high managers lean to the GOP. Workers are just pawns in this whole play. Now GOP and Trump are playing with them again.
1
When US corporation "share" intellectual property with China. they do so willingly. That is, each corporation judges that the loss of its intellectual property exclusivity is less important than entrance to the Chinese market. For years now, it has been widely understood that when anything is manufactured in China, Chinese firms will copy the item and ignore patents. Yet, corporations continue to export manufacturing.
We must also remember that moving product creation to low wage countries benefits corporate profits and to an extent consumers through lower prices. US tax laws encouraged the export of our jobs. The job export has been going on for so long that the expertise and supply chain needed to produce many consumer goods has been lost.
If Trump's reality TV policies provoke a real trade war, the US has already lost. How will Americans react to empty store shelves?
1
I'm an engineer. I designed and commissioned pickle acid regeneration plants used in steel mills throughout the world. The US is viewed as chumps, by our allies and our enemies ---- the Chinese are our enemies. Our German competitors started to build a regen. plant but quit when the Chinese starting building a copy next door. My company finished the plant; I designed it. We didn't give them cutting edge technology: we kept that for ourselves. The Chinese steal technology: that's how they got ahead so quickly.
The Chinese had a plan starting in the 70's to nurture new industries. Before the US disrupts supply chains they should have started creating investment strategies for restoring rust-belt plants. Of course, the FBI would be busy rounding up Chinese lobbyist and their banker friends in Wall Street who would quickly squash any effort to rebuilt US industries.
So, my first comment stands: we are chumps. Our politicians (not statesmen) have allowed the destruction of the American working class, of which, I am one.
48
"When it comes to the global economic order, China is in fact a bad citizen. In particular, it plays fast and loose on intellectual property, in effect ripping off technologies and ideas developed elsewhere. It also subsidizes some industries..."
Krugman is defending the neoliberal order, and although he doesn't mention pharmaceuticals, that is a big part of US trade reps' grievances with China. China used to allow western pharma to sell off-patent medicines to its citizens at three or four times generic rates.
But when China set out to cut costs earlier this century in order to provide universal care to its citizens (you know, the kind that Krugman says isn't possible here), China refused to allow the big pharma gouging to continue.
One of the goals of US trade reps in negotiating the TPP (the one Krugman tacitly endorsed) was to enshrine into law prolonged patent periods for pharmaceuticals - a reprehensible practice that would hurt poor countries like Vietnam, Malaysia etc.
Now you can understand why Krugman didn't mention that "intellectual property" includes pharmaceuticals. He is a "neoliberal without a conscience" who always backs investors rights over consumer needs.
1
Does the tariffs include Trump products made in China or are they exempted under this new policy.
2
I don’t fully understand this stuff, and I’m pretty sure I pat attention more than the current resident in the White House, who seems to rely on things he’s heard from decades past, or just makes things up.
Where tariffs should be considered is when and where companies export "dirty" manufacturing processes to avoid US Environmental Regulations. These regulations, while developed for the United States, benefit the entire world as long as they are not being intentional avoided.
Make it punitive by adding a tariff based on the cost avoidance plus a penalty for any companies that move production off shore to avoid environmental compliance. Or make compliance with "best available technology" equivalent to or better than US standards part of the international trade agreements, and make a tariff part of that agreement.
1
Paul, Trumps China tariffs are intended to create a bargaining chip to be used in the intellectual property negotiations.
I am no Trump supporter, but at least acknowledge (and criticize if you like) the clear actual strategy rather than over analyze a mere opening gambit.
3
The Chinese government turns a blind eye (if not encourages and subsidizes) to the theft of intellectual property. Sure, they will gladly "assemble" our IPhones, but they will more happily steal the technology and make their own. Eventually (already in markets outside the US), their products will be exported and compete with the IPhone. With so much of the US's profits (and stock market gains) coming from companies with strong intellectual property rights it is only a short matter of time until our goose is cooked.
Has anyone noticed that all of our major tech players have direct major competition in China, but virtually nowhere else? To make matters worse, the Chinese conglomerates are buying foreign companies with the intention of bringing the technology home, and reproducing it in their domestic market - and again, eventually for export. The end result will be catastrophic for the US. Sure, the usual methods of "consensus" with our allies, and WTO pressure is the "right" way to go.
But haven't we been doing that for years now? And here we are.
Also, do we really need to wait for high unemployment and a recession before we do something? Once the technology goes abroad, so do the high wage technology jobs that all of the "redeployed" workers from already ravaged industries are supposed to be retrained to do. We need to act now, and if Trump's bumbleheadedness is the catalyst - so be it.
4
Check out the British edition of Top Gear a few years back where they drove Chinese knock offs of some of the world's best selling autos.
The lesson people should learn from trade is that some countries may benefit more than others, but that mostly everyone benefits to some extent. Competition in the market demands greater efficiency everywhere.
3
So, Canada, Mexico, EU, etc are looking now for new trade partners which will, effectively, freeze out the US for much of the back and forth trade among our 'former' trading partners. Funny how easy it will be for China to establish alternate trade routes and patterns, and how receptive our allies are to such a change. It is as if Xi and Trump are working together on this war. All Trump really wants is to be King like Xi and Putin.
5
The United States has the largest and richest consumer market in the world. There are no other trading partners that these countries can turn too. The fact that they have a trade surplus with the U.S. indicates how dependent they are on our market for their goods. Furthermore, the United States is the number 1 trading partners for many of these countries and they risk a great deal if the retaliate. All Trump wants to do is stop these countries from dumping excess inventory of steel and aluminum in the U.S. and protect our own industries from unfair and harmful pricing practices. This is both reasonable and long over due.
This is a great article. The referenced chart showing a decreasing trade deficit with China is something everyone needs to know. It shows a transition of the Chinese economy from a poor country desperate to export to a part of growing world prosperity which raises us too.
That being said, it is remarkable that we have a President who is both beholden to Russia AND doing everything possible to advance the interests of China! (ontheoutside.blog/2017/06/23/the-president-of-china)
3
Let me get this straight. Most people got crumbs in the tax cut deal and now they will purchase goods "produced" (assembled) in China that will cost more. Net result: no economic gain for most Americans and looking uninformed and unreliable to our allies. I guess DJT was right in his stump speeches: if that represents winning, I'm tired of it.
9
The expanded exemptions from the steel and aluminum tariffs is a pure Trumpian tactic. A big splash for the attention, but in the end just sound and fury signifying nothing. Trump, Navarro and friends seem to truly believe that the U.S. has such an out-sized role in international trade that no country would dare to retaliate to whatever trade restrictions the U.S. would implement. Given that China has already stated that they will being imposing targeted tariffs, this philosophy does hold up.
Maybe Trump's trade advisor's haven't gotten beyond the two country model used in Econ 100 in understanding how trade works in the real world.
9
Next to the economical arguments against a trade war, it is a bit surprising that Mr Trump targets the Chinese while at the same time he needs them to keep North Korea in check. Without Chinese help, the imposed sanctions have only little effect. It seems to me that North Korea is the more urgent national security issue to be tackled.
Is China playing dirty trade tricks ? Undoubtedly. But the best way by far to keep them under control would have been to stay in TPP.
8
It seems Trump can't do anything that benefits the entire nation. He picks out segments, such as steel and goes all out - in his eyes - to help that industry. I'm certain our country will survive this incompetent period of terrible policy making and come out stronger for it. I can't help but wonder the work that his successors will have to do mend the world wide relationships he's destroyed and restore our economy to world wide respectability. A sad and sorry situation to be sure.
4
"Only connect" E.M.Forster.
Trump keeps doing the same thing over and over. A big splashy announcement, which makes the front pages and causes panic in some circles, delight in others. Then, a week later, he backtracks and waters the whole thing down by which time people have lost interest. Could it be that he knows his base has the attention span of the average gnat? This is a showman, pulling one flashy rabbit after another from his hat. This isn't "policy" , this is " Bread and circuses" to keep the masses entertained.
Yes,of course we may stumble into a trade war,or a real war, through bragging, chest beating and horrific incompetence. More likely,surely,is that we will just lurch on in the same incompetent chaos until we wise up and see that we have a buffoon in power, surrounding himself with bloviating buffoons just like him.
A contributor to these comments recently asked if this show was "The Apprentice" or "Survivor".
I think it's "Lost" .
13
Why must you insult the average gnat? And what about all of the elite, winner gnats?
1
I stand corrected, Sir. Apologies to gnats everywhere.
All of Donald Trump's policies and pet peeves are based on racist bigoted White supremacist beliefs. The us versus White mentality. China is just one of many examples of racism veiled in trade tariffs and economic war veiled in White prowess. If you have any grasp of Trump, all the negative commentary about his predecessor President Obama, spreads blame on why America is uncompetitive because or that policy Obama implemented, that some how had a negative impact on the United States. He does the same to an Oprah Winfrey candidacy for President even before she has declared she will run. I can go on and on sighting examples of minorities being used as scapegoats. One thing is clear the Chinese trade war is no different. This is not about Trade or tariffs it is about attacking a non White establishment that has changed the game on how products and good are going to be traded globally in years to come. The Donald Trump's of this world are very worried about the new world order and every non White enemy has to be attacked.
3
The title of this article should be "Bumbling and Fumbling a Presidency"!
Trump, I am going to hire the very best and brightest, unfortunately you, Donald Trump, are not even close to the qualifications required in your interview process! You are unable to hire qualified legal counsel to represent you, one area which cannot e bought on the cheap, and has ethical and moral determinants.
A man posessing no moral compass, a proven congenital prevaricator, whom is unable to make proper decisions in his personal life is now making decisions which will effect the future of all American's.
Leadership in Washington please become a majority and a force for the saving of our democracy as the peril we are now being exposed to has far reaching consequences in our future.
6
What we have here is a individual helming our country whose prior business experience, his resume, amounts to a string of business failures, 4 bankruptcies involving such as Atlantic City in the casino business, a situation akin - mind you - to printing money, and generally stiffing his financial partners, employees and colleagues in all he did, this while running to Russian oligarch's to fund his misadventures. The man's a mess. So why stand surprised at the mess he's now making of all of this? We've got a child running things folks, so what do you expect, eh?
John~
American Net'Zen
14
I'm more comfortable with the tariffs now that Paul "I'm never right" Krugman has rendered an opinion.
2
None of this bumbling and stumbling around apparently is hurting Trump. His approval ratings are rising, apparently as the result of the token tax break households are receiving as the result of the GOP rob-the-poor-to-pay-the-rich tax overhaul. Respected commenters on NPR yesterday opined that if the economy keeps on chugging along, Trump is a shoo-in for re-election in 2020.
So much to look forward to including, with Bolton as National Security Advisor, saber-rattling and the prospects of war with NKorea, along with further destabilization in the Middle East, the devastation of our environment, the firing of Robert Mueller, and continued "Christian" incursion into government policy.
Oh what a loverly mess we're in!
2
Krugman, in case you have never been to Walmart, China won the trade war years ago when we let them flood our markets with low cost junk. Junk of all descriptions was foisted on us, creating an incredible imbalance in trade not due to products and quality but currency manipulation. You sat by while this was ruining the ability of the USA to compete, which of course was the real goal of the Chinese. You sat by during all those miserable Obama years while our ability to compete was being dismantled and applauded while our factories were closing. Everyday I thank Pres. Trump for doing something to recover from the devastation left by Obama.
2
Well, I think it was corporations that made decisions to make their goods i China, etc. because they believed American workers were hurting their bottom line. It’s the same reason employers are willing to hire illegal workers. Good for the bottom line. So when will the *president go after them?
1
This guy. He went bankrupt in the casino business.
1
"Bumbling".
That's the motto for this Trump presidency.
There's been "The Great Society", "A New Deal", "A Fair Deal", "The New Freedom" and so on.
This one: "Bumbling".
Or: "Just kidding".
1
Leader recipe = geo-political influence not ego-political influence...
1
Personally, I'm much more worried about John Bolton who's a fan of real not just trade, wars. But, has the U.S. tried negotiating about the intellectual property issue or brought a case before the W.T.O.? I suspect not. With Donald Trump everything is a planned media spectacular designed to show he's a tough hombre while simultaneously pushing not so flattering coverage of Stormy Daniels, Karen McDougal, and Robert Mueller off the front pages. He was a master of media coverage during the campaign and the torrent of Trump actions just yesterday alone with the trade sanctions on China along with the replacement of his National Security Adviser and new lawyers on his legal team have, as this column testifies to, had the desired effect. It's Trump uber alles!
3
A trade war is foreplay for real war, of this there is growing certainty. Taken as a whole, the best that America’s allies can hope for is that the US alone bears the brunt of this disaster foretold.
