As per Wikipedia, “the American Enterprise Institute for Public Policy Research, known simply as the American Enterprise Institute, is a Washington, D.C.-based conservative think tank that researches government, politics, economics, and social welfare.”
You know how I’ve been posting how the republican President Donald Trump likes to boast about something he has accomplished which is an absolute provable lie, like he has been constructing that beautiful new SW border wall for months which doesn’t exist, and that he negotiated a great deal with N Korea in 2018 that has led to its denuclearization program when all the experts are saying just the opposite.
President Trump’s administration has been knee deep into negotiating a better trade deal for US businesses that according to our president is supposed to be nearing an end, but he has been making this promise, like forever. Contrary to what President Trump keeps saying, the tariffs that he has imposed on Chinese goods do not add revenues to the US Treasury but because businesses have to pay more for these products at the ports of entry, that added expense is passed onto the consumers who have to pay more for these products.
The trade war came into being because China countered by not purchasing US goods as it has in the past, like Harley Davidson motorcycles and soybeans from US farmers. The cost to US businesses has been harsh to the tune of a loss of $3 billion dollars per month. This has been a very painful process for US industries but Americans have indicated that they were willing to endure this pain to correct for some of the real problems that do exist with conducting trade with China.
So, unlike in the past, where President Trump has gotten away with telling a truth, not born out by the facts, with no substantive consequences, but this time is different. He will not get away with bragging about the newly improved US-China trade deal without this assertion being verifiable and credible. Business leaders are expecting serious structural reforms on intellectual property and technology transfers that are measurable and verifiable with real teeth for enforcement and penalties for infractions.
This time even conservative watchdog groups like the American Enterprise Institute will be analyzing the final agreement product and it had better be a better trade deal in substantive measurable ways, otherwise, President Trump had better be prepared for the backlash.
Here’s the rest of the story…
On March 4, 2019, Bess Levin of Vanity Fair penned the following report, “TRUMP’S DUMB TRADE WAR COST AMERICANS $3 BILLION A MONTH LAST YEAR”
“Here are some things Donald Trump has said about his trade war with China since first hitting Beijing with tariffs last March, a move supported exclusively by his craziest advisers that caused National Economic Council director Gary Cohn to sprint across the South Lawn of the White House and hail the next cab back to New York:”
“Because of Tariffs we will be able to start paying down large amounts of the $21 Trillion in debt that has been accumulated, much by the Obama Administration, while at the same time reducing taxes for our people.” (August 2018);”
“Billions of Dollars are pouring into the coffers of the U.S.A. because of the Tariffs being charged to China” (November 2018);”
“The United States Treasury has taken in MANY billions of dollars from the Tariffs we are charging China and other countries that have not treated us fairly” (January 2019);”
“Trade negotiators have just returned from China where the meetings on Trade were very productive. Now at meetings with me at Mar-a-Lago giving the details. In the meantime, Billions of Dollars are being paid to the United States by China in the form of Trade Tariffs!” (February 2019)”
“He says these things because he doesn’t actually have any idea how tariffs work, despite having it explained to him numerous times.” If he did, he’d tweet something like, “Billions of Dollars are being paid to the United States by Americans in the form of Trade Tariffs!,” because in reality, U.S. companies and consumers are the ones who’ve paid for his little trade war. And according to two studies published over the weekend, they’ve paid a lot!”
“In a study published on Saturday, economists from the Federal Reserve Bank of New York, Princeton University, and Columbia University found that tariffs imposed last year by Trump on products ranging from washing machines and steel to some $250 billion in Chinese imports were costing U.S. companies and consumers $3 billion a month in additional tax costs and companies a further $1.4 billion in deadweight losses. They also were causing the diversion of $165 billion a year in trade leading to significant costs for companies having to reorganize supply chains.”
“In a separate paper published on Sunday, four economists including Pinelopi Goldberg, the World Bank’s chief economist and a former editor in chief of the prestigious American Economic Review, put the annual losses from the higher cost of imports alone for the U.S. economy at $68.8 billion.”
“This is kind of the worst-case scenario in terms of consumers,” Columbia University professor David Weinstein told Bloomberg. “It’s pretty unclear that this trade war is a net win for the economy at this point.” Moreover, as Paul Krugman points out, the fact that consumers are paying for the trade war is just one of several reasons why this whole thing ranks somewhere around Trump Airlines on a list of the president’s worst ideas:”
“By the way, in practice any manufacturing jobs added by the Trump tariffs are probably offset by losses of other manufacturing jobs. Partly that’s because most of the tariffs are on intermediate goods—inputs into production, so that job gains in, say, steel are offset by losses in autos and other downstream sectors. Beyond that, the tariffs have probably contributed to a rising dollar, which makes U.S. exports less competitive.”
“Meanwhile, Wall Street appears to be sick of the White House’s frequent pronouncements that a deal is just around the corner, which have so far proven empty. “After a while it feels like the boy who cried wolf,” R.J. Grant, director of equity trading at KBW Inc., told The Wall Street Journal. “The market can only rally so much on hope. We actually need tangible results. The rally has gotten a little bit long in the tooth, given the fact that we’re really not seeing much global growth.” On the bright side, reports suggest that a deal may be imminent. On the less-bright side, it’s not totally clear whether the results would justify the last year of pain:”
“Strategists have said the biggest market pop would come from a deal that peeled away tariffs but also included serious structural reforms on intellectual property and technology transfers. As per current discussions, China could possibly include language about state-owned enterprise subsidies and forced technology transfers, in to a new foreign investment law changing equity ownership rules. But sources tell CNBC, they are skeptical about how strong that language would be.”
“According to news reports, Beijing would also increase purchases of U.S. goods, a move that responds to Trump’s concern that it’s the trade deficit between the U.S. and China that needs to be fixed. The purchases would include $18 billion in natural gas from Cheniere Energy. But some worry that any deal will not have enough teeth for enforcement and the rules on technology would ring hollow. It also seems likely that any deal would still be followed by rounds of negotiations on some of the knottier issues.”
“Meanwhile, U.S. officials are reportedly worried that Trump’s failed summit with Kim Jong Un has resulted in desperation. “His failure to get a deal in Vietnam increases the pressure on him to get a deal with the Chinese,” Fred Bergsten, founder of the Institute for International Economics in Washington, told the Journal. And if those singular negotiating skills we’ve heard so much about don’t magically appear in the next several weeks, just remember: it’s all Michael Cohen’s fault.”
Link to the entire report: vanityfair.com