Then the question is- what is behind the trade war? Who benefits? Americans are paying tariffs that boost the profits of Russian firms subject to U.S. sanctions. China had accounted for about 22 percent of U.S. oil exports in the two years to July 2018, it fell to zero thereafter. This has proven a boon to alternative suppliers like Russia.
Perhaps this is another quid pro quo- indirect and hard to prove in THIS case- but it fits the pattern.
168
@Lowell Greenberg
Given things like "fuel wars" -- remember there were gas lines in the 1970s and that the supply of oil is not infinite unlike soybeans, WHY are we selling oil abroad?
Ditto, in the 1980s there were rules on selling laptop computers abroad - lest they be used as guidance systems or some such in missiles -- and now Apple products are all made in China in Foxcomm factories under horrible working conditions. (I will never buy an Apple product.)
16
Incredible that to date: the cost of bailing out farmers hurt by trade war exceeds that which we used under Obama to bail out auto industry, and the taxpayer was eventually recompensed. Republicans could not rail enough against Obama signing off on that deal. Do both parties act in partisan fashions sometimes: well at one time yes, but certainly since Obama's election the GOP seems to believe we are a one party nation. To hear the POTUS refer to the fourth state as enemies of the state and also to hear the POTUS refer to Democrats as evil is truly horrific.
234
This opinion contains the best summary I've seen of all of the ways in which Trump and his economic "experts" have been wrong about Trump's trade wars.
The first problem is that Trump is getting his economic advice from two of the nation's worst "economists" -- Peter Navarro and Larry Kudlow. As Paul Krugman has pointed out, Kudlow for years has been wrong, basically, 100% of the time about economic issues, yet refuses to back down or change his views. (Sounds a lot like Republicans generally and how they react when confronted with real evidence on most issues, e.g., climate change, gun violence, immigration.) With guys like Navarro and Kudlow steering our economic policy, you can bet that nothing is going to change any time soon.
The second problem is the Right's disinformation campaign on the U.S. economy. If all you listen to is Fox "News," you would certainly believe that the domestic economic picture has never been rosier -- and you would never hear bad economic news about China sticking it to our farmers, retailers, the automotive industry, technology companies, medical device manufacturers, etc.
Trump has magically "found" $28 billion in the cookie jar to prop up U.S. farmers, with $10 billion already spent, but there are limits to how many billions more he can "find," and in any case the small farmers haven't been receiving his largesse. Meanwhile trade talks with China have, unsurprisingly, failed to progress.
The iceberg is getting closer.
371
@ALB Trump threw another bone to the farmers in the form of more "socialist", but not socialistic, aid to mandate more ethanol in our gasoline.
So, two interests were satisfied-Trump successfully bribed the farmers who will not vote for the grand businessman, and the farmers will get to cash in on Trump's bribe at our expense.
The winning.
64
@ALB But, but, but...Trump promised he would hire only the best people! And,and, and...people chant, “Promises made. Promises kept!”
44
@Dan
"to mandate more ethanol in our gasoline."....
And, to mandate that vehicles burn more of it.
39
A man with Trump's parochial intellect is incapable of entering (let alone functioning in) a complex international arena. He couldn't manage a business that was well-funded when it was handed to him. There is no evidence to suggest that he has the faintest grasp of economics; let along word trade and finance. And, to add icing to this mess of a cake, he won't listen to anybody who is conversant in these areas. Feeling great yet?
362
@Frank
But he talks like a person without any education, so he isn't talking down to his base.
I'd love to hear what he says about his base in private. I bet it makes the Romney, 47% who don't pay any taxes who won't vote for me anyway, look like a compliment.
70
@Frank
So well said! Thank you!
23
@Frank I know arrogant people. I know ignorant people. But has anyone ever seen such a toxic mix of both traits?
74
Trump has exposed us to the dangers of the Chinese - and we see that we do want to do business with them.
That is something that the globalist Dems and Neocon Republicans never achieved as they gave away our jobs and intellectual property to the Chinese and told us lies about how these Communists would eventually embrace Democracy.
Instead they embrace censorship of those in the NBA and probably other US companies who dare to tell the truth.
4
Hire a clown, expect a circus.
Anybody who thinks that man has a clue is sadly mistaken.
The sad thing is his enablers, the GOP, are just fine with his never ending nonsense.
America is lost.
22
Ms. de Rugy you have made an excellent case that the Trump Administration's approach to trade did not perform as claimed. The approach did NOT improve the well being, financial security and improved quality of life that many thought might have occurred if we pursued a strategy of bringing manufacturing home. As the announced trade policy evolved I was skeptical and was most surprised that the experts in the Senate and House did not question the policies as vigorously as you did.
Now, I wonder what policies we could adopt when a new Administration is elected in 2020 and installed in office in 2021 and how long will itake to rebuild U.S. markets. I don't think it will be easy because some of our old trading partners will be difficult to reform. Trump's policies were ill-advised and cost the economy and our workers a bundle.
I wish your excellent evidence based analysis becomes more widely shared and I would suggest to our TV producers like "Frontline" or "60 Minutes" that they use you to build a program that would share your analysis with a much broader audience.
10
It is perfectly possible for multinationals to take a hit in their profits for the good of the country. It is perfectly possible for citizens to pay more for goods made at home. It is possible to close our markets to foreign goods. It's the opposite of the neo-liberal agenda, and it may work.
1
This is one of the most balanced and well informed articles written about the US-China trade war. Thank you, Ms de Rugy.
The US is not winning it by any measure. It is a relief to know that we have intellectuals among us who look at the data and formulate conclusions based on fact.
What is becoming very dangerous is so many of our lawmakers and many in the media take to blanket vilification of China without insight or balance. A country that lifted 800 million people out of poverty, and is the largest economy in the world in terms of purchasing power parity cannot be all bad as we in America are being led to believe on a daily basis.
That sounds like a drumbeat for crossing the line from trade war to military war. That would be a tragic outcome for Americans and the Chinese people as there will be no winner.
Those with the loudest amplifiers should be more responsible in how they cast China as the arch villain over a problem largely of our own making.
8
The GOP has in effect implemented the FairTax agenda.
The "upward wealth redistribution" (aka tax cut) bill of December 2017 dramatically reduced taxes on the income side of the donor class.
The "National sales tax" (aka tariffs) levied a massive tax on the consumption side of the middle class.
https://en.wikipedia.org/wiki/FairTax
FairTax is a proposal to reform the federal tax code of the United States. It would replace all federal income taxes (including the alternative minimum tax, corporate income taxes, and capital gains taxes), payroll taxes (including Social Security and Medicare taxes), gift taxes, and estate taxes with a single broad national consumption tax on retail sales.
The author is from the Mercatus Center, which was originally started by the Koch Family Foundation. Perhaps this Libertarian foundation will actively work to educate the public on Trump's disastrous policies? We can only hope.
4
Please don't confuse us with facts, our minds are made up....
6
The "very stable genius" simply lacks the intellectual capacity to understand trade. He thinks being in trade deficit means you're losing for Pete's sake. Hello Donald, it means you're getting stuff at less cost than it would cost you to make it yourself. Duh.
5
You lost me at Trump thinks. There is no evidence for thought from that man. None.
2
Thank you for laying it all out. I would share it with Trump loving friends and family but they don't believe in facts.