The only way to avoid this is his removal from office, by ANY means.
3
Trade war?
That began over 20 years ago under Clinton. Who remembers when the Admin justified most favorable nations status by saying think of all the cell phones we can sell in China? If the goal was 4-5 ginormous flat screens in every American household, I guess it worked pretty good.
And here’s the really scary thing, something all world class economists know, China still has 3 times the US population working the fields. Shift that pop to the government sponsored factories, and Krugman can be the guy to shut off the lights here in the US.
And I thought the Professor was a champion of the middle class. Silly me.
1
I wonder how long Wal Mart Execs will be able to keep telling the Chinese: "You will make item X at THIS price" ?? ....not long, I'll wager.
1
There you go again, Krugman - analyzing and presenting a cogent case. That will get you (and us) nowhere.
1
This is one of the big issues for his base and the steel/coal industry people he surrounds himself with. He's like Palin, saying things that make the tiny, ignorant base cheer with absolutely no idea what any of it means.
All my life I've been amazed that we let people who are this ignorant vote. Now we've let one into the highest position of power and responsibility in the nation. Our only hope is the new generation of voters that are highly energized by the evil being forced on them.
1
Trump reminds me of Macbeth, only Trump fires people instead of killing them (for the time being). He could wind up alone in his castle with only a few lackeys to do his bidding, his enemies closing in. But, right now, I think we are at the point in this tragedy where Macbeth says, "I am in blood Stepped in so far that, should I wade no more, returning were as tedious as go o'er;" that is, the point of no return. Trump's done so much Trumpian mischief he can't turn back, so he's going to go full-Trump ahead... Maybe the Senate will give him the Julius Caesar treatment--only rejecting him instead of stabbing him (we hope).
2
Trump is very aware of upcoming elections and his pandering to the perceptions of his base is very much about trying to prevent a democratic landslide. He is well aware of how his base responds to the idea that they are threatened by external enemies. His bizarre obsession with building a wall between us and Mexico and now his singling out of China play well to those that voted for him.
The announcing of trade war with China allows him prime time TV and pulls attention away from the investigations that surround him. When he directs his attention to China Bashing he is jointed by a chorous reminiscent of the days of Japan bashing. He is knowingly , like in a reality TV program aiming for the passions of people and not trying to inform them. It is a manipulation of peoples expectations and beliefs in an attempt to make the republican party look as if it is defending the average working person…and it is a deception, just like the tax cuts that were give aways to millionaires leaving the middle class to cover the inevitable deficits. In many ways it is an act of desperation that will in the end do much more harm than good .
For data junkies some interesting data on U.S. imports and exports here: https://tradingeconomics.com/united-states/exports
If China wishes to do so there is hardly a sector of the U.S. economy it can't injure to some extent. For example, China is the largest buyer of U.S. exported crude oil, cheap tar sands oil. Maybe slightly more expensive Russian or Saudi oil will start to look better?
As with so many of the actions of this incompetent administration, this can not end well.
.
Donald's father, Fred Trump, hammered that idea at the kitchen table that trade wars are good when Donald was 12 years old. That is where Don al Dough got his idea that, "Trade Wars are good, and easy to win."
A better idea would be a meetng with the Walmart and Target boards of directors to pitch shifting their purchases from China to Vietnam. Ask them to inform their Chinese suppliers that because of their Chinese government's policies they are having to start negotiating agreements with Vietnamese suppliers.
That idea / plan would filter up to the Chinese government leaders lightning fast. We would see results in Chinese making needed changes in their trade policies.
In Trump's whole life is there anyone who can say Trump gave them a hand or did them a favor? Our political two party rig is a sham. The party "in" squanders the money to promote their reelections and the party "out" preaches austerity and every six years they switch sides during nthe half.
Americans feel all men are equal and leaders come forward.
Half of our country's potential voters do not participate. The only leaders coming forward in America today are teenagers. They are quickly learning : "Don't trust anyone over twenty."
2
trump's mania is accelerating. His reality testing is worsening. His decisions are more irrational.
djt is manic and his mania is accelerating. The republicans are proposing to take guns away from the mentally ill yet they applaud the decisions of a man with bipolar illness with his finger on the nuclear button.
It is bad enough having a nut in the white house, but to have the overseers just as unbalanced is a disaster for the whole world, not just the US.
Get ready for a bumpy ride. Manic depressive illness accelerating at the rate that djt is with the obvious brick wall of illegality he is facing in his path will not end well.
At the present rate, a crisis will come well before the elections have time to intervene. We know the republicans are crippled by greed and the fear of losing power so they are paralyzed into inaction and will not invoke with 25th amendment.
The mad clown king is raging through the china shop, the owner of the shop is screaming for law enforcement to come and the precinct house is out to lunch.
Rome is burning and Nero is fiddling.
Regarding the issue of China just be an assembler of other countries parts this is rapidly changing. China is working at a furious pace to increase the complexity of the parts that they manufacture and are therefore reducing the import of such parts. For example they are currently testing their first commercial airplane. Like the Europeans in the 1970s I assume that it will have western engines and flight control systems, but over the next 20 years this will gradually change. In any case in a few years the imports of airplanes will start to drop. Another example is that they are building a high tech semiconductor industry. In a few years they will start to be able to supply the parts needed to build the RF sections of cell phones, and certainly all of the chips needed for the "internet of things". Besides commercial applications this obviously also has military implications.
There is the old saying about generals always fighting the last war. We should be careful about characterizing the Chinese economy and basing our decision on where they were a few years ago instead of where they will be a few years from now. This is not to say that Trump isn't an idiot and what he is doing is not shelf distructive.
This administration appears to have no compass .
It’s a ship unknowingly sailing through tempest .
The tariffs war is just one face of a complicated and deranged White House where chaos reigns sovereign and the lives and livelihoods of Americans are in perils.
1
"If you want to pressure China into respecting intellectual property, you need to assemble a coalition of nations...."
I believe that might serve as a description of the TransPacific Partnership (TPP) negotiated by the Obama Administration, and negated by Cadet Bone Spurs' Administration, because he's "like, a really smart guy".
Meanwhile, it's the American consumer who will pay the price, literally.
1
China has a fast response already - 25% and 10% for certain items. Anyone knows why they does that and how that affects the US?
http://www.xinhuanet.com/fortune/2018-03/23/c_1122578885.htm
"An object lesson in the wages of ignorance." Great phrase. Doesn't that apply to every action taken by the current administration?
1
This whole trumped-up (pun intended) "other Countries are so mean and unfair to the willtle cute USA" pity party is just subterfuge.
For Trump it all all about building up his ego - exciting his minions favorably, securing more of their mindless adulation, and satisfying his need to look like an alpha dog without really having to be one.
For the GOP the made up problems, scapegoats, and gas-lighting simply are just part of their propaganda system designed to spread their ideologies - most of which should have no place in modern societies.
For the real powers behind the stage - the Plutocrats - they don't care where the circus looks like it is going they know overall as long as the GOP can play the People/maintain power they'll get their way - they'll can rein in stupidity when stupidity is counterproductive to them.
Think about this. The USA has about 1/3 of the World's wealth. China has about 1/10, or about 1/3 the USA wealth. We are 4% of the World's population, China is 18%.
The problems we have are problems because we don't INTERNALLY take care of our People. The fact that China makes steel and Pittsburgh not so much now should not be a problem in a by and for the People society. It is only because the People like the crumbling mill structures are neglected. Mostly the blood is on the GOP's head.
This is the way Trump always acts. It is text book. He makes a big splash-"TRUMP IMPOSES TARIFF ON STEEL" Then a few days or weeks later-we see Trump creating exemptions to the tariff-to the point that there is no real tariff except on a few unimportant countries. So, he backs down. Now, again "TRUMP IMPOSES TARIFF ON CHINA". You wait he will then carve out exemptions or place the tariffs on Chinese Fortune cookies. But in this wake of nonsense he leaves behind the clear sense that he is just a huckster and frankly a joke of a President. Hopefully, in the next 2.5 years he will be removed from office and a more sensible individual will occupy the White House. Until that time we will continue to ride this rollercoaster whiplash of an administration.
1
One thing that is being overlooked here is that China is still ultimately an authoritarian state. While I don't think the current Chinese regime could survive a crisis like the famine of the early 60s (the great leap!) or the cultural revolution of the 1970s, it still has much more leeway in terms of how far it can risk economic and social instability.
In addition, Trump's move only plays into the hand of Xi Jinping's power grab. The fake trade war (however stupid they might be, the economic effects of these tariffs are being wildly exaggerated), is fodder for his militaristic China first propaganda.
I think what the President meant to say is:
Trade wars are good [for my image], and easy to win [at least until I am out of the picture and then who cares].
As someone who travels the world for business and pleasure, one thing I'm sure Trump supporters fail to realise is that world is actually a pretty small place. In about 24 hours you can go from anywhere to pretty much anywhere else. There is no changing that and going back to the past they seem to hold so dear.
The world is interconnected like never before in human history this is not necessarily a bad thing. But if you are ignorant of these basic facts and hold no intellectual curiosity of the world around you I guess you find this change to scary to comprehend.
135
Chris,
You are mistaken. Transportation is subsidized. We are living on a sea of cheap petroleum that really isn't cheap. Every country does it. If you factored in the real cost of transportation shipping chickens to China to be plucked and processed then shipping them back to US markets wouldn't make any sense.
Soon, we won't have the option of cheap fuel. The supply chain will break down. The markets will crash and it will be decades before we recover, if we. Global warming will become more and more an economic issue. Already, New Orleans, Houston, and Puerto Rico are beginning to understand.
Suppose we look at the China trade issue in a different light. Instead of the nationalist "they're cheating, they're stealing our jobs", suppose we say that the jobs were given away by American companies for the sake of cheap labor. Now everything has consequences. The consequences of this trend have been severe. I doubt that trade theories, not even yours, account for all the consequences. There must be something that could be done to discourage American companies from doing this. I don't accept your contention that nothing can be done. I suspect you are biased because of proposals you made decades ago in favor of free trade as a way to lift other countries in the developing world.
Trade war on one hand and real war on the other (with Bolton appointment). This presidency is leading the US down the toilet and continues to push the lever.
1
Mr. Krugman,
We imposed $60 billion in trade tarrifs, on Chinese goods entering the United States; this morning we know that China has retaliated by imposing tarrifs on our goods, entering China, in the sum of $3 billion.
So the net effect against China is $57 billion.
The following report details only one fully proved instance of Chinese theft of our software and intellectual property, wherein a lawsuit was filed, and subsequently won by American Superconductor, January 2018, against Sinovel, the Chinese partner since 2005 of American Superconductor.
The theft cost American Superconductor nearly $1 billion, and further tens of millions of dollars in additional lost revenue, because it's customers became Sinovels' customers.
Penalties will be established by June.
Excerpt and link to report -
"AMSC partnered with Sinovel on wind power projects after China passed a clean energy law in 2005, launching the development of major wind farms throughout the country. The Chinese firm built turbines and the U.S. company developed software and technology to control them."
https://www.bloomberg.com/news/articles/2018-01-24/chinese-firm-sinovel-...
The foregoing is only one of dozens of instances of outright theft, ignored by previous administrations, simply because corporate America was pulling the strings to avoid losing market share to China, which obviously took production and other manufacturing opportunities from the American worker.
2
“After all, trade is clearly an issue about which Donald Trump is truly passionate.”
Well, sort of.
Trump views world trade as a fairly simple competitive sport. If you sell more to other countries, and make them pay for it, but you don’t buy much from those other countries, you win. Their pockets are empty. They’ve been humbled. You’re the man’s man, the victor. You got the muscle. You get the trophy. Awed reporters stand in line to ask you easy questions. You are watched and heard on TV screens around the world.
Of course, as Mr. Krugman and other experienced economists have pointed out, international trade is not a simple contest. It’s complicated, slippery, often cooperative, and mathematically counter-intuitive.
But that’s no fun for The Donald.
So he’s out on the empty field, playing a big game with himself, though he hasn’t quite figured out the rules, throwing the imaginary ball to Donald, catching the imaginary pass from Donald, and then cheering for himself ... and hearing the thunder of loud applause.
The only issue Trump is truly passionate about is Trump.
3
"Was this climb-down a reaction to threats of retaliation, or did the administration not at first realize that the tariffs would mainly hit our allies?"
