Farmers in the midwest are experiencing pain from the loss of major Chinese markets. Soy exports have collapsed. Government subsidies aren't nearly enough. But having said that, Midwestern Whites, including farmers, have been voting against their own interests for years.
President Obama saved the economy of the midwest by bailing out the car and auto parts industries, and by extending unemployment insurance which Republicans had tried to cut. But those same voters went for Trump.
Residents of the midwest were victimized by Trump's and the Republicans' efforts to sabotage the ACA, resulting in the bankruptcy and closure of scores of rural health clinics, the closure of rural hospitals, and rising premiums as Trump cut subsidies.
But midwestern Whites ignore everything that Democrats have done for them. Why? Largely because of their anti-immigrant bigotry.
The midwest is unlikely to support a Democrat, no matter what they're offered, and no matter how much Trump hurts them on trade.
It's all about keeping "those people" out of their communities.
164
@Sean
You are right that Trump's policies are hurting midwestern farmers but wrong in writing off midwestern voters as a whole.
There are plenty of progressive voters in the region, especially in urban areas. It ended up being a relative handful of voters in the purple states of Wisconsin (where I grew up), Michigan, and Pennsylvania that determined the results of 2016. D's will fail in 2020 if they ignore flyover country.
8
Immigration seems to be an ethnic issue in the midwest but many farms are collapsing from a lack of labor and commodity sales.,
Whether they like it or not Midwestern farmers need cheap imported consumer goods from China. The need cheaper imported trucks and food from Mexico. They need cheap imported labor to work the farm/ranch and work in pig and cow slaughterhouses.
If they didn’t need these immigrants the fed would be prosecuting more business for illegal non documented workers. 12 million undocumented and only 22 prosecutions of businesses hiring the undocumented. Plus E Verify is not required for all employers. Go figure!
9
@Sean: Because of our electoral college system, Trump and his cronies will control Washington until the Democrats find a way to sell those midwestern whites on changing their votes. Railing against them and demonizing them for being white will not do it. It will have just the opposite effect.
2
Trump's ham-fisted handling of China has brought matters to a head, but the underlying fault lines are real. China balked when they were required to formally commit the terms of the deal into written law. How can we ever handle intellectual property infringement, for example, if this is never done? China is not to be trusted, neither is Trump, and neither are most of the corporate Democrats unfortunately. What the Chinese basically want is a toothless verbal contract, and as Samuel Goldwyn famously remarked, "A verbal contract isn't worth the paper it's written on.
6
It is encouraging to see some movement on attitudes regarding trade. Too many Americans tend to believe that if something isn't developed, produced and sold in the US, it is a negative for the economy and employment.
Manufacturing and mining account for only 8% of US employment and some of that share is at risk of automation.
On the other hand, nearly half of S&P 500 company revenue (ie, selling stuff) is. generated outside the US, which is supported by tens of millions of US jobs.
And the largest sectors of US employment, like health care, education, retail, information and business services, transportation and government are funded by the money paid by those public and private companies to workers, investors and suppliers.
Manufacturing has been somewhat concentrated in midwestern and southern states, so it is imperative for those states to participate in next generation advanced development and manufacturing.
But Trump has been pushing that region backward, penalizing them with tariffs on steel and other imports, as well as retaliatory tariffs on their exports, and throwing regulations into chaos at the very time huge investments and planning are required for the future.
The biggest risk is that US companies will move more operations to free trade areas outside of the US. That is already happening.
36
This piece oddly ignores the fact that the Democratic party has traditionally upheld labor rights and protections. Big trade agreements have clearly not been good for US workers, and the demolition of unions has compounded that. This is why Trump won working class voters who were abandoned by the Democratic party.
And yet we're supposed to win now by doubling down on our abandonment of labor protections in support of corporate-designed trade agreements that do nothing to (re)establish a living wage in this country?
28
@NellieC
The point is that the destruction of trade agreements has done nothing to reestablish a living wage in this country, nor will it ever do so. Trump is doing all of the work of demonstrating this for us. Trump won the working class with vague, grandiose, sweeping proclamations and accusations that can't be translated to policy. What he gave us instead were higher consumer costs and massive tax cuts for billionaires and billionaires alone.
The real tragedy is that such a large proportion of today's voters have no memory of the 1990s, or the context provided by preceding decades. Voters barely remember the overwhelming, unprecedented prosperity of the 90s or the tremendous, mind-blowing pace of US-driven technological progress we achieved during that era. We're living in a completely different world now, where industrial and technological progress have become mired in stagnation, even ground to a halt in certain fields.
Our former prosperity was driven in part by NAFTA, a bipartisan agreement designed by Republicans and finalized by Democrats during an era when Americans believed in our own competitive spirit. Competition has its ups and downs, of course. But the mindset of today's America is a morbid fear of competition driven by the belief that we can't win. We elected Trump to raise the drawbridge so we don't have to participate in the world anymore. Somehow, the implementation of Juche is supposed to bring us back to a golden age of prosperity. Did it work for Kim?
10
Mr. Irwin writes, "On Friday night Mr. Trump suspended the tariffs, for now, after Mexico agreed to reduce the flow of migration."
I knew a week ago there would be no tariffs. That was just Mr. Trump's headline of the week. Big story. Big distraction. And I always knew that at the end of the week, he was going to come up with some way to pretend he had scored another victory and "undo" what he never intended to do anyway. It isn't the first time he has garnered big headlines with some threat that he later doesn't go through with. It amazes me that people still fall for this tired old routine.
