Trade Wars – What doesn’t work

“Trade wars are good, and easy to win”  Donald Trump March 2, 2018 tweet

Trump would like to pressure China into respecting intellectual property.  A lot of folks who understand free trade say this is fair and right.   Trade wars using tariffs don’t work.  In fact, the outcomes are so absolutely predictable, the other country will retaliate.  We have a 34 billion dollar tariff against China, so they impose equal tariffs against us.   Their and our exporters get hurt.  Does any country gain leverage on trade disputes by first imposing tariffs?   What tariffs have done is to end trade discussions between countries.   Policy changes can’t proceed while trade wars are in progress.   So, the idea of waging war and peace doesn’t work.  And leverage would work if one country is feeling real pain and the other is not.  But, this isn’t the case, and our pain is very apparent to voters.  China doesn’t have voters, so their tolerance is as high as the leaders want to go.

Really dumb.

Stay tuned,

Dave

PS.  I’m working on another blog called Presidential lies and myths.    Trump’s tweet on trade wars is a myth and it’s a whopper.   Lies usually have some false statistic associated with them, most notably with immigration and the economy.

 

 

 

 

Freshly brewed morning news on trade

Front page of today’s  New York Times.   “As US Steps back on Trade, Allies Move on,” Peter Goodman, correspondent from London, writes:

In the master plan advanced by President Trump, an unabashedly aggressive United States is supposed to retain its rightful perch as the center of the commercial universe, wielding its economic dominance to dictate the rules to the rest of global trade.

As it turns out, the rest of the planet has its own ideas.

Gee, what a wonderful way to say we don’t all think the same.  And what sounds good, sometimes isn’t!  Two  beautifully written sentences in the morning goes well with coffee and toast.

The rest of the article adds more details on the collaboration between the European Union and Japan on trade. It certainly adds to other stories of the day, such as the Qatar crisis,  where unintended consequences can be completely contrary to the original intent of a strategy.

Madeleine Albright got it right when she said international relationships should be considered more like a game of billiards rather than a game of chess.    The balls in billiards are all clustered together, but when hit, they go in different directions.

Stay tuned,

Dave

 

 

Don’t you worry ’bout a thing

Stevie Wonder,  released 1973.

I talked to someone about Trump, and he tells me we are in good hands.  He listens to Fox News and plays golf 3 times a week.   Not a bad life.

There are some real tough questioning coming up on Trump’s cabinet positions.   I guess the most troublesome is our future relations with China.  We can not have a trade war with China, and expect their help in stopping North Korea’s nuclear plans.

I would think there is nothing more urgent than a united front against North Korea.  Trump would be wise to remember that a majority of Americans voted for Hillary Clinton, whose campaign slogan was “stronger together.”

There was a great discussion on Fareed Zakaria show (GPS)  with James Baker, saying that what previous republican presidents (Reagan & HW Bush) have favored was free trade agreements, and Trump’s new cabinet tends more towards protectionism.   Baker said Trump as candidate, or now president-elect is not the same as when he actually moves into the White House with the staff making recommendations.

Baker may be right.  He’s not yet our president.  However, the more Trump goes after Mexico stealing our jobs  and their citizens pouring over the border, the more I worry that it’s the same old Trump,  always playing politics with an incoherent foreign policy strategy.