I don't think the "climb-down" was based on either of these issues, although I'm convinced Trump didn't know how this would affect allies. I think Trump's climb-down was the result of his basic posture, which he has amply demonstrated in business. Break everything as a negotiating tactic, because the only thing that matter is a "win." For Trump, a win is getting away with beating another entity in what his very small mind envisions as a "deal." Trump has no basis to think deeply about complexity and competing interests, and he surrounds himself with others who either can't do so or simply share his all or nothing idea of a win with no regard for the fallout. Dr Krugman attributes too much of a thought process to Trump, and thos around him like their proximity to his power more than they like deep thinking and allegiance to country and a prosperous and safe world.
1
Can we not remember the message of the fable? It was the friendly sun that persuaded the man to remove his coat. All the blowing from the north wind only made him clutch it tighter. Isn't that why we have trade agreements?
Sorry Dr. Krugman but you are completely on the wrong track here. To find the motives of any Trump "policy," look to his own business interests. Taking sides against Qatar even though it was directly against American interests - that was because Kushner sought loans from the Qataris. Take away servers' tips and give them to restauarant owners - duh Trump hotels. Tax reform - more deductions for real estate developers. The list is long (Russia). Here, it looks like Trump has positioned himself to dole out exemptions. This precedent was the real purpose of the steel/aluminum tariffs, namely that Trump will sell exemptions to tarifs to the Chinese. Trying to match Trump's actions to policy considerations is like matching weapons of mass destruction to Iraq.
5
Dr K hit on the most crucial point when he said,”And here’s the thing: By bumbling into a trade war, Trump undermines our ability to do anything about the real issues.” The GOP have turned this into an art form long before Trump.
By bumbling into tax cuts the economy suffers long term. By bumbling into voter suppression outside influences damage our election process. By bumbling into Fox News fantasy and right wing conspiracy mongering the truth is damaged. By bumbling into attacks on Planned Parenthood womens’ health Care is diminished. By bumbling down the path of denying science all of our futures are put at risk. By bumbling into health care millions will lose theirs and suffer. By bumbling into two wars we lost lives and prestige. And the list goes on.
This is not a Trump problem. It is a systemic GOP problem. Until leadership that learns from its mistakes takes over the GOP will continue to bumble into mistakes that will continue to erode our standing In the world and destroy our economy.
2
Trump's trade policies seem a lot like Trump's businesses: the facade and claims of victory all while sinking more and more into self-destruction.
3
Am am I the only one out here that sees the old “create a problem, solve the problem, be a hero” tactic that Trump is counting on for his re-election. This prelude to war ( any kind of war - trade war, nuclear war, sociological war - ) is all about firing up his base base. Wave the flag, support the troops, harken back to “over there” George M. Cohan rah-rah, all the while sacrificing someone else’s children’s lives in the sad but farcical time-honored use of good old patriotism to con the citizenry into loving a country that more often than not, these days anyway, doesn’t really love you back.....
1
The most fundamental issue that needs to be addressed here is the Administration's lack of any appropriate framework of economic principles within which to frame trade policy. The focus on bilateral trade balances as the objective function of policy was debunked over 200 years ago. These days most trade flows are the result of international investment and production decisions decided by multi-national corporations, a great many of which are American. They have optimized these arrangements internationally to minimize costs, expand markets and maximize returns. Much of the trade is inter and intra-corporate. Disturb this with tariffs and you upset intricate production arrangements that will be costly to consumers and to profits. That is why the Dow lost 700 points yesterday. This president is an economic illiterate and his ignorance is dragging the world down. The economics profession itself has been remiss in developing theories of transition guiding us on how to manage changes in trade patterns and technological progress so that they become less disruptive while we reap the benefits. This is one of the factors that allows demagogues to exploit under-educated disadvantaged people and we end up with counter-productive economic policies.
2
It seems that made in America is misleading when all the parts are made some where else. Krugman makes good point about china. Trump has no idea about the subject of trade. Maybe all this is done by Trumpy bear which is a toy. Is our country being run by Trumpy bear? It sure is one mean bear.
1
Mr. Krugman assumes that economic reality matters, Mr. Trump, focused entirely on the perceptions of his not-too-clever base, does not.
5
Trump's trade problem is the same problem he has faced since he was elected. Solving it is "complicated". Just like the implications of repealing Obamacare, tinkering with world trade or NAFTA, or many other issues, Trump is not prepared to learn or take advice from actual experts. Instead he seems to rely on his gut, which I would assert is most times wrong. Trump is taking this country down. If his off the hip decision making doesn't get us into a major economic depression, or a new war, I will be truly amazed.
12
I am sure if there were still any 19th century British textile workers still alive, they would be laughing at the poetic justice of our trade deficits and our anger over intellectual property theft. We were once the "developing" country and Britain was the global trade behemoth and they were not happy when magically their technology ended up in American plants and that their textiles couldn't compete with ours on the global market.
5
Having gained the White House through bluster, Mr. Trump wields policy cudgels which can fit on a hat or bumper sticker. Complexity is alien to his world view. He is to politics what Mohammad Ali was to boxing--"I am the greatest!"--except for the fact Ali was the greatest, backing up the bluster with competence. Trump's administration in a Potemkin village for the world from which his set designers and builders flee at an increasing rate when they understand the ends their works are aimed at achieving: a cult of personality.
8
After Trump remembers how he admires Xi, president for life, China will be exempted. Short after, the administration will exempt Taiwan, Japan, Turkey and of course, Russia.
So Trump will be able to tell his voters that he is protecting them because of tariffs imposed on everybody except the 10 top exporters of steel to the US. The real protection of our intellectual property rights and ability to invest equally in China could have been accomplished through the TPP. Effectively and without the drama. But of course the TPP was Obama's child and Trump killed it giving "the bad citizen" the leadership in Asia with little competition.
8
Trump is wildly successful when you realize his main job is to undermine our country from within. Since WWII, there have been no foreign "enemies" that threatened American security or hegemony. The USSR was not a threat except in the instance of a global war that involved nuclear weapons. After the fall of the USSR, many proclaimed the "end of history" and that the US would dominate the world for the foreseeable future. Our one major vulnerability was the Brier Rabbit scenario where we allowed ourselves to get bogged down in foreign adventures (Iraq, Afghanistan, Syria, etc.) and spend our blood and treasury on the elusive pursuit of "National Security." While a few have grown wealthy from this unending war, it has caused great harm to our country. Trump gained the Oval Office under the influence of a hostile foreign power. Trump had no political experience, no ethical or moral foundation except for the things he believed would enrich himself and a very fragile ego that was easily manipulated. For a small expenditure, Putin has placed the ultimate mole in our government without risk to himself or Russia. Trump is in power to denigrate and eventually disable our government's ability to function. Our role as the dominate world leader is diminished daily allowing Russia, China, India, and others to fill the power vacuum. Trump is doing his job better than Putin ever imagined and we will pay dearly for allowing it to happen.
14
The US is utterly helpless to do its most urgent task: update its constitution to remove all vestiges of slavery and belief that nature has a personality.
Trump's trade (and other policies) make perfect sense when you understand that they are not intended to "make America great again", but rather to "make Russia great again" (MRGA).
As the German expression goes, Russia will be "der lachende Dritte" (the laughing bystander).
China has nothing to gain from a trade war with the US, and the real damage will be to the western alliance.
6
Trump's only friend is Putin, and the Russians are set to benefit from this in one way or another. That is the only consistent and coherent thing about Trump's actions. Russia First!
8
When Trump talks about trade, he is winging it. He knows almost nothing.
Last year when the subject of a strong dollar was broached, Trump asked one of his advisers what a strong dollar was. I remember reading that in the NY Times and wondering how he ever became president.
7
Trump's motive is personal and pecuniary, as usual. He wants a tariff system that he can use to personally punish or reward individual players with cut-outs and exemptions. Why? Because "extortion" is such and ugly word.
Want a tariff cut-out? No problem. Just talk to the sales department at Trump.org about investing in exciting new Trump development opportunities! Shell company purchases and investments welcome!
2
And not mentioned yet by Mr. Krugman is what this guy is doing to our personal investments for our future which are sinking daily. I'm wringing my hands thinking about getting out of the stock markets while the going gets good.
3
You're overthinking this. Trump isn't considering consequences - short-term or long-term. Trump is wondering what "Fox and Friends" will say tomorrow morning. Trump is all about "the ratings". His policy decisions, his tweets, and his public posturing are all about getting "the ratings" for himself. What happens to the rest of America isn't even in the list of considerations. As long as Trump gets something he can brag about at his next 'campaign rally' speech, he doesn't care what else happens.
14
When did Ignorance became Power? What a daily nightmare we have now.
11
No US president has been an expert on Everything, and several have been political hacks (Harding) who were being managed rather than managing. Still, many were astute politicians with deep 'people skills', while others were highly accomplished in areas like the military that require high competence.
Now we have Trump, a fast-talking, hyperbolic, self-aggrandizing old satyr. This is what it looks like when POTUS both does not know what he is doing and does not know who to ask. But that's OK because he ignores criticism, especially the kind that is correct.
At least he now has John 'Ramsay' Bolton who will get us into the right sort of war, not these confusing trade wars. Who knew trade policy could be so complicated, right?
9
Trump slaps $60 billion in trade tariffs on China because their exports to us exceed our exports to them.
But deficits are a dumb figure, a crude estimate that distorts the value of exports and imports that constitute the balance in trade.
The Apple Iphone is a good example. Foxconn, Apple's subcontractor in China, imports most components from the US, which are low value so it's a small US export; Apple ships the finished Iphones back to the US, which counts as a Chinese export. But the finished Iphone is valued at retail, making it a high dollar export to the US. The trade balance shows about $150 in components exported by the US and $800+ per finished Iphone exported by China.
For every 1000 Iphones shipped from China, about $80,000 is added to the trade deficit, which counts as a $60,000 trade deficit on the US side after exporting $15,000 in components to China.
Last year, Foxconn (a Taiwanese company) in China shipped 61 million Iphones to Apple in the US, adding $16 billion to China's trade balance with the US. Did China actually take $16 billion out of Uncle Sam's pocket and put it in a Chinese bank? Nope. In effect China had to import $1 billion in parts from the US and took a $16 billion hit shipping the finished product back as an export. A nation could get rich running a trade deficit with China.
The next Nobel Prize in Economics should go to whomever can explain that to Trump. I bet the prize will go unawarded the next 3 years.
3
China is guilty of intellectual piracy, dumping, currency manipulation, protectionism, cyber spying and shady trade practices. In order to combat this, Trump has decided to begin a trade war in which no one wins. Soybean farmers in red states are likely to be collateral damage. U.S. consumers who will end up paying the tariff because the goods we need still will come from China will be victims as well. Perhaps China decides to buy fewer Boeing planes and opts for Airbus. Caterpillar equipment can be replaced with non-U.S. products. And on and on.
When a fool who thinks he's a genius is running the show and he's surrounded himself with yes men who are undistinguished at best ( Kudlow, Mnuchin, Ross, etc.), we are all in for big trouble. Think of America as a Trump casino. Remember how that worked out?
7
The Great Assembler is a good piece of explanation, Prof. K.
Meanwhile, the world comes to think of Trump as The Great Dissembler.
1
Yes...... But I think you give DJT too much credit as a reasoning human. Trump's trade war ploy is more likely just another way for him to stay in the news, distract people from the Mueller investigation, and signal his domestic base voters that he remains faithful to them. Since he doesn't know how to do his management job, he's instead already campaigning for 2020, and he's betting that most folks won't figure out how destructive his policies are by then. Or, he'll blame Obama...
2
Donald Trump has never done his homework on anything other than finding out what the adoring crowds at his rallies say is important to them. Trump dispenses with studying the actual issues, because any issue with the slightest complexity bores him.
International trade is one of those complex issues, although Donald Trump has no idea how complex it is.
When outsiders like journalists and mainstream economists criticize a Trump pronouncement on trade, he brags loudly about being an expert on the subject. He then launches a tirade at the motives and character of the critics.
To be fair, Donald Trump is willing to listen to a cabinet member or economic adviser – as long as they are brief in their remarks and completely agree with the conclusions which he and his cheering base already have reached.
So, on the subject of tariffs, a highly qualified Gary Cohn gives way to a radical outlier and tariff supporter like Peter Navarro. When the stock market begins to wilt, Trump turns to an old friend, Larry Kudlow, who is unlikely to offer much resistance.
The end result is that President Trump has outraged America’s best friends, and he is back-pedaling like crazy.
In the meantime, the bad guys – in this case, China – have stolen Donald Trump’s lunch money at the cafeteria door, and he is too embarrassed to admit it.
2
Welcome to Season Two, Episode 7 of the wackiest, unreality show ever!
1
Even when people understand economics, they make bad decisions about it. Ignorance about economics at the White House is much worse. China doesn't have to reinvest its surplus in Treasuries. It can stop sending so many of its children to great American universities. As for foreign trade, there's only one great truth: 'When goods stop crossing borders, soldiers will.' If you think the trade deficit is expensive, wait until you see what it costs to arm ourselves against China, North Korea and Iran. There's a bad moon on the rise.