26
Addendum -- Turns out, it's even phonier than I thought. The "deal" turns out to have been in place months ago. It's like in "The Sting." It's easy to get the right bet down when the race has already ended before you have to bet.
5
An anti-tariff Democrat needs to explain how he/she will take on the Chinese without the threat of tariffs. We've had thirty years of empty promises from the Chinese to reform, plus they've laughed in the faces of every president from Bush I to Obama. At least now Trump has got their attention for sure.
"Soft on China" is a threat that Trump can make stick if the Democrats are not careful.
5
The message should be simple:
Democrats will keep all options on the table to protect the US economy and US jobs, but will follow the advice of serious economists when doing so, rather than making policy "from the gut."
The problem isn't the tool; the problem is the utter incompetence in using the tool.
8
Anti-trade hysteria is as crazy on the left as it is on the right. On balance, global trade and supply chains make all countries richer, while impeding them with regressive taxes like tariffs makes everyone poorer. Using tariffs rather than a trade deal with other regional allies like TPP to counter China is plain stupid.
Americans on both sides of the political spectrum tend to blame our huge economic problem, wealth inequality, on trade, which is false. Yes, globalization is a factor in manufacturing job loss, but the much larger cause of inequality is the unrelenting economic war Republicans have waged on the middle class since Reagan - a scorched-earth campaign of destruction toward unions, public education, public infrastructure and the social safety net, all in service of eliminating taxes for the wealthy and big corporations.
They have obfuscated that campaign with cultural wedge issues like racism and abortion, while winning elections as a minority with extreme gerrymandering and voter suppression. The low point our country has reached under Trump shows that, sadly, it has all worked.
13
So the US and the rest of he western world have bought cheap goods from China and other Asian countries due to their low labour costs. This has no doubt benefited us. It is just outrageous to now accuse China and the Asian countries that they had too low prices. When has somebody ever complained about low prices? This phenomenon has been going on for a long time. We in the western world have had an edge in technology which we have been able to sell at very high prices and then "rape" the third world. The problem is that China and Asia is reaching our level of technological advancement and we can no longer use our previous advantage to overprice our goods. In summry China has not "raped" the US, it is actually the reverse.
5
Odd there is no mention that tariffs are selective sales taxes. In effect Donald Trump has discovered the perfect tax.....he can raise taxes on middle class America without a high profile vote in Congress. If you talk tariffs to people and leave it in the context of international trade many Americans are uncertain how to respond, especially given the wholesale flow of lies from the Trump administration. But tell Kentucky voters Mitch McConnell supports a 25 percent tax on auto parts imported from Mexico, and this will jack up the cost of cars assembled in Kentucky by X percent, costing Y jobs, and voters will understand. Tell your Oklahoma beer drinker who likes Corona that its price is up Z percent per six-pack to replace tax revenue given away in corporate tax breaks and the voting calculus changes. Here in Oregon Republicans will kill their dog before voting a 2 percent sales tax for education but Rep. Greg Walden embraces a 25 percent federal sales tax on Chinese products, potentially costing the state thousands of jobs in international trade. Tariffs are sales taxes largely eliminating any middle class gain from the 2017 tax cut. Congressional Republicans are happy to see federal revenues rise, cutting the effect of the 2017 giveaway, without having to vote for an increase. Every Republican should be under relentless attack for supporting a backdoor sales tax on the American public. Why do McConnell, Walden, and other Republicans support job-killing sales taxes?
62
So Biden being for TPP, NAFTA, China in the WTO is his strong suit?
Hillary 2.0.
1
Presidenting For Dummies.
Literally.
1
Actually...despite all Mr. Trump's gaff's (and there are innumerable)..the reason he has the support of his base..is because he speaks 'common sense' to them.....border security, american jobs, America First, the value of work..
We (except for his base) all know he doesn't mean any of it...
So..what is needed is a candidate who talks and emphasizes Work!! .
And..I don't mean the have a job kind of work..
I mean the "always be found doing something" kind of work..the type of work which propels you forward because you do something good.
You want to take Mr. Trump's base away?? Emphasize the virtues of work...you can can take care of your family from it..how you can add a room onto your house from it.. how you can build something from nothing from it.
then..Start hitting him on the fact that he wouldn't know work if it hit in head w/ a shovel.
It's that simple.. already, 3 million more people didn't want him as president. Now is the time to start getting his base back..but showing them how stupid he is..and how he doesn't care a wit about work
The 2nd weak point is to get him emotional about being seen as stupid.
If no-one else has noticed..his real emotional weak spot is his belief in his intelligence. He is loath to be in a position where he is mocked and made fun of because he's so stupid.
If anyone were to say, after he called them a bad name "Gosh..if my name rhymed w/ chump...or the place you take the trash...or what you in the toilet"..he'd stop!!
1
Were we Billionaire$ - despite being Dems - we'd make a large donation to the campaign of Bill Weld, to ensure he's a significant GOP'er primary rival to Clear & Present Danger 45*.
1
Trump is a bluffer and bully and is using tariffs to punish and to try to intimidate other countries. The problem with this kind of behavior is that other countries can call his bluff. The sad thing is that it is the American people who will suffer not the bully causing the problem. I don't cate if trump is voted out or impeached but this egomaniac needs to go.
The size and intensity of the black of his signature on that document -- that he made it the visual center of attention, of course -- says so much.
The longer Republicans enable Trump, the more likely we are going to end up with another Great Depression. The global economy, underpinned by ours and China's, is already facing recession because of Trump's trade wars and things will get worse if he is allowed to keep swinging his wrecking ball. Will no one in the GOP rid us of this fool?