9
Trump is like a kid punching someone because it will later feel so good to them when he quits. After his tariff battles cause turmoil for manufacturers, real losses in farming and timber communities, uncertainty for investors, he will be able to cut some kind of deal --any kind of deal -- in the run-up to the election that may make things "feel better."
Hope all those out there with the cuts, bruises, and black eyes will remember who their tormenter was. Oh yeah... it was that guy who had all his signature ties manufactured in
China!
9
So trump lies, his people lie and Fox lies. Tell us something we haven't known for sometime now. The real question is what are we going to do about it come November 2020.
11
"The bottom line is that pretty much everything Mr. Trump has promised on the trade front by imposing tariffs hasn’t panned out, even if the president persists in saying the opposite."
Everything Trump touches, dies.
12
Give it 5 more years, and then decide. LOL
"even if the president persists in saying the opposite."
Saying the opposite, over and over again, works. All ya need is what Trump has on spades, no integrity. Anything repeated, right or wrong, true or not will be incorporated as so in our little brains.
3
This is looking more and more like the run up to WWII and less and less like the path to prosperity.
7
Trump is killing the economy. beginning to think the unemployment rate is doctored. jobs are leaving the country at a pace never seen. wages are stagnant, layoffs are high, industries are closing, renewable energy investments (a strong source of jobs) are stalled. the worst crisis is already here.
13
I just looked at total trade data through August today at the US Census Bureau site. Total foreign trade through August 2019 remains near all-time highs. Hard to conclude that we're getting shellacked on foreign trade when total trade dollars have not declined.
Moreover, total farm income this year, not including federal support, is $69 billion. This is higher than the 20-year average of $62 billion. China is buying US soybeans for a reason - we are a reliable and capable producer and they need us. They're dealing with a swine flu epidemic and they need protein.
I don't like tariffs as a long-term trade policy. Free trade is the best solution - trade that is free from government interference. But this trade skirmish has not been extraordinarily damaging yet, except in the eyes of never-Trumpers.
https://www.fb.org/market-intel/is-farm-income-really-up
1
You are cherry-picking data. Read the article in Forbes, August 30, 2019. There is a dramatic rise in farm bankruptcies and suicides. Last week, Sonny Perdue was in Iowa telling farmers that family farms are a dying breed. If you think things are fine, you are mistaken.
10
Of course the trade war is lost. That's what happens when you go in with no plan, no achievable objectives, a team comprised of amateurs, and a complete fool in charge.
What might help Trump in the polls would be if he dropped all these stupid tariff taxes and let the economy resume it's expansion. Never mind impeachment, Trump's failed economic policies were dragging him down long before any of that happened. It's obvious the economy is slowing down and its obvious Trump's trade war is behind it. He can't even blame the Fed anymore because they've cut interest rates (and look, nothing happened when they did).
3
Ms de Rugy is mistaken in thinking the trade war is about trade. The trade war is about war.
Since WW II, American foreign trade has been part of American foreign policy. That's why so many trade agreements had built-in biases against America; we were supporting our friends and enticing our enemies, at considerable cost to ourselves.
That was the right thing to do then. But, much has changed, and American trade and foreign policies have not changed with the changing circumstances.
Naturally, all those countries---friends and foes---will resist changes to trade relations that were structured so much to their their benefit. This fight will cost us, but there is no alternative because the post-WW II arrangements cannot go on.
1
The other effect of the trade wars is that trading dynamics are changing around the world. Many countries are turning away from the US in favour of new trading relationships. That will be the longest lasting effect of these trade wars and could take a decade or more to get customers to come back. This is Business 101: offend a customer and it is very difficult to ever get them back!
8
Shorter version: When a completely and proudly ignorant fool creates international trade policy, bad things happen.
23
Perhaps a number of bullet points from Ms. de Rugy's excellent and very troubling piece could be blown up to billboard size and strategically placed along highways, near factories and farms, and in towns in Trumplandia, USA. Provide some alternative---i.e. REAL---facts for folks to consider.
164
@SurlyBird Except that her facts are not all correct. China trade may be flat-lining or declining modestly. But trade with Japan, South Korea, Vietnam and other countries in SE Asia is up. Total foreign trade volume through August 2019 remains near all-time highs. The data presented by the author is incomplete and is not the entire picture.
3
@Once From Rome
"trade with Japan, South Korea, Vietnam and other countries in SE Asia is up"
And yet the total trade deficit has increased from $40 billion per month to $50 billion per month ... a 25% increase. The reason is that we mainly import from those countries, not export to them.
23
Weird that the trade deficit has also blown up though right?
14
Well done, Ms. de Rugy, you've nailed this one 8 ways to Sunday with the facts and plain-speaking. Prepare yourself, because you are sure to be denounced as mistaken and wildly spinning the facts from a partisan bias. We all would like to see the USA compete more effectively with, and export more goods & services to China, but Trump's tariff war strategy is already a failure and self-defeating over the longer-term even if both sides conclude a face-saving interim deal.
8
Reality is the Trump base believe him.
4
@RH
But that doesn't make what he says true, its for their consumption, since Trump has brain washed them to believe that Obama just sat in the White House and spent money. In fact the money he spent saved 2 million jobs his first few months in office.
Those people would remain willfully ignorant regardless of what happens to them. Trump could burn down their homes, blame it on the dems even though he's covered in gas, and a pocket full of matches. But there isn't enough of his "base" to reelect him, he needs moderate repubs, and those are the republicans like Romney, that believe in the tenets of this country.
5
Dont be so sure about his re-election prospects. With anyone from Putin to other foreign mafia helping prop him up, hacking, gerrymandering, and plain voter repression, his chances are boosted. Never take an election for granted ever again.
1
I live in farm country where many farmers have been seduced by Trump's "tough" talk. I liken Trump to a football kickoff returner who beats his chest and tell his teammates to stay on the bench while he handles the kickoff himself. A person who has never seen a football game may think him a tough guy. Everyone else will just see a fool.
21
I live in the city and liken Trump to a con artist and to mafia. Acts like he’s on your side, its your lucky day! Then robs you blind.
6
Promises made, promises broken. The president’s go-to punitive attitude of angry father has boxed him in. Bilateral trade agreements can seem ideal, unless China decides to ally itself with Russia and North Korea and then we find ourselves where we are now.
5
Trade Wars are good and easy to win. There is a word for a statement like that, but to stay within the normals of the NYT, I will refrain from using that word. Nothing that Trump has put a tariff on has worked, they have just caused retaliatory tariffs that are harmful to manufacturers and farmers. What I have read on the myriad of other sources tell me that the rate of farmer suicides is greater than veteran suicides. If you take the tariffs, the weather in the spring and early summer, and the early snows in parts of the midwest, the crops were late to get into the ground and are not ready for harvest if they can be harvested at all in many places. The tariffs on metal have proven interesting. The US is not the place to mind Bauxite, the ore for aluminum, there are a few sites, but the quality of ore is not that good. As for steel, Trump has lied about increased steel production in the US one too many times, he is crying wolf. The cost of cars and other heavy metal users will climb, increasing the cost of farm equipment and cars among other things. Those costs will be reflected in a rise of cost in consumer goods and foods. If this man is an economic major, I have to wonder if he ever attended class.
12
@Bill Dooley Total foreign trade dollar trade volume remains near a record high on a nominal basis. Farm income this year is higher than the 20-year average.