171
there has been a trade war going on for decades now; only the USA has not engaged. All the while doing nothing as our manufacturing base evaporates.
wars are won by manufacturing. We going to beg china for some steel to make our tanks and planes, etc should we ever find ourselves at war with them or another country they favor?
bit more complicated than “free trade” (which leftists all of a sudden seem to favor....)
China does not own the largest percentage of USA debt. That they do is a total myth.
The 40-year US government spending spree could go on forever if we in the USA were earning money and not borrowing the money (from people in foreign BRIC nations that have a positive balance of trade) that we are spending.
If the US dollar value diminishes to zero at the future Federal Reserve Auctions, the Chinese Yuan might be the "last man standing".
It does not matter how we reverse the balance of trade as long as we stop the flow of gold, dollars, T-bills, Government Bonds, title to US located property, and other US assets from this country to other countries in payment for the things that they make and we consume.
1
This whole mess can be summed up this way, trade with China and the rest of the world is complicated with most actors always trying to gain a competitive advantage over others and everyone having competing interests and agreements.
Trump and the people he surrounds himself do not handle complexity well. Now how is all this going to turn out well for any of us when the ship of state is being steered by a guy who can only make right turns and all the icebergs lie to the right of course.
22
You should be specific in identifying the people, in and out of government, who have been responsible for encouraging Mr. Trump in his bumbling. With regard to his recent claims concerning lying about trade numbers in discussions with Canada, there is a likelihood that the lying was not a tactic (to what end?) or, in fact, a lie, but the use of grossly mistaken information given to Mr. Trump by Peter Navarro.
4
Trump has been saying and believing dumb things about trade for years, long before he ever heard of Peter Navarro. For him, foolishness on trade is pretty much sui generis, i.e. he dreamt it up all by his ignorant self. So the appointment of Navarro is a result of Trump's ignorance, not a cause, like so many of his other appointments, Bolton being the most recent example, as of 6:30 AM EST today.
It's ironic that Mr Trump keeps talking about "winning" on the basis of one nation or another having a trade surplus or deficit. As Mr Krugman suggests, that's a naive view, but the real issue, the conflict is no longer between one nation and another, but between international corporations and nation states altogether. China has decided to form a corporate-national coalition (this was tried in the 1920s and 1930s in Europe, and did not end well), while the US had the former head of Exxon as Secretary of State, suggesting that it's not that different here. But in the end, corporate power is seeking to escape national power altogether, something that tariffs have absolutely no consequence for. And if they succeed even more than they already have, we will all be the losers.
5
China once led the world in inventions. Things like the compass and papers and gun powder. They sent out the treasure fleet - a massive armada that rolled into ports with thousands of Chinese. Then something unusual in our minds happened. Lightening struck the newly build Forbidden City and China changed with what was a message from the heavens. The fleet was disbanded and China withdrew from within. It lost its edge and when it started to re-emerge it was dominated by the West and Japan. That 400 year period of isolation left China without an ability to innovate so they copy everything. We need to recognize that is changing. China has stolen or copied because they could and because they lacked the Designed in the Silicon Valley mentality. The United States on the other hand embraced capitalism, individualism and property ownership. The Chinese capitalism we are starting a trade war with is quite different from a cultural standpoint. That is important to understand. We are playing on different game boards most of the time. The Art of War and the 36 Strategies are foreign to us but useful for the Chinese. Collective thinking means the state does for the people. We have lost the WE THE PEOPLE mentality for group identity and power.
15
All true, but it is also true that Dr. Krugman was a diehard supporter of Hillary Clinton whose solid backers in the US Congress (e.g. the vast majority of Democrats there now) continue to avoid playing effective hard ball with Trump because that might require really acknowledging their own crucial role in forcing nomination of the only politician so widely disliked as to be the dream opponent for Trump's presidential campaign. Trump needed impeaching and removing a year ago, and a confession from this columnist on his disastrous support of Clinton in 2016 might really help both Democrats and Republicans in Congress finally put the interests of the United States foremost, and rescue the White House and the country.
5
I recently installed a solar system on my house here in PR. None of the components were made in the US, all came from China. So we are not participating in the energy revolution. Is it China's fault or our pigheaded industrial policy where Exxon Mobile chief becomes sec. of State? Every people deserve the leaders they have.
75
Put is straight out...Trump is a moron unfit as POTUS.
Ok, Paul. I have no sympathy for the Trump "Administration" and I am more than persuaded by your arguments against tarifs.
However, there is something missing here: a direct address of the problem those defending the tarifs say they are addressing, which is the proper and dignified employment of low skilled workers.
I mean, the unemployment statistics is hardly an argument, being it...a statistic with no relation with the adjectives "proper" and "dignified".
I would really like to hear some arguments on this that didn't sound like: "well, in a generation or two, everything will be settled". That sounds a lot like "eat cake" for those lacking a proper job right now.
5
Let's not forget the big effect global trade has on World Peace either. It's been Europe's way for many centuries: Buying a lot of energy from Russia for example creates a mutual dependency, Putin barks but had to undergo the expansion of the EU into former Warsaw Pact countries on his watch.
Trade is a vital element of soft power, moreover soft power is the only realistic weapon against nuclear country autocrats. More trade means higher impact of sanctions.
9
The policy substance may be wrong, but the method and process are perhaps more consequential. He introduces tariffs and then forces allies to plead for exemptions. The long term effects of governing by capriciousness? Uncertainty, and the erosion of trust. Who would invest large resources, or craft, let alone orchestrate, complex plans under such conditions?
16
Yes. "Let's be clear." Where in all these stories is the evidence of China being a "bad citizen" with regard to the global economic order. (BTW wasn't it China that saved the world economy in 2008 when the US almost crashed it?) Where are the detailed examples of this alleged "theft" of technology and/or IP? Where are the companies complaining of this alleged "robbery". Surely, given this phenomenon is such an accepted fact the proponents of these theories can put forward a few examples. I have not seen any in any of these pieces. Why? Because once again it's not "theft" it's a voluntary transfer of tech that was negotiated in exchange for something of value be it market access or a desired partner. Many on the US side of these deals would prefer better terms and secretly complain but that does not change the fact it's not theft. It's a failure in their bargaining strength they are looking at the US government for assistance on. Once again. Where are the examples of theft? If it's so prevalent please provide some examples.
8
Belasco, just curious, what's your background? Are you in a profession that would have visibility to intellectual property theft if it were occuring and you don't see it? Or are you simply assuming it doesn't exist because it's not discussed much in the media?
The Chinese have ripped us off for years. They promised to open markets but did not. First they went after the low wage manufacturing, but now they want business to give them our mid-to-high end intellectual property in exchange for profits. And businesses, who don’t care about US employment, are happy to oblige. It is time to respond and protect us. Otherwise, in 30 years we will be all working for China. I guess we could all go back to working the fields to grow soy beans and corn for them. What a joke, including in our services for the balance of trade all the people from China who come to our colleges and pay tuition. We are simply training our Chinese replacements. Someone has to make a stand, and I wish it were done five or 10 years ago.
31
Who created the conditions for what you now complain of?
Republicans.
Who allowed Yeltsin to displace Gorbachev, thereby opening the floodgates to a mafia takeover of the ex-USSR -- a mafia takeover that has now expanded wildly into leading Western societies?
Republicans.
Who complains all the time, but never takes responsibility for bad decisions of a sweeping nature, often taken abruptly & with no mitigation or contingency planning?
Republicans.
Who foisted Trump on the rest of us?
The US GOP. Own it.
Now do something about the mess you've made!
(And here's a hint: attempting to undo history, whether by reopening PA steel mills shuttered during Reagan, or suddenly reverse-engineering swords out of post-détente ploughshares in order to wage a hostile campaign to hurt China, is not going to work. History has no "Reverse" gear.)
18
You DO grow soybeans and corn for them. That is a major export to China. But it's not you doing the work, it's immigrants so you can have the corner office.
6
Let us know when your son gets a high-paying job with good healthcare and pension benefits in a widget factory in Ohio.
4
Unfortunately, Paul won’t give Trump and his people credit for the value that announcing the tariffs offers us. It jolted a complacent trade framework that for decades had been too cozy in the interests of trading partners to buy our continued global influence – trading away the interests of the American industrial middle class to protect the interests of a Pax Americana whose importance Trump argues is no longer as important as it once was. Then, he exempted important allies from the potentially damaging tariffs.
What is missed here is that exemptions can be reversed; and what these moves do is put trading partners on notice that we mean to re-negotiate bilateral trade agreements to be more balanced to U.S. interests than they are now. With the exceptions as leverage. In any event, I assured the readership that there would be no global trade war, and, clearly, there will not be; yet, Trump has made his point and what remains is actually negotiating new and better-balanced trade agreements.
The only serious challenge that exists to Trump’s China tariffs is finding a way for China to back down while retaining face. That a tectonic response to China’s outrageous antics in stealing the West’s, and particular our intellectual capital for decades, as well as for other unacceptable trade practices … always was clear and inevitable. It only lacked a president with the hand-size to do what had to be done.
I’m not so sure that there won’t be a trade war with China over this.
3
Their state-sanctioned thefts, dumping and closed markets may be so central to their economic and political viability that they see no other options. Paul places the onus for solving this on us, not on China, where it belongs. Yet it’s NOT our job to prevent China’s economic and political models from joining others in the dustbin of history – it’s THEIRS. OUR job is to protect what legitimately is ours. Trump has begun that process where others were unwilling or unable.
“China’s overall trade surplus is not currently a major problem …?” Really? Tell that to our hollowed-out industrial middle class, our destroyed rust-belt cities and desperate opioid sufferers – THEIR problems won’t be solved without jobs. This domestic de-verticalization of industries, sending parts manufacture and the extraction and refinement of economically key commodities overseas on their terms has been great for the objective of making the world more interdependent -- so long as countries on which we rely, such as China, play ball – but from a national security perspective, it’s very dangerous. When some countries place survivability, indeed extension, of flawed political frameworks above all other concerns, then we are at risk of seeing domestic supply chains closed and severe domestic economic damage.
China needs to come up with a way of prospering WITH us, instead of prospering on our backs. This will be a long, contentious and complex effort, and Trump has FINALLY tossed OUR hat in the ring.
3
That “jolted” trade framework is negotiating trade agreements over, under, and around a USG ignorant of it’s own stupidity. Trade wars are the ultimate poison - a nation swallows it’s own poison hoping to hurt other countries. The reward is domestic production that becomes bloated, overpriced, and dependent on the government hand out of protection. Sclerotic production leads to uncompetitive industry, and worse trade capability. The economic losses take a generation to recover.
It’s not what he does not know that is killing us, it is that everything Dotard knows is so utterly wrong.
3
Richard,
There will be a trade war over this, and consequences all round. New supply chains will be formed as per free market rules - rules the American corporations took plenty advantage of back in the day.
When the years of scraping the earth for its 'gold' and making it into the stuff you need evolved into making the money to buy it, you bought yourselves a trade deficit. Your domestic supply chains, 'Made in America' brands priced themselves out of the market. It's a different world now.
I believe a wholesale shake up of trade policies is sorely needed and Trump's China shop rampage may have set something in motion, but I doubt he has the chops to control the outcome. Stocks will swing where they will. Money has no allegiance, no conscience. It will flow.
2
The US is forcing leaders elsewhere to devise ways of insulating themselves from the fickle behaviour of the US. This is really teaching the rest of the world to do without the US. That seems difficult now, but it will get easier.
30
Tariffs have never been one of my major interests--actually, I was never interested in politics either. Yet these days I find that I understand more about tariffs (thanks to Dr. K) and politics (thanks to the current fascinating chaos) than our POTUS does. Yet that gives me no comfort--I have a feeling that a C-minus third grader knows more than our POTUS does about such things.
5
Time will tell. According to the headlines, China is going to place a $3.0 Billion tariff on American goods. Trump is going to place a $50 Billion tariff on Chinese goods. So, it looks like we are winning by $47.0 billion.
This is going to be really interesting. I've lived through the Vietnam War, Desert Storm and Iraqi Freedom. What is this war going to be called? The Chop Suey War? The Chinese Hammer vs Golden Boy?
This should really be interesting.
3
That's how Trump sees trade and is too simplistic. Let's take the example of Germany, another country with a big trade surplus vs. the US. Belgium and the Netherlands are part of the same industrial zone (greater Ruhr area) and run a trade deficit with the US because of their harbours, which import a lot from the US (like chemicals), supplies that are used in the same supply chains. This is what Dr. Krugman also hinted at in his opinion piece, mentioning other Asian countries that supply semi-finished goods to China, and which will be hurt by tariffs too.