3
Has any psychologist analyzed that signature?
1
I want the America I knew, not the New America.
America has been cooked by Trump. We are well done.
Looks like Kentucky will be saved from the tariffs. I noticed that Mitches state was one of the hardest states hit by the tariffs.
If the goal is to get Trump out of office, the Dems need to use every tool they have and every issue on the horizon to frame the conversation and explain the implications of another four years of this madman. Strategy, scenario planning, and simple sound bytes are the way to go.
PBS and NPR could help by teaching economics to the American voter. But they’d have to learn it first.
1
If the Chinese want to sell us solar panels or aluminum below cost, then let’s say thank you. Their subsidies make us wealthier.
1
Money is the only thing that gets the right wing to criticize Trump? Praising dictators doesn't do it. Insulting war heroes doesn't do it. Lying about a country being de-nuclearized doesn't do it? Insulting gold star families doesn't do it? etc....
Seriously? Only the almighty dollar gets Republican's attention?
3
Can someone please analyze Donald Trump’s handwriting publicly? How many of us have ever seen the likes of his? Look at the structure of his handwritten name on the document, and every document he signs. There’s got to be some telltale in there.
1
Iowa seems like a real target for Democrats in 2020 given they will be camped there for the next half year anyway..
Despite the unsubtle choice to interview a still pro-Trump garbage truck manufacturer on "The Daily", many people have no choice but to address the effects of the extreme weather and tariffs on their already-vulnerable farm-related businesses.This includes addressing it at the ballot box.
The question to be answered relative to the reelection is always the same: "Are you better off than you were four years ago?"
Trump said that "only he" could solve many of our problems and he had two years with a Republican Congress to accomplish what he promised.
Trump said he'd build and wall and Mexico would pay for it. Do you feel safer because he did and they did?
Trump said he'd repeal Obamacare and replace it with excellent and affordable health care coverage Is your health insurance coverage cheaper?
Trump said he'd lower drug prices. Are you paying less for your prescription drugs?
Trump said he'd ban Muslims and reform our immigration system. Do you feel safer because he did?
He said he'd lower the cost of college and do something about the burden of student loans? Has your student loan payment decreased?
He said tax cuts would wind up in your pockets rather than those of the wealthiest Americans and corporations. Have you been able to build up your nest egg with your tax cut?
He said deregulation would make all of us safer. Do you feel that your food, drugs, air travel, water, and air are safer?
He said that he would restore America to its proper place in the world. Do you think we are more respected in the world?
He said he would be able to "act Presidential." Do you think so?
Now, I ask you, "Are you better off than you were four years ago?"
Then, for the sake of all that is right, and all that is good, vote in 2020.
5
The Democratic platform should be progressive capitalism.
Progressive capitalism includes, for instance, going after China for intellectual property theft; protecting folks from the depredations of unfettered capitalism; reinstating sane levels of regulation vis-a-vis monopolies and oligopolies; aggressive capitalism along the lines of Germany and Sweden; actively encouraging investment that specifically addresses global warming; holding businesses and business leaders accountable for wrongdoing.
It doesn't include this Trump tariff and trade pact chaos and inanity, which is principally motivated by white nationalist lies, demonization and fear.
2
Trump is using trade to enhance his ego which is so fragile his staff worries about him flying into a rage upon seeing McCain's name on a ship. Trump's ego is so fragile he has a FOX NEWS STATE TV interview in front of grave markers of our WW2 heroes where he trashes Robert Mueller A war hero and Ms. Pelosi speaker of the House . Trump found out he can do tariffs and pardons just like a king and he loves the power lashing out at every one blaming all prior presidents as no good compared to his brilliant leadership. Putin installed this blowhard clown for a reason and Trump cowers in fear of Putin he has all the dirt on Trump.
1
Trump supporters won't be won over by helping them realize the damage his tariffs do. Because Fox News will never tell them the truth about it. They literally will never really know.
Time to reinstate the Reagan-repealed Fairness Doctrine so that even Fox will have to report some actual facts.
26
@Election Inspector. You are kidding, right? Get anything “fairness” related in these Cabinet agencies?
1
The problem with the Democrats is that they agree with Republicans actions out of fairness. Republicans count on that to squeeze them in apparent contradictions.
7
One thing the Democratic nominee should do is, yes, get on Fox News and speak to the millions of farmers and blue collar workers about how the tariffs are directly impacting them. For example, farmers should be told about how the tariffs on China are lowering the price for, and demand for, American soybeans because of Chinese retaliation. Mention that the Chinese are specifically targeting Trump's base - farmers in particular. Mention that under the Democratic nominee, we would seek a trade agreement with China, not tariffs. This would increase Chinese demand for American Soybeans, not Brazilian soybeans.
Don't assume people who get their news from conservative media necessarily make the connection between Trump's policies and their pocketbook, or that they get the same information NY Times readers do (as the woman at a Justin Amash town hall was unaware of damaging information in the Mueller Report).
16
It's too bad the Democratic Party doesn't have a credible spokesperson for such a platform, like Bernie or Elizabeth Warren, and didn't have one in the last election.
3
Hillary Clinton, winner of the popular vote by a substantial 2.8 million was certainly credible.
And scared Vladimir Putin to the point of Making America Sick Again.
“You can imagine a trade pitch from the 2020 Democratic nominee that goes something like this….”