Bauxite has not been meaningfully mined in the US in decades. Most is mined in South America and Australia. Steel has been negatively impacted here because, as they seemingly always do, US steel producers have announced billions in new capex including new mills because they thought tariffs would solve their problems. Never mind that global steel capacity was too high before the tariffs.
I don't want tariffs long term. It's just government picking winners and losers. But Trump's trade bluster has yet to turn into a disaster. The data just doesn't support the author's conclusions yet.
1
@Once From Rome farm income would be nowhere near the 20 year average if it weren’t for the Market Facilitation Program which was designed to buy votes from the U.S. farmer when the infinitely wise, supreme leader realized that winning a trade war wasn’t going to be as simple as flapping his gums. The Trump administration chose to give away $28 billion in welfare to farmers, which by the way was funded by the U.S. tax payer. Strip out the MFP and farm incomes are down. Trump talks about things he knows nothing about, like how Japan is going to buy massive amounts of corn following the recent trade pact. Guess what, that market is captive and finite, meaning it’s always been there and has no room for growth. This guy and his crew are lost in the woods without a flashlight.
7
I am not an economist, but I studied it in college and read analyses in the press. The intersection of Monetary policy, inflation, trade and government spending can make your head spin. It seems a system as complicated as weather. In Meteorology it is easy to find Hurricanes but harder to track them. Making predictions a week out becomes more unreliable. Still, When I heard of Trump's tariffs and trade war, I felt similar to when Bush decided to attack Iraq. Oh, NO!!? It is easy to just make a decision, but to figure out what will happen is ridiculously hard. I suppose that is why T went bankrupt so many times, he never asked anyone who knew what the possible outcomes would be. You don't win at roulette in the long run, play Black Jack at least there can be a winning system, counting cards (imagine Trump counting cards!).
6
@William Trainor
But most presidents try and surround themselves with people who are respected in their fields. Not like Kudlow, he's not respected within the real economists. Mainly because Kudlow while he's a trained economist, he's a flat earther, and he doesn't adhere to the norms that economists like Nobel Laureate Paul Krugman does. Kudlow is from Fox News, and like Trump, Kudlow just makes stuff up when it comes to the economy, Remember Kudlow said a few months after the tax reform, that Trump had lowered the national debt, he hasn't he's raised it.
6
I'd like to see some discussion of Ivanka's lucrative patents with China. I wonder how much money she's made off of them, and in what ways her products are singled out as exceptions from trump's tariffs.
17
Thank you, Ms. de Rugy. We have been selling to China for nearly 40 years. Our current policy is not hurting China but rather helping China and our other competitors. China will not change its behavior. It will turn their attention to trade more with other global markets than with the United States. They'll buy more from Europe and Japan and sell more to them. China will also learn to become more self-reliant technologically. The trade war is a bad move. We're shooting ourselves in the foot.
177
I'm surprised that this brilliant article did not get more attention and, like, 2000 comments.
18
@Alexander Many are intellectually "stiffed" by the word trade. Many who agree with this article have no need to reinforce it's thorough analysis with anecdotes.
Those of us with a manufacturing background have seen the "creep" of China for many years, especially in the IP area, and that cannot be undone with tariffs.
8
@Slann
And it certainly couldn't be done alone by the U.S. regardless of who's in office. The TPP would have addressed these issues only with a group of nations not alone.
3
Lots of us thinking America overcame a massive financial crisis on its own without any help or boost from China. They are wrong. Your house price will go down significantly if Chinese economy goes down. Your living standard will go down with it. American people have been getting free rides on Chinese people's hard work (so disrespectfully called "cheap labor," they live in China! Not in America! They are not American slaves!). They suffer, you will suffer too. If you really are thinking for them, you won't be such a reckless country and starting one financial crisis after another and brutal trade wars.
4
Mr. Trump is not wrong about one thing concerning China. But, Mr. Trump conveniently ignores something else about China that has directly contributed to why we are at this point.
First, Mr. Trump is correct that China has had its way on things economic for a long time. When the Chinese government abandoned Marxist economics for a market economy, they retained for as long as they could a near-slave labor force and dedicated it to winning manufacturing jobs away from the US and Europe. The Chinese government has systematically manipulated labor markets, patent and copyright law, currencies and just about every other facet of an economy in the same way they did under Mao, but did it in a world market setting. They have gradually extended a small portion of their incredible profiteering to their labor force, which has lifted them out of the extreme poverty status they suffered under the Maoists, and have permitted a certain level of entrepreneurship to flourish, as long as it does not threaten the overarching power of the State. And we not only let it happen, our moneyed business classes gladly encouraged it to happen.
And that is the thing that Mr. Trump blithely ignores, at least publicly. Because capital generally flows to where it is welcomed, American business transferred millions of jobs to China and elsewhere in SE Asia, and profited accordingly. American greed has now made our economy so dependent on Chinese and other Asian labor that we have very little leverage.
213
@Steve Feldmann
Good point. American businesses chose to go to China and be subject to their rules and regs. trump paints a picture of a terrible mean old China, which it is, but the rapaciousness of American business, which trump knows well, is the real cause of the imbalance in trade.
60
@Zeke27 Yep and the same story regarding the immigration issue. While the right has been drumming up hate against illegal immigration, it has refused to throw the employers, who are the magnet, in jail or mandate some type of foolproof e-verify.
The right wing media was also instrumental in killing immigration reform under both Bush and Obama by inflaming the base with amnesty misinformation instead of educating and leading the base as to why the immigrants are here doing hard un-glamorous work like slaves.
A family member took a job at a fish processing plant in the PNW. The owner of the business, a conservative, owned a bus and would send it to LA, San Diego or the border to pick up illegals because most Americans he hired quit in short order. Very hard work for little pay, my family member quit after a few months too.
That's reality.
But the right thinks we're being invaded because "open border" Democrats want to treat human beings like human beings in real time as a counter balance the near genocidal hate being spread by Conservative media.
The confrontational hate motivated approach the American right uses to govern is just as dysfunctional on the national level as it would be if that's how we dealt with our friends, co-workers and families.
77
@Zeke27
We need to remember how automation has contributed to job losses, in addition to trade imbalances. And let’s not forget Wall Street’s incessant focus on quarterly earnings. Any company missing an earnings target sees its stock price fall and shareholders upset. How does a company make certain they don’t miss an earnings target? Why, they lay off workers since they are the largest expense for most companies. And then watch their stocks increase in value. Workers today face a toxic brew of corporate greed, automation, tariff battles and constant churn to keep their skills current to stay competitive. And we need smarter people than the “economic” team in the WH to tackle these issues
23
And still the farmers and dairies support him. I wish someone would analyze that for me.
238
@Carol
Maybe $28 Billion buys a lot of support.
43
@Carol
Maybe their t.v.s are permanently set to Fox News and they literally do not know better.
70
@nora I live in farm country and you hit the nail of the head. When I go to the dentist or doctor, the TV is tuned to Fox News. Farmer's have bought the line that they are being patriotic by suffering for the long term benefit of the country. They think Trump is a tough guy. They don't understand that Trump's trade "strategy" is so weak because he sidelined all our teammates in the TPP and other traditional allies whom he has alienated.
85
No one is a more valiant champion of freeing trade than me. I even supported TPA back when Paul Krugman -- who has donned the mantle of a free trader again -- opposed it.
