The President finally made good on his trade threats, imposing punitive duties on Chinese and South Korean exports. American consumers and workers will foot the bill.
He needs to go A LOT farther. It’s not capitalism to be “trading” with, outsourcing to, or importing from unfair traders, and especially not ones ruled by authoritarian communist regimes. Americans have footed the bill with unemployment directly if theirs was a tradable sector job lost, and most non-tradable sector jobs suffer wage depression from those millions unemployed who then seek their own non-tradable jobs.
I still say they ought to rename this rag Against the American Interest
Figures I would be reading William McKinley’s bio this week. He was the expert on protective tariffs. It is one of the core divides of American political history – the early Dems favored free trade, the GOP believed in protecting young industries with tariffs. In the 19th century, every time the Dems got their way, a panic ensued, and unemployment skyrocketed. Apologies to Joffe, skipped from his opening line to the comments. My interest in the trade balance ended, after being quite expert with trade data and laws, 1990-2006. No good reason for most of nondurables to migrate offshore. When I had to buy major appliances in 2006, the only stove Made in USA was by Bosch, because USA unit labor costs are lower than in Germany.
In other news, thought you’d like to see how FEMA, and the DoD are still helping Puerto Rico recover from Hurricane Maria: January 18, 2018 – Over 15,000 poles have been delivered to restore electricity in Puerto Rico https://www.fema.gov/media-library/assets/images/157212 https://uploads.disquscdn.com/images/2dc027b3ebf36341ce86d9cacd37982d883c2a6993b21b8c762ab1f7275c282a.jpg Photo: Eduardo Martinez/FEMA I got confused when DoD Tweet today showed same photo, implying it happened today. I was trying to find the source of the poles.
I see TAI has posted on Turkey.
Adam needs a sane Photo Editor, and, a literate Copy Editor.
I guess it’s a trade war if the US finally fires back after being fired upon nonstop for decades. But only if the US fires back!
Not to excuse the behavior, but Japan and Korea seem to have devalued their currencies, at least in large part, to compete with the Chinese regime which does it also. There supposedly #2 economy in the world has a currency with a 100 for the largest denomination, 100 rmb, yet that is worth less than $20! Last time I checked was worth about $16.05 Lol. Something is not right there.
Well it’s been a double whammy. Not only is the RMB too low for what it should be, but the USD has been pushed artificially high! Jumped up about 25% between 2013 and 2016 alone. Terrible. Makes exports less competitive and expensive at the exact same time it makes imports cheaper. Of course it’s partially done by the Japanese and Chinese alike buying treasury securities, but there are other factors. Dollar denominated asset demand equals upward pressure on the dollar.
Even worse is when they take some of America’s own trade deficit dollars and then use those to buy US firms, or large stakes of them. And those in the economic illiterati call that “investment” lol. It’s really no wonder the country has lost millions of decent jobs and replaced those with millions of lower-paying jobs, and been in relative decline for decades.
What it boils down to is simply this: The vast majority of US imports are finished goods, like washers and dryers. The vast majority of those imports enter the US tariff-free, or very low tariff rates of just a couple percent. By stark contrast, many finished goods and products do not enter china tarrif-free or even at a lower rate.
In fact, the situation is so unfair and absurd that just a couple of years ago it was big news that the regime decided to cut tariffs on many things, like many apparel items such as footwear, as well as some appliances, from 25% to 12.5%. Slow clap.
I guess we are supposed to laud that as great progress.
Of course the country has been in relative decline for decades. At the end of WWII, we were the only large country that hadn’t had our core areas overrun or bombed. Our relative position was guaranteed to shrink from that.
The US has been running a consistent and growing trade deficit for 40 years. In part, thats certainly do to Japan, Germany and others finally finding their bearings over those 30 years since WWII (an endeavor of rebuilding that the US helped them with as long as they fought the Cold War Americas way), and the US not doing very smart trade with them. A bribe during the Cold War
Two problems. 1. Cold war is over, or at least it was until the Democrats wanted to reignite it over embarrassing defeats in 2014 and especially 2016.