Don’t know about you folks, but since these tariffs on Mexico and Canada my grocery bills have gone up 10%, that adds up to $700.00 more this year, price of cars up 3%, that’s another $900.00. Then there’s China, all toll I spent an extra $1500.00 this year alone on their stuff.
Now I’m all for “fair” trade, but let’s not cut off our noses to spite our face. Here’s what we should be doing. First, focus on our future largest trading partner, China. Zero out their attack on our intellectual properties, in other words stop them from stealing our ideas. Or, we’ll trade you some of our intellectual properties for yours, specifically solar panel technology.
That’s for starters, but what we really are looking for is job creation in areas not ventured to any great degree before. Solar, wind and tidal power. Under my plan, $2 billion in solar energy will be spent by 2027 in West Virginia, and another $2 billion in wind and tidal power in the Gulf region. And by……
Be specific, be brave, and be innovative.
10
Free trade agreements that are agreed to between free people who are in control of their respective governments would be an improvement over our current system of multi-nationial corporations negotiating with dictators and oligarchs for their mutual benefit at the expense of citizens.
9
Trump's tariffs are a necessary tax to push back upon China. Free trade works well if you're on a level playing field. China is crying foul with respect to Huawei, but what about Google, this publication, and the many other US corporations with limited access to Chinese market. China built it's power off generations of western development and low cost labor. Let's see how China fairs on its own.
5
So a substantial portion of Democratic voters are now so driven by partisanship that they will change their positions to oppose the enemy. This is how Trumpism & the right wing media, which took over the GOP years ago, takes over the country.
4
And trading partners have been savvy about using retaliatory tariffs to punish Mr. Trump’s base, most notably on American farm products." Where is the pain when you get $26 billion in government handouts (oh I mean subsidies)?
11
@stefanie
You mean welfare
4
Trump is not vulnerable in any issue related to economics.
The imposition of tariffs by the President has three effects. One, his bluster is a welcome change from the usual political speech filled with vacillation, hesitancy and malarkey. Second, Trump’s straight talk is producing immediate results on the political front. Mexico took steps almost instantly to avoid a total collapse of their economy. China’s complex economy needs more deliberate turning than the single issue on which Mexico could instantly respond.
The third and most important effect of the President’s policies is that he is successfully bringing attention to the way countries like China, Mexico, Japan and the jealousy-driven, decrepit members of EU define free-trade. They want to sell their products in the US ‘freely’ with no import duties. They impose huge tariffs and operational roadblocks (read about what EU did/does to Apple and Google) on import of US products. Japan and China levy sky-high tariffs on US agricultural and automobile products. This inequality is what Trump is addressing and fighting against. He is also educating the public.
Democrats are clueless on how to tackle the systemic imbalance in the so-called free-trade definition.
6
This might work if voters forget that Bill Clinton enacted NAFTA over labor's objections and campaigned for MFN status for China. Hilary Clinton was for TPP before she was against it. So far the Democrats have not come up with a policy on the surge of asylum seekers. Trump has received a lot of visibility by "doing something", basically holding a trade gun to Mexico's head. It is not pretty and probably will not work, but he is "doing something." So far the Democrats are on the sidelines when it comes to trade and immigration.
4
I mostly agree with everything you said, but let’s remember the surge of Southern immigrants (asylum and otherwise) happened due to (and during) Trump’s chaotic policies in the first place.
2
The first thing to remember is the first thing that always comes out of Donald Trump's mouth is how the great the economy is since he's been President.
If all of that started to crumble away because of his ever more frequent use of tariffs and the economy slowly came to a grinding halt, as Economists have already started to warn -- that would put him in a very vulnerable position... and just in time for the 2020 election.
7
Donald Trump has mastered the art of distraction. When the truth gets to close to him on Russian meddling or arms sales to Saudi Arabia he creates a tariff war with Mexico or pretends to read a heart felt speech at a D day memorial. If he fires James Comey as part of a cover up, he screams the old tired news about Hillary Clinton which may or may not have happened years ago. It goes on and on.
The news media falls into the trap as everything the man says becomes 'big news' and its our attentions spans can not always follow the endless spin,
but economic issues draw us like a magnet because they concern our daily lives. Democrats need to focus on the plight of individual farmers hurt by Trump's policies, the promises not kept to manufacturers and workers and the markets lost to those same people who have supported Trump and do it effectively to the right media markets. The GOP buys advertising time to trash Nancy Pelosi on these very pages. Where is the Democratic response and the message that preempts GOP false advertising.
5
Tariffs are a "lose-lose" strategy where the Trump tariffs become a national sales tax that consumers must pay that hurts both out economy through less consumption as well as the exporting nation like China with reduced sales. Republicans have in recent years been singing from the hymnal of "no new taxes" and it would be easy to assume that many would support a candidate who opposed the Trump tariffs, especially Midwest farmers who have been loyal Trump supporters. So, Trump is clearly "vulnerable," especially when he threatened to use tariffs for a non-trade issue as he recently tried with Mexico generating the anger of all Senate Republicans. Tariffs have been revealed to be a poor economic strategy that contributed to the Great Depression and to the formation of monopolies. Of course, Congress has the Constitutional authority to set tariffs despite the lame rationales Trump has invoked, but their dereliction of duty is political fodder against Trump.
3
Globalization, where we have open trade with many countries including poor ones who have rock bottom labor costs is one thing. Having open trade with an authoritarian, economic and military powerhouse like China that has camps forcefully detaining one to four million people due to their ethnic and religious beliefs is another.