6
I think the comments here show a perspective that is a bit narrow, just economic.
My theory is that Trump announced the steel and aluminum tariffs to influence the Congressional election in the 18th Pennsylvania Congressional District. He was always planning to reverse course after that election; which he has done. After all, those tariffs would injure his real friends -- the business elite. He's playing the rust belt for chumps along along the way; and pleasantly they are figuring it out!
29
"Then came what looks like a climb-down: The administration has exempted Canada, Mexico, the European Union and others from those tariffs."
It wasn't a climb-down, it is Trump tactics.
First, do something with the potential to hurt a lot of people, then either get patronage points for exempting folks that might later do something for you, or blame others for the hurt caused.
DACA was a good example, where Dems eventually looked irresponsible. With tariffs, Trump is now in a position to do lots of favors, first for our major trade partners but likely later for others.
6
At some point, we must accept the fact that Mr. Trump has no idea how to do much of anything. Appointing John Bolton as his new national security advisor kind of says it all.
Someone needs to take a deep dive into how we reached this point. With or without Trump, our democracy is utterly broken. The cause is staring us in the face: extreme wealth is gaming our media, manipulating voters, and making sure that government is run exclusively for them.
There is no simple solution. If we don't act soon on keeping people like Bircher Charles Koch from buying our democracy, it will die- along with countless species, including us.
111
Good points, but the myth we ever really had a democracy free of big money control is an illusion. It's true that the accumulation of wealth by the 1% more extreme than it's ever been, but money has always pulled the levers, set the agenda, and painted the picture of popular (un)reality. The only good news is that people are talking more about it. It's is discouraging to see how the masses are so easily manipulated by deception and fear baiting. Here's an idea, let's defund public education!
3
Mike, I completely agree with you, and I think the answer is to be found in Socrates' earlier comment. The inescapable fact is that our electorate is currently not up to the task of maintaining a democracy. The evidence of that - Trump - is overwhelming, and possibly represents our end.
1
Good point, Michael, I agree with both you and Socrates- who should be hired by The Times or some other major media company.
Trade is the great distractor. Trade was not the cause of the Great Recession or the global financial crisis both of which explain most of the US job losses, sluggish recovery, low wage growth and sub-par productivity growth over the last decade. The global financial crisis was Made in USA and exported to the world in the form of toxic mortgage-back securities; negatively impacting allies and adversaries alike. The Trump administration, like the Wall Street bankers before him, want you to forget about all of that and focus on phantom external threats while they unwind Dodd-Frank.
Trade, especially trade with China, is a very minor factor in US job losses, low wage gains and the rise of extreme income inequality that began way back in the 1980s. But trade is useful for demagogues because it directs attention and blame away from domestic bad actors in the financial sector and elsewhere who are to blame for US economic problems. And Trump personally likes the idea of a trade war to distract from the Mueller probe and excite xenophobia in his base.
It's unfortunate that so many people who are not Trump supporters and who would never vote for him do still think that trade and China in particular are responsible for job losses in the US. It's one area where there are quite a few liberals who fall into the trap of blaming other countries for failures of US domestic policy, which is exactly what Trump plays to when he says other countries are taking unfair advantage.
3
I fear we may be past the point where only a crisis creates enough pressure to counter corporate and other interests. I suppose we'll find out somewhere in the next 2-7 years.
Not looking forward to it.
4
With Stormy storming and Mueller mulling who has the time for trade policy (even if the intellectual capacity to process all this were available)?
11
To do business in China, American corporations must partner with Chinese companies. The question I have is why can't we put the same preconditions on Chinese corporations and individuals doing business in the United States? We can say to the Chinese if you want to do business in the United States you have to partner with US companies. When Chinese want to buy property in Manhattan or Los Angeles, they have to do it with an American partner instead of an opaque shell company.
4
I agree with you. We never seem to get an answer to simple questions like that. Here's another simple question we can't seem to get an answer to, "What are we doing in Afghanistan, still?"
2
Why can't we have a coherent trade policy that serves the common citizen? The government is bought by individuals and corporations that are better selfishly served in the short term by the current trade policies. They don't want solutions. They're doing quite well, thank you.
1
then corporations are part of the problem.
Non Economist will take the China Syndrome to be a movie title.
Economist know that it is the title of an MIT paper that proved Mr. Krugman's prediction that globalization was as likely to increase wages in the US as to decrease to be wrong. Here it is
American Economic Review 2013, 103(6): 2121–2168
http://dx.doi.org/10.1257/aer.103.6.2121
2121
"The China Syndrome: Local Labor Market Effects
of Import Competition in the United States
By David H. Autor, David Dorn, and Gordon H. Hanson*
We analyze the effect of rising Chinese import competition between
1990 and 2007 on US local labor markets, exploiting cross-market
variation in import exposure stemming from initial differences in
industry specialization and instrumenting for US imports using
changes in Chinese imports by other high-income countries. Rising
imports cause higher unemployment, lower labor force participation,
and reduced wages in local labor markets that house import-competing manufacturing industries. In our main specification, import competition e
xplains one-quarter of the contemporaneous aggregate decline in US manufacturing employment. Transfer benefits payments for unemployment,
disability, retirement, and healthcare also rise sharply in more trade-exposed labor markets. "
Mr. Krugman's now proven wrong theories about the impact of globalization on US wages have done more damage to US workers than any the work of any other US other economist.
7
Even if he was wrong about one thing, that doesn't mean that he wrong about this. So what you are doing here is attacking the person, rather than his ideas.
6
If you say two things are equally likely to happen, and one of them happens, then are you actually wrong?
Re: "Chinese trade surpluses have come way down"
The NY Times, 2018/02/06/
"U.S.-China Trade Deficit Hits Record, Fueling Trade Fight"
— The United States trade deficit with China climbed to its highest level on record in 2017, a trend that could prompt the Trump administration toward tougher trade actions in the coming months.
The gap between Chinese goods imported to the United States and American goods exported to China rose to $375.2 billion last year, up from $347 billion the prior year, data released Tuesday morning by the Commerce Department showed.
The overall United States trade deficit in goods and services with the world widened 12.1 percent to $566 billion last year, the largest gap since 2008."
https://www.nytimes.com/2018/02/06/us/politics/us-china-trade-deficit.html
Mr. Krugman's has a way of slicing and dicing numbers that is disturbing.
6
Not quite what you are suggesting. The trade figures that are broken out in the Commerce Dept. report for "certain countries," including China are for trade in GOODS only, and I didn't find any figure broken out for trade with China in Services. In other words, I suspect that Krugman has a better handle on US-China trade than you will admit.
13
Did you read the article ?
The gap between Chinese GOODS imported to the United States and American goods exported to China rose to $375.2 billion last year.
That is goods. And that is what I posted, which was a straight copy from the NYT
1. Paul Krugman was a paid advisor to the Enron Board in 1999, for one year, and paid $ 50 000. Read
http://www.princeton.edu/~pkrugman/enron.html
2. In the NY Times, in 2002, Paul Krugman wrote about Enron
" I predict that in the years ahead Enron, not Sept. 11, will come to be seen as the greater turning point in U.S. society."
http://www.nytimes.com/2002/01/29/opinion/the-great-divide.html
Here's data about steel, from the Dept. of Commerce's International Trade Administration, government stats!
The US imports steel from 85 countries, 9 countries provide 75 percent of the total. Imports fall into 5 categories: flat-rolled (automotive, machines, appliance), semi-finished (billets, slabs, ingots), long (bars, rails, rods, beams), tube (pipes and tubes), stainless. Of the 5 categories, China only appears in the top 5 exports in one category, long steel. Canada leads in flat and long pmports; it is number two in tube imports. Brasil leads in semi-finished products; Taiwan leads in stainless.
China is the world’s largest exporter of steel, exporting to 220 countries–although its exports are only 14 percent of its total production. China has 16 US anti-dumping duties and 12 countervailing duties in place (totial: 28) to protect against unfair trade. The political and popular narratives in the US blame China for catastrophic US job losses, but this narrative hides the real reasons for US steel imports. According to an ITA profile, the major reason the US imports steel is not price–since 2009, US consumption (demand) has exceeded production (supply). This shortfall is made up by imports!
Of the top 7 steel producers in the US, 2 are foreign-owned.
10
Trump behaves as if China's major economic focus is increasing its trade imbalance with the US. Trump's vision of tariffs assume political economies are based on trade. He views economies as blocks of goods. He turns a blind eye to supply chains, pricing, demand, innovation, income, business clusters, new markets, financing, regulation and education--all critical features of an economy. Moreover, trade is a movement back and forth. It doesn't create forward movement. Tariffs can not substitute for strategic thinking!
Conflicts actually stop progress! Every one of his fights to make America “great” are based on the same ideas of power and dominance that led to its global decline and do more harm than good.
148
For a closer reading of China's vision and strategy for forward growth and Trump's use of trade to balance the US balance sheet, see: A Lay Person's Guide To Tariffs And Economic Growth [https://blackhistory360.wordpress.com/2018/03/21/a-lay-persons-guide-to-...]. It's a 7 minute read that covers the strategic differences in the two countries approaches to growth.
1
And what if they (China) completely corner the steel market, which they're in the process of doing? We can't manufacture weapons of war with no domestic steel production. This is a national security issue in my view.
I guess the idea is that the pressure of these trade measures will dissuade the Chinese from taking new technologies from US companies in the future. I haven't seen any mention of returning current technology. Otherwise we appear to be making each other worse off. The US objective of making the Chinese follow international trade rules more closely seems very worthwhile. Maybe a coalition approach isn't possible because of fears of retribution.
Paul, what does Trump have against Japan?
Canada, the EU, Mexico, South Korea all had their tariffs waived, but the ones on Japan remain.
Has he watched too many WWII films? Does he not recognize that Japan has been our ally now for more than 70 years? Does he not recognize that many Americans prefer Japanese products, even though they tend to be quite expensive, because they also tend to be of extremely high quality?
As for the tariffs against China, I mean, what could go wrong?
For instance, how would Wall Street react if Chinese economic growth were to slow? Has Trump ever heard the phrase "when China sneezes, Wall Street gets a cold".
Honestly, if I'm the establishment of the GOP, I'm thinking that impeachment isn't such bad option after all. This clown could literally bring our entire economy crashing down - and with it the net worth of a lot of their donors.
Donald Trump clearly understands as much about trade and macroeconomics as he understands about marital fidelity.
401
he understands lying and covering up infidelity. Hard to bluff thru macroeconomics and trade policy!
At some point, doing something is better than doing nothing. Nothing is what has been done since China joined the WTO.
I wonder also, what does Professor Krugman think the 370,000 people who "make" iPhones in China do all day?
6
Doing something is better than doing nothing only if the benefit of the something is positive. It may not be.
8
maybe apple bears some responsibility?
16
"Something must be done. This is something. Therefore this must be done." That's is very bad reasoning. Doing something without thought often leads to a situation much worse than even a bad status quo.
Similarly, all the people who voted for Trump, because he wasn't "business as usual." As we have seen, often that means getting something much worse than business as usual.
5
Bumbling into a trade war is bad. But bumbling into a real war is far, far worse.
The Don here is reacting to the situation that existed from the time that China was admitted to the WTO until a few years ago. The damage from those trade policies has been done. So retaliating now is simply wrong.
Moreover, the Don knows that he, and only he, possesses the true solution. So he will do everything on his own, without asking advice.
A bit more that a century ago, another world leader decided that he could run his country's policies on his own. Acting without input from his advisors, he pledged his unconditional support to another country. And that act by Kaiser Wilhelm led to a century of war and many millions dead.
Hopefully, when history repeats it will only be a trade war.
11
No the winners won't be "China". The winners will be, as always, the very wealthy who have more money than all the governments in the world combined.
The perpetual academic economic analyses, so devoid of morality, misses tall the points. No, the black children of sharecroppers will not be hurt by a trade work--workers in general wont' be hurt by a trade war. The owners of the companies they work for (if they have a job) might not make as much money in the margins of their trades, but they will still make money. This inevitable hurt of the workers that is announced any time big companies (and the hedge funds that own them) might make the same as last year, or even a little less, is a total ruse.
Economic pain is real, and it already exists. And no one figures into their calculations whether or not a rising price for steel will help hungry children at night.
it is pathetic to worry that the major consequence of tariffs might be that Alphabet, or Iphone might not be as profitable as last year. Mr. Krugman, let's see how capitalism and profit motive will save this planet....oops it won't, so then what?
