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No More Excuses on Trade

 

Trump was in rare form Saturday at the G-7 press conference. It’s hard to argue with his thesis that free trade should be a two-way street. Trade concessions from our friends and adversaries alike must come, and I think they will come. I am a free trader. I believe a free exchange of goods leads to prosperity on the national and international level. I read Adam Smith and David Ricardo. Comparative advantage is a magical thing. But free trade has to be a two-way street. Let all countries reciprocate the free market access that we extend to them. I call for an equitable reduction in tariff and non-tariff barriers that benefits all countries.

When libertarians say that other countries’ tariff rates are none of our business, that’s a load of nonsense. Does this policy extend to all aspects of foreign policy? It’s none of our business when other countries block sea lanes? It’s none of our business when they invade and occupy their neighbors? Is it our business when countries sell nuclear and chemical weapons all over the world?

This is not a serious position. It is what I would like to call “the one-way street” approach to free trade. The idea that since free trade is beneficial it should be undertaken without reciprocation is extremely flawed. This approach may be the optimal one if you are a small country like Chile with no international market power. However, the US economy represents 22 percent of global GDP. That is power.

Of course, neither I nor President Trump intends to use this power to hurt other countries on trade. Proof of this is the fact that at the G7 meeting, our supposedly “protectionist” President floated Larry Kudlow’s idea for a tariff-free G-7. Yes, you read that correctly: Trump offered to eliminate all US tariffs on goods from G-7 countries if G-7 countries agree to reciprocate! Did you hear that? That was the sound of our mealy mouthed allies running out of excuses for continuing their unfair trade practices. It’s time for our allies to put up or shut up.

European sophisticates love to lecture Trump and his supporters on multilateralism and politeness, but they should practice what they preach. The German schoolmarm Angela Merkel, pictured above lecturing our President, needs to explain why the winner of WWII has to pay the loser four times the tariff rate on car imports. If our trading partners want free trade, it should be free trade that benefits everyone. No more protection of favored business interests. No more byzantine regulatory excuses. No more!

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There are 119 comments.

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  1. Member

    Shinzo Abe looks pretty relaxed there. I wonder if he and Trump discussed this prior to heading north. If Japan opened its market…well, cue the political cartoons with Trump as Commodore Perry.

    • #1
    • June 9, 2018 at 8:27 pm
    • 4 likes
  2. Member
    blood thirsty neocon Post author

    Chris O. (View Comment):

    Shinzo Abe looks pretty relaxed there. I wonder if he and Trump discussed this prior to heading north. If Japan opened its market…well, cue the political cartoons with Trump as Commodore Perry.

    Abe’s got more important fish to fry. He’s not about to lecture Trump ahead of the Singapore summit.

    • #2
    • June 9, 2018 at 8:30 pm
    • 7 likes
  3. Member

    Chris O. (View Comment):
    Shinzo Abe looks pretty relaxed there.

    Kind of an “I’m your huckleberry” look. But that’s just me.

    • #3
    • June 9, 2018 at 9:09 pm
    • 6 likes
  4. Member

    I can see Mutti is getting a migraine…

     

    • #4
    • June 9, 2018 at 9:12 pm
    • 2 likes
  5. Member
    blood thirsty neocon Post author

    BTW, German trade scholar Gabriel Felbermayr agrees with me. According to him, “the unweighted average EU customs duty is 5.2 percent, versus the US rate of 3.5 percent”.

    • #5
    • June 9, 2018 at 9:27 pm
    • 3 likes
  6. Member
    blood thirsty neocon Post author

    These thousands of Germans weren’t protesting Trump’s manners. They were protesting a trans-Atlantic free trade deal in the making. Trump seems to be on board with such a deal now. What about Europe?

    • #6
    • June 9, 2018 at 9:50 pm
    • Like
  7. Member

    I think Mutti has a busted flush, and Trump knows it.

    • #7
    • June 9, 2018 at 10:50 pm
    • 2 likes
  8. Member

    Most of this is pure bravado from all sides. Theresa May is correct we are all going to end up poorer.

    Trump clearly doesn’t understand trade as a win win. The diary cartel in Canada only serves to hurt Canadians, not Americans. But Trump message is designed for domestic consumption not for convincing others to change their practice.