I admit I have a gripe against globalization due to losing my job of the past 10 years when our NYC factory could no longer compete with cheaper imports.
But as a journalist maybe think twice about conducting free trade with a country that would lock up you and your family in jail forever if you negatively wrote about their policies under their watch.
When do we draw the line about restricting trade with repressive regimes that keep their population poor so the leaders can profit on trade?
6
Hiding truth is but the other side of producing falsehoods. In all, a running away from the authenticity most needed for a honest life.
Trump is also vulnerable from the right. Republicans has historically supported free market capitalism. Trump’s tariffs are openly intended to benefit U.S. businesses that choose to trade in the world market; the tariffs result in economic harm to other businesses and even potentially, via loss of market share, those businesses intended to benefit. This government meddling and economic favoritism in business - instituted by Trump - is contrary to Republican policies.
2
"The challenge for the Democratic nominee will be to offer a persuasive vision for a trade policy that makes both workers and businesses better off than they are under the status quo, to stand up for American interests while removing the erratic approach of the Trump administration."
As long as "American interests" is understood to mean the interests of corporations--some of them criminal corporations--and the one-tenth of the top 1%, the Democratic nominee, whoever it is, will lose...again.
1
The only good thing Trump did in trade policy was pull out of the TPP, which had distinct politicaladvamtages for the U.S. but which had greater economic disadvantages as welfare program for Big Pharma and trade lawyers than it brought in open markets for American goods.
Presuambly Democrats are realizing that the great North American Common Market formed among Canada, the U.S.and Mexico is a good thing for the U.S., politically and economically, notwithstanding the lack ef enforceable environmental and labor provision in the Clinton era deal.
For one thing, Mexico did not "steal" 30% of our manufacturing jobs, another wrongheaded Trumpism.
Most of the jobs that left the U.S. went to China, not Mexico where a couple of years after NAFTA went into effect, our neighbor to the south was also exporting jobs to China.
Moreover,the decisions to deindustrialize America were in the main taken by American firms, their managers and corporate boards who saw profit in moving manufacturing abroad. If we want to re-industrialize, as I do, we must incentivize, though targeted tax breaks, subsidies for training workers, etc., companies to manufacture here. Like elephants mating, it will have to be done carefully in order to avoid WTO sanctions.
Only the Democrats can undertake such an effort. Trump claims to have brought back manufacturing but it's just another lie. Republican party leaders humor Trump but have no interest in riling corporate board rooms.
5
International trade - and its close cousin, off-shoring - are complex initiatives, not easily fixed or amended with a "silver bullet" like imposing or increasing tariffs. This is where Trump's limited understanding of how the economy works is a major liability.
Establishing, raising, or lowering of tariffs, is just one tool of many that have to be employed in fixing a decades long problem. Our current international trade and economic structure was designed with only one thing in mind: minimize costs of development and production and increase profits. Note: There is no aspect that is designed to help American workers. Workers are seen as major liabilities, and as such need to be minimized or even eliminated. On that basis we've made laws, policies, and tax policy which are geared towards increasing off-shoring, and even stashing profits off-shore. The damage this has done to American workers and their share of the great prosperity achieved in the past 40 years is astronomical, and it's the source for the anger that propelled Trump into office.
But simply starting trade wars will not fix this, in fact it only makes things worse. We need to create incentives for businesses to build in America, and use tariffs and higher taxes to discourage off-shoring. Maybe lower taxes on stock returns from domestic companies and higher taxes on foreign ones. Of course these are just examples, it's more complex than even this. In short, Trumpian tariffs are not the answer.
5
The US does have a chronic trade deficit -- spending more on imports than we make in exports. That is a fact that cannot be denied. What can be denied is that tariff wars are the way to correct it. The way to correct it is by spending restraint. Do not spend more than we earn. Grant US exporters trade credits for $ earned that US importers of foreign goods and services must buy on a regulated exchange before releasing equivalent $ to spend on imports. It all was once spelled out clearly in a Fortune article by Warren Buffett. It became a Congressional bill that unfortunately was beaten down by lobbyists, mainly in those days the oil barons. It may be time to look into that again.
3
@Penseur states that the way to fix a chronic trade deficit is through "spending restraint". Ignoring the fact that trade deficits do not mean what Trump says they mean, there is an alternate way to reduce the US trade deficit.
That is simply for the US to produce goods and services that the rest of the world is prepared to buy.
5
In the midst of everything written here about the president's vulnerability within all his trade wars, and the jockeying for position to take him on by numerous politicians because of our country's failures and loss of purposeful efforts, I had about given up hope for any rise in kindness and caring still existing in the world until last night when something so simple became so hopeful and rewarding.
I attended an event at Music Hall here in Cincinnati. I had parked my car about 2 blocks from the entrance. As I was leaving the event and because of age (90 this year) having trouble walking I was one of the last to leave. A police officer, named Al Staples, saw the difficulty I was having. He asked me where I was parked and I told him.
He said: Give me your key and I will bring you your car which he did. To most anyone it would not seem that big a deal but it was to me. I learned from others that he often assists people and is well known for his kindness and caring.
He was also one of the first to respond to a mass shooting at a Fifth Third Bank months ago and where he pulled a young woman to safety who had been shot multiple times by the shooter.
I thought of him as I read this article and realized there is that faint flicker of hope still alive in this country and its found in people like this officer's kindness and caring for others. Individuals like Al Staples will eventually turn the country around to what it destined to be - a kind and caring country.