Tonight. I will simply hold my child and be grateful she was fed before she fell asleep. You can enjoy your make believe, never-never land.
1
38 years ago, author Isaac Asimov wrote an essay lamenting Americans' disdain for intellect and higher education.
That preference for 'simplicity' and ignorance brought us the right-wing nightmares of Reagan, Dubya and now, the Crown Jewel of Republican Idiots, Donald Trump.
Asimov wrote that "the American public, by and large, in their distrust of experts and in their contempt for pointy-headed professors, can't read and don't read".
"To be sure, the average American can sign his name more or less legibly, and can make out the sports headlines -- but how many 'nonelitist' Americans can, without undue difficulty, read as many as a thousand consecutive words of small print, some of which may be trisyllabic?"
"With an ignorant population", Asimov wrote, "the function of a free press is virtually zero when hardly anyone can read. We might begin by asking ourselves whether ignorance is so wonderful after all, and whether it makes sense to denounce 'elitism'."
"I believe that every human being with a physically normal brain can learn a great deal and can be surprisingly intellectual. I believe that what we badly need is social approval of learning and social rewards for learning."
"We can all be members of the intellectual elite and then, and only then, will ...any true concept of democracy have any meaning."
Our Moron-In-Chief's "my ignorance is just as good as your knowledge" campaign and his "I'm With Stupid" voter base are about to get a taste of their own stupidity.
715
Socrates,
I highly recommend Professor Richard J. Sternberg's talk at the 2017 APS convention
Are We Creating a Society of Smart Fools?
https://www.youtube.com/watch?v=Yn6XEYnAU1g
5
Socrates, you never fail to convey your wise message eloquently and concisely. Thank you.
11
@Socrates:
If what Asimov wrote is true then America should be the happiest country in the world...for ignorance is, after all, bliss! But I'm not happy. Oh, wait...I'm not ignorant. Never mind:~).
2
Trump spoke to the resentments of 40% of Americans in his campaign by attacking immigrants and trade agreements. He bashed China and fawned on Russia, conveniently popular with the far right. Trump promised to Make America Great Again by bringing back the 1950s - life-time jobs in manufacturing, immigrants expelled or kept out by the Wall, people of color put in their place, and sexual predators like himself empowered. Gary Cohn has left. Trump is appearing to deliver to his voters, showing he's "tough." That's all that matters to him, the mid-term elections, so the Democrats don't take over Congress to impeach him. And the Republicans in Congress don't dare offend Trump supporters so as to avoid making GOP losses worse by dividing the party. Meanwhile, America and the world will suffer. At the rate Trump is going, he's likely to fire Sessions and appoint an Acting A-G to stop Mueller's investigation, arousing a massive popular push-back, a further downward spiral in stock prices, and an economy pushed over the edge by governance problems before the end of the year.
220
You're prediction sounds, unfortunately, quite plausible. Facts and logic don't matter to this President. We're in for a rough ride.
2
Actually the American middle class is less than 50% for the first time in modern history, so your 40% is probably on the low side.
There are, in modern USA, three dominant doctrines/ideologies:
1) the most dominant one is the Wolfowitz Doctrine, aka Russophobia. In 1992, Wolfowitz, under H. W. Bush, wrote a top secret document -- on which some fragments leaked to the public through the NYT, in the same year (that's why we know its basic content) -- that stated the new Russia would remain, as the successor state of the USSR, as America's greatest enemy in the long term, because, albeit now a capitalist country, Russia inherited the Soviet nuclear arsenal and military expertise. This is the "establishment" ideology, which comprises all the Democrats and the majority of Republicans.
2) the second most dominant one is the Clash of Civilizations doctrine. It states that, now that we reached the "end of History", with the final victory of capitalism, the battle will now shift to culture. Samuel P. Huntington mentions the Islamic from the ME as immediate threats, but he said that, in the long term, the battle would be between West and East, against the "yellows", i.e. mainly China. This is the dominant doctrine of the American far-right, Trump included.
3) Last there's the hybrid doctrine -- the "Chicom" (Chinese Communist) ideology. Although with very few adepts, it is the dominant ideology of the Pacific Fleet -- the most important and powerful section of the American Military -- and one of them is Admiral Harry B. Harris Jr., possibly the single most powerful pure-military (i.e. non-bureaucrat) man alive.
3
Apparently Trump thinks he is the President of 20 years ago. In trade he is trying to stop the China of 20 years ago and in immigration he is trying to stop the flood of migrants crossing our borders 20 years ago. He needs to catch up with the times.
29
"The truth is that trade wars are bad, and almost everyone ends up losing economically."
And yet, China just won the most consequential trade war in history that was waged over the past 25 years, and things seems to have worked out rather well for it.
It won economically, emphatically.
It won geopolitically.
It's hard to find a way that it didn't win, actually.
And they've been laughing at American economists spouting Ricardian comparative advantage nonsense for the past 25 years the entire time.
And now the consequences of the monumental incompetence of economists who "did the homework", the naivete of business "leaders", and the sheer stupidity of politicians are destabilizing the entire developed world.
2
What happened over the last 25 years was the inevitable industrialization of a great nation. There were many benefits from this for America, Europe and the rest of the world. And some negatives including job loss for some and lower wages for some; the "some" being a small minority of Americans. A larger minority of Americans suffered job loss and reduced wages for reasons having little or nothing to do with trade or China.
Your statement that what happened was China's victory in a war is despicable nonsense. China did not seek our defeat, merely their own rapid growth. Therefore what happened was not a war.
The problem is not merely that Trump and Co are kind of dumb; the real problem is that they are picking fights with people who are very much smarter. To date, the world has reacted slowly, not believing anyone this grossly incompetent could actually be POTUS. And Trump's short term transactional ego, all puffed up thinking he's rolled a Congress that's playing him for a fool, has confused capitulation with power. But in truth, he has now assembled an army of reality TV 98 lb intellectual weaklings and wants to start an altercation with some of the toughest battle-hardened intellectual giants on the planet. It is going to take a long time to repair the damage to the US brand.
505
Forget the brand, they are doing serious damage to our COUNTRY!
2
"kind of dumb " ? How about really, really, really stupid.
1
I think you overestimate the US brand.
We've long been known as loud, obnoxious, uncouth, uneducated, and violent.
The "ugly American" meme has been around long before Trump was born.
Trump hasn't damaged the brand, he's reinforced it.
Krugman forgot to mention that China's currency, the Yuan, does not float. China keeps tight reign on capital flows. Doing away with that would go along way towards evening that out. That's a good concession to get! Yet, given how inter connected the global economy is, any sanction, tariff, etc., no matter how wise or foolish creates both losers and bigger losers.
2
Bumbling? More like wittingly following Putin's master plan to dismantle the United States of America, piece by piece exactly as trump is doing.
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Some " businessman " you've got there, GOP. He couldn't manage a gas station. Seriously.
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Oh yes DJT could run a gas station...he'd stiff his suppliers and fail to pay fuel taxes. One great business man, that Trump.
3
Trump wants to run the nations economy like he ran his real-estate business as a system of simple transactions where if we don't directly profit, we try to destroy the person who is profiting. He has neither the intelligence nor the humility to try and understand macro economics or international trade. And his ego is so gigantic, he won't be educated. Our nation is therefore in the hands of an arrogant ignoramus. Add that to his other utterly disgusting qualities, and we can only pray that this nightmare administration will end soon.
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question versus comment - would "Team Pence" policy be any better? Or the same ignorance furthered under a christian caliphate?
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It would be exactly the same, as the majority of Trumpian "policy" is just what Republicans have desired all along but were afraid to say out loud. Pence would just add an extra dollop of religious lunacy and extremism on top. I've taken to calling Pence and his ilk what they really are -- radicalized Christians.
Pence is the reason why, as much as I might see the impeachment and removal of Trump from office as desirable, the nation might be better off with the vice president remaining in the role of official sycophant. Have a look at the line of succession, if you need a good scare to start your Friday morning:
https://en.wikipedia.org/wiki/United_States_presidential_line_of_succession
Pence is the proverbial cigar store indian. Look into the void of his face and the face reports back: "lights out". Remember...this is what America voted for-WANTED! The Russians and Chinese play chess. The Americans? They're rolling around on the floor playing "Twister".
Just wait until China retaliatates by liquidating it's US Treasury bills. Then the blood will run in this country
37
Xie xie!
Isn't that thank you in China?
Who said Trump's an "alienator." The man's a "friendinator."
Thanks big guy!
1
Experts are part of the "deep state." "I alone can fix it." "This American carnage stops right here and stops right now."
We elected this ignorant, stupid, preening, insecure child, who is being used by those at home who want to make their obscene wealth permanent, and whose power on the world stage cannot be checked for many more months. It will only get worse.
There is nothing more important for the American people to do - patriotic Republicans as well as Democrats - than to completely crush the Republican party leaders that enable his vile idiocy. Vote!
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Don't forget one of the winners may well be Russia that probably has something on Trump. By that I don't mean the Dossier which, even if true, will not bother the shameless, but probably Russian financing of his business.
1
Perhaps one day Dr. Krugman will name a first world industrial democracy which didn't get rich by protecting emerging industries, government industrial subsidies and theft of intellectual property.....
No doubt we'd love to pull up the ladder to prevent others from doing the same, but a more fundamental question is, why should working Americans care if the Chinese are stealing intellectual property from Microsoft or big pharma?
One reason is that Microsoft stock and pharma company stocks are in their pension fund or 401k account. We don't equally benefit but on some level we are all in this together.
2
@phil
These government-granted patent and monopoly rights, extending far beyond any investment justification and with research and development frequently financed by taxpayers, cost most Americans far more than they could ever recoup from their 401Ks.
In terms of what this column says about the current leadership in the White House, this information is utterly terrifying.
5
China is going to emerge from Trump's trade war as a major economic power. It makes me wonder, given the monumental stupidity that informed both his candidacy and his presidency, didn't the Chinese--and not the Russians--want him to defeat Hillary Clinton in 2016?
I mean, look how well it's working out for China. An America weakened politically by domestic unrest; an America whose trade culture is watered down, fueled by ideology and spite; an America that is fast-becoming a third-rate player on the world stage, not much better than many struggling Third World countries.
We have an infrastructure that is so out of date that we can't get out of our own way. The highways in most European countries are smooth-topped and efficient; ours are mainly highlighted by craters and drops and patched-over tar ways. Our railroads are nearing obsolescence. Where will the steel come from to replace the road beds?
Trump's trade war will jack up prices domestically--to China's benefit. While we should be wary of trading intellectual property rights and other secrets to a country that is still an opponent--rather than ally--we should encourage cooperation and collaboration rather than reckless competition that will benefit only the one percent--in both countries.
Finally, perhaps it's beginning to dawn on the 63-millions who thought Trump such a bright idea that they're the ones who'll walk the economic plank first. We're chasing allies away. Now Trump is thumbing his nose at his "base."
7
One must not forget that it was American businesses and corporate chieftains who outsourced America's manufacturing to the Chinese to maximize profits for themselves while yanking the rug out from under productive, employed, tax paying citizens that contributed to our society and turning them into a burden with the loss of taxes to boot.
These chieftains willingly gave them our technology - not all of it was stolen - so that now we can no longer buy our own manufactured goods. Instead of teaching the Chinese how to fish to feed themselves, they gave them our own fishing rod making us dependent on them to feed ourselves.
As undeveloped countries develop, trump is un-developing America, just as Putin and Xi like it.
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Trumps actions are consistent with his agenda, Making China Great Again! First he tears up the trade ageeement with the TransPacific nations, leaving China to fill the void and assert its influence, then he starts a trade war with China, which then can reach more agreements with our former friends. The result will be a world led by China, with the US on the outside looking in. I hope Mueller is looking into the Trump licenses recently granted by China. I can’t see any other reason for his incredibly treasonous actions.
3
The counter to that argument that many corporations will very likely use, is that it was a necessary evil to keep the price of consumer goods at competitive levels in the context of the global economy. Manufacture cheaply to make products more accessible while keeping high margins. I know is simplistic but it’s their argument.
1
Thank you, PAN. You may have read my own blog entries where I have reminded readers that China did not steal American jobs. Corporate America sent those jobs to China, and elsewhere, to plump up profits for shareholders, as well as executive compensation. The downside, as you point out, is that millions of Americans — striving to carve out careers while caring for their families — who worked to make those companies successful, and their CEO's rich, were thrown under the proverbial bus.
2
Watching the thousand or so delegates to the Chinese Communist gathering in Beijing vote 1000+ to 2 to make Xi dictator for life was truly scary bringing to mind the Soviet delegates voting unanimously for their party Chiefs. The problems we are going to have with this new China are going to get big and trade is not the only or even the most treacherous problem. This is a new Cold War. Only this time against a bigger, tougher and smarter adversary.