I also think that Veronique de Rugy has scored a lot of direct hits on Trump's trade policy.
But ... she is dancing around the elephant in the room. As Krugman said in a rare moment of lucidity, "Let’s be clear: China is not a good actor in the world economy. It engages in real misbehavior, especially with regard to intellectual property: The Chinese essentially rip off technology. So there is a case for toughening our stance on trade."
That's right -- for a decade and more, Trump's predecessors failed to toughen our stance on trade. But then God said, "Let there be Trump", and the Trump finally did what Krugman conceded is long overdue. If de Rugy has a better solution than Trump, then she needs to share it with us.
De Rugy's myopic accounting of trade balances is a good debating point. But misses the point that trade wars, like all wars, inflict damage on both sides. Since when does a referee declare that the game is over at half-time?
True, he's a bull in the China shop, but the world trading system was already broken. Does de Rugy deny that the WTO is broken? (Or even a farce?). Let's not settle for counterfeit free trade when, with sufficient patience, we can get something close to the genuine article. Trump may not understand what he is doing. but that doesn't mean he hasn't got it right.
4
@Ian Maitland
"Trump may not understand what he is doing. but that doesn't mean he hasn't got it right."
And because he doesn't understand it, he might mess it all up with a single tweet, phone call, or firing.
6
@Ian Maitland
The article points to specifics of where Trump's trade policies have not gotten it right, contrary to all Trumps bluster.
No one that I can recall supported China's trade infractions. The Obama-led TPP was a move to keep China on the outside looking in. A move that Trump negated in his 3rd day in office. My guess is that he didn't even read the agreement, but, as with other Obama initiatives, deep sixing it was an automatic for him.
14
@Ian Maitland
Wrong, the TPP would have addressed these issues...
2
There is no greater threat to rising healthcare costs than tariffs on China. Everything from gauze wrap to sterile gloves and surgical masks is imported from there. Watch for increases that may become too costly for the uninsured with disastrous consequences.
13
Trump and his economists never understand how global economy works, and they also underestimate China's capability and determination to fight a long trade war.
Yes, the trade war causes some pain on China. But in the past three years, when Trump always blusters: "Trade wars are good and easy to win", China takes this challenge and turns it into an opportunity to improve their infrastructure and upgrade their industry.
They now have the biggest and best high-speed railway system in the world. They just outnumber and outperfom our GPS satellite network. They now have a low-cost logistic network throughout the country, and even extend it to Africa and Europe. When the EPA tries to reverse the rules of CO2-producing industry in US, China has already set their next goal to develop green industry.
It is quite obvious China is well prepared for the trade war, and what is even more terrifying, China is plotting a world without US involvement. I am afraid what Trump has damages to our country in his four years administration, cannot be recovered even after decades.
18
I think the bias in this article has to do with short-term goals vs long-term goals. Changing the structure of the economy requires time, to adapt and adjust to a new "equilibrium". So, I would not claim yet that Trump trade war has failed to live up to its promises.
Moreover, there might be exogenous factors of the economy that played against Trump strategy, such as interest rates, etc.
What the article left out, are relevant aspects of Trump's trade war: due to his trade war, consumers like me have become more aware about China's economic and production system; e.g. in term of CO2/GHG, kg per $ of export is five time greater than US. In today’s time of climate change concern, wouldn't this factor change consumer perception and consumption behavior in the long run, buying more domestic product that substitute for Chinese product, even at higher prices?
At least, buying less Chinese imports is slowing CO2 emissions, that should go in Trump's favor
Not only that, but we have seen recently with NBA how China has no problem to retaliate against businesses that dare to speak against Chinese undemocratic practice, could that be also a factor that might change US business/ consumers' behavior in favor of domestic products and production?
Too early to know, yet US economy fare better than any other western countries, and China's economy is slowing down (about time)
1
@Paul.R
I don't think Chinese government actually control trades and manufacturing as much as we like to think. They are trying to not have civil wars, and collect tax dollars to feed 1.2 billion people. In order to achieve what you have in mind. U.S. government have to convince Americans to eat less and consume much less. And to tell American business to make less money. Good luck with that?
5
@Paul.R
But the U.S. is worlds largest producer of greenhouse gas.
Especially with interest rates so low there is little corporations can't do they profitably opt to do. An issue is what company is really an American company or any nations company?
For any lazier readers out there, this fine piece boils down to one TL;DR summary ...
So much winning!!
5
Garbage in, garbage out.
1
The first and last best trade deal war that Donald Trump won was his choice of New York City real estate baron daddy to inherit 295 streams of income from in order to shield him from the consequences of being the worst losing businessman in America over a ten year period.
Every business that Trump made on his own failed. Except for Trump playing a businessman on reality TV.
18
@Blackmamba
But that wasn't his creation, it was the creation of a network, that Trump convinced his show is what America wanted. I watched one or two episodes but I didn't find it likable, but maybe that's because I have never liked Trump to begin with, he's always left a slug trail wherever he goes.
1
I don't see Germany needing to start a trade war to have a healthy manufacturing sector. You want to make your own slippers and frying pans while working as an engineer? You think you can be a country that makes everything and not conduct trades with others? You think you can be alone or a bully in this world and not suffer any consequence?
21
China is much better in equal rights and many other social aspects in comparison to Saudi Arabia for example, which is an absolute monarchy! It is total hypocrisy for our government to target and single out China.
14
@Julia What have you bought at Walmart made in Saudi Arabia lately?
1
All manufacturing uses oil. Plastic is a petroleum product, so is asphalt. You may not buy a bunch at Walmart, but governments do buy plenty asphalt. Just one example. And before you proudly say that fracking, with all of the ecological horror it has ushered in, has "reduced our dependency on foreign oil", I suggest you also learn how oil cartels work, oil is oil ( granted of whatever specific grade, which fracking oil is very low quality), oil enters the global marketplace and doesnt have a country of origin sticker. Might stop buying chinese made educational materials at Walmart for a start.
2
@Julia
Since when is China better with equal rights, and what rights are you speaking of, they don't have any.
All of Trump’s claims about tariffs prove one thing, he has absolutely no understanding about tariffs and how they work. He is negotiating from of point of absolute ignorance, which is a liability. The best we will get is a token agreement, which Trump will hype as the greatest agreement in the history of agreements. Meanwhile, US businesses will have altered their supply chains and whatever cost increases they have incurred will be paid by American people.. It is a loosening proposition regardless of the outcome.
13
@Bruce Pippin "Only the best", you will sadly remember the Trump's administration for a loooooooong time!
4
@yves rochette
Yes, unfortunately, and so will my grandchildren.
1
The Trump companies are doing very well. Perhaps during the halcyon second Trump term we can enlist his entire family into the Cabinet, Treasury, State Department, and what used to be referred to as The Department of Justice.
7
The biggest negative effect is the long term one, namely that we have taught the world to get along without us. Businesses and countries all over the globe have been figuring out ways to purchase goods and materials and have been establishing markets that work their way around the US and all the Trump-induced uncertainty. Those lessons, once learned, will not be readily unlearned.
423
@Joel and after we betray the Kurds few will want to ally with us for anything. After Turkeys experience with our strong arm misses sales tactics, few will have reason to buy weapons from such an unreliable partner.