31
Whenever you do something, anything, you will annoy some of the electorate. Trump promised action on trade, and, there are good reasons to go after China. But, these matters are complex, and can have unattended consequences. Trump's simplistic understanding (if you can call it that) of Trade wasn't true in 1950, let alone now. Even IF he accomplished something for his base, the reality is, he has hurt his base more than he has helped it. Moreover, the latest job numbers and the reversal of the yield curve suggest that our long running economic expansion is coming to an end. It is clear that the tariffs are not helping the economy. Imagine if the economy crashes before the election, instead of after the election, because of his tariffs accelerating the decline.
6
Thank you for this piece. I agree.
Look at the monthly state-by-state Trump approval ratings:
- https://morningconsult.com/tracking-trump/
Look at Kansas, Nebraska, North Dakota, and Montana. Also look at Texas and Utah. If the election were held today, Mr. Trump would lose Iowa and Wisconsin, as well as Michigan.
Democrats have a chance to be competitive in farm states in the Great Plains and Midwest. Farmers benefited from free trade agreements, and are being hurt by Mr. Trump's tariffs and trade wars.
Even if Democrats don't win in many of these formerly red states, we can force Mr. Trump to spend time and money campaigning is states that he should have been able to take for granted.
9
I am so tired of neo-liberal/neo-laissez-faire liberals who have taken their abhorrence of nationalism to the point of being actively against measures to protect their fellow citizens' jobs. Democrats and union leaders were, from the Depression onward, suspicious of "free trade" arguments that played to the strength of the country-club/rentier class but not the working class. (The same remarks, btw, apply to unlimited immigration of essentially unskilled labor: it hurts American workers, while benefiting American bosses).
This divorce of the Democrats' intellectual class from its working class base began in the late 1960s, when many of the former went to college while the latter toiled in factories and, btw, supported the Vietnam War. "All in the Family" sneered at Archie Bunker, but Archie was a solid union man who in at least one season arc went on strike and manned the picket line. The "information" workers so hailed by the likes of Robert Reich, on the other hand, pursued a beggar-thy-neighbor individualism that we live with to this day.
Neil Irwin and the think-tank-erati who live quite well in Washington DC and its *very* wealthy suburbs have abandoned the working class (and not just the white working class) as so cogently argued by Thomas Frank in his many books. When the corporations can outsource fellowships and Washington cocktail parties to 3rd world countries will Neil feel strongly about the virtues of free trade and job relocation?
5
@dubbmann
Please point to one time in history when nationalism has ended well.
By the way, please don't confuse nationalism with patriotism.
1
Beginning with the Clinton and W Administrations and ending in the Obama Administration, we went too far over the hill on international trade. It got to the point where a manufacture could sue a pact country refusing to allow cigarette imports, and an international trade court could overrule a nation's laws on questions traditionally in the jurisdiction of the sovereign.
Now Trump has taken it much too far in the other direction. It's wrong to use tariffs as a stick on a non-trade issue, and Trump will find this out the hard way by taking a political hit. Unfortunately our workers and businesses will pay the biggest price while he switches to some other damaging whim. But he'll get his due in November 2020.
Joseph Missoula
6
Who would have thought Republicans would become the driving force behind America's transformation to a centrally-planned Bolshevist economy?
I welcome this transformation in our nation's economic policy, but I fear that the change may not go far enough. The Democratic and Republican parties are both dominated by centrist elements that seem determined to mire us in a state of Chinese post-communist proto-capitalism. As we have seen in China and the former Soviet Union, this system of government is the most powerful and efficient method in human history for the rapid transfer of wealth from the middle classes to the wealthy oligarchy.
America now teeters on an economic precipice between a free-market Democratic party with a Marxist fringe that they have thus far managed to hold at bay, and a pseudo-free-market Republican party now utterly dominated by the Trumpist fringe. The Trumpists seek to enact post-communist proto-capitalism not for the sake of transition or moderation, but explicitly BECAUSE this will facilitate the transfer of wealth from poor to rich. There is no other goal in mind. No American Greatness, no restoration of the norms and values that worked so well for us before, just profit, profit, profit.
America has fallen for it. We've fallen so hard that we may never get back onto our feet. The deception has been uncovered, and the humiliation of those who have fallen for it is so overwhelming that they can't muster the courage to own up to it and change course.
15
@Ryan
Republicans only stand for whatever the next rich white guy wants. If it is Bolshevism, so be it. Americans are clueless and mindless and deserve all the derision they get.
The Soybean Farmers of America, probably as stalwart a group of Trump supporters as you can find (especially now that he has cut them in for $16 billion in subsidies) has supposedly been arguing "Trade Not Aid".
23
Missing in the discussion so far of Trumps threats to slap tariffs on Mexico is the effect his threats had on the stock market. The effects are not just a by product of his threats. It is very probably that it is the reason for them, the major intention of them. All around him, people urged him not to do it. But their urging was part of the show. They were, of course reassured that it was just a threat and thus assured they waited for the drop. This drop, even among drops was extreme. They rushed in, even some pouring money they didn't have from margin accounts, but as much as they could manage, and VOILA ! the moment it became clear that it was all a hoax, the market leaped, leaped way beyond its price before the threats. I wonder how much of Trump money went into the stock market at the nadir. Go figure.
Anyone on the inside, or just anyone who has caught on to him, might have easily made an enormous profit.
The second reason for the threats, were of course to make it seem that something was accomplished by them, a story of "Mexico" agreed to make a greater effort to stop the flow of immigrants. If you believe that any of this is real, I have a bridge over the East River to sell you.