    In terms of dropping all tariffs I sincerely doubt he means that. It be great, but this is the first time he mentioned it (I think) and the man is a tad bit capricious.

    Also what is this nonsense about being a victim because one is the worlds bank? When was a bank become a victim to anyone?

    • #8
    • June 9, 2018 at 10:54 pm
    • 7 likes
  9. Member

    That photo is so great. It’s staged just like a renaissance painting.

    And some folks have had fun with it.

    And my favorite:

    • #9
    • June 9, 2018 at 11:03 pm
    • 21 likes
  10. Member

    Not just the victor of WW2, but also the victor of the Cold War — Merkel and Macron have got some nerve, and May should be reviving Lady Thatcher’s legacy, not paving the way for a real-life Airstrip One under Corbyn.

    And yes, as a Tokyo denizen, I would surmise that Abe Shinzo has a better sense of proportion in these circumstances. Even if the DPRK threat and China’s intolerable bullying weren’t part of the picture over here, it’s not unreasonable to think that Abe might welcome Trump’s stance on trade to the extent that it provides a plausible excuse in the form of salutary “gai-atsu”/foreign pressure to move forward with the kind of structural economic reforms that were supposed to be the “3rd arrow” in the Abenomics vision of revitalization.

    • #10
    • June 9, 2018 at 11:09 pm
    • 9 likes
  11. Member

    This is something Trump campaigned on, and, like it or not, he seems to actually be going down the list (or at least checking off boxes as the opportunity comes up).

    I will [CoC] all of the Free Traders by saying this, but free trade has to be a two-way street, and for a long time the US has paid a huge price, not only at the cash register, but also in terms of military cost, for our allies in Europe and the rest of the world, and that has led to things like the Rust Belt.

    It’s not like we really need to be propping up Japan, Korea, and Europe with unfair trade anymore. [CoC], they are more than happy to take advantage of NAFTA and other agreements we have with other countries to their advantage, so I’d love to see that stopped.

    He may not be presenting “the deal to end all deals”, but I, for one, am glad Trump is actually negotiating and not just acquiescing with regards to trade. His posture there may [CoC] a lot of people off, but it’s an “I’m actually-negotiating” stance. And as we’ve seen, it’s probably nowhere near where the final position will end up (An aside, I hate the Nazis for taking basic English construction off the table. PM me if you don’t get the reference.).

    Also, I love that Bolton and his mustache are right by his side.

    • #11
    • June 10, 2018 at 12:34 am
    • 12 likes
  12. Member

    And our Canadian boy wonder in the back ground…. derp….

    • #12
    • June 10, 2018 at 1:11 am
    • 5 likes
  13. Reagan

    Everything Trump touches dies.

    He has a unique talent for blowing things up, and very little talent for working with others.

    I am looking forward to primarying that arrogant [CoC] and regaining our party from this home invader.

    • #13
    • June 10, 2018 at 1:21 am
    • 1 like
  14. Member

    All of the EU leaders attempting to lecture us on the evils of tariffs make excellent nominees for the Apex of Mount Hypocrisy Award. Especially the fro…er…I mean French, after how they treated their former colonies on trade issues in the last …well, forever. My question about the photo is: Can a Photoshop Job that looks more incompetent than this one get published? I want to know. It looks almost as bad as those old Soviet cut and paste jobs. 

    • #14
    • June 10, 2018 at 2:47 am
    • 2 likes
  15. Member

    Agree with everything. The problem is he picked the wrong leverage, the wrong sectors. Steel and Aluminum aren’t sustainable nor ultimately credible because tariffs on them harm us more than them, they are GATT illegal and just smell of subsidies to powerful special interests. Had he instead requested across the board uniform and low tariffs on everything, he’d be GATT legal, could then negotiate over years with partners who want to come in under the tariffs, they would reduce our current account discount and maybe even trade deficits while in place and wouldn’t lead to a trade war. And with the right sales pitch he’d get these sound economic policies from a constitutionally conforming process. Policies that are pure PR with weak or negative substance are what we’re supposed to be undoing.

    • #15
    • June 10, 2018 at 5:31 am
    • 4 likes
  16. Member

    Gary Robbins (View Comment):

    Everything Trump touches dies.