45
@Joel Various ag organisations have been working for decades for access to the Chinese market. Trump's deeply irresponsible "strategy" has rapidly destroyed that progress. I fear exactly what you are saying.
27
@Joel China, Russia and the EU are working hard to find a "new international currency"...This will increase the cost of borrowing for the USA... and, tank to the GOP, borrowing you will have to do in the next years !
19
If you want to encourage manufacturing in the United States, then make your society a good place to do manufacturing. Make your workforce world-class with excellent education (we are far from that). Build excellent infrastructure. Great roads, bridges, airport, and public transportation are good for business. Reduce manufacturing business costs with a universal government subsidized healthcare system land environmental policiies that make for healthy citizens. Support science and research. If we want a healthy economy and society including a healthy manufacturing sector, we need to stop the rot and look towards ourselves. It is easier to blame our own internal failures on foreign companies that are out-competing us and immigrants who are just trying to make a better lives for themselves. Building a good society requires active and progressive government leadership, planning, and hard work. We should ignore the demogogues and have the courage and resoluteness look ourselves squarely in the mirror and stop the rot and hate that is leading our country to ruin.
532
@Michael Whitehead Didn't you know? Good business is due only to the skills of the individual entrepreneur with no help from society. Infrastructure and education has nothing to do with it. Obviously you didn't get the memo.
And just in case it's not obvious to some of our slower readers Michael, I'd give your post 20 recommends if I could.
102
@Andrew On the contrary, education is right in the middle of any country ability to sustain growth. There is far to many school dropouts who can not sustain their own "household economy" by spending twice what they earn until they reach bankruptcy.
12
@Wentworth Roger
Mr. Wentworth: I suggest you check the batteries in your sarcasm detector.
46
What exactly is Trump’s endgame for this trade war? China is now buying soybeans from other countries, and Brazil is even burning down the Amazon forest to plant more. The US farmers will never get that business back.
In what way is Trump’s “strategy” addressing the issues with China’s intellectual theft? If his goal is for technology to be produced in the US, then will consumers be happy to be paying more for their phones and computers?
9
@Jean
"What exactly is Trump’s endgame for this trade war?"
Winning the next election so he doesn't go to jail. That's the endgame.
12
Trump achieved a slowing economy, possibly a recession in 2020. He took a good economy and created the conditions for a recession. Genius.
12
@Kathryn Aguilar It is obviously not HIS fault but his stupid economic advisors combine with the too high interest rate..../S
@yves rochette
Sorry but the buck stops with Trump, regardless of who's giving him information, it's up to Trump to surround himself with smart people, not flat earthers, and grifters. so that he can make a well thought out decision.
All good points for the Democratic nominee to raise during debates with Trump.
11
Trump lies about everything, including trade wars. That said, I don’t think pulling back from China is a bad thing. It is becoming more and more obvious that these trade relationships are giving them more influence over us than we have over them. Something needs to change here. A randomly executed trade war is stupid policy but I don’t think the sort of policies advocated by the Mercatus Center are going to be good for us either.
China has four times our population and is a massive market. The more we integrate with them the more they leverage they have over us and they have made it crystal clear that they will use that leverage to steal our technologies and enlist our companies to help them stifle criticism. The direction they’re taking us in is bad for us in the long run even if it leads to short term economic gains. We should not just blindly play into their ambitions. Democratic candidates in the last debate were mostly unwilling to say they’d overturn the tariffs right away and that’s a good thing.
1
@Eric
Except 99% of what you buy, comes from China. So it's easy to say we don't need China, until you read the label on your Haines tighty whities, what do they say "Made in China, or Thailand, or Malaysia, or Honduras, ect. But 99% of what you buy is made in China.
Trump is reprehensible, deplorable, but so are all of the CEOs who moved most of American manufacturing abroad. We assemble a few automobiles here -- do we even make all of the parts?
Why are Apple computers/iPhones being made in China? ditto drugs or ingredients for such? (GREED -- Chinese workers can be truly badly treated - factory slaves.
"Companies can't afford" - how adorable!! Broader trends -- can we say what we really mean - inconvenient... and American workers perhaps are overpaid because of American health insurance companies and landlords (real estate- a protected entity taxwise) …. can we see patterns?? And there's the small matter of about 280billion $$ in food trashed annually, along with the throw it in the garbage consumer economy ….
One can justify almost anything. That neither means that it is inevitable or right.. E.g. global warming and CO2 emissions..
3
Get real! This was inevitable. These low information jobs were not going to continue to pay $80k per year in the US. We need to wake up and ensure our population is educated for the 21st century in the same manner China is. Have you been to China & seen how seriously their population takes education? While we are more concerned with how are kids do in sports!
9
@Mary Sampson
The Republicans were saying that same thing in the 1990s, yet they continue to pull money out of education at ALL levels of government, city, state, county.
Times readers should note that this column was written by an employee of the Mercatus Center, which is funded by the Koch brothers and receives no financial support from George Washington U. Accordingly, no opinion expressed by an employee of the Mercatus Center will stray very far from the Koch brothers'/Libertarian/Neoliberal economics line.
5
As I noted when I placed this on Facebook, but some of this is accurate, just how accurate.
1
@Robert Monteverde
We might dare to hope that the Koch family is ready to redeem itself. There have been faint signs, pale ones but occasionally sane instead of simply selfish. The statements in this article are flush with the truth.
2
So does that make his column factually inaccurate? Seems empirically accurate to me.
3
When the havoc that this man has wrought on your country is finally revealed and Republicans acknowledge how deeply flawed in every possible way he was - will they accept that every syllable that dripped from his mouth was a non-sequitur? Entrusting your country to a huckster is the worst thing that has happened politically on the domestic front in your 243 year history.
11
I don’t know why the media insistently attack the “very stable genius” and his “great and unmatched wisdom.”
Obviously, they’re focusing far too much on reality.
Nov. 3, 2020. Vote.
9
@Tomás
Because he's not stable, or a genius, or have great unmatched anything. Lets remember, none of Trumps businesses have made money they ALL went bankrupt before they could. From Trump Air, to Trump Travel, to Trump Water, Vodka, Steaks, Trumps USFL team, all defunct and bankrupt.
Bankruptcy laws are written for the rich, they get to stay rich. Try filing for bankruptcy and see if you get to keep anything including your self respect. Your credit will be ruined for 7 years or more.
Hey if we can't sell a good lie, is life worth living?
3
Trump was not giving farmers $28 billion in aid, he was giving them a $28 billion bailout.
But where's our bailout I'm a small manufacturer who lost 25% to 30% of my profits due to Trumps trade war. the one that was so easily won.
14
@Okentt Thank you for your service. You are yet another true American patriot!
1
Great debunking of Trump.
All fake news of course, deep state, liberal elitism, George Soros............. You might as well not bother . They will never accept facts over beliefs.
Unfortunately Trumpanzees are all back in their nice warm bunks 2 minutes later.
When you criticize Trump to a Trump Supporter, the usual answer is to make a false claim about Obama.
It was the same with GW Bush - criticize his policy - his supporters make a false claim about Clinton.
This is GOP standard practice. False deflection.
16
Thanks to the Obama economic plan Trump took over an economy with nearly full employment, so who are all these people that need jobs in coal mine? Most people who want to work realize that you need to move to where the jobs are, waiting generations for jobs to come to you (as a big percentage of Trump supporters seem to do) is just not a good strategy to get ahead in life.