56
Being pro-trade would align Democrats with most of the American business establishment. Candidates would be punished by activists if they were seen to be too cozy with business interests. Sadly, I don't think a Democrat can be respected by the progressive wing of the party if their economic policies are not reviled by the business establishment.
1
@Tom Meadowcroft Has the "progressive" wing of the party EVER gotten their way? Their grumblings mostly serve to outline what the moderates and conservatives who make up the party's majority DON'T want. People think the Bernie crowd got Trump elected by staying home in 2016, but I don't buy it. I think Trump just had more appeal (and campaigned harder) in a few specific places that just happened to deliver the electoral votes that decided the race.
Trump has already spent whatever political capital he had in those places. He failed to live up to his promise to revive the rust belt (he brought back, what, a few thousand coal mining jobs? What about the rest of us who maybe don't want to work in a coal mine and die when we're forty?) and meanwhile his trade policies are hurting farmers, manufacturers and retailers.
So let the hard left grumble and complain like they have for the past seven decades. Until they launch a Marxist revolution, they'll be stuck betting on the lesser of two "evils". Business always decides these things in the end. Businesses liked Republicans because they like to cut taxes. But if they keep replacing them with new taxes in the form of tariffs, businesses will flip on them and never look back. Trying to kill neoliberalism at this point is a hopeless effort to stuff the genie back into the bottle.
8
@Tom, you need to get out more. Progressives are not anti-business; it's the monopoly-plutocratic form of business - the toxic, destructive form, the one that's been buying politicians and skewing the playing field since the 1980s - that's got to be reformed.
Heck, there are millions of us who, like me, file a Schedule C ourselves every year.
@Tom Meadowcroft
There are as many democrat capitalists as there are republican capitalists. It's foolish to think otherwise.
As far as I can tell, so far the tariffs on China are not meant to permanently disentangle our economies, but are a means of coercion to obtain more fair trade terms with them.
If Trump starts to advocate for true protectionism, I agree he's vulnerable to attack--as free trade is obviously better for everyone.
But non-reciprocal free trade--where the American economy is open to foreign imports on fair terms (open access, no arbitrary regulatory hurdles, no stealing IP, etc.) but the inverse isn't true for American exports--really is a problem.
If Trump focuses on that message, he wins the point. Because he'd be right.
7
I hate to say it but I agree in general with you. This is a much bigger and more complex problem that won’t be settled by tariffs alone. If the trade team deals effectively with spying and patent and IP theft that’s a worthy battle to fight. They have gotten away with too much for too long. The other side of that coin is that this country needs to build the modern infrastructure to compete. They will not be buying our cars and airplanes in the foreseeable future and that’s going to be a big problem for our economy going forward. They are already, by some measures the largest economy in the world
.
1
@Mmm
You can't "steal" intellectual property because there is no such thing as intellectual property. The only "property" in this world is what you can defend by force. Someday you'll be dead and you won't be able to defend your property anymore. Those are the cold, hard facts.
With all of their combined efforts and resources, the governments of China and the United States will never, ever stop the Chinese people from violating "intellectual property rights". Trying to do so is like claiming to own the sun and the moon.
As for "arbitrary regulatory hurdles" and "open access", the question of whether American businesses choose to export to another country with or without these factors is entirely up to American businesses to decide. A sovereign country cannot change the laws of another sovereign country. If we wish to change China's laws, we must first eliminate their sovereignty. We could accomplish this with military intervention. We cannot accomplish it through tariffs, because our tariffs pose no threat to China's government or their sovereignty. We are not arguing from a position of strength, because we have no leverage. The priority of China's government is absolute power and control, not the economic well-being of China's population and its businesses. Therefore China will not trade any part of its sovereignty for the latter. The result is that Americans will pay cost of the tariffs while our efforts to "coerce" China meet with utter and total failure.
The purpose of the economy in the U.S. is to increase the standard of living of the people. Sometimes that can result in lost jobs, while the entire population benefits. Trumps tariffs decrease the standard of living with no benefits at all. During his campaign, he said "millions of high-paying jobs would come flooding back to the U.S." Where are they? I think he is really vulnerable on this issue, not to mention if the economy slows and tariffs are to blame.
31
@Gery Katona "The purpose of the economy in the US is to increase the standard of living of the people"? Even if we interpret this to mean increase the standard of living of *US citizens* (leaving aside the exploitation of foreign labor and the externalization of social and ecological costs to China and elsewhere), I'm still left wondering why you think the purpose of the US economy (i.e., capitalism) isn't to enrich shareholders? There is a "trickle down" theory about how rich shareholders (the 1%) are good for the rest of us (the 99%), but the stagnant wages and massive debt of young and working people in our current economy suggests otherwise.
10
@Matt Agree. I think it is has been proven that the "trickle down" theory has been replaced by a a "trickle up" theory. Lower and middle income people are supporting the rich.
23
@Matt It is not a perfect world for sure. If our economic system allows us to purchase products with the best value from anywhere in the world, our standard of living is raised. But there needs to be more done for those that fall between the cracks. I trust Democrats to do more in that area then the other party.
2
The suggestion that Democrats could exploit trade ingores the Democrats' poor performance regarding worker training and protection. NAFTA passed with the pen of Bill Clinton. Immigrant labor used to undermine domestic labor power has had Democrat approval from immigrant one. Democrats have never stood for strong protections for workers: guaranteed medical care, training and retraining, long term unemployment compensation, freedom to organize unions. The trade deals always won over worker protection. Workers figured that out and a few power Democrats may be awakening.