    He has a unique talent for blowing things up, and very little talent for working with others.

    I am looking forward to primarying that arrogant [CoC] and regaining our party from this home invader.

    Ridiculous Gary – this story on Fox sums it up in a nutshell:

    http://www.foxnews.com/opinion/2018/06/08/g7-should-listen-to-trump-or-go-away.html

    Love the picture above – it looks like Trump is singing ‘dada lala lala Merkel, I don’t hear you lalala’ without actually putting his fingers in his ears! Funny!

    • #16
    • June 10, 2018 at 6:22 am
    • 1 like
  17. Member

    Mitchell Messom (View Comment):
    In terms of dropping all tariffs I sincerely doubt he means that. It be great, but this is the first time he mentioned it (I think) and the man is a tad bit capricious.

    Do you remember Reagan proposing that all nuclear weapons be dismantled when he met with Gorbachev? I thought not. It’s called “Negotiating.”

    • #17
    • June 10, 2018 at 7:13 am
    • 13 likes
  18. Member

    Gary Robbins (View Comment):
    I am looking forward to primarying that arrogant [CoC] and regaining our party from this home invader.

    Yes, then we can go back to invading Iraq and shipping our industry to China.

    • #18
    • June 10, 2018 at 7:14 am
    • 23 likes
  19. Member
    blood thirsty neocon Post author

    Mitchell Messom (View Comment):

    Most of this is pure bravado from all sides. Theresa May is correct we are all going to end up poorer.

    It’s called a negotiation. We haven’t done that in a while, so it looks strange.

    Trump clearly doesn’t understand trade as a win win. The diary cartel in Canada only serves to hurt Canadians, not Americans. But Trump message is designed for domestic consumption not for convincing others to change their practice.

    I know, the universe bends towards justice; this is not who we are; and all that.

    In terms of dropping all tariffs I sincerely doubt he means that. It be great, but this is the first time he mentioned it (I think) and the man is a tad bit capricious.

    It would be great, so if he’s bluffing, then call him. If he truly is bluffing, then Trump skeptics on both sides of the Atlantic could make him look life a fool, just by taking him up on his tariff-free G-7 idea. I suspect that they won’t, because they have to appease certain business interests. 

    Also what is this nonsense about being a victim because one is the worlds bank? When was a bank become a victim to anyone?

    I believe he said ‘piggy bank’. The connotation is somewhat different.

    • #19
    • June 10, 2018 at 7:22 am
    • 7 likes
  20. Member

    Gary Robbins (View Comment):

    Everything Trump touches dies.

    He has a unique talent for blowing things up, and very little talent for working with others.

    I am looking forward to primarying that arrogant [CoC] and regaining our party from this home invader.

    We were told by the Obama administration that 2% growth was the the max we could achieve. Trump has already proven them wrong. Gary, your constantly repeated theme is crumbling before your eyes.

    • #20
    • June 10, 2018 at 7:23 am
    • 26 likes
  21. Member
    blood thirsty neocon Post author

    Gary Robbins (View Comment):

    Everything Trump touches dies.

    He has a unique talent for blowing things up, and very little talent for working with others.

    I am looking forward to primarying that arrogant [CoC] and regaining our party from this home invader.

    So do you agree with Trump’s tariff free G-7 idea, or not? 

    • #21
    • June 10, 2018 at 7:27 am
    • 4 likes
  22. Member
    blood thirsty neocon Post author

    After Trump made his tariff-free G-7 comment:

    Justin Trudeau: “I will always protect Canadian workers and Canadian interests,”

    Yeah, we know, that’s the problem.

     

    • #22
    • June 10, 2018 at 7:41 am
    • 11 likes
  23. Inactive

    That photo seems so old school, I thought it was a painting. Is there something in the composition and lighting that evokes 1950s photography or is it just my imagination?

    • #23
    • June 10, 2018 at 8:07 am
    • 2 likes
  24. Contributor

    Thanks, @bloodthirstyneocon! A thoughtful post. Since my understanding of tariffs is minimal, what would everyone have to lose with the level playing field Trump proposes? For countries who demand “equality for all,” they sound pretty greedy to me. Is this basically that they don’t want to lose the income from tariffs? Maybe this is too complex a question for this forum.

