Ricochet is the best place on the internet to discuss the issues of the day, either through commenting on posts or writing your own for our active and dynamic community in a fully moderated environment. In addition, the Ricochet Audio Network offers over 50 original podcasts with new episodes released every day.
Trade Wars Are Easy to Win
The President demonstrated his ignorance of the basics of trade once again this morning with a classic tweet:
Tariffs are the greatest! Either a country which has treated the United States unfairly on Trade negotiates a fair deal, or it gets hit with Tariffs. It’s as simple as that – and everybody’s talking! Remember, we are the “piggy bank” that’s being robbed. All will be Great!
— Donald J. Trump (@realDonaldTrump) July 24, 2018
Someone should tell that to Harley Davidson and Whirlpool who just cut forecasts due primarily to the impact of tariffs. At least their workers benefit as their jobs will remain in America. Oops.
At least the American farmer, the bedrock of our nation, remains unaffected. Damn. Don’t worry about the great American farmer, however, President Trump has just the plan to fix this.
Once again we find out that it is the politically connected who are protected from the destruction wrought by trade wars:
The Trump administration plans to offer billions of dollars in aid to farmers hit by tariffs on their goods, an emergency bailout intended to ease the pain caused by Trump’s escalating trade war in key electoral states, people briefed on the plan told CNBC.
The total aid amount is reportedly about $12 billion. A senior administration official told NBC News that the aid would be temporary.
The announcement could come as soon as Tuesday afternoon, hours after the president proclaimed on Twitter that “Tariffs are the greatest!” An industry source briefed on the plan said the package could use existing programs designed to mitigate price and coverage risks, and could target dairy, pork and soy products.
So, to combat the predictable effects of an ill-considered trade war, the President is going to mortgage the future to pay off those in the present. Well, at least Trump is starting to act like a typical Washington politician.
I hate to say I told you so, but…
Published in General
Don’t bring up automation. @henryracette will get angry….
Am I the only one that finds it strange that The Federalist does not have an article about this? Mollie Hemingway and Sean Davis‘ twitter feeds are also strangely silent on the issue, though Sean does have a re-tweet on the subject designed to own the libs.
So much winning.
I’m not a protectionist, but I also don’t like that we try to pretend that oppressive countries like China with oppressive and borderline hostile policies should be treated as equal or better than equal to trade with. They should be treated like North Korea and Cuba until they become free.
Unfortunately I don’t credit The Federalist with much objectivity when it comes to Trump.
He’s dealin’.
Added:
@columbo makes my point in more detail over here: EU Chief Juncker’s Junket To Washington
How do you propose treating them? Are you suggesting breaking off trade with China?
TPP was designed to isolate China because of their trade practices. We killed it. Now we’re trying tariffs. In my opinion, we have done the exact opposite of what would work.
I’m late to this, Jamie. Just read it. Bravo for writing it.
I just heard this morning that no matter how many times his people try to tell Trump that he is wrong on the Trade Deficit, he will not listen.
I am curious about one thing, however. And forgive me if you’ve answered this. I don’t have time to read all the comments: How would you handle China? I think tariffs are wrong, and will hurt us. But isn’t China a separate issue, with their stealing?
:( I misread what you said as “Chinese manufacturing company.”
I’m a dunce at times!
I think “vacuum of a text book” is a cop out. You can invalidate any argument that way- but it is a fallacy. There are unseen and unknown consequences, but immediate benefits (to a small group). This is quantifiable, but harder to do, and much harder to publicly disseminate.
Totally agree.
That would be wonderful. I’d like to hope he keeps this up, and not the sort of mindset we see in the OP. Fingers crossed!
I think “unseen and unknown consequences” is a cop out.
How so?
The exact same way that “vacuum of a textbook” is.
I agree that if this is the actual end goal then I will be pleasantly surprised. Until I see evidence that this is what is actually happening I will remain skeptical. As I have been told by many on this forum: don’t pay attention to what Trumps say, definitely don’t pay attention to what he tweets, only pay attention to his actions. The President’s history on this subject is that he sees all trade, all “deals” as zero-sum: there is always a winner and a loser. I await being proven wrong on this.
They aren’t analogous. The broken window fallacy is a well known and econometrically measurable element of economics. The “vacuum of a textbook” is a slogan meant to circumvent critical analysis of ideas.
A book the President didn’t write is analogous to a policy he doesn’t believe in?
The implicit assumption behind this Trump metaphor is the fallacy I was referring to when I spoke of the basic laws of economics.
I used that phrasing not to invalidate the relevant tenets of economic theory (I fully subscribe BTW). Rather, I’m considering a “greater good” argument. Preventing China’s long march to global hegemony will have some costs.
I was for tariffs before I was against them…
That was not my intention (see #110).
I would like to propose tariffs on ladders and toner cartridges.
As the “deal maker” works out his trade strategy, let us not forget his financial skills.
Fair enough.
No apology necessary.
One would think that supporting TPP would have been a prime goal of those worried about China’s long march to global hegemony. (I don’t know where you specifically came down on TPP so this isn’t directed at you). One would also think that targeting our allies with tariffs, allies that often have lower average tariffs than the United States, would also hamper this goal given that China is currently doing everything possible to reestablish a “silk road” to Europe.
No – “unseen and unknown consequences” is an explanation of why a particular theory might be wise. Have you heard the economic discussion of broken windows? That someone might say breaking a window is a good thing because it employs the window-maker? The reason that example gets used in economics is specifically to illustrate the importance of “unseen and unknown consequences.” In other words, they are not absolutely unseen and unknown (i.e. unseeable and unknowable), but they are not immediately apparent, either. You should look for them when considering the wisdom of any policy. This is one of the most powerful arguments against government action over private sector action. That is the opposite of a cop out.
Haha – I wrote my response before reading subsequent comments. Sorry for the redundant comment, there.
TPP was problematic in that it included a lot of regulatory (labor, environmental) and other meddlesome aspects to it. Those aside, it was weak tea as a containment strategy against China—a mere bump in the road on the long march (e.g.: “silk road” to Europe would be unencumbered). Furthermore, containment is insufficient. The leadership of Red China needs to be taken down a few notches.
As for the targeting of other allies, some of it seems a bit aggressive, but how else can one move other governments off of entrenched anti-free trade positions?