Tag: trade war

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free trade & free markets government transparency media and media people national politics & policies too much government

Most Outrageous Negotiation Strategy Yet

Trump cards, Donald Trump, The Madman Theory, strategy, negotiation, deal, trade, tariffs, trade war

The best defense of Donald Trump’s presidency, so far? He is smarter than the rest of us, and knows how to negotiate with bad guys and insider players. We have to discount what he is saying, the theory goes, because he is not telling truths … obviously. 

He is negotiating.

Take nothing at face value, including Trump’s professed beliefs.

Protectionism, for example. Trump has long been against NAFTA and the modern version of “free trade.”* But, as I noted in late July, Trump does not seem to be demanding managed trade, or high tariffs as a means to protect American producers, or even tariffs as a means to increase government revenue. He appears — at least some of the time — to be using tariffs as a way to bargain other countries to reduce their tariffs.

This method has not worked in the past.

But is Trump different enough a politician to pull off a “madman” strategy to get leaders in other countries to do the right thing and reduce their tariff and regulatory burdens on their own countries?

A long shot — and several sectors of American business are being hurt right now in this “negotiating” (threat) phase of Trump’s outrageous gambit.

Another area where one might express such hope for a master-​negotiator president is in reining back the Pentagon. In the run-​up to November 2016, Trump sure seemed defiant of the neo-conservative/neo-“liberal”/center-left establishment on foreign policy.

But now he just signed a huge increase in the Pentagon budget: an $82 billion increase.

Is Trump’s plan to bring big-​spending military-​industrial complex lobbyists to heal by first giving them what they want?

That. Won’t. Work. 

This is Common Sense. I’m Paul Jacob.

 

* Post-​WWII trade policy has consistently defended treaty-​based global trade, but with heavy elements of protective tariffs, regulations and subsidies, making the whole thing look less like Free Trade and more like Mis-​Managed Trade.

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Accountability free trade & free markets general freedom national politics & policies property rights responsibility too much government U.S. Constitution

The Trump Trade Enigma

Trump, worship, trade, trade war, tariff, free trade, trade deficit

President Donald J. Trump, former “reality TV” star, often seems merely to skirt reality.

“Our trade deficit ballooned to $817 billion,” President Trump exaggerated to the “men and women of U.S. Steel” last week. 

“Think of that. We lost $817 billion a year over the last number of years in trade,” he went on. 

“In other words, if we didn’t trade, we’d save a hell of a lot of money.”

This is the sort of dopey bunk a drunk at a bar might say, after the fourth shot had obliterated any remnant of economic understanding from his synapses.

But the president said this in Granite City, Illinois, in front of cameras, a live mic, and a cheering crowd.

And yet, as I wrote yesterday at Townhall, Donald Trump is now explicitly aiming at a worldwide free trade policy, negotiating to break down trade barriers and get rid of subsidies on … well, “non-​automobile industrial goods.”

I’m almost afraid to ask him why not all industrial (and, for that matter, agricultural) products. Could one expect a coherent answer from someone who does not understand that an $817 billion “trade deficit” means that we, the consumers of the United States of America, got stuff from each billion spent? Each dollar?

And yet, if he pulls off worldwide free trade agreements — for whatever reason — he may almost be worth the attention that Bussa Krishna, of the southern state of Telangana, India, gives him.

The man set up a shrine to worship Donald Trump.

I will never do the same. But I’d tip my hat to almost anyone who fosters trade, and the peace and progress trade brings to the world.

This is Common Sense. I’m Paul Jacob.

 

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Accountability general freedom ideological culture media and media people moral hazard national politics & policies Regulating Protest Second Amendment rights

The Other Kind of Trade War

trade war, fractured, division, Alex Jones, censorship, boycott, civility, civil discourse

President Donald Trump’s promise — threat? mere negotiating gambit? — to add a 25 percent tariff on steel could usher in a new international trade war, which he says is “easy to win” but which in reality could lead to a cascade of tariff increases worldwide, throttling trade and plummeting us into a Great Depression.*

This is not just politically divisive (designed to please his protectionist base), it’s socially and globally divisive.

But that’s not the only radically divisive move at present. 

Last weekend, YouTube froze, for a short time, the account of one of the most popular channels on the video service, Alex Jones’ Infowars. This is part of a major effort by Google’s platform, Jones says,** as well as a general trend by businesses and European governments, to suppress the speech of the strongest critics of open immigration, PC speech codes, gender politics, and outrageous media bias. Though, in Jones’ case, admittedly peddling some ridiculous conspiracy theories in the process.

YouTube has admitted that the new people the company had hired to police the platform — from the Southern Poverty Law Center, Jones pointedly emphasizes — had taken down thousands of sites without cause.

For partisan reasons. Apparently.

Jones and many other YouTubers call it a “purge.”

What to make of all this I’m not sure. But I do know that the pressure that activist groups are putting on some companies to sever all ties with the National Rifle Association has an obvious problem: fracturing the market into warring political tribes.

Do activists on the left not see where this ultimately leads? Some companies serving half the market, others the other — this is a disaster in the making.

I prefer civil discourse.

And democracy.

This is Common Sense. I’m Paul Jacob.

 

* Just as it happened in 1929 – 1931 with the Smoot-​Hawley Tariff Act.

** Infowars insists that CNN is behind at least some of the push against Jones’ popular radio/​podcast news-​and-conspiracy commentary business, as CNN’s own coverage more than suggests.

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free trade & free markets

Tire Trade War, Tiring

Political folly comes around, again and again, like a puncture in a rapidly deflating tire as you drive down the freeway. The end is never good.

President Obama and congressional Democrats pushed a tariff hike on China-​made tires, up to 35 percent — and the WTO okayed it. They excuse their action because they wish to “retaliate” against China for its alleged monetary “manipulations” — manipulations that bear remarkable resemblance to our own Federal Reserve’s policies, by the way — which they say cause our current trade imbalance.

And, like non-​economists everywhere, these buffoons judge the trade deficit a horrible thing. The fact that U.S. consumer’s get great benefit from lower-​priced goods coming from China, and can — as a result of less expensive, Chinese-​made tires – afford to replace their tires more often, thereby saving lives and health-​care costs, doesn’t appear in politicians’ protectionist arguments.

It’s the economy that’s making our representatives stupid, of course. Blaming foreign competition is an easy out, when times get tough. It helps you avoid blaming your own country’s regulations, taxes, and (ahem) monetary policy.

This blame game is nothing new. The Smoot-​Hawley Tariff was pushed through early in the Great Depression, and it made a lot of sense to … politicians.

But the the trade wars the infamous tariff engendered became a major factor in making the Great Depression so Great.

Our politicians, reviving tired old policies — regarding tires, no less — merely make matters worse. Greatly worse.

This is Common Sense. I’m Paul Jacob.