6
For the first time in my life, I feel like I have to fact-check every single word my president says. Trump is running re-election ads in SC right now. They are nauseatingly false or half-true, with no facts to back them up. Sadly, my Republican neighbors will believe them. It's the same with trade. Instead of "just the facts, ma'am," we have no facts at all.
13
@Barbara
There used to be a regulation that said that political ads had to be true, or they were taken off the air. Reagan made sure to roll that back along with the SEC rule that made it illegal to buy back their own stock. Why, because corporations used to take part of their profits and plow it back into their business. CEOs were paid based upon how the company did, not how their stock did. Corporations moved away from that to a compensation package that allowed them to use stock options as compensation. Which basically means that the companies issues stock and if that stock prices moves above the "strike" price the owner of the options can cash in. Recently Elon Musk was paid 2 billion in stock options, his strike price was $13.00 a share, so he collects money for dollar Tesla stock is over the strike. Currently, the executives that were recently hired at Tesla, have stock options with a strike of $330.00 a share, if they exercised their options they would OWE money.
And insiders when they announce a buy back it doesn't mean starting the next day. So they can time it, the SEC promulgates rule 10-C safe harbor, so a CEO can't be accused of market manipulation, and a company can buy back 25% of their daily average volume for Apple thats 3 billion A DAY in stock they can buy back.
https://hbr.org/2014/09/profits-without-prosperity
More of the same from the liberal thinkers who are, in fact, the best friends of the communist China in the USA, always advocating 'doing nothing' and leaving China and the rest of the underdeveloped world make giant leaps that apparently harm the long-term strength and prospects of US economy.
In addition to the businessman who stuff their pockets at the expense of the US (in the long run again), and successive US governments who allowed China to become what it is today, a giant to take on the US much sooner than any one thinks (we're already there).
All those 5 claims are somewhat trivially rebuffed:
Claim 1, of course, you tax them they tax you except that you can tax them a lot more if you want to.
Claim 2 - only shows the greed and willingness to continue lining the pockets vs. strengthening US economy.
Claim 3 - I agree that only fools will say that trade wars are good or winnable but some lose more than the others, and US is not waging a trade war against any one.
Claim 4 - indeed the farmers are hurt but why not take a look at how the other side is hurting, does it compare?
Claim 5 - indeed, we have to continue fighting against the cheaters who shift the business from China to elsewhere, not US. We should name and blame them.
@ss Look, I know this is pointless but I'm going to try anyway: Bullying other countries or people doesn't mean you're strong, it means you're weak. Yes, today we have the strongest economy, military, etc., etc., but even with all our blessings as a country, we can't maintain Global Leadership for long by picking fights with everyone. The truth is that it is up to each and every one of us to decide what kind of country we want: strong or weak. If you want a USA that people around the world respect (or fear) and look to for inspiration, we have to change tack and engage with the world in a constructive manner. If you want a USA that doesn't play a large role in global affairs, doesn't have the respect of other democracies and is indeed poorer, then we can keep doing this stuff.
14
Andrew, there's no arguing with Trump supporters. Your facts will go in one ear and out the other. And now that facebook permits political ads that have alternative facts, they'll be able to read how well Trump's actions are improving America.
4
These low information factory jobs are never coming back to the US! Make sure your kids & grandchildren have a good education. China is ensuring their children are ready for the 21st century. They do not even want these low tech factory jobs. They are all moving to lower cost countries. Believe me...the Walmart crowd does not want to pay $5000 for a TV!
4
None of this--none whatsoever--will move any of Trump's staunchest supporters or, for that matter, even many so-called "moderate" Republicans. All they'd say is, "Where'd you get those statistics?" or "That's all stuff from liberal media."
All that matters to them is that Trump is making a world where white men rule and everyone else knows their place.
36
@Emile And also when you get your facts from Fox news everything with trump is sooo much better. That along with his deregulations , we could be in for a real disaster.
1
@Rich g.
I accidentally stopped by for about 5 minutes to see what Sean Hannity had to say. He was asserting that Trump was merely trying to "out" the democrats corruption. But then he went on to assert that's what he was doing with Ukraine. Hannity should go back to the hole he come from.
2
We are winning the "trade war". Look at the price of the dollar since. People are not choosing the Potemkin village of China, nor the Euro experiment. They've chosen the USD. I've followed you Veronique for years at Mercatus and the other spots but I feel trying to score points with the Left on trade is misguided. They don't support our agenda of free markets and will not, soon after Bad Orange Man is out of office.
@Humbly Yogurt apparently you are too lazy to educate yourself. The international business community is actively considering another currency to use in international trade. Trump’s policy of the moment decisions are destabilizing the USD.
6
@Humbly Yogurt
That'd because the USD is considered the worlds currency, before us, was the UK, until their sterling fell.
1
TRUMP'S PERFORMANCE As an entrepreneur was awful. During a single decade, his father had to bail him out of his business failures to the tune of $1 billion. Now Daddy Trump is gone. Guess who's on the hook to bail Trump out of his failures? If the answer you guess was the US taxpayer you'd be 100% correct. History is repeating itself. Trump continues to be an incompetent deal maker. His failed deals are costing the US billions. For one example on the domestic front, Trump's tax "overhaul" (read ripoff of the 99% and gift to the 1%) was the largest transfer of wealth in US history. Never mind that if the wealth had been shifted down to the 99% rather than up to the 1%, the GOPpers would have been foaming at their collective mouth in outrage. The amount transferred from the 99% to the 1% is estimated to range between $1.6 to $2.2 trillion over the next decade. The tax overhaul hauled over to the 1%, has resulted in DECREASED government revenues and increased taxes, drastically in some cases, to the 99%. The writer demonstrates how Trump's gross incompetence as a deal maker affects the US adversely. Trump, in fact, is a DEAL BREAKER of epic proportions. Yet the GOPpers continue to support him. Voters flood him with money to fix his boo boos during the highly warranted impeachment investigation. Talk about throwing good money after bad! Stay tuned for the Trump Slow Down during the next year between 11/2019 and 11/2020. Will voters vote their pocketbooks? Maybe?
18
Whnen there is a pattern of 'wrong responses' by otherwise smart people, it's time to call them out as not wrong, but bald faced, out and out lies.
1
"Obviously, if farmers did so well under Trump’s trade war, he wouldn’t need to provide them with $28 billion in aid."
Reminder: Republicans lost their minds when the Obama administration provided $11-12bn bailout of General Motors in the depths of the financial crisis.
30
@PWW
And GM repaid every penny. The $28 billion will never be repaid. Biggest welfare check in history.
33
Trump has turned conventional trade wisdom on its head..for better or worse. One thing has come in clear focus, the failure of our decades long China trade policy. Instead of China becoming a more open and free people,we have given them tools to enforce communist thought control to unprecedented levels. Not only domestically in China, but as a condition of trade worldwide.
Lucrative trade with China means they will tell us what our eyes see as a condition...a concept diametrically opposed to a millennia of Western Civilization.
1
If we get out of the Trump Presidency with a mild recession consider it a win and move on.
18
So why did so many businesses support the Trump election? They did so for self-serving and narrow interests. The economic principles of entrepreneurial businesses and governmental economic policy are completely different. I would no more seek advice on governmental economic policy from a businessmen then I would seek advice on a heart condition from a plumber.
