Tag: trade

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Tariffs and the looming threat of a trade war, the White House shaking up its economic team, and the president suggesting another round of tax cuts begs the question: what next in Washington, DC? Dr. Michael J. Boskin, a Hoover Institution senior fellow and the Tully M. Friedman Professor of Economics at Stanford University, discusses […]

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China is a big player in economic and geopolitical matters, including trade, global aspirations, and finding a solution to the escalating tensions with North Korea. Michael Auslin, Hoover’s inaugural Williams-Griffis Fellow in Contemporary Asia, discusses North Korea, China, trade wars, tariffs, ICBMs, China’s one belt one road plan to link the infrastructure and trade of […]

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While I would never claim to understand something completely, which I don’t, I do try to use common Sense. And my common sense tells me that free trade is good for everyone. Sure, some people might lose at the outset, when new products arrive on the market. But such is the nature of things. If […]

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Richard Epstein opines on whether Donald Trump or Barack Obama deserves more credit for the current economic expansion, then tackles the policy agenda the president laid out in his State of the Union address. More

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The Looming NAFTA Disaster

 

The North America Free Trade Agreement (NAFTA) among Canada, Mexico, and the United States was put into place in November 1993 with the staunch support of the Clinton administration. A sweeping agreement that lifted major trade barriers among these three nations, NAFTA had its share of problems when it was implemented, including the dislocation of some workers. But the mutual gains from free trade dwarfed any losses associated with the agreement. Now, over twenty years later, NAFTA needs to be updated to take into account new technologies, such as those associated with the digital economy. As the agreement gets renegotiated, all three parties should make as few changes as possible to bring the agreement up to date without altering its fundamental structure. But that might not happen. Each of the three signatory nations has adopted a tough bargaining position that could result in a breakdown of the treaty, which would be the greatest trade disaster in recent years.

The American public seems to be mixed on free trade. On the one hand, during the recent presidential campaign, much of the electorate, including many Republicans, turned against the Trans-Pacific Partnership (TPP), a free trade deal among Pacific Rim nations, while still announcing their support for free trade in the abstract. But upon taking office, Donald Trump proudly but foolishly withdrew from the TPP, and since that time has taken every opportunity to denounce free trade and to express his frustration with NAFTA. Today, his demands on NAFTA, as communicated through his trade representative Robert Lighthizer, have effectively deadlocked negotiations going forward.

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Recorded on September 26, 2017 The largest nation on the other side of the Pacific Rim plays an outsized role in economic and geopolitical matters, including trade, global aspirations, and finding a solution to the escalating tensions with North Korea. Michael Auslin, Hoover’s inaugural Williams-Griffis Fellow in Contemporary Asia, discusses just how communist China is, […]

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Trump’s Flawed Protectionism

 

In the midst of the din over Charlottesville, let’s not overlook the Trump administration’s controversial stance on free trade. This smoldering problem has risen to the surface in the delicate negotiations that the United States now is undertaking with China over the status of American intellectual property rights, and with Mexico and Canada over the North American Free Trade Agreement. Before looking at the particulars of these two disputes, it is instructive to set out the intellectual case for free trade, which Trump has consistently misunderstood.

The basic insight here is that ordinary contracts between private parties are not neutral; they produce gains for each party. If I swap my horse for your cow, it is tempting, but wrong, to say that no value has been added for the parties because we have the same horse and cow after the transaction that we had before it. So why worry, the argument goes, if the trade does not take place? This facile argument ignores that these transactions are costly to complete. Why would two parties waste money to organize a trade from which neither side has gained? Even this simple trade is a positive-sum game that produces for each side a net advantage that exceeds the costs of putting the deal together. I could desperately need a cow for milk or breeding, and you might need the horse to pull a plow. The trade allows both of us to get greater value by the more efficient deployment of existing resources. That short-term advantage has long-term effects, by letting me breed horses while you breed cows.

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Tucker Carlson on Trump and DC Republicans

 

Last night a friend of mine (a former Ricochet member) e-mailed me the following video clip. This clip is of a speech that Fox News host Tucker Carlson gave to the International Association of Fire Fighters back in March:

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The future of UK trade policy: Remarks from the Right Honorable Liam Fox MP, UK Secretary of State for International Trade

 

In this AEI Events Podcast, AEI’s Claude Barfield and Michael Strain host the Right Honorable Liam Fox MP, the UK’s Secretary of State for International Trade, to discuss international trade policy in the wake of Brexit. Dr. Strain welcomes Dr. Fox back to AEI and delivers introductory remarks.

Following Dr. Strain’s introduction, Dr. Barfield sits down with Dr. Fox to discuss the steps the UK is taking domestically to form a sovereign trade policy and the future of UK-US trade relations. Dr. Fox is leading the effort to redesign the UK’s trade policy after the departure from the European Union. He believes the UK undoubtedly will leave the EU by March 2019 — the question that remains is the process by which it will leave.

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This week on Banter, Dr. Desmond Lachman discussed the UK’s June election and its implications for Brexit negotiations. Dr. Lachman is a resident fellow at AEI where he studies the global economy. He previously served as deputy director in the International Monetary Fund’s (IMF) Policy Development and Review Department. This week, Dr. Lachman hosted a […]

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Dave Carter on Syria and Gorsuch

 

Dave Carter joins us at the Whiskey Politics Podcast after one of the most news-heavy weeks in recent memory where we had a breaking story seemingly every 3 hours. We decided to focus on 2 issues: Syria and the Supreme Court and Dave C. shares his perspective on both, as only he can.

