Thursday 5 April 2018

The trade war that won't happen

Let's start with what Trump'w National Economic Advisor is saying today:

"Trump is really the first president to fight back and to put a shot across the bow, stealing intellectual property rights, technology transfers, high barriers, investment limitations, high tariffs – this stuff really is not just unfair, it’s unlawful. It’s outside the boundaries of the WTO. Every country in the world knows this.
Every analyst knows this is the case. Somebody’s got to deal with it. President Trump is going to deal with it. There’s no trade war here. What you’ve got is the early stages of a process which will include tariffs, comments on the tariffs, then ultimate decisions and negotiations. There’s already backchannel talks going on. So look, I understand the stock market’s anxiety. I get that. But on the other hand, don’t over react. We’ll see how this works out.
My view Stu, look, you know I’m a growth guy, I’m a Reagan supply side growth guy. I think that at the end of this whole process, that at the end of the rainbow, there’s a pot of gold. And if you open up that pot, you will see better economic growth, more trading going on, improved wages for both sides.
Anytime you lower barriers, anytime you lower barriers, and that’s the key, the president will say this, lower barriers is the key, don’t raise the barriers. Anytime you do that, it’s good for growth. It’s good for American growth and American workers, it’s good for China’s growth, it’s good for the rest of the world’s growth.”

When you read the contest you can see that Trump is, as the private deal maker he is, just raising the game and not going through the usual channels of the WTO etc.

It is good to recall that the US has won 16/16 claims against China in the WTO and a fat lot of good it did as its consumer manufacturing base was hollowed out.

By way of return, I note that China is being very cautious with its retaliatory tariffs. One sector targeted is Soy Beans, but China imports so much Soy Bean that really, the Tariff's are unlikely to reduce demand and will instead just add to the US tax income. China needs raw materials more than the US needs cheap TV's. Of course, if China targeted iphones then it would be a real threat, as we have seen of late, the millenials can get very voiceferous and excited about access to social media!

So, as is a pattern, the crazed Trump might achieve some of his ends by taking this route. I compare and contrast to Obama, who hand-wringed and talked his way to achieving so little. It is really hard after a year of Trump not to think he is a far better President at getting stuff done. Of course, his tone and associations are dreadful, but his actions do deliver results. This area will be one to watch, albeit the Chinese play a much longer game, much better, as there are no pesky elections to worry about for Emperor Xi.


Anonymous said...

I think Trump will turn out to be a successful President. I hope he wins a second term.

Obama will always go down in history as the first "black" President, which is a great achievement, but apart from that he was useless or worse. A weak imitation of Woodrow Wilson.

Lyndon Johnson accomplished far more.

Don Cox

Bill Quango MP said...

Don Cox - In USA Academic surveys Woodrow Wilson ranks 4 or 5 most successful President ever. Johnson, 14 or 15.

In public surveys Johnson is not in the top twenty for republicans. 9th or so for democrats.
Both Republicans and democrats rate Woodrow Wilson top 10.

Very strange. i wonder what they teach about Wilson in US schools? Is it like Atlee here? Living God stuff?

Graeme said...

US political history is intriguing. How did a party that, once upon a time, had a semi-official para-military wing called the Ku Klux Klan become the party of civil rights and Obama? How come LBJ, responsible for the repeal of so much racist Democrat history, is so hated for Vietnam while WW, who openly endorsed Jim Crow laws and imbroiled the US in World War One and screwed up 20th century Europe by his stance at Versailles, gets a free pass?

decnine said...

It reminds me of a story about Lord Beaverbrook who was Minister of something like Aircraft Production in Churchill's government. A civil servant was complaining bitterly about Beaverbrook. The other person said, "What's the problem? The RAF is getting all the aircraft it needs, isn't it?" The civil servant said, "Yes. But, my dear, his methods...."

Anonymous said...

no pesky elections to worry about for Emperor Xi

Article started off well looking at life as it is, not as you want it to be. Then that nonsense about Li. Deal with it - as Trump would.

Trump may be a master tactician or then again he might just be a slimy politician in the mould age old mould of slimy politicians.

He has a track record though.

Thud said...

I expected quite a bit of trump and he has not disappointed given it is still early days (2 terms?) as for xi....another in the long line of grasping Chinese depots.

Anonymous said...

Woodrow Wilson was the President who allowed the Federal Reserve to come into being at the behest of JP Morgan etc.
The concept was apparently viewed by many -at the time - as un-American and unconstitutional.
I have read that he later regretted it.
It is said that he was having an affair at the time - female- and it is possible that he feared exposure (fancy that!).
Of course, 1914-18 followed and the USA and Wall St prospered at the expense of the British Empire. If I recall correctly JP Morgan did particularly well.
To the Victors the spoils!

Anonymous said...

BQ - any politician looking to restore UK laws to those in force in Attlee's time would be called a Nazi. Britain really was a National Socialist country then, and mostly* in a good way.

* the death duties that destroyed the estates of aristocrats killed fighting for Britain, and Emmanuel Shinwell's war on the Fitzwilliam family were pretty evil.

Electro-Kevin said...

I always said that Trump was being underestimated. I don't doubt that he will take Russia to the brink.

Dick the Prick said...

@BQ - ffs, Woodrow Wilson was a bloody maniac.

Bill Quango MP said...

DTP + Anon.

he was very strange. Don't know why he is rated so highly by Americans. His heart may have been in the right place, but his judgements were mostly off.

And as for Johnson. He repeatedly lied. Over and over. Blatant lies about Vietnam and Tonkin and such.
So much so, that in 1967 the press were reporting on his 'credibility gap.'

A play on the 'missile gap' fears that were prevalent following Cuba crisis.
Which was pretty damning from the more restrained press of the day.

Lyndon Johnson passed some very progressive and difficult civil rights agenda. And benefits and health welfare bills.
But his Vietnam strategy and lies was very, very damaging and can't just be excused.

Johnson managed the difficult feat of simultaneously committing too few and too many troops to the Vietnam conflict.

Anonymous said...

Interesting (and certainly true even 30 years ago, not sure if it still applies to Mexico Norte)

"In a long enough timeline, the US has enough resources, a big enough market, and technical know how to recreate supply chains domestically and be autarkic. Nobody else has that."

Anonymous said...

OT - our brilliantly competent police and security services sealed Skripal's house and left his pets to die of thirst.