21
Thank goodness you have us as a trading partner.
6
@Steve Williams: not really. Cross-border shopping was down last winter, Snowbirds went to Cuba rather than Florida or Arizona, and the consumer boycott of American grown produce continues. And yet apparently NAFTA-2 (albeit no one can tell you how the new version is different from the old) was a big "win" for Trump et al.
9
@curious ok, we don't cross the border to get cheap shoes as much. But that's a drop in the bucket compared to the $700 billion in trade between our two countries (and you guys enjoy a surplus despite what the Donald says!)
The point being, we're each other's best customers and the article barely mentions that.
10
This article is both important and on-point. It would also have been useful to point out that Navarro is not the only one spinning nonsense on trade policy. Ross, Kudlow and Mnuchin have also done their share to advance or support these foolish and irrational policies.
As for the trade agreements, Trump wasted a tremendous amount of time renegotiating NAFTA only to emerge with another one called USMCA, which is largely similar to NAFTA but hasn't achieved a consensus amongst those needed to give it effect in Congress - a very large and impactful failure in the making.
30
@Mark
Yup! Any people like Kudlow have sold their reputations (and their souls) to prop up the myth that tariffs are good for the world. Open markets have made us, USA, the most innovative nation in the world in order to compete with cheap labor in the many areas of the world.
When it comes to trade is Donald Trump ignorant, a liar or stupid? And does it matter?
Ignorance is not knowing that 2+2=4. A universal condition that can be cured by curiosity.
Stupidity is knowing that 2+2=5. A rare but fatally incurable terminal condition
Lying is not caring about the facts or the truth.
32
So what else is new. Trump is a congenital liar who probably failed Econ 101 before daddy bought his Wharton degree. The clown car of Trump's economic advisers has been wrong on all counts, and since much of the world's economy is still pegged to the U.S. dollar, we now face a global downturn. Republicans had better realize they'll have to dump the stable genius with great and unmatched wisdom -- you know, the one with six bankruptcies on his resume -- before the downturn becomes a Great Depression.
41
The world is tied to the U.S. Dollar…for now.
A long term goal of the Chinese govt is to make the Yuan the standard international currency. Their plan is to use the stability of the Yuan compared to the Greenback to convince world markets to switch.
They had planned to do it slowly over 25 years, but Trump and co. may allow them to accelerate their timetable.
As others have said this is a great summary of Trump's failure on the trade front. Interesting how all of this has been swept under the rug during the impeachment inquiry. Democrats should be pounding these facts and they are facts home without pause. Perhaps Trumpers will continue their head in the sand ways, but these things will only get worse as the trump fiasco continues to hurt our economy and especially those who continue to support this con man.
13
It is amazing how categorically wrong this president is at every turn. It's like the Midas touch, only everything disintegrates. The magnitude of the failures is breathtaking!
21
Trump rules by incompetence because he is a "stable genius"..This malignant narcissism leads him to make horrible policy decisions. He is not informed, and does not understand the Constitution nor the rule law. He knows nothing of trade policy, or economics. Advised by all the experts he is wrong about tariffs, he surrounds himself with yes men and sycophants. Inept, unhinged, incompetence are hallmarks of this sad administration...
15
A few thoughts:
1. Shifting factories "back" from anywhere will have very little affect on employment. It will make money for the shareholders of companies that manufacture robotics, and create a small number of positions for those who design or repair robots, but no human beings will be working the actual line.
2. I wonder if Trump supporters have any idea on just how the rest of the world view his negotiating tactics, which amount to nothing more than equal portions of bullying and bluster.
Which means that whatever minuscule gains he might make are more than lost through the loss of consumer goodwill. What's the point of giving a few farmers in Wisconsin a half-percent more access to the Canadian dairy market when -- as a consequence of the threats and insults -- Canadian consumers refuse to buy anything "made in the USA". Ditto everyone else in the world once Trump has done his tweeting.
3. In the 21st century Trump supporters (along with everybody else) have to ask themselves one simple question. "What can I do better and cheaper than a machine?" If the answer is "nothing" then you've got a serious problem, and scapegoating immigrants or "bad" trade deals isn't going to solve it for you. The only person who can do anything about that is you.
41
@curious
"3. In the 21st century Trump supporters (along with everybody else) have to ask themselves one simple question. "What can I do better and cheaper than a machine?" If the answer is "nothing" then you've got a serious problem, and scapegoating immigrants or "bad" trade deals isn't going to solve it for you. The only person who can do anything about that is you."
This is one of the most important statements I have seen this year.
11
Many of Trump's supporters believe Europe is a country, so he can pretty much can make them believe what he wants.
24
Trade isn't just dollars and cents but also relationships. After World War II, when the US was the strongest economy standing, the nation realized that it could be more successful exporting democracy and forging alliances through trade than anything else. Also, trade helped promote higher living standards which helps alleviate the source of conflict.
International travel is a form of trade and Trump has done significant damage to one of the nation's biggest sources of trade surplus by the negative policies which discourage, impede and even ban travel into the US, and here, too, it is more than dollars, but understanding and relationships that are sacrificed when there isn't face-to-face interaction. Travelers become ambassadors for their country.
24
@krubin The US always pretended it was exporting democracy while they were actually policing the world as they see fit especially getting its puppets on thrown so they build fortunes of their own on the back of the citizens of those countries for several decades.
It is a lot more difficult nowadays for the USA to continue with the same jazz as most country knows who they are dealing with.
1
' “Our great Patriot Farmers will be one of the biggest beneficiaries” of the trade war with China, Mr. Trump tweeted in May. '
Not only will farmers be hammered during the trade war, but they will also be losers if President Trump succeeds.
Success is forcing the Chinese to pay more for intellectual property and to give U.S. companies more favorable terms on joint ventures. That success would mean that the Chinese have less money to spend on other products including U.S. agriculture produce.
But this is not just Trump, he is enabled by the entire Republican party. On a recent trip to the Midwest I saw separate opinion pieces by Senator John Thune and Senator Mike Rounds in a local South Dakota newspaper discussing how farmers need to sacrifice for the good of the country but will come out economically ahead in the long run.
My high school classmates who are now farmers work incredibly hard 12-14 hour days under grueling conditions. They deserve to be treated fairly, not be used as pawns.
78
@rbitset More to the point about the farmers, China is now purchasing agricultural products, such as soy, corn, wheat, and cranberries, from other nations, and dairy exports are down as much as 50%.They won't come out ahead in the long run because other countries will have replaced their markets. And that doesn't even take into account the $20Billion of taxpayer money going to replace that lost agricultural revenue.
15
Trump's obsession with trade balances between nations is misplaced and ignorant. Nations do not trade goods and services! Enterprises within nations trade goods and services.
Trump's foolish and unpredictable threats, tariffs, and sanctions are shrinking the export markets for US industry and agriculture, and raising the prices of foreign and domestic goods purchased by American consumers.
Trump's arrogant assumption that US exports cannot be displaced is delusion. With a small foreign investment, South American countries can readily replace US agricultural products in the world market. Manufacturing enterprises in every industrialized country can, if challenged, replace US-manufactured goods. Foreign importers are already adjusting their trade arrangements to reduce reliance on US goods and services.
There is a sensible alternative to trade wars. Follow China's lead by embracing, rather than repelling, trade! Eliminate tariffs, offer competitive products in the world market, negotiate trade arrangements to open new export markets, and cultivate export markets like Iran and Russia by lifting sanctions.