@DaveCarter is a household name for Ricochet.com members, but for those who have not had the pleasure of reading or hearing Dave’s work you’re in for a treat. Dave’s a cross country truck driver, a Veteran and Security Forces member and Senior Historian authoring over 40 volumes of Air Force histories. In the US Air Force Dave was deployed throughout Asia, Europe, and the Middle East accompanying aircrews on combat missions. He’s a former private detective, a radio show host and a Contributor for Ricochet, The Federalist, and Conservative Review. Dave’s new podcast “Radio Deplorable” can be found at Ricochet.com.

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Our favorite Navy Fighter Pilot, @BrentB67 (let’s get him back on Rico!) joins this week’s Whiskey Politics podcast to discuss the current economy. Brent Berarducci of BlackLion Capital Management shares his unique and timely perspective as we talk about the trend towards populism, the U.S. debt, trade protectionism, and just what the heck is happening in Saudi […]

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A Simple Explanation Why the Trump Theory on Trade Deficits Is Wrong

 

This explainer from Mike Feroli at JPMorgan does a pretty good job showing why a focus on trade deficits as a measure of US economic vitality is wrongheaded (bold is by me):

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Trump vs. Free Trade

 

It is hard to believe that less than a week has passed since Donald Trump made his presidential address to the joint houses of Congress. The success or failure of his administration will depend largely on the policies it adopts—and his speech is a good window into his administration’s plans. Trump articulated pro-market views domestically, but deeply flawed protectionist views internationally. It’s possible that genuine economic growth will result from the former. But it is equally plausible that implementing his protectionist trade policies will lead to economic disaster. How he resolves this tension may well determine whether he succeeds or fails as president.

Trump’s recipes for domestic economic reform are often right on the money, given that they loosen regulatory barriers that thwart domestic competition. His speech was on target when he announced that “the time has come to give Americans the freedom to purchase health insurance across state lines—creating a truly competitive national marketplace that will bring cost way down and provide far better care.” The President understands that competition drives prices down and reduces administrative costs. This economic victory was squandered when the Affordable Care Act spurned interstate competition in favor of a hugely complex system of regulatory markets that have proved to be, as predicted, unsustainable.

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Trump Leaves Transgender Debate to States, 4th Circuit Attacks 2nd Amendment, Fleecing of the Kings

 

Greg Corombos of Radio America and David French of National Review applaud the Trump administration for rescinding Pres. Obama’s demand that all public schools embrace transgender accommodation and leaving the issue to states or local school districts. They also slam the Fourth U.S. Circuit Court of Appeals for ruling that any gun can be banned if it’s “useful for military service.” And David vents about the one of the worst trades in NBA history.

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Is Trumpism Sustainable?

 

Victor Davis Hanson examines the early initiatives coming out of the Trump Administration and reflects on whether the new president’s momentum is sustainable over the long run.

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So Would the GOP Border Adjustment Really Be a Big Tax on Consumers?

 

House Republicans — and maybe President Trump, too — want to shift the US corporate tax system to a destination-based tax with a border adjustment. There’s been a lot of confusion about this border adjustment feature. Wall Street Journal reporter Richard Rubin offers a good explanation:

Think of it as a tax getting added at the border to imports and subtracted from exports. Target Corp.’s cost of buying toys from China wouldn’t be deductible from U.S. taxes. Exports—think of an American apple farm’s shipments to Canada—wouldn’t count as income for U.S. tax purposes. The Republican plan would add the border adjustment to the U.S. corporate income tax, which is expected to drop to 20% from 35%. So the tax on imports for corporations would be 20%.

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Ricochet and the TPP

 

Ricochet began as a podcast and a subscription-based website, but quickly became a community that extends well beyond. Perhaps it would be more accurate to say it began with the unlikely friendships of its founders — @peterrobinson and @roblong — so the ensuing meet ups and social media interactions of members should not be surprising. Via Facebook, Twitter, or face-to-face, the debates and conversations don’t end here.*

Nor do they always begin here. And sometimes, that’s regrettable because I learned a thing or two that others could certainly appreciate. Case in point, @jamielockett proposed elsewhere that President Donald Trump’s decision to withdraw from the Trans-Pacific Partnership was a mistake. That led to the following exchange including myself, Jamie, and @jamesofengland, reprinted here (somewhat abridged) with their permission. 

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The Anti-Business Businessman

 

We’ve been instructed not to take our new president literally, but instead seriously (in the felicitous phrasing of Salena Zito). As I write, there are hints that the inaugural address will focus on the theme of “America First.” President-elect Trump may or may not be familiar with the historical taint of that phrase, but in any case the meaning he attaches to it has been clear enough.

Throughout his career, Mr. Trump has been consistent on two issues: trade and admiration for strong men. He departs from the consensus about American leadership in the post-World War II era. Rather than seeing US security guarantees and promotion of trade as providing the means through which the world (and the US) has seen unprecedented growth, peace, and prosperity, he thinks we’ve been chumps.

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How Far Back Do the Populists Want to Turn the Clock?

 
The old Heinz factory, now a combination of residential lofts and a manufacturing facility, sits among houses in Pittsburgh.

From Janan Ganesh in the Financial Times:

What western electorates seem to want is a correction of the liberal model, not its extinction. The marginal British voter, who braved EU exit, but only just, can worry that freedom — to migrate, to trade, to avoid taxes — has run away with itself since the millennium without pining for Ye Olde Worlde rigidities.

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