13
@stewart bolinger
Democrats and the left are the reason unions exist. The blue states are wealthy because of liberal policies for pensions and health care. Please don't re-write history. It's not the democratic leaders calling for right to work laws to undermine the unions we have left.
6
@stewart bolinger, if you really believe what you write, it is obvious that the Democratic Party has a problem, but it’s not where it stands on the issues (unions, unemployment compensation, training and healthcare are staples of every Dem stump speech since FDR). No our real problem is communicating that fact to people who refer to us with the schoolyard taunt “Democrat” Party.
1
@stewart bolinger The things you say democrats never stood for are mostly outgrowths of FDR's New Deal. Perhaps you don't know this fact: FDR was a democrat!
2
Good luck for the Democrats with this issue after Biden said, "'They're Not Competition" (meaning China).
Chinese will be willing to make a deal this year guaranteed. They realize that if a Democrat wins the Presidency, he/she will be under pressure to take a tougher line than Trump. The Chinese are just trying to maximize their negotiating position by getting closer to the US election, but the pressure Trump is putting on Huawei may force the Chinese to act sooner.
2
The general public is indeed cognizant of tariff's effects, as they watch clothing prices, auto parts prices, computer and phone prices rise. In large and small businesses, the increased price of all tariffed items is passed on to the consumer. This is not insignificant.
Then there is the slow-down in hiring. I must confess that whenever I read "close to full employment", it means a large percentage of people are working 2 minimum wage jobs.
So, in sectors that make the most use of imported steel and aluminum, for instance, prices have gone up and hiring's gone down. There is still an abundance of low-wage, fast-food jobs where the dross of American foods are sold, but, fashion and make-up retailers, particularly those in fast-fashion, do well on the internet. They just hire fewer retail employees.
Imported foods are more expensive. At the same time, retaliatory tariffs are hurting farmers.
The U.S. could eventually get rid of tariff's, but that is not the only way forward. There is a huge market in green energy and products just waiting to be tapped, with new jobs, too. As the planet is indeed warming, it's the most important market, now and in the future.
38
Your area must have a much different employment situation than I have seen. If I drive 3 miles to a shopping area, I will pass at least a dozen ads looking for workers, “no experience necessary“. Some advertise starting wages at $14.50/hr to as much as $22.00 per hour. (“We will train you.”) The lowest I have seen is $11.50/hr to start as a food demonstrator at Costco. But workers must be drug free and show up on time for work. Old criminal records are often ignored by the employers.
2
Did anyone else notice this comment on what is happening in the US is being written from Paris. So far the COLA for my Social Security and retired pay has been in negative territory. And if there is a tariff on Mexican produce maybe our Florida farmers can get back what they lost on NAFTA.
Trump’s haphazard approach of using the cudgel of tariffs as a tweeted weapon is inappropriate, of course. However, a serious issue lies below as we contemplate the prospect of higher prices for consumer goods. They will inevitably rise if we pursue a policy of “bringing back good jobs” from countries where wages and standards have undercut those in the US.
Are we prepared to accept higher prices as a cost of a healthier society where good jobs are available and people working full-time don’t have to go on welfare to support their family? I am personally, but I’ve heard no broader discussion recently on this important topic, after the “living wage” efforts a few years ago.
29
@ChrisM
We could afford higher prices for american made goods if the wages paid to produce them were living wages. Most likely, American production will be mechanized with few jobs for people without science and engineering expertise.
11
The problem for wage-earners in the US is not trade agreements, it is trade agreements made for the purpose of increasing corporate profits and ultimately reducing the power of unions and keeping wages low. The Democratic party establishment as well as many self-described liberal economists have taken a trickle-down attitude to international trade. Many reporters and other writers in the MSM attack the incoherent trade moves of Trump as essentially a means of preserving the status quo, that is a state of trade which is almost all in the interests of corporate profits. Some of the Democratic candidates have proposed changes - what will the attitude of the "liberal" media be?
17
It's a simple task for Democrats if they highlight the economic costs incurred by Walmart shoppers, rural area voters, farmers.etc due from Trump's tariffs.
My concern is Democrats in the past have not been able to articulate the facts. They need to use think tank research and hold public hearings on economic costs.
77
Democrats need to hurry. Impacts will decrease as retailers like Walmart secure sources of products in other countries.
5
One impact of tariffs is economic cost-- on farmers, business, consumers. But a distinct (yet closely related) aspect is chaos. We're only an impetuous tweet away from....what next? How can farmers decide whether and what to plant, whether and what to hedge and at what price? How can businesses decide whether to make capital improvements or replace the current supply chain? What inflated prices will consumers face at the grocery or retail store? Disruption, chaos, getting whip-sawed are not only dizzying and wearying; they prevent rational planning. And planning is essential.
103
Farmers at least, can plant crops that are unlikely to be affected by foreign tariffs because they are consumed in the USA.
2
@Robert Bosch Do you fancy farmers can do this just by saying so? What would they plant? What is the cost? Is there sufficient seed supply? Or demand? Does a new crop require different mixes of fertilizers and other inputs? Is there crop insurance or other government support for such changes?
Perhaps you know and can tell us.
17
@S Halpern
Excellent point! I think the whole country is exhausted. Trump's style of "this is how it is, till I change my mind," means no one can plan. Latest example is he has told the Mexicans--and Americans who do business with Mexico--no tariffs for now. But how long does "now" last in Trumpland?
10