China's Belt and Road Initiative is peacefully building a world-wide trade infrastructure to supply raw materials and export markets for Chinese industry to the end of the 21st Century. Perhaps, US industry could be revived by a similar outreach, rather than the steady retrenchment of US trade policy.
27
The idea tariffs alone can’t do the job is great. What’s the correct strategy?
This was good. What would make it better is letting someone from the other side respond. A back and forth. A good summary of one side, though. So, thanks.
2
Some from the other side, viz., Trump, gas been making his case, albeit incoherently, for some years now.
2
@tbs I googled "conservative analysis of trump's trade policy" and found this one from the conservative national review:
https://www.nationalreview.com/2019/09/trump-trade-policy-at-crossroads/
"While moving in the right direction, making up for years of inattention and complacency with regard to the abuse of global rules by China and others, the inconsistent and heavy-handed approach employed by the president threatens to undermine the open-trade-based global economic order..."
3
So here we are, spending time and energy on punishing other countries rather supporting innovation and development of new, eco friendly industries here.
Where are the new ideas that will propel this nation into the next big industry?
We should be focused on leading competition and innovation, but instead this stable genius is closing us off and suffocating our own entrepreneurial leadership.
We have lost everything with this so called administration. We are so much less than we were.
33
"The bottom line is that pretty much everything Mr. Trump has promised on the trade front by imposing tariffs hasn’t panned out, even if the president persists in saying the opposite."
Unfortunately, none of this matters to about 35% of American. Worse, the $2+ billion of advertising propaganda enabled by the current (and growing) Trump 2020 war chest will convince many more of the veracity of the GOP "alternate facts."
Luckily, the Great Recession of 2021 will start the rout of Trump and the GOP, which will be completed by 2024 when the Dems take the WH and Congress. Until then, just keep your hands and feet inside the ride America.
14
"Case in point: The deficit with China is going down, but it has been more than offset by rising bilateral deficits elsewhere, including with Vietnam and Mexico"
So it is in fact working. Xi Jinping's China is a dangerous nation with an agenda to relentlessly work towards global domination. This includes buying energy, rare mineral mines, trade routes and harbors, buying and stealing technology etc. They're open about it too. I have yet to see the first prominent Western economist coming with arguments based on scarcity of resources in a world with 7.5 billion people (and rising rapidly) rather than the outdated theory of seeking to maximize the global GDP by eliminating any and all trade barriers.
There are many arguments from our point of view for the 20th century model of the West morally and militarily dominating the World, not in the least homeland security.
But as the article is strictly economical, I will only point out that the US economy heavily relies on having the reserve currency of the world.
3
The TPP was designed to do exactly this - confront China’s attempts to dominate the world but in a way that benefitted the US and many other countries effected by China’s policies. It knit together a coalition of countries that would work together on trade and benefit those countries confront China economically and possibly force them into serious negotiations on how they would interact with the rest of the world.
Instead T’s policies seem to benefit no one and as documented in this article seem to be bringing pain yo a whole lot of people. Trump has been a spectacular failure so far on trade.
63
@Anne
"So it is in fact working. Xi Jinping's China is a dangerous nation with an agenda to relentlessly work towards global domination. This includes buying energy, rare mineral mines, trade routes and harbors, buying and stealing technology etc"
What do you mean, "working?" The editorial notes that Trump promised to "wipe away the trade deficit." Not shift it to other nations and actually increase it.
If China is "a dangerous nation" the way to counter it is by working with our allies. Trump has destroyed virtually all our alliances in three short years.
23
@Anne
How long will we keep the reserve currency with a radical, erratic President running the show?
The reputational damage done by Trump is immense.
16
I wonder how that $28 billion to the farmers will play with WTO, in view of the recent Boeing/Airbus ruling.
12
@Andrew
Which farmers are getting the $28 billion? Bet it's not the small ones like my friends who are dairy farmers. Still they will vote for Trump again, unless the Dems pick a solid moderate.
7
That’s my question, too. How much of that bail out went to corporate farmers and how much went to small farmers. And what about farmland owned by foreign companies but farmed by American workers?
1
@Sharon: unfortunately, the Dems can't do as you wish because amongst those who dwell in the Trump fantasy universe the phrase "moderate Democract" is an oxymoron. Anybody who doesn't buy the Trump/Tea Party dogam, hook, line and sinker, is by definition "radical".
3
It’s time we elected a president that understands economics and trade deficits. Elizabeth Warren is my pick for president precisely because she understands economics and has specific plans for dealing with income inequality which poses one of the biggest threats to our Democracy. Warren’s creation of the Consumer Protection Agency shows her commitment to the average American. That agency did great work to help Americans that were suffering at the hands of unscrupulous lenders. That is until Trump came along and did everything he could to eviscerate the agency. Republicans are only for the wealthy. Trump’s tax cut for the rich underscores that fact.
156
@Mary Do you think Warren would support free trade or markets? No way. Likely she will continue Trump's tariffs, possibly adding them to more countries. Trump's trade policies have been the one area many Democrats agree with.
She absolutely will support free markets. She is, in her own words, a capitalist - but in the best sense of the word. #WARREN2020
22
Since it is clear that China, at least under its present system of government (incredibly enhanced by decades of US trade), is an existential threat to the US, why not just halt ALL trade? And with Russia, too. Trump is a bit of a dolt, but at least he recognizes threats to the US, which none of his recent predecessors did. As the Russians used to say, we are engaged in selling the communists the rope that they will use to hang us.
4
@james
Great idea! Then we can pay welfare to all the farmers and manufactures, etc. that can no longer export products to Russia and China and consequently go bankrupt. That will improve our economy enormously.
17
@james ... Is China an "existential threat" to the US because it produces and delivers the goods that Americans choose to buy? More likely, Chinese industry is an "existential complement" to the US by filling the market niche that the declining US manufacturing sector cannot now and has never filled.
8
@james
The existential threat to US business is US Business that chooses chinese slave labor and cheap products and then complain because the Chinese drive a hard bargain.
The real threat from China is how much US debt it holds and its world wide program of providing development aid to countries in South and Central America where trump has cut aid. America First has become America left behind.
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Our trade savvy WH economic advisor masquerading as president, is all wet as usual. We are not surprised. We are fortunate that most citizens do not understand the trade debacle that Trump has made for us otherwise there would be rioting in the streets.
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Farmers are one of the beneficiaries of the trade war. The did get $28 billion in aid, with much more coming (Trump needs to buy their votes and farmers have signaled they what more money). Much easier to grow the stuff and pile it high than package and sell it.
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@David
Not true. They are hurting big time. Their products are perishable.
If the Democrats put up a moderate, presented on FOX news, pronounced that they are not for protecting a woman's right to choose abortion in the 8th month to a healthy fetus (this is in fact a HUGE issue for conservative voters ) they would win easily.
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Unfortunately, that person would be called "a Republican." No thanks.
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@Sharon Yeah, well, My Body My Choice is a HUUUUGE issue to Democrats so maybe if Republicans just 'pronounced' (sic) they are ok with freedom for all, including women, we could all just get along.
Yes, you are right. But the sad fact is that the truth does not matter to Trump. The only thing that matters is how he can speak and act like he is 'winning'.
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