The complexity of the global supply chain for manufactured goods is far beyond the comprehension of Mr. Trump. His mind is stuck in the Seventies, and he wants to time warp back to when American cars were some of the worst built in the world. The modern supply chain exists because goods, services and capital can trade freely under a rules based system of multilateral agreements. These are not perfect, but all-in-all the standard of living across the globe is better as a result of free trade. But of course rules are not for Trump. And tariffs create winners and losers. Support me, says Trump, and I will exempt your company/industry/country from my tariffs. Oppose me and I will make sure to hurt you. (See Schumer and Gateway) That's what this tariff stuff is really all about. Trump is such a Putin-wannabe!
1
Krugman: "He wanted a tax cut, but more to score a “win” than because he cared about what was in it."
That statement captures the problem that Trump has created for all of us. In Trump world, there are only "winners" and "losers." Unfortunately his economic ignorance will likely put us on a path to a trade war, a conflict in which there are no winners, only losers. Bad news for both our friends and those considered to be our foes.
5
I really like this statement, Prof. Krugman: 'If anyone “wins,” it will be nations that gain geopolitical influence because America is squandering its own reputation.'
Though you are generally consistent and astute in your writings (I tend to read them all), I do wish you had a similar thought as above when you were discussing the Trans-Pacific Partnership (TPP). TPP never was primarily about trade and economics, although it would have been economically positive for all countries involved. TPP was about the US extending its influence.
Unfortunately, on TPP, you, Hillary, and Trump were all on the same page, i.e., kill it. In my opinion, it was your biggest mistake of the past few years, and, unfortunately, it came across as pandering to anti-trade liberals. Your arguments on TPP were always terribly weak. You should know better!
I don't know. You might be right, you might be wrong. Everything this administration does is bumbling, but this at least makes political sense. If the stock market continues to fall, then it will be a blunder; if it corrects and begins to go up again, all bets are off.
My gut feeling is that this Administration's incompetence will indirectly bring down Trump, the Republican Party and possibly the entire post war political-economic order. But Mueller is not going to take down Trump, neither will Russia-gate, nor will a trade war with China.
5% Market drops are good too. Trump is a financial genius.
2
Bumbling into a trade war?
First, it is about time that we realized that a state of (trade) war has existed... for decades now. China hugely restricts their markets, and demands technology transfer for what little access they do give.
China has been pursuing it's own national economic interests, and has a national industrial policy - as should all responsible Nations. (TPP? No. TPP, like all donor-supported policies, is there to benefit donors, not for the good of United States' citizens). And, far from the value of decades of US trade deficits being *over* estimated, the *real* trade deficits have been grossly *under* estimated. Sure, Chinese exports contain some components imported from outside China. But, likewise, much of exports from other places have many *Chinese* components. And the extremely low cost of Chinese exports, naturally underweights the actual value of said exports.
The huge *real* dependence of US consumption and production on foreign production, leave us very vulnerable to price and supply shocks from China. We have allowed ourselves to be put into a relatively weak and vulnerable position, by not being more self sufficient.
None of this justifies Trump's ham-fisted and ill-advised actions on trade - especially while we *are* so vulnerable.
But, we would not have Trump as President, if not for the growing inequality, and if not for the failure of *both* parties to reject usurpation by the narrow and short term interests of donors.
1
Paul, a war is a war. Trump wants a war, in fact, he needs a war. Something to show or burnish his credentials that he is a winner. Remember, by this time, we were promised we would be bored because of all our winning.
Hasn't happened. We are about as far from being bored as can be. Every day we are relieved we woke up and weren't destroyed during the night. So, we have now fired the first salvos at China and brought on John Bolton who sees that any war is a war America should be in. Of course, there is a good possibility that China may not buy any more American treasury bonds that allow us to live beyond our means, but thinking of repercussions isn't one of Trump's strengths. So, bumbling into wars is just a great way now to keep us from getting bored.
Besides, we wouldn't want to remove our Commander in Chief in the middle of a war, would we?
1
Right about now, a TRADE war should be the least of our concerns.
1
Well said. But it reads well as a history of GOP presidents going off and starting some kind of war on their own. I'm not sure if we can really stop Trump at this point - he doesn't even listen to his own lawyers apparently, and they sincerely have his best interests in mind (again, as you say to 'win'). We *can* not get caught in the inertia of what Trump is doing. For some reason, Iraq and Afghanistan troop commitments continued on, so that we wouldn't look like losers. Let's be smarter about this trade war stuff. Let's admit up front that it's nuts and as soon as Trump is gone, it's over. Whatever he does, let's not get dragged into a face-saving 15-year conflict over it.
Amateur Hour is killing us.
On the up side, however, we are all getting a master-class education in how not to run a country's trade policies. If 45 would just do the opposite of what his instincts tell him, we would now be enjoying the best days ever of the USA.
I'm not sure it's a trade war as much as bumper cars. How are countries going to respond if they don't know what comes next or when. There is an open-loop control methodology in which key inputs enter the system chaotically at high frequency and the result is that it drives the system to efficiency. The theory is related to Bougliobov-Krylov theorem. Wouldn't it be ironic if Trump's bumbling resulted in some kind optimum trade control by way of confusion...
Dr. Krugman doesn't mention possible retaliatory actions that China could pursue.
One logical action might be for China to stop buying our Treasury securities - or worse - begin selling those that they already have. The mere announcement would be enough to throw our financial markets into turmoil.
3
It is policy-on-the-fly: something which is breathtaking to behold, and alarming in its predictable effects. International trade is an immensely complex phenomenon, which means that tt Mr. Trump will never have the patience let alone interest to understand its fundamentals, or to heed the advice of respected experts on how to proceed in an effective and prudent manner, keeping the best interests of his country firmly in focus.
9
Because of tRump America will be significantly battered for years to come. We may never regain our standing in the world markets.
57
Out of legitimate curiosity, what would you mean to do with a coterie of advanced nations that have been ripped off by China? It seems reasonable that US/Japanese/otherwise industry would be doing whatever possible to protect trade secrets, since that's in their immediate financial interest. It's unclear cooperation would improve how companies protect their IP in a meaningful sense. Further, if these nations have been ripped off by China and that has not stopped, what recourse becomes available simply because they are angry together? Presumably officials are intelligent enough to commiserate to at east enough of a degree to discuss some collective action, so I'm really unclear on what the avenue that exists here is. Of course, tariffs are a terrible solution but it's not obvious there is one.
The immediate effect of tariffs is to raise the price of goods for consumers.It doesn't prevent goods from entering the country. It's just a tax. Now if the products hit by tariffs are already manufactured here, the tariffs may help local entreprises sell more of their products and thus help create jobs. But no one is going to build a factory from scratch because of those tariffs; they are going to wait and see what the opportunities are before they go ahead with any project.
But in the meantime, prices are going up and the consumers are hit immediately with no assurance that jobs will be created. That pain is real, and that's why these things have to be well planed, which they are not if there is a lesson to be learned in the fiasco of the steel and aluminum on again, off again tariffs.
226
Local enterprises won't sell much more ... they'll just raise their prices to just under - by pennies - what the now-tarrifed competitor products would charge. But you're right: nobody is going to put up a new factory under such uncertainty.
3
Let’s be clear: When it comes to the global economic order, China is in fact a bad citizen....
-- Paul Krugman
[ Imagine, bettering the lives of hundreds of millions of people these last 40 years, bettering the lives of hundreds of millions remarkably only to be dismissed with disdain.
Problems between nations or peoples that respect each other are resolved through diplomacy.
Clear enough? ]
3
Hi Nancy. Good point. Bringing a substantial fraction of the world out of poverty is nothing to sneeze at. But as they say of stocks, "past performance does not predict future performance". Also keep in mind that those 40 years of progress were a reaction to decades of utter horror (under political conditions that may be reforming today). Yes, diplomacy is how such differences are resolved (especially when nations or peoples don't respect each other), but the best way to conduct diplomacy is rarely clear. Mr. Krugman is suggesting a diplomacy founded and backed by the collective strength and self-interests of many nations. Certainly also nothing to sneeze at.
2
It was the bumbling of the few that has brought about the upheaval by the many, and this is just the beginning of the changes in store for our world. In the next seven years this wake up will be taking form through a dismantling of the old structures that have outlived their usefulness, and replacing them with exchanges more in line with the times our world has ben delivered into.
1
It's clear that there is little, if any, strategic thinking in Trump's trade strategy. Instead, it's a series of knee-jerk actions in response to either a remembered campaign 'promise' or something he heard on Fox news. To him, sounding tough is of paramount importance. I'm reminded of Theodore Roosevelt's adage 'speak softly and carry a big stick', except with Trump it's more like 'speak loudly and carry a small stick'.
I thought China approved several Trump trademarks last year, and would have thought that would have been enough to buy his acquiescence. Maybe he thought he should get (or wants) more, and this is his way of striking back. Maybe all China has to do is offer up a few more Trump Towers in Beijing, Chongqing, Shanghai, Guangzhou, etc. and see how long it takes for those tariffs to be walked back.
21
Just commenting here because of the general theme of Trump mucking it all up -
The departure of Trump's personal lawyer over Trump's refusal to cease his continuing attack on Mueller for his Russia investigation, and the departure of ever more of Trump's top aides, leaves the wafting aroma of isolation and downfall.
I think Trump is circling the drain now, and/or is like the moth circling its way into the bug zapper. I don't have a read on the "why now", and I can't see where the acceleration is coming from, but it sure feels like Trump is about to wager it all on a confrontation with Mueller, and set the stage for his inevitable impeachment.
In short, it's "end times" folks! Trump's loyal evangelicals should be so pleased.
35
Well, I hope Trump's "end times" confrontation is with Mueller and not Kim Jong Un or Iran's Supreme Leader. We shall see. Finger crossed.
Let’s be clear: When it comes to the global economic order, China is in fact a bad citizen....
[ Let's be clear, if there is a problem with China then use the World Trade Organization and diplomacy to resolve the problem but otherwise this is mere jingoism, mere prejudice. I am disheartened by the Krugman prejudice about China but sadly not surprised since sneering at China is endemic in this country. ]
3
Who is the real bumbler here?
It's amazing that it never crossed Paul Krugman's mind that Trump is playing a much deeper game than Krugman imagines. Krugman does not interrupt his tirade even for a few second to consider the possibility that the tariffs on steel are not really about steel at all. Rather they are the gambit to get China's attention and to bring it to the bargaining table where a comprehensive trade agreement can be reached.
Consider Krugman's claim that Trump's "bumbling" has alienated the allies whose support we need to get China to reform. Over at Project Syndicate, Marty Feldstein makes the opposite case: "Because the tariffs are being levied under a provision of US trade law that applies to national security, rather than dumping or import surges, it will be possible to exempt imports from military allies in NATO, as well as Japan and South Korea, focusing the tariffs on China and avoiding the risk of a broader trade war."
It is just possible that Trump is smarter than he sounds or acts. After Trump shares the Nobel Peace Prize with Kim Jong-un for denuclearizing the Korean pensinsula and after he gets China to begin respecting other countries' intellectual property rights, will Krugman promise to retire from punditry? That would be a win-win-win outcome!
3
The Nobel Peace prize is awarded by the Norwegian Nobel Committee. Obama got it largely because people on the committee liked him. Trump will never get it no matter what he does because the people on the committee despise him and always will, for good reason.
1
Ian,
Trump is playing a deeper gambit? Steel and aluminium tariffs are already reduced to meaningless, who is supposed to pay attention? China tariffs will likely reduce economic growth by 0.5-1% immediately and push the economy into recession. At the end those tariffs will become meaningless too and only exacerbate structural economic problems we have been facing, and not addressing, for the last couple of decades. For example, we have about 2 millions unfilled high paying jobs that require college degree in engineering and informatics. Is that China's fault too?
By the way, if you supported Republicans last four decades you are responsible for global capitalism we have now and they have pushed all along. But I guess finding a new scapegoat is much more attractive than finding a lasting solution.
2
While the Chinese will not be pleased and there will be a wish to be treated fairly, I do not think the American trade action will be much of a problem for the Chinese and accordingly the Chinese economic ministry may recommend no more than symbolic action. However, the Chinese are going to be reluctant to deal economically with America in ways, as with direct investment or long term purchase or supply contracts, that may be at all subject to disruption.
1
The way to improve the trade situation with China is to form multilateral trade associations that give nations increased market leverage, reduce trade barriers between them and protect members' intellectual property. We had such an agreement. It was called the TPP. Trump killed it before the he removed his first day's presidential orange makeup.