    • #24
    • June 10, 2018 at 8:13 am
    • 1 like
  25. Member

    Moderator Note:

    Rude. Personal attack.

    Gary Robbins (View Comment):

    Everything Trump touches dies.

    He has a unique talent for blowing things up, and very little talent for working with others.

    I am looking forward to primarying that arrogant [CoC] and regaining our party from this home invader.

    Get out of your burrow much, Gary?

    We’ve got full employment, a preserved Supreme Court and a fragmented opposition.

    [redacted]

    • #25
    • June 10, 2018 at 8:20 am
    • 7 likes
  26. Member
    blood thirsty neocon Post author

    Susan Quinn (View Comment):

    Thanks, @bloodthirstyneocon! A thoughtful post. Since my understanding of tariffs is minimal, what would everyone have to lose with the level playing field Trump proposes? For countries who demand “equality for all,” they sound pretty greedy to me. Is this basically that they don’t want to lose the income from tariffs? Maybe this is too complex a question for this forum.

    Thanks, @susanquinn, I’m not a trade expert either, but the simplicity of seven wealthy Western democracies all treating each others’ exports equally is highly appealing to me. Unfortunately, I know that the devil is often in the details. For example, to read about Canada’s byzantine system of dairy supply chain/price support management, read here.

    Maybe there is a complex history behind Canada’s convoluted dairy arrangement. Maybe the Canadian cows or dairy farmers were historically mistreated. I honestly don’t know. Fine, but if these domestic arrangements are so important to globalist sophisticates with French-sounding names like Trudeau, then said sophisticates should at least refrain from lecturing us about free trade and shared values, because Justin Trudeau’s affection for Canadian dairy farmers is not a shared value. It’s an excuse.

    Speaking of complex arrangements, the Trans-Pacific Partnership, which I reluctantly believe we should join, has different tariff rates for different products for different countries. For example, I’m sure there is a complicated reason that Vietnam needs a 37% tariff on rock lobster, while we have no tariff at all on this product, but it sure seems unfair to me. When people like President Trump talk about unfair trade agreements, this is what they are talking about. I want simplicity. Take the tariffs down to 0 for everyone. If the sophisticates want free trade, then let there be free trade. 

     

    • #26
    • June 10, 2018 at 8:46 am
    • 7 likes
  27. Thatcher

    Gary Robbins (View Comment):

    Everything Trump touches dies.

    He has a unique talent for blowing things up, and very little talent for working with others.

    I am looking forward to primarying that arrogant [CoC] and regaining our party from this home invader.

    And here me hoping you get to shake Trump’s hand soon as he runs for his third term in office.

    • #27
    • June 10, 2018 at 8:49 am
    • 5 likes
  28. Member
    blood thirsty neocon Post author

    Doctor Robert (View Comment):

    Gary Robbins (View Comment):

    Everything Trump touches dies.

    He has a unique talent for blowing things up, and very little talent for working with others.

    I am looking forward to primarying that arrogant [CoC] and regaining our party from this home invader.

    Get out of your burrow much, Gary?

    We’ve got full employment, a preserved Supreme Court and a fragmented opposition.

    [redacted]

    I will forgive Gary’s pessimism if he just answers a simple, direct question. Gary, tariff-free G-7: good idea or bad idea? Let’s put policy over personality, just for today.

    • #28
    • June 10, 2018 at 8:59 am
    • 4 likes
  29. Thatcher

    I love the picture, and I love the Germans released it thinking it makes Trump look bad. As a supporter, I think it makes Trump look like he is President of the world’s indispensable nation.

    • #29
    • June 10, 2018 at 9:20 am
    • 19 likes
  30. Member

    Bryan G. Stephens (View Comment):

    I love the picture, and I love the Germans released it thinking it makes Trump look bad. As a supporter, I think it makes Trump look like he is President of the world’s indispensable nation.

    You ain’t kidding.

    Imagine President Trump in a group of nation leaders, leaning over a table, trying to address any other leader on Earth. Would never happen.

    U! S! A! U! S! A!

     

    • #30
    • June 10, 2018 at 9:33 am
    • 7 likes
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