2. Has never made sense to do massive amounts of unfair trade with a state that is not an ally or even really a partner, like China.
Hey, if it’s the cold war again and we have to be so terrified of Russia airing Clinton and DNC dirty laundry, well we’re definitely going to need to stop sending so much money to Beijing, right? Hmmm.
Not just a bribe during the Cold War — it was a lesson learned from the way the Germans were treated by the Treaty of Versailles, which specifically prevented them from trading and prospering (and led to another war.)
I think it’s somewhat foolish to get into an argument with a pair of NKVD trollbots and a fellow who thinks that the nominal value of the unit of currency has anything to do with trade. Really, would anything change if the US used as currency the penny or the franklin? I’d let the trolls have the last word and move on.
The value of a currency absolutely has to do with the price of your exports and whether they’re competitive or not lol. I saw you get caught on another thread. You run the Anthony account! I can’t believe they haven’t kicked you off here for that. You were like having a conversation with yourself
Leave me out of your tete-a-tete; realize that some Americans (and others) recognize “tells”.
Can’t do that. You’re the same person. To Anybody reading the thread it’s so clear. I’m going to find that again.
I’ll make this real brief (as I’ve engaged you once before and I’m not sure you’re real – but for me that’s irrelevant now): You aggregators since late 2016 (at American Interest, National Interest, et al) have an agenda; not a new one, just new instruments to attempt its execution – continue on! And I leave you with Pait’s favorite maxim: let the Troll have the last word.
You mean your maxim! So, you’re talking to me, and then not even sure if I’m real? You don’t even know how crazy that reads lol. Never leave us Anthony/Pait lol
Pait. Oh, Pait. Lol. Lord have mercy.
He’s hilarious, isn’t he?
So now people who disagree with you are NKVD trollbots? Jesus man, this is stupid even for you.
As for you running away, like I said, you should try living a life as if you are not a little b!tch.
Well, almost guaranteed. We’ve been on the leading edge of every single technological wave since then, and that could have made the difference.
However, our foreign policy was to sell out American workers for friendship with other countries, via trade deals. It’s like the old Polynesian myth, where a guy with a pet whale regularly has whalemeat barbecues, figuring his pet will never miss it.
Sorry Foggy Bottom, Trump’s election means your job is harder now.
The problem is that your first paragraph isn’t true.
Aside from computers and the internet, which Americans pretty much invented, what do you have in mind?
Innovations in manufacturing processes, mostly. One of the silver linings for Germany, Japan, and the Asian Tigers was that the factories they built were designed to use techniques developed in the 50s, 60s, and 70s, because that was when the factories were built. American factories, on the other hand, were less efficient because they were built earlier–and, understandably, their owners didn’t see why they needed to change until their lunch started getting eaten.
It’s the same sort of problem Britain had when Germany industrialized in the late 19th century–the tech the Germans started with was more advanced than the tech the Brits started with, because the Germans industrialized later.
The fact is that while American trade policy might have exacerbated the Rust Belt, it was going to happen as the Japanese, Germans, and Koreans cut into the export market thanks to lower production costs.
Well, considering the beating our manufacturing sector has taken in the last couple of decades (massive factory shutdowns and the like) it would seem to me that an American manufacturing Renaissance would not suffer from sunk costs today like it would have then.
Probably not, which is one of the reasons American manufacturing has been picking up. However, the jobs will not be as plentiful as they were in the 50s and 60s, thanks to increased automation and the like.
Hard to say if they will be as plentiful, that depends on the number of factories too. And, factory owners will need their employees to be customers if they want ends to meet.
There are more restoring forces here than progressive pessimism can imagine.
Alright. So let’s declare that the New Dollar is worth half a penny. Then America will have the most devalued currency in the world and will become rich ate everyone else’s expense.