We don't want to increase trade barriers for goods coming into America, we want to reduce barriers for goods leaving America. The way we do that is by strengthening our associations with other nations. Then market forces will cause bad actors to relent. They lose market share if they don't play nice. Trump's bilateral, zero sum, trade policies are the opposite strategy. They will not work. We will not succeed if we try to bully China.
But more to the point. Global trade is a global ecosystem. We are all connected. Supply chains are global. Financial services are global. Computer stuff is global. In fact, just today, I bought a marvelous program for my little shop that came from England. I wouldn't doubt if some of the code writers live in Asia. I downloaded it over the global internet. Paid for it with global credit card services. I will use it to make parts out of USA materials that I will sell to customers here and overseas. The parts I make cost much less, increasing my profits and allowing me to hold my prices down to the benefit of my customers. That's how globalization increases business.
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The way to improve the trade situation with China is to form multilateral trade associations that give nations increased market leverage, reduce trade barriers between them and protect members' intellectual property. We had such an agreement. It was called the TPP....
[ Well done. ]
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You neglect to mention the (negative) role of Big Capital; The kind of innovative "Small" business that exports successfully is of NO interest to the hedge funds, etc.
Too much of our national wealth is tied up in enormous conglomerates and family fortunes at this point. They "Rolled up" the small manufacturers, paper mills, and retail chains. Without a sturdy, three tier distribution ecosystem, unless you have a product that will attract the attention of the dominant market players (Walmart, Target and...) you can't make any money.
In toys and clothing (The sectors I am most familiar with) Amazon, eBay (and the Walmart website) are pretty much flooded with Chinese junk, the major players or their favored reps; Except for a few high end boutique items, there is no entry point.
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Not bumbling, but rather doing what the president promised, now if a trade war starts we will just have to win it. There will be of course a price of winning it, in higher prices for "stuff".
V,
The other shoe is well on its way down.
See: China threatens to raise tariffs on about $3 billion of U.S. imports
https://www.washingtonpost.com/business/economy/trump-moves-toward-impos...
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The amount of entirely sardonic comments is mind numbing.The Chinese social order and economy is not bulletproof. China does not have a food surplus and the US provides a lot of China's food. That is just one example. A trade war like this will effect Chinese citizens much more than American citizens. I do agree with the author that it is a strange time to enact tariffs with China but time will tell.
It's okay, Australia and New Zealand agriculture are already angling to step in when the China opportunity presents itself.
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Trump always a cortical jumble
By a birther's brain was bound to bumble
Into a trade war
On some boundless shore
On to which was slated to stumble.
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The first order of business for the new President on day one was to rip up the TPP. Promise made, promise kept. Hope the coal miners are still happy with that decision.
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And Hillary promised to do the same. Trade works for low cost countries not the US.
@Vulcanalex:
Hillary called the TPP the "gold standard", until election season, when polls said that pro-TPP was a toxic position. Then she conveniently adopted the position that was paying dividends for Trump and Bernie.
Even those with zero political aptitude correctly discerned that Hillary could not be trusted to stay anti-TPP had she been elected.
Voters were fed up with decades of establishment, Wall Street supported candidates.
And Democrats still reject the truth that Trump's victory was about the rejection of the establishment of *both* parties. The Wall Street Democratic establishment, prefers to double down on the idea that being the Wall Street party (that is leftist on wedge issues), is the winning ticket.
I guess the only way to get Democrats to reject the path of being another Wall Street party, is to keep defeating Democratic Wall Street candidates. Preferably in primaries, but in the generals if necessary.
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Like Krugman I'm no fan of China but the incompetence of this is breathtaking. Firstly Trump imposes steel and aluminum tariffs then he exempts countries who are allies but who provide 60% of steel and aluminum imports. So why do it??
Act 2 is to impose 25% tariffs on 50 billion of as yet un-named Chinese imports which will impose a tax on all Americans and will inevitably produce very precisely targeted retaliation probably against the ag industry and key manufacturers like Boeing and Cat. It wasn't a coincidence their stock led the nose dive today falling by about 5%.
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John, your post points out that Trump (responding to unnamed advisors making his policy) is essentially picking domestic winners and losers. By calling for steel tariffs, he paid off his investor-friend-advisor, Carl Icahn, who he owed for Atlantic casino investments gone bad. Who benefits with these latest tariffs? The answer will point out who Trump is playing to. Also of note: when a country refuses to loan Kushner money, Trump follows with a punitive reaction.
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If China hits U.S. ag, bad for farmers, but maybe good for U.S. consumers of ag products - farmers would have to unload product for whatever price they can. At least temporarily ( until farmers switch to raising un-tarriffed plants, or go out of business). Complicated.
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The mistake is in the planning, as Krugman says. The thought is in the right place. We could never plan for recovery of our manufacturing in the public light: lobbyists for the Chinese, for Wall Street, and the rich would lame such laws before they could be enacted.
The standard definition of an undeveloped country is that it provides soybeans, hogs and grain (agricultural produces and things like coal), and in return the developed nation provides high-tech goods like cell phones and whatever Walmart wants. In short, China is assuming that we in the USA are an underdeveloped nation and treats us like one too. Trump is on to that. Whether or not the trade war works to solve the issues is apparently unclear.
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There seems to be a win-win solution here, which is to reduce the value of the dollar. That would reduce our trade deficit, and a lot of other countries might go along with it because their debts are in dollars and they can see that the weaker dollar of 2017 improved global growth—China itself spent hundreds of billions of dollars a few years ago to keep the value of its currency up because of the dangers posed by the strong dollar then. Unfortunately, Trump seems more concerned with belligerent posturing than actually finding a win-win solution. China will have a huge advantage over us in a lose-lose trade war because they are used to a lower standard of living and would therefore be able to tolerate economic harm for a longer time.
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There is no win win situation. We must win jobs, they must lose them.
Unfortunately we don't control the value of the dollar. That is set by the international currency markets. And the only significant levers we have at driving our currency down are inflationary. These include lower interest rates and printing more money. So your solution is more theoretical than practical.
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This situation has exposed yet another weakness in our system of government. Added on to the obsolete electoral college and the same number of senators representing nearly 40,000,000 people in California and roughly 600,000 people in Wyoming etc, etc, we have the ability of the President to single-handedly start a trade war. This is a lot of power to give to any president. With Trump it's a recipe for disaster.
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I wish that the Republicans (and the Democrats) had said no-no-no to the creation of the "fast track" trade agreement legislation which allowed the last three US presidents to unilaterally create all of these "Free Trade Agreements" with third world nations, without congressional discussion as constitutionally required for international treaties between the USA and foreign nations.
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China can retaliate quickly, and it most likely will.
First will be to restrict amounts of soybeans, hogs and grain mostly from Midwest states, trump territory.
It can also restrict American companies doing business there, demand more Chinese interest in companies such as KFC, GM, Microsoft, Boeing, and others. China can forbid American participation in its financial markets, it can raise the price of several key chemicals that China has been supplying.
Intellectual property theft is the cost of doing business there, companies can refuse, and not do business there. Sure China is taking advantage of its market power, it has the largest customer base of any country, India is second, it also has its own protectionist policies.
Companies like Walmart will have to raise prices, the majority of its wares come from China. This stupid move by Rump will actually reduce Americans spending power. It could cause a slight rise in income, but that will be offset by a rise in prices. China does not need the U.S. to buy its products, it is selling world wide. It is building a railroad to the middle east for trade, it has a population that is still undeserved and willing to work for wages that are poverty wages here but not there.
It is becoming a leader in AI. History of trade and business has many examples of the failure of protectionism and high trade tariffs. This is a move by an ignoramus to impress the idiocracy that he appeals to. The uneducated, dregs of society.
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We're not sure His Unhinged Unraveling Unfitness is bumbling into war so much as he is just acting out his preferred role as the 'Mayhem' leader of the free world, a la the Allstate Insurance character.
It cannot be overstated how serious it is that a 'businessman' whose claim to fame is being the king of bankruptcy, and has no experience leading a public company, has such a profound economic and trade role.
Combined with the Agent Orange from KAOS's profound malevolence and disrespect of any semblance of 'regular order', we can only hope Special Counsel Mueller and his team of heroes will hurry.
Food for thought from Sen. Corker:
https://www.washingtonpost.com/blogs/plum-line/wp/2018/03/21/a-gop-senat...
It is even worse that by hiring away the cranks and charlatans from Faux Noise Machina, that the GOP'er base will see the lines further blurred between the White House and propaganda TV; which will all serve the purpose of catering to a base to discredit Mueller, his investigation, and his conclusions.
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Trump's real target are the business owners that outsourced jobs and technology to areas with cheaper labor, weakening america's economy and casting off workers. He's looking for a simple solution to bring back production and retain technology. Driven by Wall Street, capitalist CEOs would throw America under the bus to make a dollar. List would agree that it is a national security issue.
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@Beaconps CT
Shoes and flat screen TV's are a national security issue? Really? You need to get beyond your hatred of capitalism and realize that who he's going to actually going to hit is American consumers and key sectors of the US economy like agriculture and aerospace.
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I would rather pay a bit more for a flat screen TV and see Americans working than using the excuse of we need cheap consumer goods. Bottom line, a supported family is more important than the next iPhone.
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sorry - jobs will be lost not returned.
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The two things that can be said are trade is complex and trade wars are hard to win.
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Yes trade is complex, depending on the criteria consuming countries can easily win a trade war.
What Trump and his supporters do not understand and will probably never accept, is that the planet is becoming a single economic and social entity; whether anyone wishes it or not. It may already be impossible for a single nation or group of nations, to operate on their own. Advances in communications, transportation, and manufacturing technology simply won't allow it.
Globalization is not a choice, it's inevitable. Whoever adapts first, and continues to adapt, wins.
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I don't know, globalization relies on the intensification of exchanges, in volume and intensity, which in turn relies mainly on fossil fuel.
There will come a time where those fossil fuels won't be usable, or there, anymore, and the conclusion that ensues is that the exchanges will lose in intensity and global trade will lessen.
Sure we are developing alternative energy sources, but I'm not sure it will ever be enough to sustain today's level of reliance on it, not to mention what will happen on fifty years with 2 billions more people.
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When do you think that fossil fuels won't be used? Not in my lifetime and I bet not in yours either. Reduce trade and you need less.
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"Globalization is not a choice, it's inevitable. Whoever adapts first, and continues to adapt, wins."
Yes, the world has gotten smaller. A trade war here creates a storm next door that travels back our way. The GOP ignores 'adaptation' and hinders our evolution as a nation.
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What Trump neither knows or cares about is already hurting us. Trump only listens to himself and, after accomplishing the missions they accepted their respective jobs for, people as dishonest and greedy (but a bit more competent) than Trump have left his administration of white supremacists and ignorant fools. Gary Cohn was one and he left after he got the Tax Scam bill passed and realized his ability to influence his Orange Madness was nil.
Trump, being so full of himself, now only has fully compliant sycophants around him. But Wall Street gave him a warning today. He pays attention to Wall Street and may do a little dance and put some caveats into his China trade tariffs. Real money is at stake here not only for Wall Street, but many of his fellow oligarchs. They will pressure him.
"He tried to kill Obamacare..."
Rates have continued to rise. Insuring a spouse and child, through what passes for a "good job" can cost as much as $770 per pay period, not including dental or vision, with the employee's own premium being covered at 50% by the employer.
That brings me to Senator Schumer's curious statement yesterday that he was "feeling very good about..." the omnibus bill he is about to vote Yea with Republicans. It has no Obamacare stabilization funding. It has no DACA fix. It doesn't even have Gateway funding. Rates will rise. Trump will kill thousands all because Dems were terrified of shutting down the government.
O, resistance, where art thou?
---
www.rimaregas.com
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Agree wholeheartedly with your last sentiment. Congressional Democrats always take the wants of their base for granted. It's shameful that Schumer and Pelosi are willing to throw DACA and Obamacare under the bus for the sake of political expedience and anachronistic conventional wisdom. A Tea Party of the left is coming. It may not come into view in 2018 (but then again...), but it's coming soon enough. We know the GOP is the party of oligarchy. We expect the Democrats to be more than the party of oligarchy lite.
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Rima-
We must vote them all out!
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The Omnibus bill of 2018 passed both houses yesterday. I quoted Senator Schumer above. The Washington Post reports that "House Minority Leader Nancy Pelosi (D-Calif.) called the bill “a tremendous victory for the American people." The legislation, by the way, includes $10 million additional funds for abstinence education, among many other things Democrats are opposed to in principle.
House votes: http://clerk.house.gov/evs/2018/roll127.xml
Senate votes: https://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cf...
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