Or perhaps the Dollar Fuerte should be worth 100 old dollars. The America will have the strongest currency in the world and will be the richest. Number 1! I’m not clear which of the ways you trolls prefer, but I’m sure you’ll agree to call it the Trump dollar in Bolivarian fashion and that it will be the biggest and smallest.
Kiddo, you need to go to school! How can you say something so inane unless you’re just a kid and you don’t know any better, is that it? For your benefit and the benefit of any other kids reading, it’s the reason why Chinese or Japanese and other countries in the past have pegged their currency to the dollar various times. To get more dollars by boosting their own exports!
The dollar becoming two or three times more expensive than it is currently would do even more damage to US exports. And It’s not going to become as worthless as a penny because the US does not get to decide, at least not completely, how much it’s worth! It’s a free floating currency! The sheer volume of trade done in dollars means it’s going to be worth a substantial amount, and that’s one of the problems with the RMB. That’s not a democracy in Beijing, and those are not fair traders, and they keep it artificially low by fiat and capital controls and buying treasuries to pump the dollar up.
There is no excuse for one dollar being worth like 6 or 7 RMB. That’s just utter nonsense. Somebody is wrong. Either the dollar is way too high, or the RMB is way too low. In reality it’s a little bit of both
At the end of World War II, the US began using its military, specifically the Navy, to guarantee freedom of navigation for friend and foe alike, and it also opened its market so that both could export their way back to affluence so long as they did with the US told them in the Cold War. It was a bribe. Many revisionist Americans like to think of it so much more is it a gesture of goodwill, well I guess if they want to believe that lol, but the evidence doesn’t support it.
So, over the next few decades many of these countries, from Europe to East Asia, devalued their currencies even further to guarantee huge surpluses with the US – getting their hands on dollars and creating a lot of employment in their own countries. But by the 1980s, the Reagan administration was under pressure to do something about the growing deficits, as the US became a trade deficit country in the 1970s and the attitude was becoming something along the lines of “okay, now they [japanese, Germans, etc.] are just taking advantage. This is absurd.”
Anyway, Reagan was under pressure to do something about it because this had never happened before. There was no period of 10 or 11 years of straight and growing deficits with no end in sight. The balance of trade was more or less balanced throughout the nations history, otherwise it was an ebb and flow situation. George Washington to Abe Lincoln to teddy Roosevelt, they all talked about the importance of tariffs and protecting industry, obviously on the USs rise to global prominence. It surely didn’t rise to prominence losing jobs and running huge deficits.
Perhaps most interesting, a man who played a role in the Plaza Accord is our current trade repesentative, Rob Lighthizer. Not a surprising choice by trump. Lighthizer has been sounding the alarm for decades.
It takes two sides to make a war, but only one side to make a massacre.
China needs little examination. One of the worst regimes on the face of the planet for repression and lack of basic rights. It’s a super unfair trader, and the jury is in. Anyone in doubt need only look at the job loss and growing deficit December, 2001 (when Clinton’s hard work to shoehorn them into the WTO his whole second term paid off). Disaster.
Korea is also interesting. KORFUS, the Obama admins trade “deal” is often overlooked, particularly since he’s now so famous for trying to ram through the garbage TPP as he was literally packing and about out the door. Sheesh. Bad guy. Wow.
Anyway, Obama made some big claims about KORFUS in 2010-2011. Well how’s he doing on accuracy? Not well.
The Obama admin and the economic dolts working for him claimed that the “deal” would increase exports and thus support up to 70,000 jobs. Hmm. Sounds good. Oops. Math is tough:P
Between 2011-2015, the trade deficit surged from $10 billion in the hole to a whopping $28 billion lost!
Only the last year and a half really have seen any recovery, and it still sits at more than 20 billion, ie doubled the size of the deficit.
The “deal” has eliminated at least 100,000 jobs. Do you all understand what that means? Even though exports have increased and perhaps 70,000 jobs were created, 100,000 were loss and the net deficit has doubled. It’s a net loss!
And people sit there and wonder why Donald Trump won the “Rust Belt”, or perhaps they don’t even understand how the Rust Belt became the Rust Belt. Obama and his low-education team clearly don’t get it.
Oh, they got it. they just didn’t care
I have no problem with punitive tariffs against makers of solar panels. Make them more expensive and stop subsidizing solar power. Solar power is a joke. Give me fossil fuels any day. And if China or South Korea wants a trade war, I say bring it on. they will blink first anyway.
Given how often our economic “experts” have been wrong lately, I think I’ll wait and judge the actual results. They have lost credibility.
Pundits seem absolutely terrified that changes in trade policy might actually work, so terrified that they are falling all over themselves to declare them failures before the facts come in. If you are on the lower end of the knowledge worker scale you are quite ready to do some experimenting here. These people get to vote.
So here’s a challenge pundits: Declare how you will judge success or failure of these policies today, so you can’t make it up as you go along. Give us a falsifiable argument. Partisan pundits will never make this commitment.
The facts come in showing that the status quo doesn’t work, or rather works for a few. See Unelected Leader’s comment.
American history shows modest tariffs are better than an income tax.
Future American history is about to show that the reverse of your statement was actually true. The on-coming decades are going to be a rough ride for both the country and a lot (lot) of people.
Which was going to happen anyway.
My entire stock portfolio is S&P 500 ETF. My entire 401k consists of S&P 500 low cost tracking fund. I’m long America, all in. I genuinely don’t see a better place to put a bet on. Whiners and morons like Comrade FG always predict doom and gloom when things don’t go their way. My long term forecast for America is much better than my long term forecast for Comrade FG.
We tolerate a great deal of inefficient redistribution in this country, from professional guilds protecting their rackets to welfare programs enacted under an implied threat of mass violence. All are considered fair game politically. But not trade. It’s considered ethical for doctors to keep patients from seeing lower-skilled practitioners (who needs an MD to get a shot?), and it’s considered fair play for ethnic minorities to threaten violence if redistribution their way doesn’t appear, but for some reason trade protectionism is beyond the pale.
Our society has devolved into a high school popularity contest. Threatening violence if economic demands aren’t met used to be something poor white people did, back when they were the politically popular ones. It used to be something poor black people did, until a few years ago when Hispanics became the popular ones.
AT&T had a telecommunications monopoly, until it became unpopular. Google may yet suffer the same fate. Doctors extract huge rents from society due to their social popularity. Ditto for college administrators and tenured professors. American K12 teachers are notorious for abusing their economic and political power, so much so that they’ve lost an enormous amount of their popularity.
Heck, the economic and social pain two-thirds of our population feel from the college guild system must dwarf the losses from trade protectionism.
Please, Mr. Joffe. Have some credibility before you speak.
The argument Joffe is making is true as far as it goes. Yes, tariffs are ultimately borne by end consumers, and the entire economy and GDP growth are probably better off without them in place. But I think you make an important point. In an era of inequality, the size of the pie still matters. But how the pie is distributed matters too. I’m willing to pay a little extra so that my fellow Americans get more money in their pocket with a job to provide for their families. While doing what Joffe suggests might be the most efficient short-term approach, given its social negative externalities, it is not the best long term approach.
My mother is a retired high school math teacher. What is this nonsense about notoriously abusing economic and political power? Do you actually know any teachers or professors? I know a few, and they’re not wealthy or powerful. Anytime I go anywhere with her, some former student will run up to her and give her a hug. She’s a villain now? What the heck? I’ve also had quite a few professors who most certainly do not deserve such remarks. Your criticisms are directed at real people who get vilified for no reason other than some anonymous reader needs a scapegoat. Children will always need good teachers, but who wants to enter a profession that is regularly lambasted? Please have some consideration for other people and the thankless jobs they perform even if you do not see the social value of such jobs.
You might consider looking at how teacher’s unions handle their bad apples. They make police unions look like models of self-enforcement. Your comment, by the way, is an excellent demonstration of the social power that teachers wield.
Oh, and before you start in on a rant, both my parents were public school teachers.
It was more of a plea than a rant, but my knee-jerk reaction was dumb. Any worthwhile profession is worth defending (solar panel manufacturers and installers included if we want to stay on topic), but my purpose was to give a human face to a seemingly random assertion. I see that’s unnecessary. So, how should one respond to “American K12 teachers are notorious for abusing their economic and political power”? Without context or explanation, it would have been presumptuous of me to assume anything, regardless of whether I inferred this was a dig at teachers’ unions from afar or the lament of a disillusioned veteran. I wound up being presumptuous anyway, but we could probably find some common ground if we were discussing teaching issues involving unions, labor shortages, standards, etc.
What about manufacturing associated with oil services? Is that a worthwhile profession? How would one know if one is a worthwhile profession or not? I work in a fairly esoteric corner of financial markets. Am I worthwhile?
I originally wrote “any profession” without “worthwhile”, but I added the adjective as a way of acknowledging that some professions may not be worth defending. I was thinking of organized crime, illegal trades, and human rights violations. Perhaps “legal” would be a better adjective, assuming laws and regulations are just. Ethics come into play, too, though. Depending on the circumstances, a job may raise ethical questions or have unacceptable negative impacts on individuals, societies, and ecosystems. However, I never intended to judge jobs by some dubious moral code. I was trying to contrast Eager’s assessment with the obvious services education and healthcare workers provide, but the sentence that resulted is a silly tautology. In response to your questions, the value of a job in manufacturing or finance (like anything else) would depend on relative circumstances, demand, benefits, costs, etc.
Fair enough. After the financial crisis, I learned that I was personally responsible for it occurring. Perhaps I got a bit too defensive.
As for solar panel manufacturers, I have no opinion.
You asked reasonable questions, and I was too defensive regarding teachers. It’s hard to know what’s behind a comment, too. (You piqued my interest when you mentioned the financial crisis, but I realize this isn’t always the best forum for sharing life stories.) Anyway, it was good to reexamine the implications of my own words and how they might be interpreted. I should probably stop telling others to be more thoughtful if I can’t follow my own advice!
Thanks for an intelligent conversation. MY career has been indelibly marked by 2 macro events: 9/11 terrorist attacks and financial crisis of 2008. I’m sure I’m not the only one in that boat. My experience is somewhat unique is that I got a real front row seat to how it played out in financial industry. It was…. interesting times. Ultimately it worked out well, but I would be lying if I didn’t tell that there were moments when the shitstorm seemed unending. Great Recession was a toughie…
As it happens, my mother is a math teacher (she teaches college math online and also subs for the local middle schools), and she has no illusions about her profession.
I suppose my defense of teachers seemed like a hagiography of my mother. In reality, she taught at the public school I attended, so I was uncomfortably familiar with her flaws, her colleagues’ shortcomings, and problems within the school district. Though I never had her as a teacher, most of my friends did, and kids weren’t shy about sharing their opinions. Plus, anyone who did not flee the city school system for greener suburban pastures was largely ridiculed as a poor city kid. My point is that your statement about K-12 teachers does not meaningfully address the problems facing teachers and the communities they serve. It’s painting with a very broad brush, and it implies a group of people, by virtue of their profession, are at fault for implied transgressions that are too vague to address. I can’t say if your mother is a keen or jaded observer because there is nothing specific to accept or dismiss. In reality, a teacher’s performance or success depends on multiple variables, many of which are beyond a teacher’s control. To the extent that the leverage teachers do have results in abuses (some details would help here), addressing the problem directly in terms of its causes and effects is more useful than assuming a specific behavior is universal or limited to a single group.